|UNITED STATESSECURITIES AND EXCHANGE
      COMMISSIONWashington, D.C. 20549FORM
10-Q
|------------------------------------------------------------------------------------

[X]
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the
      Securities Exchange Act of 1934For
      the quarterly period ended March 31, 2006[   ]
    
    Transition Report Pursuant to Section 13 or 15(d) of the
      Securities Exchange Act of 1934For the transition period
      from  ___ to ___




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



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

Massachusetts
    
    04-3404037(State of organization)
    
    (I.R.S.
      Employer Identification No.)The Eaton Vance Building255 State StreetBoston, Massachusetts
    
    02109(Address of principal executive offices)
    
    (Zip
    Code)Registrants telephone
    number:
    
    617-482-8260




|None(Former name, former address and
      former fiscal year, if changed since last
report)
|--------------------------------------------------------------------------------------------



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



| | Indicate by check mark whether the Registrant is a large
      accelerated filer, an accelerated filer or a non-accelerated filer (as
      defined in Rule 12b-2 of the Act).     Large
      Accelerated Filer X       
      Accelerated Filer __       
      Non-Accelerated Filer __
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Indicate by check mark whether the Registrant is a shell
      company (as defined in Rule 12b-2 of the Act).    Yes
      __    No X
| | -------------------------------------------------------------------------------------------------------------------------------------





|BelairCapital Fund LLCIndex to Form 10-Q
|----------------------------------------

PART I.       
FINANCIAL
INFORMATION                                         
                     
Page

Item
    
    1.
    
    Financial StatementsCondensed Consolidated Statements of Assets
      and Liabilities as of  March 31, 2006(Unaudited) andDecember 31,
      20053Condensed Consolidated Statements of
      Operations (Unaudited) for the  Three Months
      EndedMarch 31, 2006and20054Condensed Consolidated Statements of Changes
      in Net Assets for the  ThreeMonths EndedMarch 31, 2006(Unaudited) and the Year Ended  December 31, 20056Condensed Consolidated Statements of Cash
      Flows (Unaudited) for the  ThreeMonths EndedMarch 31, 2006and20057Financial Highlights for theThreeMonths Ended  March 31, 2006(Unaudited) and the Year Ended
      December 31, 20059Notes to Condensed Consolidated Financial
      Statements  as ofMarch
      31, 2006(Unaudited)10Item
    
    2.
    
    Managements Discussion and Analysis of
      Financial Condition (MD&A)  and Results
      of Operations16Item
    
    3.
    
    Quantitative and Qualitative Disclosures About Market
      Risk
    
    19Item
    
    4.
    
    Controls and Procedures
    
    21PART II.
    
    OTHER INFORMATIONItem
    
    1.
    
    Legal Proceedings
    
    22Item
    
    1A.
    
    Risk Factors
    
    22Item
    
    2.
    
    Unregistered Sales of Equity Securities and Use of
      Proceeds
    
    22Item
    
    3.
    
    Defaults Upon Senior Securities
    
    22Item
    
    4.
    
    Submission of Matters to a Vote of Security Holders
    
    22Item
    
    5.
    
    Other Information
    
    22Item
    
    6.
    
    Exhibits
    
    23SIGNATURES
    
    24EXHIBIT INDEX
    
    25


2

|PART I.
      FINANCIAL INFORMATION                                        |  |   |  |                      |  |   |  |                   
|-------------------------------------------------------------------------- |  | - |  | -------------------- |  | - |  | ------------------
|Item 1.
      Financial Statements.                                        |  |   |  |                      |  |   |  |                   
|                                                                           |  |   |  |                      |  |   |  |                   
|                                                                           |  |   |  |                      |  |   |  |                   
|BELAIR
      CAPITAL FUND LLC                                              |  |   |  |                      |  |   |  |                   
|Condensed
      Consolidated Statements of Assets and Liabilities          |  |   |  |                      |  |   |  |                   
|                                                                           |  |   |  | March
      31, 2006 |  |   |  | December
      31,
|                                                                           |  |   |  | (Unaudited)          |  |   |  | 2005              
|                                                                           |  |   |  |                     
|Assets:                                                                    |  |   |  |                      |  |   |  |                   
|Investment in Belvedere Capital Fund Company LLC                           |  |   |  |                      |  |   |  |                   
|(Belvedere Company)                                                        |  | $ |  | 1,334,294,690        |  | $ |  | 1,357,703,240     
|Investment in Partnership Preference Units                                 |  |   |  | 236,389,876          |  |   |  | 260,574,687       
|Investment in other real estate                                            |  |   |  | 183,427,033          |  |   |  | 177,461,814       
|Short-term investments                                                     |  |   |  | 6,077,000            |  |   |  | 5,320,225         
|                                                                           |  |   |  |                     
|Total
      investments                                                    |  | $ |  | 1,760,188,599        |  | $ |  | 1,801,059,966     
|Cash                                                                       |  |   |  | 2,984,616            |  |   |  | 4,278,246         
|Open interest rate swap agreements, at value                               |  |   |  | 12,705,762           |  |   |  | 9,169,429         
|Distributions and interest receivable                                      |  |   |  | 1,046,710            |  |   |  | 1,046,636         
|Swap interest receivable                                                   |  |   |  | 28,375               |  |   |  | -                 
|Other assets                                                               |  |   |  | 2,590,044            |  |   |  | 3,419,826         
|                                                                           |  |   |  |                     
|Total
      assets                                                         |  | $ |  | 1,779,544,106        |  | $ |  | 1,818,974,103     
|                                                                           |  |   |  |                     
|Liabilities:                                                               |  |   |  |                      |  |   |  |                   
|Loan payable  Credit Facility                                             |  | $ |  | 437,000,000          |  | $ |  | 426,000,000       
|Mortgages payable                                                          |  |   |  | 135,000,000          |  |   |  | 135,000,000       
|Payable for Fund Shares redeemed                                           |  |   |  | 7,570,352            |  |   |  | 1,405,709         
|Payable to affiliate for investment advisory and administration
      fees |  |   |  | 392,101              |  |   |  | 416,105           
|Payable to affiliate for servicing fees                                    |  |   |  | 101,821              |  |   |  | 112,496           
|Security deposits                                                          |  |   |  | 364,513              |  |   |  | 310,740           
|Accrued expenses:                                                          |  |   |  |                      |  |   |  |                   
|Swap interest expense                                                      |  |   |  | -                    |  |   |  | 3,417             
|Interest expense                                                           |  |   |  | 982,315              |  |   |  | 892,512           
|Property taxes                                                             |  |   |  | 134,484              |  |   |  | 599,990           
|Other expenses and liabilities                                             |  |   |  | 966,061              |  |   |  | 1,352,051         
|Minority interests in controlled subsidiaries                              |  |   |  | 8,608,363            |  |   |  | 8,190,240         
|                                                                           |  |   |  |                     
|Total
      liabilities                                                    |  | $ |  | 591,120,010          |  | $ |  | 574,283,260       
|                                                                           |  |   |  |                     
|Net
      assets                                                           |  | $ |  | 1,188,424,096        |  | $ |  | 1,244,690,843     
|                                                                           |  |   |  |                     
|Shareholders
      Capital                                                |  | $ |  | 1,188,424,096        |  | $ |  | 1,244,690,843     
|                                                                           |  |   |  |                     
|Shares
      outstanding                                                   |  |   |  | 8,880,188            |  |   |  | 9,405,723         
|                                                                           |  |   |  |                     
|Net asset value
      and redemption price per Share                       |  | $ |  | 133.83               |  | $ |  | 132.33            
|                                                                           |  |   |  |                     

See notes to unaudited condensed consolidated financial
statements

3

BELAIR CAPITAL FUND LLC

Condensed Consolidated Statements of Operations
(Unaudited)

|                                                      |  | Three Months Ended
|----------------------------------------------------- |  | ------------------
|                                                      |  |                   
|                                                      |  | March 31, 2006    
|                                                      |  |                   
|Investment Income:                                    |  |                   
|Dividends allocated from Belvedere
      Company      |  |                   
|(net of foreign taxes, $34,231
      and              |  |                   
|$62,722, respectively)                                |  | $                 
|Interest allocated from Belvedere Company             |  |                   
|Expenses allocated from Belvedere Company             |  |                   
|                                                      |  |                   
|Net investment income allocated from                  |  |                   
|Belvedere Company                                     |  | $                 
|Rental income                                         |  |                   
|Distributions from Partnership Preference
      Units |  |                   
|Interest                                              |  |                   
|                                                      |  |                   
|Total investment income                               |  | $                 
|                                                      |  |                   
|Expenses:                                             |  |                   
|Investment advisory and administrative
      fees     |  | $                 
|Property management and administrative
      fees     |  |                   
|Servicing fees                                        |  |                   
|Interest expense on mortgages                         |  |                   
|Interest expense on Credit Facility                   |  |                   
|Property and maintenance expenses                     |  |                   
|Property taxes and insurance                          |  |                   
|Miscellaneous                                         |  |                   
|                                                      |  |                   
|Total expenses                                        |  | $                 
|                                                      |  |                   
|Net investment income before                          |  |                   
|minority interests in net income of                   |  |                   
|controlled subsidiaries                               |  | $                 
|Minority interests in net income of                   |  |                   
|controlled subsidiaries                               |  |                   
|                                                      |  |                   
|Net investment income                                 |  | $                 
|                                                      |  |                   

See notes to unaudited condensed consolidated
financial statements

4

|BELAIR CAPITAL FUND LLC                                                       |  |                    |  |             |  |                |  |             
|----------------------------------------------------------------------------- |  | ------------------ |  | ----------- |  | -------------- |  | ------------
|Condensed Consolidated Statements of Operations (Unaudited)
      (Continued) |  |                    |  |            
|                                                                              |  |                   
|                                                                              |  |                   
|                                                                              |  | Three Months Ended
|                                                                              |  |                   
|                                                                              |  | March 31, 2006     |  |             |  | March 31, 2005
|                                                                              |  |                    |  |             |  |               
|Realized and Unrealized Gain (Loss)                                           |  |                    |  |             |  |                |  |             
|Net realized gain (loss)                                                     |  |                    |  |             |  |                |  |             
|Investment transactions, securities sold short
      and                      |  |                    |  |             |  |                |  |             
|foreign currency transactions allocated
      from                            |  |                    |  |             |  |                |  |             
|Belvedere Company (identified cost
      basis)                               |  | $                  |  | 11,859,643  |  | $              |  | (1,353,089) 
|Investment transactions in
      Partnership                                  |  |                    |  |             |  |                |  |             
|Preference Units (identified cost
      basis)                                |  |                    |  | 183,254     |  |                |  | (3,679)     
|Investment transactions in other real estate
      (net                       |  |                    |  |             |  |                |  |             
|of minority
      interest in realized loss of                                |  |                    |  |             |  |                |  |             
|controlled
      subsidiary of $0 and                                         |  |                    |  |             |  |                |  |             
|$(3,550,665),
      respectively)                                             |  |                    |  | -           |  |                |  | 2,326,193   
|Interest rate swap agreements (1)                                             |  |                    |  | 93,102      |  |                |  | (1,761,821) 
|                                                                              |  |                    |  |            
|Net realized gain (loss)                                                      |  | $                  |  | 12,135,999  |  | $              |  | (792,396)   
|                                                                              |  |                    |  |            
|Change in unrealized appreciation (depreciation)                             |  |                    |  |             |  |                |  |             
|Investments, securities sold short and
      foreign                          |  |                    |  |             |  |                |  |             
|currency allocated
      from Belvedere Company                               |  |                    |  |             |  |                |  |             
|(identified cost
      basis)                                                 |  | $                  |  | 41,534,811  |  | $              |  | (36,552,996)
|Investments in Partnership Preference
      Units                             |  |                    |  |             |  |                |  |             
|(identified cost
      basis)                                                 |  |                    |  | (5,555,926) |  |                |  | 628,755     
|Investments in other real estate (net of
      minority                       |  |                    |  |             |  |                |  |             
|interests in
      unrealized appreciation (depreciation)                     |  |                    |  |             |  |                |  |             
|$150,455 and
      $3,402,756, respectively)                                  |  |                    |  | 5,015,944   |  |                |  | 225,324     
|Interest rate swap agreements                                                 |  |                    |  | 3,536,333   |  |                |  | 4,856,905   
|                                                                              |  |                    |  |            
|Net change in unrealized appreciation (depreciation)                          |  | $                  |  | 44,531,162  |  | $              |  | (30,842,012)
|                                                                              |  |                    |  |            
|Net realized and unrealized gain (loss)                                       |  | $                  |  | 56,667,161  |  | $              |  | (31,634,408)
|                                                                              |  |                    |  |            
|Net increase (decrease) in net assets from operations                         |  | $                  |  | 57,710,048  |  | $              |  | (26,000,287)
|                                                                              |  |                    |  |            

(1) Amounts represent interest earned (incurred) in
connection with interest rate swap agreements (Note 4).

See notes to unaudited condensed consolidated
financial statements

5

|BELAIR CAPITAL FUND LLC                                                      |  |                   |  |                   |  |               |  |              
|---------------------------------------------------------------------------- |  | ----------------- |  | ----------------- |  | ------------- |  | -------------
|Condensed Consolidated Statements of Changes in Net
      Assets             |  |                   |  |                  
|                                                                             |  |                   |  |                   |  |              
|                                                                             |  |                   |  |                   |  |              
|                                                                             |  |                   |  |                   |  |              
|                                                                             |  | Three Months      |  |                   |  |              
|                                                                             |  | Ended             |  |                   |  |              
|                                                                             |  | March 31, 2006    |  | Year Ended       
|                                                                             |  | (Unaudited)       |  | December 31, 2005
|                                                                             |  |                   |  |                  
|Increase (Decrease) in Net Assets:                                           |  |                   |  |                   |  |               |  |              
|From operations                                                             |  |                   |  |                   |  |               |  |              
|Net investment income                                                        |  | $                 |  | 1,042,887         |  | $             |  | 22,385,296   
|Net realized gain from investment transactions,
      securities sold short, |  |                   |  |                   |  |               |  |              
|foreign currency transactions and interest rate
      swap agreements        |  |                   |  | 12,135,999        |  |               |  | 34,660,225   
|Net change in unrealized appreciation (depreciation)
      of investments,   |  |                   |  |                   |  |               |  |              
|securities sold short, foreign currency and
      interest rate swap         |  |                   |  |                   |  |               |  |              
|agreements                                                                   |  |                   |  | 44,531,162        |  |               |  | 17,816,648   
|                                                                             |  |                   |  |                  
|Net increase in net assets from operations                                   |  | $                 |  | 57,710,048        |  | $             |  | 74,862,169   
|                                                                             |  |                   |  |                  
|Transactions in Fund Shares                                                 |  |                   |  |                   |  |               |  |              
|Net asset value of Fund Shares issued to Shareholders
      in               |  |                   |  |                   |  |               |  |              
|payment of distributions declared                                            |  | $                 |  | 16,482,811        |  | $             |  | 12,687,778   
|Net asset value of Fund Shares redeemed                                      |  |                   |  | (86,594,444)      |  |               |  | (344,200,079)
|                                                                             |  |                   |  |                  
|Net decrease in net assets from Fund Share
      transactions                |  | $                 |  | (70,111,633)      |  | $             |  | (331,512,301)
|                                                                             |  |                   |  |                  
|Distributions                                                               |  |                   |  |                   |  |               |  |              
|Distributions to Shareholders                                                |  | $                 |  | (43,865,162)      |  | $             |  | (28,650,917) 
|                                                                             |  |                   |  |                  
|Total distributions                                                          |  | $                 |  | (43,865,162)      |  | $             |  | (28,650,917) 
|                                                                             |  |                   |  |                  
|Net decrease in net assets                                                   |  | $                 |  | (56,266,747)      |  | $             |  | (285,301,049)
|                                                                             |  |                   |  |                   |  |               |  |              
|                                                                             |  |                   |  |                   |  |               |  |              
|Net assets:                                                                  |  |                   |  |                   |  |               |  |              
|At beginning of period                                                       |  | $   1,244,690,843 |  | $                 |  | 1,529,991,892
|                                                                             |  |                   |  |                  
|At end of period                                                             |  | $   1,188,424,096 |  | $                 |  | 1,244,690,843
|                                                                             |  |                   |  |                  

See notes to unaudited condensed consolidated
financial statements

6

|BELAIR CAPITAL FUND LLC                                                          |  |                    |  |                |  |   |  |              
|-------------------------------------------------------------------------------- |  | ------------------ |  | -------------- |  | - |  | -------------
|Condensed Consolidated Statements of Cash Flows
      (Unaudited)                |  |                    |  |                |  |   |  |              
|                                                                                 |  |                    |  |               
|                                                                                 |  |                    |  |               
|                                                                                 |  | Three Months Ended
|                                                                                 |  |                   
|                                                                                 |  | March 31, 2006     |  | March 31, 2005
|                                                                                 |  |                    |  |               
|Cash Flows From (For) Operating Activities                                      |  |                    |  |                |  |   |  |              
|Net increase (decrease) in net assets from operations                            |  | $                  |  | 57,710,048     |  | $ |  | (26,000,287) 
|Adjustments to reconcile net increase (decrease) in net assets
      from        |  |                    |  |                |  |   |  |              
|operations to net cash flows from (for) operating
      activities              |  |                    |  |                |  |   |  |              
|Net investment income allocated from Belvedere
      Company                     |  |                    |  | (3,625,833)    |  |   |  | (4,202,988)  
|Increase in note receivable from other real
      estate investments             |  |                    |  | (49,794)       |  |   |  | (46,105)     
|(Increase) decrease in other
      assets                                        |  |                    |  | 829,782        |  |   |  | (993,630)    
|Increase in distributions and interest
      receivable                          |  |                    |  | (74)           |  |   |  | (1,051,156)  
|Increase in interest receivable for open swap
      agreements                   |  |                    |  | (28,375)       |  |   |  | -            
|Decrease in interest payable for open swap
      agreements                      |  |                    |  | (3,417)        |  |   |  | (31,670)     
|Increase (decrease) in security deposits,
      accrued interest and accrued     |  |                    |  |                |  |   |  |              
|other expenses and
      liabilities                                             |  |                    |  | (242,414)      |  |   |  | 778,063      
|Decrease in payable to affiliate for investment
      advisory                   |  |                    |  |                |  |   |  |              
|and administrative
      fees                                                    |  |                    |  | (24,004)       |  |   |  | -            
|Decrease in payable to affiliate for servicing
      fees                        |  |                    |  | (10,675)       |  |   |  | -            
|Increase (decrease) in accrued property
      taxes                              |  |                    |  | (465,506)      |  |   |  | 146,309      
|Purchases of Partnership Preference
      Units                                  |  |                    |  | -              |  |   |  | (115,848,417)
|Proceeds from sales of Partnership Preference
      Units                        |  |                    |  | 18,812,139     |  |   |  | 407,026      
|Proceeds from sale of investment in other real
      estate                      |  |                    |  | -              |  |   |  | 42,877,294   
|Improvements to rental property                                                  |  |                    |  | (749,026)      |  |   |  | (534,855)    
|Decrease in cash due to sale of majority
      interest in controlled subsidiary |  |                    |  | -              |  |   |  | (2,199,688)  
|Interest earned (incurred) on interest rate
      swap agreements                |  |                    |  | 93,102         |  |   |  | (1,761,821)  
|Increase in short-term investments                                               |  |                    |  | (756,775)      |  |   |  | (384,000)    
|Minority interests in net income of controlled
      subsidiaries                |  |                    |  | 736            |  |   |  | 259,420      
|Net realized (gain) loss from investment
      transactions, securities sold     |  |                    |  |                |  |   |  |              
|short, foreign
      currency transactions and interest rate swap agreements     |  |                    |  | (12,135,999)   |  |   |  | 792,396      
|Net change in unrealized (appreciation)
      depreciation of investments,       |  |                    |  |                |  |   |  |              
|securities sold short,
      foreign currency and interest rate                  |  |                    |  |                |  |   |  |              
|swap
      agreements                                                            |  |                    |  | (44,531,162)   |  |   |  | 30,842,012   
|                                                                                 |  |                    |  |               
|Net cash flows from (for) operating activities                                   |  | $                  |  | 14,822,753     |  | $ |  | (76,952,097) 
|                                                                                 |  |                    |  |               
|Cash Flows From (For) Financing Activities                                      |  |                    |  |                |  |   |  |              
|Proceeds from Credit Facility                                                    |  | $                  |  | 11,000,000     |  | $ |  | 89,000,000   
|Issuance of real estate joint venture preferred
      shares                     |  |                    |  | -              |  |   |  | 240,000      
|Payments for Fund Shares redeemed                                                |  |                    |  | (964)          |  |   |  | (1,373)      
|Distributions paid to Shareholders                                               |  |                    |  | (27,382,351)   |  |   |  | (15,963,139) 
|Distributions paid to minority
      shareholders                                |  |                    |  | -              |  |   |  | (847,526)    
|Capital contributed by minority
      shareholder                                |  |                    |  | 266,932        |  |   |  | -            
|                                                                                 |  |                    |  |               
|Net cash flows from (for) financing activities                                   |  | $                  |  | (16,116,383)   |  | $ |  | 72,427,962   
|                                                                                 |  |                    |  |               
|Net decrease in cash                                                             |  | $                  |  | (1,293,630)    |  | $ |  | (4,524,135)  
|                                                                                 |  |                    |  |                |  |   |  |              
|                                                                                 |  |                    |  |                |  |   |  |              
|Cash at beginning of period                                                      |  | $                  |  | 4,278,246      |  | $ |  | 9,759,487    
|                                                                                 |  |                    |  |               
|Cash at end of period                                                            |  | $                  |  | 2,984,616      |  | $ |  | 5,235,352    
|                                                                                 |  |                    |  |               

See notes to unaudited condensed consolidated
financial statements

7

|BELAIR CAPITAL FUND LLC                                                       |  |                    |  |                |  |   |  |            
|----------------------------------------------------------------------------- |  | ------------------ |  | -------------- |  | - |  | -----------
|Condensed Consolidated Statements of Cash Flows (Unaudited)
      (Continued) |  |                    |  |               
|                                                                              |  |                    |  |               
|                                                                              |  |                    |  |               
|                                                                              |  | Three Months Ended
|                                                                              |  |                   
|                                                                              |  | March 31, 2006     |  | March 31, 2005
|                                                                              |  |                    |  |               
|Supplemental Disclosure and Non-cash Investing and                            |  |                    |  |                |  |   |  |            
|Financing Activities                                                         |  |                    |  |                |  |   |  |            
|Interest paid on loan  Credit
      Facility                                 |  | $                  |  | 5,116,191      |  | $ |  | 3,325,463  
|Interest paid on mortgages                                                    |  | $                  |  | 1,913,625      |  | $ |  | 2,695,468  
|Interest paid (received) on swap
      agreements                             |  | $                  |  | (61,310)       |  | $ |  | 1,793,491  
|Market value of securities distributed
      in payment of                    |  |                    |  |                |  |   |  |            
|redemptions                                                                   |  | $                  |  | 80,428,837     |  | $ |  | 43,694,775 
|Market value of real property and other
      assets, net of                  |  |                    |  |                |  |   |  |            
|current
      liabilities, disposed of in conjunction with the                |  |                    |  |                |  |   |  |            
|sale of other real
      estate                                               |  | $                  |  | -              |  | $ |  | 163,004,330
|Market value of minority interest
      disposed of in                        |  |                    |  |                |  |   |  |            
|conjunction with
      the sale of other real estate                          |  | $                  |  | -              |  | $ |  | 10,585,993 
|Mortgage disposed of in conjunction with
      the sale of                    |  |                    |  |                |  |   |  |            
|other real
      estate                                                       |  | $                  |  | -              |  | $ |  | 112,630,517

See notes to unaudited condensed consolidated
financial statements

8

BELAIR CAPITAL FUND LLC

Condensed Consolidated Financial Statements
(Continued)

Financial Highlights

|                                      |  | March 31, 2006 |  | Year Ended       
|------------------------------------- |  | -------------- |  | -----------------
|                                      |  | (Unaudited)    |  | December 31, 2005
|                                     
|Net asset value  Beginning of period |  | $              |  | 132.330          
|                                     
|Income (loss) from operations         |  |                |  |                  
|                                     
|Net investment income (1)             |  | $              |  | 0.113            
|Net realized and unrealized gain      |  |                |  | 6.097            
|                                     
|Total income from operations          |  | $              |  | 6.210            
|                                     
|Distributions                         |  |                |  |                  
|                                     
|Distributions to Shareholders         |  | $              |  | (4.710)          
|                                     
|Total distributions                   |  | $              |  | (4.710)          
|                                     
|Net asset value  End of period       |  | $              |  | 133.830          
|                                     
|Total Return (2)                      |  |                |  | 4.83%            
|                                     

|Ratios as a percentage of average
      net assets (3)                   |  |             |  |            |  |            
|------------------------------------------------------------------------ |  | ----------- |  | ---------- |  | -----------
|                                                                        
|Expenses of Consolidated Real Property Subsidiaries                      |  |             |  |            |  |            
|Interest and other borrowing
      costs (4)                             |  | 0.52%  (9)  |  | 0.52%     
|Operating expenses (4)                                                   |  |             |  | 0.45%  (9) |  | 0.48%      
|Belair Capital Fund LLC Expenses                                         |  |             |  |            |  |            
|Interest and other borrowing
      costs (5)(6)                          |  | 1.73%  (9)  |  | 1.27%     
|Investment advisory and
      administrative fees,                       |  |             |  |            |  |            
|servicing fees
      and other Fund operating expenses (5)(7)            |  | 1.14%  (9)  |  | 1.15%     
|                                                                         |  |            
|Total expenses                                                           |  |             |  | 3.84% (9)  |  | 3.42%      
|Net investment income                                                    |  |             |  | 0.35% (9)  |  | 1.66%      
|                                                                        
|Ratios as a percentage of average
      gross assets (3)(8)              |  |             |  |            |  |            
|                                                                        
|Expenses of Consolidated Real Property Subsidiaries                      |  |             |  |            |  |            
|Interest and other borrowing
      costs  (4)                            |  | 0.36%  (9)  |  | 0.36%     
|Operating expenses (4)                                                   |  |             |  | 0.31%  (9) |  | 0.33%      
|Belair Capital Fund LLC Expenses                                         |  |             |  |            |  |            
|Interest and other borrowing
      costs  (5)(6)                         |  | 1.20%  (9)  |  | 0.88%     
|Investment advisory and
      administrative fees,                       |  |             |  |            |  |            
|servicing fees
      and other Fund operating expenses (5)(7)            |  | 0.79%  (9)  |  | 0.80%     
|                                                                         |  |            
|Total expenses                                                           |  |             |  | 2.66%  (9) |  | 2.37%      
|Net investment income                                                    |  |             |  | 0.24%  (9) |  | 1.16%      
|                                                                        
|Supplemental Data                                                        |  |             |  |            |  |            
|                                                                        
|Net assets, end of period (000s omitted)                                |  | $ 1,188,424 |  |            |  | $ 1,244,691
|Portfolio turnover of Tax-Managed Growth
      Portfolio (the Portfolio) |  | 0%          |  |            |  | 0% (10)    
|                                                                        

|(1)  | Calculated using average shares
      outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                                         
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|(2)  | Returns are calculated by determining the
      percentage change in net asset value with all distributions reinvested.
      Total return is not computed on an annualized basis.                                                                                                                                                                                                                                                                                                         
|    
|(3)  | For the purpose of calculating ratios, the
      income and expenses of Belair Real Estate Corporation's (Belair Real
      Estate) controlled subsidiaries are reduced by the proportionate interests
      therein of investors other than Belair Real Estate.                                                                                                                                                                                                                           
|    
|(4)  | Includes Belair Real Estate's proportional
      share of expenses incurred by its controlled subsidiaries.                                                                                                                                                                                                                                                                                                                                                                                
|    
|(5)  | Includes the expenses of Belair Capital
      Fund LLC (Belair Capital) and Belair Real Estate. Does not include
      expenses of Belair Real Estate's controlled subsidiaries.                                                                                                                                                                                                                                                                                                           
|    
|(6)  | Ratios do not include interest incurred in
      connection with interest rate swap agreements, if any. Had such amounts
      been included, ratios would be higher.                                                                                                                                                                                                                                                                                                                      
|    
|(7)  | Includes Belair Capitals share of
      Belvedere Capital Fund Company LLC's (Belvedere Company) allocated
      expenses, including those expenses allocated from the Portfolio.                                                                                                                                                                                                                                                                                                         
|    
|(8)  | Average gross assets is defined as the
      average daily amount of all assets of Belair Capital (not including its
      investment in Belair Real Estate) plus all assets of Belair Real Estate
      minus the sum of their liabilities other than the principal amount of
      money borrowed. For this purpose, the assets of Belair Real Estate's
      controlled subsidiaries are reduced by the proportionate interest therein
      of investors other than Belair Real Estate.
|    
|(9)  | Annualized.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    
|(10) | Amounts to less than 1%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    

See notes to unaudited condensed consolidated
financial statements

9

BELAIR CAPITAL FUND LLCas of March 31, 2006

Notes To Condensed Consolidated Financial Statements
(Unaudited)



|1 Basis of
Presentation
|-----------------------

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

The balance sheet at December 31, 2005 and the
statement of changes in net assets and the financial highlights for the year
then ended have been derived from the December 31, 2005 audited financial
statements but do not include all of the information and footnotes required by
GAAP for complete financial statements as permitted by the instructions to Form
10-Q and Article 10 of Regulation S-X.

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



|2 Investment
Transactions
|-------------------------

The following table summarizes the Funds investment
transactions, other than short-term obligations, for the three months ended
March 31, 2006 and March 31, 2005:

|                                                                    |  |   |  | Three Months Ended
|------------------------------------------------------------------- |  | - |  | ------------------
|                                                                    |  |   |  |                   
|Investment Transactions                                             |  |   |  | March 31, 2006    
|                                                                   
|Decreases in investment in Belvedere Capital Fund Company
      LLC |  | $ |  | 80,428,837        
|Sale of other real estate (1)                                       |  | $ |  | -                 
|Purchases of Partnership Preference Units (2)                       |  | $ |  | -                 
|Sales of Partnership Preference Units (3)                           |  | $ |  | 18,812,139        
|                                                                   

|(1) | In February 2005, Belair Real Estate
      Corporation (Belair Real Estate) sold its majority interest in Bel
      Residential Properties Trust (Bel Residential) to the real estate
      investment affiliate of another investment fund advised by Boston
      Management and Research (Boston Management) for which a gain of $2,326,193
      was recognized.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) | Purchases of Partnership Preference Units
      during the three months ended March 31, 2005 represent Partnership
      Preference Units purchased from the real estate investment affiliates of
      other investment funds advised by Boston Management.                                                                                                        
|   
|(3) | Sales of Partnership Preference Units for
      the three months ended March 31, 2006 and 2005 represent Partnership
      Preference Units sold to the real estate investment affiliates of other
      investment funds advised by Boston Management for which a gain of $183,254
      and a loss of $3,679 were recognized, respectively.                       
|   

10



|3 Indirect Investment in the
    Portfolio
|------------------------------------------

The following table summarizes the Funds investment
in Tax-Managed Growth Portfolio (the Portfolio) through Belvedere Capital Fund
Company LLC (Belvedere Company) for the three months ended March 31, 2006 and
2005, including allocations of income, expenses and net realized and unrealized
gains (losses) for the respective periods then ended:

|                                                                                   |  | Three Months Ended
|---------------------------------------------------------------------------------- |  | ------------------
|                                                                                   |  |                   
|                                                                                   |  | March 31, 2006    
|                                                                                  
|Belvedere Companys interest in the Portfolio (1)                                  |  | $                 
|The Funds investment in Belvedere Company (2)                                     |  | $                 
|Income allocated to Belvedere Company from the
      Portfolio                     |  | $                 
|Income allocated to the Fund from Belvedere Company                                |  | $                 
|Expenses allocated to Belvedere Company from the
      Portfolio                   |  | $                 
|Expenses allocated to the Fund from Belvedere Company                              |  | $                 
|Net realized gain (loss) from investment transactions, securities
      sold short |  |                   
|and foreign currency transactions allocated to
      Belvedere Company             |  |                   
|from the Portfolio                                                                 |  | $                 
|Net realized gain (loss) from investment transactions, securities
      sold short |  |                   
|and foreign currency transactions allocated to the
      Fund from Belvedere       |  |                   
|Company                                                                            |  | $                 
|Net change in unrealized appreciation (depreciation) of
      investments,         |  |                   
|securities sold short and foreign currency
      allocated to Belvedere            |  |                   
|Company from the Portfolio                                                         |  | $                 
|Net change in unrealized appreciation (depreciation) of
      investments,         |  |                   
|securities sold short and foreign currency
      allocated to the Fund from        |  |                   
|Belvedere Company                                                                  |  | $                 
|                                                                                  

|(1) | As of March 31, 2006 and 2005, the value of
      Belvedere Companys interest in the Portfolio represents 71.4% and 67.7%
      of the Portfolios net assets, respectively.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) | As of March 31, 2006 and 2005, the Funds
      investment in Belvedere Company represents 9.6% and 12.4% of Belvedere
      Companys net assets, respectively.             
|   

A summary of the Portfolios Statement of Assets and
Liabilities at March 31, 2006, December 31, 2005 and March 31, 2005 and its
operations for the three months ended March 31, 2006, for the year ended
December 31, 2005 and for the three months ended March 31, 2005 follows:

|                                 |  | March 31, 2006 |  | December 31, 2005 |  | March 31, 2005
|-------------------------------- |  | -------------- |  | ----------------- |  | --------------
|                                 |  |               
|Investments, at value            |  | $              |  | 19,489,204,023    |  | $             
|Other assets                     |  |                |  | 82,793,817        |  |               
|                                
|Total assets                     |  | $              |  | 19,571,997,840    |  | $             
|                                
|Collateral for securities loaned |  | $              |  | 96,708,244        |  | $             
|Demand note payable              |  |                |  | 16,300,000        |  |               
|Management fee payable           |  |                |  | 6,942,089         |  |               
|Other liabilities                |  |                |  | 320,675           |  |               
|                                
|Total liabilities                |  | $              |  | 120,271,008       |  | $             
|                                
|Net assets                       |  | $              |  | 19,451,726,832    |  | $             
|                                

11

|                               |  | March 31, 2006 |  | December 31, 2005 |  | March 31, 2005
|------------------------------ |  | -------------- |  | ----------------- |  | --------------
|                               |  |               
|Dividends and interest         |  | $              |  | 79,789,760        |  | $             
|                              
|Investment adviser fee         |  | $              |  | 20,700,926        |  | $             
|Other expenses                 |  |                |  | 370,255           |  |               
|Total expense reductions       |  |                |  | -                 |  |               
|                              
|Net expenses                   |  | $              |  | 21,071,181        |  | $             
|                              
|Net investment income          |  | $              |  | 58,718,579        |  | $             
|Net realized gain (loss) from  |  |                |  |                   |  |               
|investment transactions,       |  |                |  |                   |  |               
|securities sold short and      |  |                |  |                   |  |               
|foreign currency transactions  |  |                |  | 444,361,395       |  |               
|Net change in unrealized       |  |                |  |                   |  |               
|appreciation (depreciation)    |  |                |  |                   |  |               
|of investments, securities     |  |                |  |                   |  |               
|sold short and foreign         |  |                |  |                   |  |               
|currency                       |  |                |  | 563,623,384       |  |               
|                              
|Net increase (decrease) in net |  |                |  |                   |  |               
|assets from operations         |  | $              |  | 1,066,703,358     |  | $             
|                              



|4 Interest Rate Swap
  Agreements
|---------------------------------

Belair Capital has entered into interest rate swap
agreements with Merrill Lynch Capital Services, Inc.tofix the cost of a substantial portion of its borrowings
under the Credit Facility used to acquire equity in real estate investments.
Under such agreements, Belair Capital has agreed to make periodic payments at
fixed rates in exchange for payments at floating rates. The notional or
contractual amounts of these instruments may not necessarily represent the
amounts potentially subject to risk. The measurement of the risks associated
with these investments is meaningful only when considered in conjunction with
all related assets, liabilities and agreements. Interest rate swap agreements in
place at March 31, 2006 and December 31, 2005 are listed below.

|          |  | Notional |  |        |  |               |  | Initial     |  |             |  |                            |  |                   |  |           |  |          
|--------- |  | -------- |  | ------ |  | ------------- |  | ----------- |  | ----------- |  | -------------------------- |  | ----------------- |  | --------- |  | ---------
|          |  | Amount   |  |        |  |               |  | Optional    |  | Final       |  | Unrealized Appreciation at
|Effective |  | (000's   |  | Fixed  |  | Floating      |  | Termination |  | Termination |  |                           
|Date      |  | omitted) |  | Rate   |  | Rate          |  | Date        |  | Date        |  | March 31, 2006             |  | December 31, 2005
|         
|10/03     |  | $ 20,000 |  | 4.045% |  | LIBOR + 0.30% |  | -           |  | 06/10       |  | $                          |  | 1,089,312         |  | $         |  | 824,248  
|10/03     |  | 61,500   |  | 4.865% |  | LIBOR + 0.30% |  | 07/04       |  | 06/10       |  |                            |  | 1,810,561         |  |           |  | 1,274,996
|10/03     |  | 75,000   |  | 4.795% |  | LIBOR + 0.30% |  | 09/04       |  | 06/10       |  |                            |  | 2,367,855         |  |           |  | 1,699,814
|10/03     |  | 42,000   |  | 4.69%  |  | LIBOR + 0.30% |  | 02/05       |  | 06/10       |  |                            |  | 1,463,271         |  |           |  | 1,077,646
|10/03     |  | 49,000   |  | 4.665% |  | LIBOR + 0.30% |  | 03/05       |  | 06/10       |  |                            |  | 1,745,884         |  |           |  | 1,292,989
|10/03     |  | 35,330   |  | 4.18%  |  | LIBOR + 0.30% |  | 07/09       |  | 06/10       |  |                            |  | 1,786,691         |  |           |  | 1,352,825
|02/04     |  | 95,952   |  | 5.00%  |  | LIBOR + 0.30% |  | 08/04       |  | 06/10       |  |                            |  | 2,442,188         |  |           |  | 1,646,911
|         
|          |  |          |  |        |  |               |  |             |  |             |  | $  
      12,705,762       |  | $                 |  | 9,169,429
|         



|5 Segment
Information
|---------------------

Belair Capital pursues its investment objective
primarily by investing indirectly in the Portfolio through Belvedere Company.
The Portfolio is a diversified investment company that emphasizes investments in
common stocks of domestic and foreign growth companies that are considered by
its investment adviser to be high in quality and attractive in their long-term
investment prospects. Separate from its investment in

12

Belvedere Company, Belair Capital invests in real
estate assets through its subsidiary, Belair Real Estate. Belair Real Estate
invests directly and indirectly in Partnership Preference Units, debt and common
equity investments in private real estate companies and in real property through
a controlled subsidiary, Elkhorn Property Trust, and formerly invested in Bel
Residential (for the period during which Belair Real Estate maintained an
interest in Bel Residential).

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

|                                                                                |   | Tax-Managed             |            |              |   |                 |           |                        |   |           
|------------------------------------------------------------------------------- | - | ----------------------- | ---------- | ------------ | - | --------------- | --------- | ---------------------- | - | ----------
|For the Three Months Ended                                                      |   | Growth                  |            | Real         |   |                 |           |                       
|March 31, 2006                                                                  |   | Portfolio*              |            | Estate       |   | Total          
|                                                                               
|Revenue                                                                         |   | $                       |            | 3,625,833    |   | $               |           | 7,624,042              |   | $         
|Interest expense on mortgage                                                    |   |                         |            | -            |   |                 |           | (1,947,612)            |   |           
|Interest expense on Credit Facility                                             |   |                         |            | -            |   |                 |           | (4,342,187)            |   |           
|Operating expenses                                                              |   |                         |            | (595,997)    |   |                 |           | (2,344,979)            |   |           
|Minority interest in net income of controlled                                   |   |                         |            |              |   |                 |           |                        |   |           
|subsidiary                                                                      |   |                         |            | -            |   |                 |           | (736)                  |   |           
|                                                                               
|Net investment income (loss)                                                    |   | $                       |            | 3,029,836    |   | $               |           | (1,011,472)            |   | $         
|Net realized gain                                                               |   |                         |            | 11,859,643   |   |                 |           | 276,356                |   |           
|Net change in unrealized appreciation (depreciation)                            |   |                         |            | 41,534,811   |   |                 |           | 2,996,351              |   |           
|                                                                               
|Net increase in net assets from
      operations of   reportable
      segments |   |                         |            |              |   |                 |           |                        |   |           
|                                                                                | $ |                         | 56,424,290 |              | $ |                 | 2,261,235 |                        | $ |           
|                                                                               
|                                                                                |   |                         |            |              |   |                 |           |                        |   |           
|                                                                                |   |                         |            |              |   |                 |           |                        |   |           
|                                                                                |   |                         |            |              |   |                 |           |                        |   |           
|                                                                                |   | Tax-Managed             |            |              |   |                 |           |                        |   |           
|For the Three Months Ended                                                      |   | Growth                  |            | Real         |   |                 |           |                       
|March 31, 2005                                                                  |   | Portfolio*              |            | Estate       |   | Total          
|                                                                               
|Revenue                                                                         |   | $                       |            | 4,202,988    |   | $    11,974,434 |           | $                      |   | 16,177,422
|Interest expense on mortgages                                                   |   |                         |            | -            |   |                 |           | (2,770,605)            |   |           
|Interest expense on Credit Facility                                             |   |                         |            | -            |   |                 |           | (3,006,468)            |   |           
|Operating expenses                                                              |   |                         |            | (687,803)    |   |                 |           | (3,354,884)            |   |           
|Minority interests in net income of controlled                                  |   |                         |            |              |   |                 |           |                        |   |           
|subsidiaries                                                                    |   |                         |            | -            |   |                 |           | (259,420)              |   |           
|                                                                               
|Net investment income                                                           |   | $                       |            | 3,515,185    |   | $               |           | 2,583,057              |   | $         
|Net realized gain (loss)                                                        |   |                         |            | (1,353,089)  |   |                 |           | 560,693                |   |           
|Net change in unrealized appreciation (depreciation)                            |   |                         |            | (36,552,996) |   |                 |           | 5,710,984              |   |           
|                                                                               
|Net increase (decrease) in net assets from                                      |   |                         |            |              |   |                 |           |                        |   |           
|operations of reportable
      segments                                         |   | $  
       (34,390,900) |            | $            |   | 8,854,734       |           | $  
      (25,536,166)
|                                                                               

* Belair Capital invests indirectly in Tax-Managed
Growth Portfolio through Belvedere Company.

13

The following table reconciles the reported segment
information to the condensed consolidated financial statements for the periods
indicated:

|                                                                          |  | Three Months   |  | Three Months  
|------------------------------------------------------------------------- |  | -------------- |  | --------------
|                                                                          |  | Ended          |  | Ended         
|                                                                          |  | March 31, 2006 |  | March 31, 2005
|                                                                          |  |               
|Revenue:                                                                  |  |                |  |               
|Revenue from reportable segments                                          |  | $              |  | 11,249,875    
|Unallocated amounts:                                                      |  |                |  |               
|Interest earned on cash not
      invested in the                         |  |                |  |               
|Portfolio or in subsidiaries                                              |  |                |  | 80,311        
|                                                                          |  |               
|Total revenue                                                             |  | $              |  | 11,330,186    
|                                                                          |  |               
|Net increase (decrease) in net assets from
      operations:              |  |                |  |               
|Net increase (decrease) in net assets from operations
      of reportable |  |                |  |               
|segments                                                                  |  | $              |  | 58,685,525    
|Unallocated investment income:                                            |  |                |  |               
|Interest earned on cash not
      invested in the                         |  |                |  |               
|Portfolio or in subsidiaries                                              |  |                |  | 80,311        
|Unallocated expenses (1):                                                 |  |                |  |               
|Servicing fees                                                            |  |                |  | (101,850)     
|Interest expense on Credit
      Facility                                 |  |                |  | (889,364)     
|Audit, tax and legal fees                                                 |  |                |  | (45,308)      
|Other operating expenses                                                  |  |                |  | (19,266)      
|                                                                          |  |               
|Net increase (decrease) in net assets from
      operations               |  | $              |  | 57,710,048    
|                                                                          |  |               

|(1) | Unallocated expenses represent costs
      incurred that pertain to the overall operation of Belair Capital, and do
      not pertain to either operating segment.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

The following tables reconcile the reported segment
information to the condensed consolidated financial statements as of March 31,
2006 and December 31, 2005:

|                                                      |  | Tax-Managed       |  |               |  | Real   |  |              |  |      
|----------------------------------------------------- |  | ----------------- |  | ------------- |  | ------ |  | ------------ |  | -----
|At March 31, 2006                                     |  | Growth Portfolio* |  |               |  | Estate |  |              |  | Total
|                                                     
|Segment assets                                        |  | $                 |  | 1,334,294,690 |  | $      |  | 436,546,210  |  | $    
|Segment liabilities                                   |  |                   |  | 7,765,854     |  |        |  | 509,306,287  |  |      
|                                                     
|Net assets (liabilities) of reportable
      segments |  | $                 |  | 1,326,528,836 |  | $      |  | (72,760,077) |  | $    
|                                                     
|                                                      |  |                   |  |               |  |        |  |              |  |      
|                                                      |  |                   |  |               |  |        |  |              |  |      
|                                                      |  | Tax-Managed       |  |               |  | Real   |  |              |  |      
|At December 31, 2005                                  |  | Growth Portfolio* |  |               |  | Estate |  |              |  | Total
|                                                     
|Segment assets                                        |  | $                 |  | 1,357,703,240 |  | $      |  | 453,319,971  |  | $    
|Segment liabilities                                   |  |                   |  | 1,613,849     |  |        |  | 528,324,724  |  |      
|                                                     
|Net assets (liabilities) of reportable
      segments |  | $                 |  | 1,356,089,391 |  | $      |  | (75,004,753) |  | $    
|                                                     

*Belair Capital invests indirectly in Tax-Managed
Growth Portfolio through Belvedere Company.

14

|                                              |  | March 31, 2006        |  | December 31, 2005    
|--------------------------------------------- |  | --------------------- |  | ---------------------
|                                              |  |                       |  |                      
|Net assets:                                   |  |                       |  |                      
|Net assets of reportable segments             |  | $
      1,253,768,759 |  | $ 1,281,084,638      
|Unallocated amounts:                          |  |                       |  |                      
|Cash (1)                                      |  | 2,626,206             |  | 2,630,667            
|Short-term investments (1)                    |  | 6,077,000             |  | 5,320,225            
|Loan payable  Credit Facility (2)            |  | (73,695,141)          |  | (44,021,653)         
|Payable to affiliate for servicing
      fees |  | (101,821)             |  | (112,496)            
|Other liabilities                             |  | (250,907)             |  | (210,538)            
|                                              |  |                       |  |                      
|Net assets                                    |  | $ 1,188,424,096       |  | $
      1,244,690,843
|                                              |  |                       |  |                      

|(1) | Unallocated cash and short-term investments
      represent cash and cash equivalents not invested in the Portfolio or real
      estate assets.                                                                                                                                     
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) | Unallocated amount of loan payable  Credit
      Facility represents borrowings not specifically used to fund real estate
      investments. Such borrowings are generally used to pay selling
      commissions, organization expenses and other liquidity needs of the
      Fund.
|   

15

Item 2. Managements Discussion and Analysis
of Financial Condition (MD&A) and Results of Operations.

The information in this report contains
forward-looking statements within the meaning of the federal securities laws.
Forward-looking statements typically are identified by use of terms such as
may, will, should, might, expect, anticipate, estimate, and
similar words, although some forward-looking statements are expressed
differently. The actual results ofBelair Capital
Fund LLC (the Fund)could differ materially from
those contained in the forward-looking statements due to a number of factors.
The Fund undertakes no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events, or otherwise,
except as required by applicable law. Factors that could affect the Funds
performance include a decline in the U.S. stock markets or in general economic
conditions, adverse developments affecting the real estate industry, or
fluctuations in interestrates.

The following discussion should be read in
conjunction with the Fundsunaudited condensed
consolidated financial statementsand related notesin Item 1 above.

MD&A and Results of Operations for the
Quarter EndedMarch 31,
2006Compared to the Quarter EndedMarch 31, 2005.

Performance of the
Fund.(1)The Funds
investment objective is to achieve long-term, after-tax returns for
shareholders.Eaton Vance Management (Eaton
Vance), as the Funds manager, measures the Funds success
in achieving its objective based on the investment returns of the Fund, using
the S&P 500 Index as the Funds primary performance benchmark. The S&P
500 Index is a broad-based, unmanaged market index of common stocks commonly
used as a measure of U.S. stock market performance. Eaton Vances primary focus
in pursuing total return is on the Funds common stock portfolio, which consists
of its indirect interest in Tax-Managed Growth Portfolio (the Portfolio). The
Fund invests in the Portfolio through its interest in Belvedere Capital Fund
Company LLC (Belvedere Company). The Funds performance will differ from that of
the Portfolio due to its investments outside the Portfolio. In measuring the
performance of the Funds real estate investments, Eaton Vance considers
whether, through current returns and changes in valuation, the real estate
investments achieve returns that over the long-term exceed the cost of the
borrowing incurred to acquire such investments and thereby add to Fund returns.
The Fund has entered into interest rate swap agreements to fix the costs of a
substantial portion of its borrowings under the Credit Facility (described under
"Liquidity and Capital Resources" below) and to mitigate in part the impact of
interest rate changes on the Funds net asset value.

The Funds total return was4.83% for the quarter endedMarch 31, 2006. This return reflectsan increasein the Funds net asset value per share
from $132.33to $133.83 and a distribution of $4.71 per shareduring
the period. The total return of the S&P 500 Index was4.21% over the same period. Last year, the Fund had
a total return performance of-1.71%for the quarter ended March 31, 2005.
This return reflecteda decreasein
the Funds net asset value per share from $126.88to $122.30 and a
distribution of $2.38 per shareduring the period. The
S&P 500 Index had a total return of-2.15% over the same period.

Performance of the Portfolio.In the face of rising interest rates and oil
prices, U.S. equities managed to post healthy results during the first quarter
of 2006. The S&P 500 and Dow Jones Industrials Indices had their strongest
quarterly advance in years, each gaining more than 4%. The NASDAQ Composite
gained an even more impressive 6.1% during the quarter. Mixed economic and
earnings reports were offset by positive news of benign inflation and healthy
capital spending. Small- and mid-cap stocks once again outperformed large-cap
investments and the large-cap value style continued to outperform the large-cap
growth style. For the quarter ended March 31, 2006, the Portfolios total return
was 4.34%, outperforming the S&P 500 Index return of 4.21% over the same
period. For comparison, during the first quarter of 2005, the Portfolio posted a
total return of -1.98%.

Telecommunication and energy were the best
performing sectors of the S&P 500 Index during the first quarter of 2006,
while the utilities and health care sectors were the weakest performers. Market
leading industries in the first quarter included construction materials,
communication equipment and diversified telecommunications. In contrast,
internet software, consumer services and catalog retailers were among the worst
performing industries.

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

16

The Portfolios modest outperformance versus the
S&P 500 Index during the quarter was driven by its sector allocation and
industry diversification. The Portfolios overweighting of the outperforming
industrials sector and the strong performing air freight logistics, machinery
and investment brokerage industries was beneficial. During the quarter, the
Portfolio maintained an underweighting of the utilities sector, which was
beneficial given the price declines experienced by independent power producers
and electric utilities stocks over the period. Stock selection within the health
care and consumer discretionary sectors also contributed positively to returns
during the quarter.

While the Portfolios continued overweighting of the
energy sector, which continues to benefit from rising oil prices, remained
positive, its holdings within the oil and gas exploration and production
industry delivered sub-par results. Relatively weak performance of semiconductor
and IT services stocks, as well as an underweighting of the outperforming
telecommunications sector, also negatively impacted returns. Commodity related
investments, such as copper, gold and aluminum stocks, registered impressive
gains and the Portfolio benefited from its allocation to and selections within
the metals and mining industry.

Performance of Real Estate Investments.The Funds real estate investments are held through
Belair Real Estate Corporation (Belair Real Estate). As of March 31, 2006, real
estate investments included a majority interest in a real estate joint venture
(Real Estate Joint Venture), Elkhorn Property Trust (Elkhorn), a portfolio of
income producing preferred equity interests in real estate operating
partnerships that are generally affiliated with and controlled by real estate
investment trusts (REITs) that are publicly-traded (Partnership Preference
Units) and certain debt and common equity investments of two private real estate
companies. Elkhorn owns industrial distribution properties. As of March 31,
2006, the estimated fair value of the Funds real estate investments represented
23.6% of the Funds total assets on a consolidated basis. After adjusting for
the minority interest in Elkhorn, the Funds real estate investmets represented
32.5% of the Funds net assets as of March 31, 2006.

During the quarter ended March 31, 2006, rental
income from real estate operations was approximately $3.6 million compared to
approximately $6.6 million for the quarter ended March 31, 2005, a decrease of
$3.0 million or 45%. This decrease in rental income was due to Belair Real
Estates February 2005 sale of its interest in a multifamily Real Estate Joint
Venture, Bel Residential Properties Trust (Bel Residential), and a modest
decrease in the rental income of Elkhorn. For the quarter ended March 31, 2006,
Elkhorns rental income was in line with expectations. During the quarter ended
March 31, 2005, rental income increased due to Belair Real Estates ownership of
interests in two Real Estate Joint Ventures during much of the quarter ended
March 31, 2005 compared to an ownership interest in only one Real Estate Joint
Venture during the quarter ended March 31, 2004.

During the quarter ended March 31, 2006, property
operating expenses were approximately $1.6 million compared to approximately
$2.4 million for the quarter ended March 31, 2005, a decrease of $0.8 million or
33% (property operating expenses are before certain operating expenses of Belair
Real Estate of approximately $0.8 million for the quarter ended March 31, 2006
and $1.0 million for the quarter ended March 31, 2005). The decrease in property
operating expenses was due to the sale of Bel Residential referenced in the
preceding paragraph, offset in part by increases in the operating expenses of
Elkhorn. For the quarter ended March 31, 2006, Elkhorns property operating
expenses were in line with expectations. Property operating expenses for the
quarter ended March 31, 2005 decreased principally due to Belair Real Estates
sale of its interests in Bel Residential during the quarter ended March 31,
2005, offset in part by the operating expenses of properties owned by
Elkhorn.

For many industrial distribution properties, rent
levels are expected to see minimal growth over the near term. Boston Management
and Research (Boston Management) expects that improvements in industrial
distribution property operating performance will occur over the longer
term.

At March 31, 2006, the estimated fair value of the
real properties indirectly held through Belair Real Estate was approximately
$176.6 million compared to approximately $174.2 million at December 31, 2005, an
increase of $2.4 million, or 1%. The increase in estimated real property values
at March 31, 2006 as compared to December 31, 2005 resulted from modest net
increases in the estimated values of the industrial properties held by Elkhorn.
Despite weak market conditions over the past several years, property values have
increased as lower near-term property earnings expectations generally have been
offset by lower capitalization and discount rates applied in valuing the
properties.

During the quarter ended March 31, 2006, the Fund
saw net unrealized appreciation of the estimated fair value of its other real
estate investments (which includes Elkhorn and certain debt and common equity
investments) of approximately $5.0 million compared to unrealized appreciation
of approximately $0.2 million during the quarter ended March 31, 2005. Net
unrealized appreciation of approximately $5.0 million during the quarter ended
March 31, 2006 consisted of approximately

17

$1.5 million of net increases in the estimated fair
value of the properties of Elkhorn and approximately $3.5 million of increases
in the value of certain debt and common equity investments. Net unrealized
appreciation of approximately $0.2 million during the quarter ended March 31,
2005 consisted of approximately $1.6 million of unrealized appreciation in the
estimated fair value of the properties of Elkhorn, offset in part by the
reclassification of previously recorded unrealized appreciation to realized
gains in the amount of $1.4 million in connection with the sale of Belair Real
Estates interest in Bel Residential.

During the quarter ended March 31, 2006, Belair Real
Estate sold certain of its Partnership Preference Units totaling approximately
$18.8 million (representing sales to real estate investment affiliates of other
investment funds advised by Boston Management), recognizing a gain of
approximately $0.2 million on the transactions. At March 31, 2006, the estimated
fair value of Belair Real Estates Partnership Preference Units totaled
approximately $236.4 million compared to approximately $260.6 million at
December 31, 2005, a net decrease of $24.2 million or 9%. The net decrease in
value was principally due to fewer Partnership Preference Units held at March
31, 2006 compared to December 31, 2005, and in addition, in the current
environment, estimated fair values for Partnership Preference Units have been
negatively impacted by rising interest rates, offset in part by tighter credit
spreads for credit-sensitive income securities, including real estate-related
securities.

During the quarter ended March 31, 2006, the Fund
saw net unrealized depreciation of the estimated fair value of its Partnership
Preference Units of approximately $5.6 million compared to net unrealized
appreciation of approximately $0.6 million during the quarter ended March 31,
2005. The net unrealized depreciation of approximately $5.6 million during the
quarter ended March 31, 2006 consisted of approximately $5.5 million of
unrealized depreciation as a result of decreases in the per unit values of
Partnership Preference Units held by Belair Real Estate at March 31, 2006, and
approximately $0.1 million of unrealized depreciation resulting from the
reclassification of previously recorded unrealized appreciation to realized
gains due to the sales of Partnership Preference Units during the quarter ended
March 31, 2006. The net unrealized appreciation of approximately $0.6 million
during the quarter ended March 31, 2005 occurred as a result of increases in the
per unit values of Partnership Preference Units held by Belair Real
Estate.

Distributions from Partnership Preference Units for
the quarter ended March 31, 2006 totaled approximately $4.0 million compared to
approximately $5.3 million for the quarter ended March 31, 2005, a decrease of
$1.3 million or 25%. The decrease was principally due to fewer Partnership
Preference Units held on average during the quarter. For the quarter ended March
31, 2005, the decrease was due to fewer Partnership Preference Units held on
average, as well as to lower average distribution rates for the Partnership
Preference Units held.

Performance of Interest Rate Swap Agreements.For the quarter ended March 31, 2006, net realized
and unrealized gains on the Funds interest rate swap agreements totaled
approximately $3.6 million, compared to net realized and unrealized gains of
approximately $3.1 million for the quarter ended March 31, 2005. Net realized
and unrealized gains on swap agreements in 2006 consisted of $3.5 million of net
unrealized gains due to changes in swap agreement valuations and $0.1 million of
periodic payments received pursuant to outstanding swap agreements (and
classified as net realized gains on interest rate swap agreements in the Funds
consolidated financial statements). For the quarter ended March 31, 2005, the
Fund had net unrealized gains of $4.9 million due to swap agreement valuation
changes, offset by $1.8 million of swap agreement periodic payments made. The
positive impact on Fund performance for the quarters ended March 31, 2006 and
2005 from changes in swap agreement valuations was attributable to increases in
swap rates during the periods.



|Liquidity and Capital
      Resources.
|--------------------------------------

Outstanding Borrowings.The Fund has entered into credit arrangements with DrKW Holdings, Inc.
and Merrill Lynch Mortgage Capital, Inc. (collectively, the Credit Facility)
primarily to finance the Funds real estate investments and will continue to use
the Credit Facility for such purpose in the future. The Credit Facility may also
be used for other purposes, including any liquidity needs of the Fund. In the
future, the Fund may increase the size of the Credit Facility (subject to lender
consent) and the amount of outstanding borrowings thereunder. As ofMarch 31, 2006, the Fund had outstanding borrowings
of $437.0 millionand unused loan
commitments of $89.0 millionunder the
CreditFacility.

The Fund has entered into interest rate swap
agreements with respect to a substantial portion of its real estate investments
and associated borrowings. Pursuant to these agreements, the Fund makes periodic
payments to the counterparty at predetermined fixed rates in exchange for
floating-rate payments that fluctuate withone-month
LIBOR. During the terms of the outstanding interest rate
swap agreements, changes in the underlying values of the agreements are recorded
as unrealized appreciation or depreciation. As ofMarch 31,
2006, the accumulated unrealizedappreciationrelated to the

18

interest rate swap agreements was approximately$12.7 million. As ofDecember 31, 2005, the accumulated unrealizedappreciationrelated to the interest
rate swap agreements was approximately$9.2
million.

Item 3. Quantitative and Qualitative
Disclosures About Market Risk.

Interest Rate Risk.The Funds primary exposure to interest rate risk arises from its real
estate investments that are financed by the Fund with floating rate borrowings
under the Credit Facility and by fixed-rate secured mortgage debt obligations ofElkhorn. Partnership Preference Units
are fixed rate instruments whose values will generally decrease when interest
rates rise and increase when interest rates fall. The interest rates on
borrowings under the Credit Facility are reset at regular intervals based on
one-month LIBOR. The Fund has entered intointerestrate swap agreements to fix the cost of a
substantial portion of its borrowings under the Credit Facility used to acquire
equity in real estate investments and to mitigate in part the impact of interest
rate changes on the Funds net asset value. Under the terms of the interest rate
swap agreements, the Fund makes cash payments at fixed rates in exchange for
floating rate payments that fluctuate withone-month
LIBOR. The Funds interest rate swap agreements will
generally increase in value when interest rates rise and decrease in value when
interest rates fall. In the future, the Fund may use other interest rate hedging
arrangements (such as caps, floors and collars) to fix or limit borrowing costs.
The use of interest rate hedging arrangements is a specialized activity that can
expose the Fund to significant loss.

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



|Interest Rate
      SensitivityCost, Principal (Notional)
      Amountby Contractual Maturity and Callable
      Datefor theTwelve Months
      Ended March 31,*
|----------------------------------------------------------------------------------------------------------------------------------------------------------------

|                            |  |      |  |      |  |      |  |      |  |              |  |              |  |              |  | Estimated 
         Fair
      Value        as of     March
      31,        2006
|--------------------------- |  | ---- |  | ---- |  | ---- |  | ---- |  | ------------ |  | ------------ |  | ------------ |  | ---------------------------------------------------------------------------------
|                            |  |      |  |      |  |      |  |      |  |              |  |              |  |              | 
|                            |  |      |  |      |  |      |  |      |  |              |  |              |  |              | 
|                            |  |      |  |      |  |      |  |      |  |              |  |              |  |              | 
|                            |  | 2007 |  | 2008 |  | 2009 |  | 2010 |  | 2011         |  | Thereafter   |  | Total        | 
|                           
|Rate sensitive liabilities: |  |      |  |      |  |      |  |      |  |              |  |              |  |              |  |                                                                                  
|                            |  |      |  |      |  |      |  |      |  |              |  |              |  |              |  |                                                                                  
|Long-term debt:             |  |      |  |      |  |      |  |      |  |              |  |              |  |              |  |                                                                                  
|                            |  |      |  |      |  |      |  |      |  |              |  |              |  |              |  |                                                                                  
|Fixed-rate mortgage         |  |      |  |      |  |      |  |      |  |              |  | $135,000,000 |  | $135,000,000 |  | $134,900,000                                                                     
|Average interest rate       |  |      |  |      |  |      |  |      |  |              |  | 5.67%        |  | 5.67%        |  |                                                                                  
|                            |  |      |  |      |  |      |  |      |  |              |  |              |  |              |  |                                                                                  
|Variable-rate Credit        |  |      |  |      |  |      |  |      |  |              |  |              |  |              |  |                                                                                  
|Facility                    |  |      |  |      |  |      |  |      |  | $437,000,000 |  |              |  | $437,000,000 |  | $437,000,000                                                                     
|Average interest rate       |  |      |  |      |  |      |  |      |  | 5.13%        |  |              |  | 5.13%        |  |                                                                                  
|                            |  |      |  |      |  |      |  |      |  |              |  |              |  |              |  |                                                                                  
|Rate sensitive derivative   |  |      |  |      |  |      |  |      |  |              |  |              |  |              |  |                                                                                  
|financial instruments:      |  |      |  |      |  |      |  |      |  |              |  |              |  |              |  |                                                                                  
|                            |  |      |  |      |  |      |  |      |  |              |  |              |  |              |  |                                                                                  
|Pay fixed/ receive variable |  |      |  |      |  |      |  |      |  |              |  |              |  |              |  |                                                                                  
|interest rate swap          |  |      |  |      |  |      |  |      |  |              |  |              |  |              |  |                                                                                  
|agreements                  |  |      |  |      |  |      |  |      |  | $378,782,000 |  |              |  | $378,782,000 |  | $12,705,762                                                                      
|Average pay rate            |  |      |  |      |  |      |  |      |  | 4.73%        |  |              |  | 4.73%        |  |                                                                                  
|Average receive rate        |  |      |  |      |  |      |  |      |  | 5.13%        |  |              |  | 5.13%        |  |                                                                                  
|                           
|Rate sensitive              |  |      |  |      |  |      |  |      |  |              |  |              |  |              |  |                                                                                  
|investments:                |  |      |  |      |  |      |  |      |  |              |  |              |  |              |  |                                                                                  
|                            |  |      |  |      |  |      |  |      |  |              |  |              |  |              |  |                                                                                  

19

|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |             | Estimated 
         Fair
      Value        as of     March
      31,        2006
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------- | ---- |  | ---- |  | ---- | ----------- | ---- | ----------- | ---- |  | ---------- | ----------- | ----- | ----------- | ---------------------------------------------------------------------------------
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             | 2007 |  | 2008 |  | 2009 |             | 2010 |             | 2011 |  | Thereafter |             | Total |            
|                                                                                                                                                                               
|Fixed-rate Partnership                                                                                                                                                          |             |      |  |      |  |      |             |      |             |      |  |            |             |       |             |                                                                                  
|Preference Units:                                                                                                                                                               |             |      |  |      |  |      |             |      |             |      |  |            |             |       |             |                                                                                  
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |             |                                                                                  
|Colonial Realty Limited 
      Partnership, 7.25%  Series
      B Cumulative  Redeemable
      Perpetual  Preferred Units, 
      Callable 8/24/09,  Current
      Yield: 7.48% |             |      |  |      |  |      |             |      |             |      |  |            |             |       |             |                                                                                  
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      | $17,918,598 |      |             |      |  |            | $17,918,598 |       | $19,868,600
|Essex Portfolio L.P., 
      7.875% Series D  Cumulative Redeemable  Preferred
      Units,  Callable 7/28/10, 
      Current Yield: 7.77%                                      |             |      |  |      |  |      |             |      |             |      |  |            |             |       |             |                                                                                  
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      | $15,399,300 |      |  |            | $15,399,300 |       | $15,199,980
|Liberty Property Limited 
      Partnership, 7.45%  Series
      B Cumulative  Redeemable
      Preferred  Units, Callable
      8/31/09,  Current Yield: 7.41%                 |             |      |  |      |  |      |             |      |             |      |  |            |             |       |             |                                                                                  
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      | $22,750,000 |      |             |      |  |            | $22,750,000 |       | $22,859,200
|MHC Operating Limited 
      Partnership, 8.0625%  Series D Cumulative  Redeemable
      Perpetual  Preference Units, 
      Callable 3/24/10,  Current
      Yield: 8.14%      |             |      |  |      |  |      |             |      |             |      |  |            |             |       |             |                                                                                  
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      | $50,000,000 |      |             |      |  |            | $50,000,000 |       | $49,540,000
|National Golf Operating 
      Partnership, L.P., 11%  Series A Cumulative  Redeemable
      Preferred  Units, Callable
      2/6/03,  Current Yield: 10.43%                    |             |      |  |      |  |      |             |      |             |      |  |            |             |       |             |                                                                                  
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                | $31,454,184 |      |  |      |  |      |             |      |             |      |  |            | $31,454,184 |       | $34,818,924
|National Golf Operating 
      Partnership, L.P., 11%  Series B Cumulative  Redeemable
      Preferred  Units, Callable
      2/6/03,  Current Yield: 10.43%                    |             |      |  |      |  |      |             |      |             |      |  |            |             |       |             |                                                                                  
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                | $5,000,000  |      |  |      |  |      |             |      |             |      |  |            | $5,000,000  |       | $5,272,000 
|PSA Institutional Partners, 
      L.P., 6.4% Series NN  Cumulative Redeemable  Perpetual
      Preferred Units,  Callable
      3/17/10,  Current Yield: 6.86%                 |             |      |  |      |  |      |             |      |             |      |  |            |             |       |             |                                                                                  
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      |             |      |             |      |  |            |             |       |            
|                                                                                                                                                                                |             |      |  |      |  |      | $29,541,670 |      |             |      |  |            | $29,541,670 |       | $27,505,800
|                                                                                                                                                                                |             |      |  |      |  |      |             | 20   |             |      |  |            |             |       |             |                                                                                  

|                                                                                                                                               |  |      |             |      |             |      |             |      |  |            |             |            |             | Estimated 
         Fair Value     
           as of   
       March 31,         
       2006
|---------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ----------- | ---- | ----------- | ---- | ----------- | ---- |  | ---------- | ----------- | ---------- | ----------- | ---------------------------------------------------------------------------------------------
|                                                                                                                                               |  |      |             |      |             |      |             |      |  |            |             |            |            
|                                                                                                                                               |  |      |             |      |             |      |             |      |  |            |             |            |            
|                                                                                                                                               |  |      |             |      |             |      |             |      |  |            |             |            |            
|2007                                                                                                                                           |  | 2008 |             | 2009 |             | 2010 |             | 2011 |  | Thereafter |             | Total      |            
|                                                                                                                                              
|Regency Centers, L.P.,  7.45% Series D  Cumulative
      Redeemable  Preferred Units, 
      Callable 9/29/09,  Current
      Yield: 7.39%     |  |      |             |      |             |      |             |      |  |            |             |            |             |                                                                                              
|                                                                                                                                               |  |      |             |      |             |      |             |      |  |            |             |            |            
|                                                                                                                                               |  |      |             |      |             |      |             |      |  |            |             |            |            
|                                                                                                                                               |  |      |             |      |             |      |             |      |  |            |             |            |            
|                                                                                                                                               |  |      |             |      |             |      |             |      |  |            |             |            |            
|                                                                                                                                               |  |      |             |      | $19,310,868 |      |             |      |  |            | $19,310,868 |            | $18,149,400
|Vornado Realty, L.P., 7% 
      Series D-10 Cumulative  Redeemable Preferred  Units,
      Callable 11/17/08,  Current Yield:
      7.15%(1)   |  |      |             |      |             |      |             |      |  |            |             |            |             |                                                                                              
|                                                                                                                                               |  |      |             |      |             |      |             |      |  |            |             |            |            
|                                                                                                                                               |  |      |             |      |             |      |             |      |  |            |             |            |            
|                                                                                                                                               |  |      |             |      |             |      |             |      |  |            |             |            |            
|                                                                                                                                               |  |      | $21,880,979 |      |             |      |             |      |  |            | $21,880,979 |            | $23,493,524
|Vornado Realty, L.P.,  6.75% Series D-14  Cumulative
      Redeemable  Preferred Units, 
      Callable 9/9/10,  Current
      Yield: 6.86%(2) |  |      |             |      |             |      |             |      |  |            |             |            |             |                                                                                              
|                                                                                                                                               |  |      |             |      |             |      |             |      |  |            |             |            |            
|                                                                                                                                               |  |      |             |      |             |      |             |      |  |            |             |            |            
|                                                                                                                                               |  |      |             |      |             |      |             |      |  |            |             |            |            
|                                                                                                                                               |  |      |             |      |             |      |             |      |  |            |             |            |            
|                                                                                                                                               |  |      |             |      |             |      | $19,591,227 |      |  |            | $19,591,227 |            | $19,682,448
|                                                                                                                                               |  |      |             |      |             |      |             |      |  |            |             |            |             |                                                                                              
|Note Receivable:                                                                                                                               |  |      |             |      |             |      |             |      |  |            |             |            |             |                                                                                              
|                                                                                                                                               |  |      |             |      |             |      |             |      |  |            |             |            |             |                                                                                              
|Fixed-rate note receivable,                                                                                                                    |  |      |             |      |             |      |             |      |  |            |             |            |             |                                                                                              
|8%                                                                                                                                             |  |      |             |      |             |      |             |      |  | $2,070,580 |             | $2,070,580 |             | $2,638,871                                                                                   
|*The amounts listed reflect the
      Funds positions as ofMarch 31, 2006.  The Funds current positions may
      differ.                    |  |     

|(1) | Belair Real Estates
      interest in these Partnership Preference Units is held through Bel
      Holdings LLC.    
|--- | ---------------------------------------------------------------------------------------------------------------------
|   
|(2) | Belair Real Estates
      interest in these Partnership Preference Units is held through Belvorn
      Holdings LLC.
|   



|Item4. Controls and
      Procedures.
|-------------------------------------

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

Disclosure Controls and Procedures.Eaton Vance, as the Funds manager, evaluated the
effectiveness of the Funds disclosure controls and procedures (as defined by
Rule 13a-15(e) of the 1934 Act) as of the end of the period covered by this
report, with the participation of the Funds Chief Executive Officer and Chief
Financial Officer. The Funds disclosure controls and procedures are the
controls and other procedures that the Fund designed to ensure that it records,
processes, summarizes and reports in a timely manner the information that the
Fund must disclose in reports that it files or submits to the Securities and
Exchange Commission. Based on that evaluation, the Funds Chief Executive
Officer and Chief Financial Officer concluded that, as ofMarch 31, 2006, the Funds disclosure controls and
procedures were effective.

Internal Control Over Financial Reporting.There were no changes in the Funds internal
control over financial reporting that occurred during the quarter endedMarch 31, 2006that have materially
affected or are reasonably likely to materially affect the Funds internal
control over financial reporting.

21



|PART II. OTHER INFORMATIONItem1. Legal
      Proceedings.
|---------------------------------------------------------

Although in the ordinary course of business, the
Fund and its directly and indirectly controlled subsidiaries may become involved
in legal proceedings, the Fund is not aware of any material pending legal
proceedings to which they are subject.



|Item 1A. Risk
  Factors.
|------------------------

There have been no material changes from risk
factors as previously disclosed in the Funds Form 10-K for the year ended
December 31, 2005 in response to Item 1A to Part 1 of Form 10-K.

Item2. Unregistered Sales of Equity
Securities and Use of Proceeds.

As described in the Funds Annual Report on Form
10-K for the year ended December 31, 2005, shares of the Fund may be redeemed by
Fund shareholders on any business day. Redemptions are met at the net asset
value per share of theFund. The right
to redeem is available to all shareholders and all outstanding Fund shares areeligible for redemption. During each
month in the quarter endedMarch 31, 2006, the total number of shares redeemed and the average price paid per
share were as follows:

Total No. of Shares
    
    Average Price PaidMonth Ended
    
    Redeemed(1)
    
    Per ShareJanuary 31, 2006
    
    153,946.996
    
    $134.02February 28, 2006
    
    273,994.902
    
    $131.03March 31, 2006
    
    225,445.416
    
    $133.21Total
    
    653,387.314
    
    $132.76


|(1) | All shares redeemed during the periods were
      redeemed at the option of shareholders pursuant to the Funds redemption
      policy. The Fund has not announced any plans or programs to repurchase
      shares other than at the option of shareholders.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

Item3. Defaults Upon Senior
Securities.

None.

Item4. Submission of Matters to a Vote of
Security Holders.

No matters were submitted to a vote of security
holders during thequarterendedMarch 31, 2006.

Item5. Other
Information.

None.

22

Item6. Exhibits.

(a) The following is a list of all exhibits filed as
part of this Form10-Q:

|31.1 | Certification Pursuant to 18 U.S.C. Section
      1350, as Adopted Pursuant to Section 302 of the Sarbanes- Oxley Act of
      2002
|---- | -----------------------------------------------------------------------------------------------------------------------------------
|    
|31.2 | Certification Pursuant to 18 U.S.C. Section
      1350, as Adopted Pursuant to Section 302 of the Sarbanes- Oxley Act of
      2002
|    
|32.1 | Certification Pursuant to 18 U.S.C. Section
      1350, as Adopted Pursuant to Section 906 of the Sarbanes- Oxley Act of
      2002
|    
|32.2 | Certification Pursuant to 18 U.S.C. Section
      1350, as Adopted Pursuant to Section 906 of the Sarbanes- Oxley Act of
      2002
|    

|(b) | Reports on Form 8-K:
      None.
|--- | --------------------------------
|   

23



|SIGNATURES
|----------

Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly authorized officer onMay 10, 2006.



|BELAIRCAPITAL
      FUND LLC
|----------------------------



| | /s/Michelle A.
      GreenMichelle A. GreenChief Financial Officer(Duly Authorized
      Officer andPrincipal Financial
    Officer)
| | ------------------------------------------------------------------------------------------------------------------------------------

24



|EXHIBIT
      INDEX
|-------------------

|31.1 | Certification Pursuant to 18 U.S.C. Section
      1350, as Adopted Pursuant to Section 302 of the Sarbanes- Oxley Act of
      2002
|---- | -----------------------------------------------------------------------------------------------------------------------------------
|    
|31.2 | Certification Pursuant to 18 U.S.C. Section
      1350, as Adopted Pursuant to Section 302 of the Sarbanes- Oxley Act of
      2002
|    
|32.1 | Certification Pursuant to 18 U.S.C. Section
      1350, as Adopted Pursuant to Section 906 of the Sarbanes- Oxley Act of
      2002
|    
|32.2 | Certification Pursuant to 18 U.S.C. Section
      1350, as Adopted Pursuant to Section 906 of the Sarbanes- Oxley Act of
      2002
|    

25