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

                                    FORM 10-Q

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

                  For the quarterly period ended June 30, 2001
                         Commission File No. 0002-25767
                                             ----------


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


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


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


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


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




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


                                  Page 1 of 22
<PAGE>
                             Belair Capital Fund LLC
                                Index to Form 10Q

PART I -        FINANCIAL INFORMATION
                                                                            Page
Item 1.         Condensed Consolidated Financial Statements

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

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

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

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

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

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

Item 3.         Quantitative and Qualitative Disclosures About Market Risk    16

PART  II -      OTHER INFORMATION

Item 1.         Legal Proceedings                                             21

Item 2.         Changes in Securities and Use of Proceeds                     21

Item 3.         Defaults Upon Senior Securities                               21

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

Item 5.         Other Information                                             21

Item 6.         Exhibits and Reports                                          21


SIGNATURES                                                                    22


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

 BELAIR CAPITAL FUND LLC
 Condensed Consolidated Statements of Assets and Liabilities

<TABLE>
                                                                                   June 30,
                                                                                     2001             December 31,
                                                                                 (Unaudited)              2000
                                                                            ---------------------  -------------------
<S>                                                                               <C>                  <C>
 Assets:
     Investment in Belvedere Capital LLC                                          $1,957,678,301       $2,132,795,139
     Investment in real estate Partnership Preference Units                          482,684,492          439,043,259
     Investment in other real estate                                                 326,392,896          157,812,925
     Short-term investments                                                            9,969,864            6,665,871
                                                                             --------------------  -------------------
             Total investments                                                    $2,776,725,553       $2,736,317,194
     Cash                                                                              5,003,327           46,875,064
     Dividends receivable                                                                148,243            8,021,686
     Deferred expenses                                                                   174,190            1,379,102
     Escrow deposits - restricted                                                      5,615,928            2,143,464
     Swap interest receivable                                                                  -              526,653
     Other assets                                                                        303,992              286,469
                                                                             --------------------  -------------------
             Total assets                                                         $2,787,971,233       $2,795,549,632
                                                                             --------------------  -------------------

 Liabilities:
    Loan payable                                                                   $ 663,000,000         $643,000,000
    Mortgage payable, net of unamortized debt issuance costs                         226,312,371          111,088,447
    Payable for Fund Shares redeemed                                                   3,619,443                    -
    Open interest rate swap contracts, at value                                       14,540,921            4,834,653
    Swap interest payable                                                              2,246,266                    -
    Security deposits                                                                    893,697              394,546
    Accrued expenses:
        Interest expense                                                               5,908,209            7,430,119
        Accrued property taxes                                                         1,859,509              659,702
        Other accrued expenses and other liabilities                                   1,949,488            4,172,804
    Minority interest in controlled subsidiaries                                      27,188,374           12,971,521
                                                                             --------------------  -------------------
             Total liabilities                                                     $ 947,518,278        $ 784,551,792
                                                                             --------------------  -------------------
 Net assets                                                                       $1,840,452,955       $2,010,997,840
                                                                             --------------------  -------------------

 Shareholders' Capital
                                                                             --------------------  -------------------
     Shareholders' capital                                                        $1,840,452,955       $2,010,997,840
                                                                             --------------------  -------------------

Shares Outstanding                                                                    14,696,725           15,106,086
                                                                             --------------------  -------------------

Net Asset Value and Redemption Price Per Share                                           $125.23              $133.13
                                                                             --------------------  -------------------
</TABLE>


                                       3
<PAGE>
BELAIR CAPITAL FUND LLC
 Condensed Consolidated Statements of
 Operations (Unaudited)
<TABLE>
                                                           Three Months      Three Months        Six Months         Six Months
                                                               Ended             Ended              Ended              Ended
                                                             June 30,          June 30,           June 30,           June 30,
                                                               2001              2000               2001               2000
                                                         ----------------- ------------------ ------------------ -----------------
<S>                                                            <C>                <C>              <C>                 <C>
Investment Income:
     Dividends allocated from Belvedere Capital                $4,670,963         $4,805,694       $  9,405,546        $9,793,831
        (net of foreign taxes of $31,173, $48,532,
         $61,493 and $88,422, respectively)
     Interest allocated from Belvedere Capital                    253,126          1,238,677          1,105,040         2,074,393
     Expenses allocated from Belvedere Capital                 (2,959,093)        (3,349,395)        (6,026,592)       (6,652,288)
                                                         ----------------- ------------------ ------------------ -----------------
         Net investment income allocated from
         Belvedere Capital                                     $1,964,996         $2,694,976         $4,483,994        $5,215,936
         Dividends from Partnership Preference
         Units                                                  3,824,112         15,496,609         14,957,328        29,185,203
     Rental income                                              8,438,058                  -         14,417,923                 -
     Interest                                                     128,241            128,886            301,235           207,628
                                                         ----------------- ------------------ ------------------ -----------------
             Total investment income                          $14,355,407        $18,320,471        $34,160,480       $34,608,767
                                                         ----------------- ------------------ ------------------ -----------------

Expenses:
    Investment advisory and administrative fees                $1,775,246         $1,809,910         $3,513,958        $3,527,449
    Property management fees                                      338,301                  -            577,142                 -
    Service fees                                                  188,945            207,095            389,063           427,406
    Interest expense on credit facility                         8,614,967         12,762,520         18,984,326        23,798,763
    Interest expense on mortgages                               3,234,769                  -          5,620,880                 -
    Interest expense/(income) on swap contracts                 2,804,879           (177,548)         3,540,740            94,232
    Property and maintenance                                    2,073,858                  -          3,536,915                 -
    Property taxes and insurance                                  908,140                  -          1,493,884                 -
    Legal and accounting services                                 192,065            264,553            241,065           404,217
    Amortization of deferred expenses                              18,780             27,466             54,429            54,831
    Custodian and transfer agent fees                              39,231             65,895             54,044            80,139
    Printing and postage                                            4,179              2,307              6,618             4,800
    Miscellaneous                                                 230,669             16,901            524,520            49,701
                                                         ----------------- ------------------ ------------------ -----------------
            Total expenses                                    $20,424,029        $14,979,099        $38,537,584       $28,441,538
                                                         ----------------- ------------------ ------------------ -----------------
Net investment income (loss) before minority
    interest in net income of controlled                       (6,068,622)         3,341,372         (4,377,104)        6,167,229
    subsidiaries
Minority interest in net income of controlled
    subsidiaries                                                 (174,292)                 -           (190,043)                -
                                                         ----------------- ------------------ ------------------ -----------------
Net investment income (loss)                                  $(6,242,914)        $3,341,372        $(4,567,147)       $6,167,229
                                                         ----------------- ------------------ ------------------ -----------------

Realized and Unrealized Gain (Loss)
Net realized gain (loss) -
Investment transactions from Belvedere
         Capital (identified cost basis)                      $(7,301,594)       $16,445,271        $(1,257,901)      $48,297,917
Investment transactions in Partnership
         Preference Units (identified cost basis)                       -            (48,619)        (1,142,610)       (2,946,213)
                                                         ----------------- ------------------ ------------------ -----------------
             Net realized gain (loss)                         $(7,301,594)       $16,396,652        $(2,400,511)      $45,351,704
                                                         ----------------- ------------------ ------------------ -----------------
Change in unrealized appreciation
         (depreciation) -
Investment in Belvedere Capital
         (identified cost basis)                             $110,600,345       $(33,067,459)     $(144,544,220)      $60,470,766
</TABLE>


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

<TABLE>
<S>                                                            <C>                <C>              <C>                 <C>
Investments in Partnership Preference
    Units (identified cost basis)                              12,236,705         12,313,512         44,783,843        (1,367,252)
Interest rate swap contracts                                    4,461,941         (4,727,393)        (9,706,268)          524,637
Investment in real property (net of minority
    interest in unrealized gain of controlled
    subsidiary of $75,597)                                     (2,187,232)                 -         (2,187,232)                -
                                                         ----------------- ------------------ ------------------ -----------------
Net change in unrealized
    appreciation (depreciation)                              $125,111,759       $(25,481,340)     $(111,653,877)      $59,628,151
                                                         ----------------- ------------------ ------------------ -----------------

Net realized and unrealized gain (loss)                      $117,810,165        $(9,084,688)     $(114,054,388)    $ 104,979,855
                                                         ----------------- ------------------ ------------------ -----------------
Net increase (decrease) in net assets from
     operations                                              $111,567,251        $(5,743,316)     $(118,621,535)     $111,147,084
                                                         ================= ================== ================== =================
</TABLE>


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

<TABLE>
                                                                              Six Months          Six Months
                                                                                 Ended               Ended
                                                                            June 30, 2001        June 30, 2000
                                                                          -------------------  ------------------
<S>                                                                        <C>                       <C>
 Increase (Decrease) in Net Assets:
     Net investment income (loss)                                            $   (4,567,147)      $    6,167,229
     Net realized gain (loss) on investment transactions                         (2,400,511)          45,351,704
     Net change in unrealized appreciation (depreciation) of
        investments                                                            (111,653,877)          59,628,151
                                                                          -------------------  ------------------
             Net increase (decrease) in net assets from
             operations                                                      $ (118,621,535)      $  111,147,084
                                                                          -------------------  ------------------

 Transactions in Fund Shares -
    Net asset value of Fund Shares redeemed                                  $  (51,286,054)      $  (89,640,998)
                                                                          -------------------  ------------------
             Net decrease in net assets from Fund Share transactions         $  (51,286,054)      $  (89,640,998)
                                                                          -------------------  ------------------

 Distributions to Shareholders
     Special distributions to Fund Shareholders                              $            -       $   (5,104,441)
     Minority shareholders of controlled subsidiaries                              (637,296)                   -
                                                                          -------------------  ------------------
             Total distributions to Shareholders                             $     (637,296)      $   (5,104,441)
                                                                          -------------------  ------------------

 Net increase (decrease) in net assets                                       $ (170,544,885)      $   16,401,645

 Net assets:
     Beginning of period                                                     $2,010,997,840       $2,094,369,753
                                                                          -------------------  ------------------
     End of period                                                           $1,840,452,955       $2,110,771,398
                                                                          ===================  ==================
</TABLE>


                                       6
<PAGE>
BELAIR CAPITAL FUND LLC
Condensed Consolidated Statements of Cash Flows (Unaudited)
<TABLE>
                                                                                       Six Months         Six Months
                                                                                         Ended               Ended
                                                                                       June 30,            June 30,
                                                                                         2001                2000
                                                                                   ------------------  ------------------
<S>                                                                                    <C>                   <C>
Cash Flows From (For) Operating Activities -
Net investment income (loss)                                                           $  (4,567,147)        $ 6,167,229
Adjustments to reconcile net investment income (loss) to net
cash flows used for operating activities -
       Amortization of deferred expenses                                                      54,429              54,831
       Amortization of debt issuance costs                                                    87,104                   -
       Net investment income allocated from Belvedere Capital                             (4,483,994)         (5,215,936)
       (Increase) decrease in dividends receivable                                         7,873,443          (1,613,074)
       Increase (decrease) in interest payable for open swap contracts                     2,772,919            (365,363)
       Increase in escrow deposits                                                          (317,545)                  -
       Increase in deferred expenses                                                               -          (2,388,784)
       Increase in other assets                                                             (928,173)                  -
       Increase in accrued property taxes                                                  1,199,807                   -
       Increase (decrease) in accrued interest and operating
            expenses and other liabilities                                                (5,239,147)            859,523
       Increase (decrease) in minority interest                                              (52,500)            159,500
       Payments for investments in other real property                                   (41,261,497)        (33,988,289)
       Cash assumed in connection with acquisition of real estate
            investments                                                                    1,745,868                   -
       Purchases of Partnership Preference Units                                          (9,386,616)       (101,895,368)
       Sales of Partnership Preference Units                                               9,386,616          12,733,012
       Improvements to property                                                             (868,093)                  -
       Net (increase) decrease in investment in Belvedere Capital                         (9,529,159)         41,398,714
       Increase in short-term investments                                                 (3,303,993)         (5,855,757)
       Minority interest in net income of controlled subsidiaries                            190,043                   -
                                                                                   ------------------  ------------------
       Net cash flows used for operating activities                                     $(56,627,635)      $ (89,949,762)
Cash Flows From (For) Financing Activities -
       Proceeds from loan                                                                $20,000,000       $ 126,000,000
       Return of Capital                                                                    (268,065)                  -
       Payments for Fund Shares redeemed                                                  (4,338,741)        (24,955,530)
       Distributions paid                                                                   (637,296)         (4,012,689)
                                                                                   --------------------------------------
       Net cash flows from financing activities                                          $14,755,898        $ 97,031,781

Net increase (decrease) in cash                                                         $(41,871,737)       $  7,082,019

Cash at beginning of period                                                              $46,875,064        $  3,802,594
                                                                                   ------------------  ------------------
Cash at end of period                                                                    $ 5,003,327        $ 10,884,613
                                                                                   ==================  ==================

</TABLE>


                                       7
<PAGE>
<TABLE>
<S>                                                                                 <C>                     <C>
SUPPLEMENTAL DISCLOSURE AND NON-CASH INVESTING AND
FINANCING ACTIVITIES-
       Change in unrealized appreciation of investments and
            open swap contracts                                                        $(111,653,877)      $ 59,628,151
       Interest paid for loan                                                          $  21,159,340       $ 24,228,338
       Interest paid for swap contracts                                                $     767,821       $    459,595
       Interest paid for mortgages                                                     $   4,880,672       $          -
       Market value of securities distributed in payment of redemptions                $  43,327,870       $ 65,757,848
       Market value of real property and other assets, net of current
           liabilities, contributed to Bel Residential                                 $           -       $158,305,656
       Market value of real property and other assets, net of current
           liabilities, contributed to Katahdin                                        $ 170,124,083       $          -
       Mortgage assumed in connection with the acquisition of real property            $ 115,850,000       $112,630,517
</TABLE>


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

1 Organization

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

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

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

2 Interim Financial Statements

The condensed  consolidated  interim financial statements of Belair Capital Fund
and  subsidiaries  as of June 30,  2001 and June 30, 2000 and for the six months
ended June 30,  2001 and June 30, 2000 have been  prepared by the Fund,  without
audit,  pursuant to the rules and  regulations  of the  Securities  and Exchange
Commission.  Certain information and footnote  disclosures  normally included in
annual financial  statements  prepared in accordance with accounting  principles
generally  accepted  in the United  States of  America  have been  condensed  or
omitted as permitted by such rules and regulations. All adjustments,  consisting
of normal recurring  adjustments,  have been included.  Management believes that
the disclosures are adequate to present fairly the financial  position,  results
of operations and cash flows at the dates and for the periods  presented.  It is
suggested that these interim  financial  statements be read in conjunction  with


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

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

3 Investment Transactions

Increases  and decreases of the Fund's  investment in Belvedere  Capital for the
six  months  ended  June  30,  2001  aggregated  $68,831,528  and  $102,630,239,
respectively,  and for the six months ended June 30, 2000 aggregated $14,761,240
and $121,917,802,  respectively.  Purchases and sales of Partnership  Preference
Units  aggregated  $9,386,616 and $9,386,616,  respectively,  for the six months
ended June 30, 2001 and $101,895,368 and $12,733,012,  respectively, for the six
months ended June 30, 2000. For the six months ended June 30, 2001, acquisitions
of other real property aggregated $41,261,497. For the six months ended June 30,
2000, acquisitions of other real property aggregated $33,988,289.

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

4 Indirect Investment in Portfolio

Belvedere   Capital's   interest  in  the   Portfolio   at  June  30,  2001  was
$9,970,047,835, representing 54.6% of the Portfolio's net assets and at June 30,
2000 was  $8,894,702,269  representing  52.4% of the Portfolio's net assets. The
Fund's  investment  in  Belvedere  Capital at June 30,  2001 was  $1,957,678,301
representing  19.6% of Belvedere  Capital's  net assets and at June 30, 2000 was
$2,234,901,756, representing 25.1% of Belvedere Capital's net assets. Investment
income  allocated to Belvedere  Capital  from the  Portfolio  for the six months
ended June 30, 2001 totaled  $50,467,696,  of which $10,510,586 was allocated to
the Fund.  Investment  income allocated to Belvedere  Capital from the Portfolio
for the six months ended June 30, 2000 totaled $43,951,952, of which $11,868,224
was  allocated to the Fund.  Expenses  allocated  to Belvedere  Capital from the
Portfolio for the six months ended June 30, 2001 totaled  $21,587,638,  of which
$4,485,806 was allocated to the Fund.  Expenses  allocated to Belvedere  Capital
from the Portfolio  for the six months ended June 30, 2000 totaled  $18,388,926,
of which  $4,961,380  was  allocated to the Fund.  Belvedere  Capital  allocated
additional  expenses to the Fund of $1,540,786 for the six months ended June 30,
2001, representing $35,411 of operating expenses and $1,505,375 of service fees.
Belvedere  Capital allocated  additional  expenses to the Fund of $1,690,908 for
the six months ended June 30, 2000,  representing  $47,926 of operating expenses
and $1,642,982 of service fees (Note 8).

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


                                       10
<PAGE>
<TABLE>
                                             June 30,             December 31,              June 30,
                                               2001                   2000                    2000
                                     -------------------- ------------------------ ---------------------
<S>                                     <C>                      <C>                   <C>
Investments, at value                   $18,239,311,489          $18,318,105,043       $16,968,560,668
Other Assets                                 19,932,030              251,324,504           129,856,981
----------------------------------- -------------------- ------------------------ ---------------------
Total Assets                            $18,259,243,519          $18,569,429,547       $17,098,417,649
Total Liabilities                               463,366              184,360,662           122,641,585
----------------------------------- -------------------- ------------------------ ---------------------
Net Assets                              $18,258,780,153          $18,385,068,885       $16,975,776,064
=================================== ==================== ======================== =====================
Dividends and interest                      $93,075,546             $189,740,537           $85,182,083
----------------------------------- -------------------- ------------------------ ---------------------
Investment adviser fee                      $38,822,203              $73,317,616           $34,563,622
Other expenses                                  959,382                2,500,093             1,049,805
----------------------------------- -------------------- ------------------------ ---------------------
Total expenses                              $39,781,585              $75,817,709           $35,613,427
----------------------------------- -------------------- ------------------------ ---------------------
Net investment income                       $53,293,961             $113,922,828           $49,568,656
Net realized gains (losses)                (12,705,834)              196,962,539           345,517,898
Net change in unrealized
    gains (losses)                      (1,238,423,587)              141,360,943           429,187,549
----------------------------------- -------------------- ------------------------ ---------------------
Net increase (decrease) in net
assets from operations                 $(1,197,835,460)             $452,246,310          $824,274,103
----------------------------------- -------------------- ------------------------ ---------------------
</TABLE>
5 Rental Property

The average occupancy rate for real property held by Bel Residential, consisting
of  2,681  residential  units,  was  approximately  96% at  June  30,  2001  and
approximately 95% at December 31, 2000. The fair value of real property owned by
the Fund  through Bel  Residential  at June 30, 2001 and December 31, 2000 is as
follows:
<TABLE>
                                                              June 30, 2001       December 31, 2000
                                                              -------------       -----------------
<S>                                                            <C>                      <C>
Land                                                           $ 23,565,000             $ 23,565,000
Buildings, improvements and other assets                        135,370,000              134,247,925
                                                       -------------------- ------------------------
Fair value                                                    $ 158,935,000            $ 157,812,925
                                                       -------------------- ------------------------
</TABLE>

The average  occupancy  rate for real property  held by Katahdin,  consisting of
2,476 residential  units, was approximately 95% at June 30, 2001. The fair value
of real  property  owned by the Fund  through  Katahdin  at June 30,  2001 is as
follows:
                                                              June 30, 2001
                                                      ---------------------
Land                                                           $ 26,441,627
Buildings, improvements and other assets                        141,016,269
                                                       --------------------
Fair value                                                    $ 167,457,896
                                                       --------------------

6 Cancelable Interest Rate Swap Agreements

The Fund has entered into cancelable interest rate swap agreements in connection
with its real  estate  investments  and the  associated  borrowings.  Under such
agreements,  the Fund has agreed to make  periodic  payments  at fixed  rates in
exchange for payments at floating rates. The notional or contractual  amounts of
these instruments may not necessarily  represent the amounts potentially subject
to risk.  The  measurement  of the risks  associated  with these  investments is
meaningful  only  when  considered  in  conjunction  with  all  related  assets,
liabilities and agreements.  As of June 30, 2001 and December 31, 2000, the Fund
has entered into  cancelable  interest rate swap  agreements  with Merrill Lynch
Capital Services, Inc.


                                       11
<TABLE>
                                                                                                   Unrealized      Unrealized
                    Notional                                         Initial                     Appreciation/    Appreciation/
                     Amount                                         Optional                     (Depreciation)  (Depreciation)
   Effective         (000's         Fixed          Floating        Termination       Maturity   At June 30, 2001 At December 31,
      Date          omitted)         Rate            Rate             Date             Date       (Unaudited)         2000
----------------------------------------------------------------------------------------------------------------------------------
      <S>                <C>           <C>              <C>           <C>              <C>         <C>                  <C>
      2/98               120,000       6.715%     Libor+.45%          2/03             2/05        $ (1,735,720)        $158,467
      4/98                50,000        6.84%     Libor+.45%          2/03             2/05            (875,367)        (105,708)
      4/98               150,000       6.835%     Libor+.45%          4/03             4/05          (2,507,260)        (413,833)
      6/98                20,000        6.67%     Libor+.45%          6/03             2/05            (311,870)           1,994
      6/98                75,000        6.68%     Libor+.45%          6/03             2/05          (1,189,020)         (14,230)
      6/98                80,000       6.595%     Libor+.45%          6/03             2/05          (1,090,686)         181,644
     11/98                14,709        6.13%     Libor+.45%          11/03            2/05             (34,526)         210,991
      2/99                34,951        6.34%     Libor+.45%          2/04             2/05            (326,566)         221,768
      4/99                 5,191        6.49%     Libor+.45%          2/04             2/05             (70,489)           6,770
      7/99                24,902       7.077%     Libor+.45%          7/04             2/05            (840,246)        (524,587)
      9/99                10,471        7.37%     Libor+.45%          9/04             2/05            (461,379)        (341,770)
      3/00                19,149        7.89%     Libor+.45%          2/04             2/05          (1,018,033)        (809,750)
      3/00                70,000        7.71%     Libor+.45%            -              2/05          (4,079,759)      (3,406,409)
----------------------------------------------------------------------------------------------------------------------------------
Total                                                                                              $(14,540,921)     $(4,834,653)
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

7 Debt

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

Real  property  held by Bel  Residential  is financed  through a loan secured by
cross-collateralized first mortgage liens on such real property. The balances at
June 30, 2001 and December 31, 2000, excluding  unamortized debt issuance costs,
are as follows:

<TABLE>
                                                    Monthly
                                    Annual          Interest         Balance at           Balance at
Maturity Date                    Interest Rate      Payment*       June 30, 2001       December 31, 2000
-------------                    -------------      --------       -------------       -----------------
<S>                                 <C>             <C>             <C>                  <C>
May 1, 2010                         8.33%           $781,844        $112,630,517         $112,630,517
</TABLE>

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

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


                                       12
<PAGE>
                                                    Monthly
                                    Annual          Interest         Balance at
Maturity Date                    Interest Rate      Payment*       June 30, 2001
-------------                    -------------      --------       -------------
June 1, 2011                       6.765%           $653,104        $115,850,000

*Mortgage  provides for monthly  payments of interest only through June 1, 2010,
with the entire principal balance due on June 1, 2011.

B Credit Facility -- Belair Capital has obtained a $790,000,000  credit facility
(the  Credit   Facility)   with  a  term  of  seven  years  from  Merrill  Lynch
International  Bank  Limited.  Belair  Capital's  obligations  under the  Credit
Facility  are  secured by a pledge of its  assets,  excluding  the assets of Bel
Residential and Katahdin.  Interest on borrowed funds is based on the prevailing
LIBOR rate for the respective  interest period plus a spread of 0.45% per annum.
Belair  Capital may borrow for interest  periods of one month to five years.  In
addition,  Belair  Capital pays a commitment fee at a rate of 0.10% per annum on
the unused amount of the loan  commitment.  Borrowings under the Credit Facility
have been used to  purchase  qualifying  assets,  pay  selling  commissions  and
organizational  expenses,  and to provide for the short-term  liquidity needs of
the Fund.  Additional  borrowings  under the Credit  Facility may be made in the
future for these  purposes.  At June 30, 2001 and  December  31,  2000,  amounts
outstanding  under the Credit Facility totaled  $663,000,000  and  $643,000,000,
respectively.

8 Management Fee and Other Transactions with Affiliates

The Fund and the Portfolio have engaged Boston  Management and Research (BMR), a
wholly-owned  subsidiary of EVM, as investment  adviser.  Under the terms of the
advisory agreement with the Portfolio,  BMR receives a monthly fee of 5/96 of 1%
(0.625%  annually)  of the  average  daily  net  assets of the  Portfolio  up to
$500,000,000 and at reduced rates as daily net assets exceed that level. For the
six months ended June 30, 2001 and June 30, 2000 the advisory fee  applicable to
the Portfolio  was 0.44%  (annualized)  of average  daily net assets.  Belvedere
Capital's  allocated  portion  of the  advisory  fee was  $21,066,909  of  which
$4,384,988 was allocated to the Fund for the six months ended June 30, 2001, and
$17,845,464  of which  $4,806,934  was allocated to the Fund, for the six months
ended June 30, 2000. In addition, Belair Capital pays BMR a monthly advisory and
administrative  fee of 1/20 of 1% (0.60%  annually)  of the average  daily gross
investment assets of Belair Capital (including the value of all assets of Belair
Capital other than Belair Capital's  investment in BREC, minus the sum of Belair
Capital's  liabilities  other than the principal  amount of money  borrowed) and
BREC pays BMR a monthly  management fee at a rate of 1/20th of 1% (equivalent to
0.60%  annually)  of the average  daily gross  investment  assets of BREC (which
consist of all assets of BREC minus the sum of BREC's liabilities other than the
principal amount of money borrowed. For this purpose, the assets and liabilities
of BREC's  controlled  subsidiaries are reduced by the  proportionate  interests
therein of investors other than BREC). The advisory fee payable by the Portfolio
with  respect  to Belair  Capital's  indirect  investment  in the  Portfolio  is
credited toward Belair Capital's advisory and  administrative  fee payment.  For
the six months ended June 30, 2001 and June 30,  2000,  the advisory fee paid or
accrued to BMR by the Fund,  less the Fund's  allocated share of the Portfolio's
advisory fee, totaled $3,513,958 and $3,527,449, respectively.

EVM serves as manager of Belair  Capital and  receives no separate  compensation
for services provided in such capacity.


                                       13
<PAGE>
Pursuant  to a servicing  agreement  between  Belvedere  Capital and Eaton Vance
Distributors,  Inc.  (EVD),  Belvedere  Capital pays a servicing  fee to EVD for
providing certain services and information to Shareholders. The servicing fee is
paid on a  quarterly  basis at an annual  rate of 0.15% of  Belvedere  Capital's
average  daily net assets and  totaled  $7,248,420  and  $6,089,747  for the six
months ended June 30, 2001 and June 30, 2000, respectively,  of which $1,505,375
and $1,642,982,  respectively,  was allocated to Belair  Capital.  Pursuant to a
servicing  agreement  between  Belair  Capital and EVD,  Belair  Capital  pays a
servicing  fee to EVD on a quarterly  basis at an annual rate of 0.20% of Belair
Capital's average daily net assets, less Belair Capital's allocated share of the
servicing  fee payable by Belvedere  Capital.  For the six months ended June 30,
2001 and June 30,  2000,  the  servicing  fee paid  directly  by Belair  Capital
totaled  $389,063 and $427,406,  respectively.  Of the amounts  allocated to and
incurred  by the Fund,  for the three  months  ended June 30,  2001 and June 30,
2000, $1,894,438 and $2,066,178, respectively, were paid to subagents.

An affiliate of the Bel Residential  minority  shareholder,  provides day-to-day
management of Bel Residential pursuant to a management agreement. The management
agreement  provides for a management fee and allows for reimbursement of payroll
expenses  incurred by the  manager  for  managing  the  properties  owned by Bel
Residential.  For the six months ended June 30, 2001,  Bel  Residential  paid or
accrued  management  fees amounting to $480,578.  There were no management  fees
paid or accrued by Bel Residential for the six months ended June 30, 2000.

An  affiliate  of  the  Katahdin  minority   shareholder,   provides  day-to-day
management  of  Katahdin  pursuant to a  management  agreement.  The  management
agreement  provides for a management fee and allows for reimbursement of payroll
expenses  incurred by the manager for managing the properties owned by Katahdin.
For the period from inception,  May 23, 2001 to June 30, 2001,  Katahdin paid or
accrued management fees amounting to $96,564.

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

Increases and decreases in Belair  Capital Fund LLC's (the Fund) net asset value
per share are derived from net  investment  income and  realized and  unrealized
gains and losses on the Fund's interest through  Belvedere  Capital Fund Company
LLC (Belvedere  Capital) in Tax-Managed  Growth Portfolio (the Portfolio),  real
estate  investments held through its subsidiary,  Belair Real Estate Corporation
(BREC) and any direct investments of the Fund.  Expenses of the Fund include its
pro-rata  share  of the  expenses  of  Belvedere  Capital,  and  indirectly  the
Portfolio,  as well as the actual  and  accrued  expenses  of the Fund and BREC,
including its  subsidiaries Bel Residential  Properties Trust (Bel  Residential)
and Katahdin Property Trust, LLC (Katahdin). The Fund's most significant expense
is interest  incurred on borrowings  incurred in connection with its real estate
investments.  The Fund's realized and unrealized gains and losses on investments
are based on its allocated share of the realized and unrealized gains and losses
of Belvedere  Capital,  and indirectly,  the Portfolio,  as well as realized and
unrealized  gains and losses on  investments  in real estate  through BREC.  The
realized  and  unrealized   gains  and  losses  on  investments  have  the  most
significant impact on the Fund's net asset value per share and result from sales
of such  investments and changes in their  underlying  value. The investments of
the Portfolio  consist primarily of common stocks of domestic and foreign growth
companies  that are  considered  to be high in quality and  attractive  in their
long-term investment prospects.  Because the securities holding of the Portfolio
are broadly  diversified,  the performance of the Portfolio cannot be attributed
to one  particular  stock or one  particular  industry  or  market  sector.  The
performance  of the Portfolio and the Fund are  substantially  influenced by the
overall performance of the United States stock market, as well as by the


                                       14
<PAGE>
relative performance versus the overall market of specific stocks and classes of
stocks in which the Portfolio  maintains large positions.  Through the impact of
interest rates on the valuation of the Fund's  investments  in  income-producing
preferred equity interests in real estate  operating  partnerships  (Partnership
Preference  Units)  through  BREC  and  its  positions  in  interest  rate  swap
agreements,  the  performance  of the  Fund is also  affected  by  movements  in
interest rates, and particularly,  changes in credit spread relationships.  On a
combined basis, the Fund's Partnership  Preference Units and interest rate swaps
generally  decline in value when credit  spreads widen (as fixed income  markets
grow more  risk-averse)  and  generally  increase in value when  credit  spreads
tighten.

RESULTS OF  OPERATIONS  FOR THE  QUARTER  ENDED JUNE 30, 2001 AND THE SIX MONTHS
ENDED JUNE 30, 2001

The Fund achieved  total return  performance  of 6.3% for the quarter ended June
30,  2001.  This  return  reflects an increase in the Fund's net asset value per
share from $117.79 to $125.23.  For comparison,  the S&P 500, an unmanaged index
of large capitalization  stocks commonly used as a benchmark for the U.S. equity
market, had a total return of 5.9% over the same period.

During the second quarter of 2001, the U.S.  equity market rallied from the lows
reached in March. The recovery was uneven,  and tailed off toward the end of the
quarter.  The best  performing  market  sector in the  quarter  was  technology,
followed by basic materials and financials.  The bounce in technology stocks was
driven by  aggressive  investors  making  the bet that the  bottom  in  industry
fundamentals  must be near,  though few signs of such a bottoming  have emerged.
Financial and other  interest-sensitive  stocks  benefited  from the  continuing
activity of the Federal Reserve to lower short-term interest rates. In the first
six months of 2001, the benchmark federal funds rate was lowered six times, by a
total of 2.75%.  Market  sentiment also benefited from the June enactment of the
Bush  Administration's  tax relief  program.  But worries about  weakness in the
economy and a collapse in corporate profits continued to weigh upon the market.

In this environment of halting  recovery,  the performance of the Portfolio fell
modestly below that of the overall market.  The Fund was able to outperform both
the Portfolio and the S&P 500 due to the  incremental  returns  derived from the
Fund's real estate  investments.  The U.S.  real estate  market  remains in good
balance despite widespread weakness in the general economy.

The Fund  achieved  total return  performance  of -5.9% for the six months ended
June 30, 2001. This return reflects a decrease in the Fund's net asset value per
share from $133.13 to $125.23.  For comparison,  the S&P 500, an unmanaged index
of large capitalization  stocks commonly used as a benchmark for the U.S. equity
market, had a total return of -6.7% over the same period.

During  the  first  half of 2001,  the U.S.  equity  market  continued  the weak
performance  pattern  prevalent since early 2000.  After bottoming in March, the
market  rallied  strongly  before tailing off again toward the end of the second
quarter.  The best performing market sector in the six-month period was consumer
cyclicals, and especially retail stocks, which recovered strongly from depressed
levels at year-end 2000. The weakest  performing  market sectors were technology


                                       15
<PAGE>
and  healthcare.  The market  suffered  from a  weakening  economic  outlook,  a
collapse  in  corporate  profits  and  valuation  levels  that  remain  high  by
historical  standards.  These  negative  effects  were partly  mitigated  by the
continuing  activity of the Federal Reserve to lower short-term  interest rates.
In the first half of 2001,  the  benchmark  federal  funds rate was  lowered six
times,  by a total of  2.75%.  Market  sentiment  also  benefited  from the June
enactment of the Bush Administration's tax relief program.

In this period of market weakness and halting  recovery,  the performance of the
Portfolio fell modestly below that of the overall  market.  The Fund was able to
outperform  both the  Portfolio and the S&P 500 due to the  incremental  returns
derived from the Fund's real estate  investments.  The U.S.  real estate  market
remains in good balance despite widespread weakness in the general economy.

Liquidity and Capital Resources

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

The Fund may redeem  shares of  Belvedere  Capital at any time.  Both  Belvedere
Capital and the Portfolio follow the practice of normally meeting redemptions by
distributing  securities  drawn from the  Portfolio.  Belvedere  Capital and the
Portfolio may also meet  redemptions by distributing  cash. As of June 30, 2001,
the Portfolio had cash and short-term  investments  totaling $181.8 million. The
Portfolio  participates  in a $150 million  multi-fund  unsecured line of credit
agreement with a group of banks.  The Portfolio may temporarily  borrow from the
line of credit to satisfy  redemption  requests in cash or to settle  investment
transactions. The Portfolio had no outstanding borrowings under the $150 million
line of credit at June 30,  2001,  and,  as of that date,  the net assets of the
Portfolio  totaled $18,258.8  million.  To ensure liquidity for investors in the
Portfolio,  the  Portfolio  may not  invest  more than 15% of its net  assets in
illiquid assets. As of June, 2001, restricted  securities,  which are considered
illiquid, constituted 2.0% of the net assets of the Portfolio.

The  Partnership  Preference  Units  held by BREC are not  registered  under the
Securities  Act of 1933 (the  Securities  Act) and are  subject  to  substantial
restrictions on transfer. As such, they are considered illiquid.

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

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

The value of Fund Shares may not increase or may decline. The performance of the
Fund fluctuates. There can be no assurance that the performance of the Fund will
match that of the United States stock market or that of other equity  funds.  In


                                       16
<PAGE>
managing  the  Portfolio  for  long-term,  after-tax  returns,  the  Portfolio's
investment adviser generally seeks to avoid or minimize sales of securities with
large  accumulated  capital  gains,  including  contributed   securities.   Such
securities  constitute  a  substantial  portion of the assets of the  Portfolio.
Although the  Portfolio  may utilize  certain  management  strategies in lieu of
selling appreciated securities, the Portfolio's,  and hence the Fund's, exposure
to losses during stock market  declines may  nonetheless  be higher than that of
funds   that  do  not   follow  a   general   policy   of   avoiding   sales  of
highly-appreciated securities.

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

Risks of Certain Investment Techniques
--------------------------------------
In  managing  the  Portfolio,  the  investment  adviser  may  purchase  or  sell
derivative   instruments  (which  derive  their  value  by  reference  to  other
securities,  indices,  instruments,  or currencies) to hedge against  securities
price declines and currency movements and to enhance returns.  Such transactions
may include,  without  limitation,  the purchase and sale of stock index futures
contracts  and options on stock index  futures;  the purchase of put options and
the sale of call options on securities held;  equity swaps; and the purchase and
sale of forward currency exchange contracts and currency futures.  The Portfolio
may make short sales of securities  provided that an equal amount is held of the
security  sold  short  (a  covered  short  sale)  and may  also  lend  portfolio
securities.  The use of these  investment  techniques is a specialized  activity
that  may be  considered  speculative  and  which  can  expose  the Fund and the
Portfolio  to  significant  risk of loss.  Successful  use of  these  investment
techniques is subject to the ability and performance of the investment  adviser.
The Fund's and the Portfolio's  ability to meet their investment  objectives may
be adversely affected by the use of these techniques. The writer of an option or
a party to an  equity  swap may  incur  losses  that  substantially  exceed  the
payments, if any, received from a counterparty. Swaps, caps, floors, collars and
over-the-counter  options are private contracts in which there is also a risk of
loss in the event of a default on an obligation to pay by the counterparty. Such
instruments  may be  difficult  to value,  may be illiquid and may be subject to
wide  swings in  valuation  caused  by  changes  in the price of the  underlying
security,  index,  instrument  or  currency.  In  addition,  if the  Fund or the
Portfolio  has  insufficient  cash  to meet  margin,  collateral  or  settlement
requirements,   it  may  have  to  sell   assets  to  meet  such   requirements.
Alternatively, should the Fund or the Portfolio fail to meet these requirements,
the counterparty or broker may liquidate positions of the Fund or the Portfolio.
The Portfolio may also have to sell or deliver securities  holdings in the event
that it is not able to purchase securities on the open market to cover its short
positions or to close out or satisfy an exercise  notice with respect to options
positions it has sold.  In any of these cases,  such sales may be made at prices
or in circumstances that the investment adviser considers unfavorable.


                                       17
<PAGE>
The Portfolio's ability to utilize covered short sales, certain equity swaps and
certain equity collar strategies (combining the purchase of a put option and the
sale of a call option) as a tax-efficient  management  technique with respect to
holdings of  appreciated  securities  is limited to  circumstances  in which the
hedging  transaction  is  closed  out  within  thirty  days  of  the  end of the
Portfolio's taxable year and the underlying  appreciated  securities position is
held unhedged for at least the next sixty days after such hedging transaction is
closed.  There  can be no  assurance  that  counterparties  will at all times be
willing to enter into covered short sales,  interest  rate hedges,  equity swaps
and other derivative  instrument  transactions on terms satisfactory to the Fund
or the  Portfolio.  The  Fund's and the  Portfolio's  ability to enter into such
transactions  may also be  limited  by  covenants  under  the  Fund's  revolving
securitization  facility,  the  federal  margin  regulations  and other laws and
regulations.  The  Portfolio's  use  of  certain  investment  techniques  may be
constrained  because  the  Portfolio  is  a  diversified,   open-end  management
investment  company  registered  under the  Investment  Company  Act of 1940 and
because other  investors in the Portfolio  are  regulated  investment  companies
under  Subchapter M of the Internal  Revenue  Code.  Moreover,  the Fund and the
Portfolio are subject to restrictions under the federal securities laws on their
ability to enter into  transactions in respect of securities that are subject to
restrictions on transfer pursuant to the Securities Act.

Interest Rate Risk
------------------
The Fund's  primary  exposure to interest rate risk arises from  investments  in
real estate that are financed with floating rate bank  borrowings.  The interest
rate on  borrowings  under  the  Fund's  Credit  Facility  is reset  at  regular
intervals  based on a fixed and  predetermined  premium to LIBOR for  short-term
extensions of credit. The Fund utilizes cancelable interest rate swap agreements
to fix the cost of its  borrowings  over the term of the Credit  Facility and to
mitigate  the impact of  interest  rate  changes on the Fund's net asset  value.
Under the  terms of the  interest  rate swap  agreements,  the Fund  makes  cash
payments at fixed rates in exchange for floating rate  payments  that  fluctuate
with  three-month  LIBOR.  The interest  rate swap  agreements  are valued on an
ongoing basis by the investment  adviser.  In the future, the Fund may use other
interest rate hedging  arrangements (such as caps, floors and collars) to fix or
limit  borrowing  costs.  The use of interest  rate  hedging  arrangements  is a
specialized activity that may be considered speculative and which can expose the
Fund to significant loss.

The following table summarizes the contractual  maturities and  weighted-average
interest rates  associated  with the Fund's  significant  non-trading  financial
instruments.  The Fund has no market risk sensitive instruments held for trading
purposes.  This information  should be read in conjunction with Notes 6 and 7 to
the condensed consolidated financial statements.

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

                         2002     2003     2004        2005        2006     Thereafter        Total        Fair Value
                        -------- -------- -------- -------------- -------- -------------- --------------- --------------
<S>                     <C>       <C>      <C>         <C>        <C>       <C>                <C>         <C>
Rate sensitive
liabilities:
---------------------
Long term debt-
   variable rate                                    $663,000,000                            $663,000,000     $663,000,000
Credit Facility
Average
 interest rate                                         4.29%                                  4.29%

Rate sensitive
 derivative financial
 instruments:
---------------------
Pay fixed/
 Receive    variable
 interest rate swap
 contracts                                          $674,373,000                            $674,373,000     $(14,540,921)
Average
  pay rate                                             6.86%                                  6.86%
Average
  receive rate                                         4.29%                                  4.29%
</TABLE>


                                       18
<PAGE>
Risks of Investing in Qualifying Assets and Leverage
----------------------------------------------------
The success of BREC's real estate  investments  depends in part on many  factors
related to the real estate market.  These factors include,  without  limitation,
general economic  conditions,  the supply and demand for different types of real
properties, the financial health of tenants, the timing of lease expirations and
terminations,  fluctuations  in rental rates and  operating  costs,  exposure to
adverse  environmental  conditions  and losses from  casualty  or  condemnation,
interest rates,  availability of financing,  managerial performance,  government
rules  and  regulations,  and  acts of God  (whether  or not  insured  against).
Partnership  Preference  Units also depend upon factors  relating to the issuing
partnerships that may affect such partnerships'  profitability and their ability
to make  distributions  to  holders  of  Partnership  Preference  Units.  BREC's
investments  in  interests  in real estate  joint  ventures  (Real  Estate Joint
Ventures) may be influenced by decisions which the principal  minority  investor
in each Real Estate Joint Venture (the Operating  Partner) may make on behalf of
the property  owned  thereby and  potential  changes in the specific real estate
sub-markets in which the  properties  are located.  The debt of each Real Estate
Joint  Venture is  fixed-rate,  secured by the  underlying  properties  and with
limited recourse to BREC.  However,  changes in interest rates, the availability
of  financing  and other  financial  conditions  can have a  material  impact on
property values and therefore on the value of BREC's equity interest.  There can
be no  assurance  that BREC's  ownership of real estate  investments  will be an
economic  success.  Moreover,  the  success  of any Real  Estate  Joint  Venture
investment  depends in large part upon the performance of the Operating Partner.
Operating  Partners  will be subject to  substantial  conflicts  of  interest in
structuring,  operating and winding up the Real Estate Joint Ventures. Operating
Partners  will have an economic  incentive  to maximize the prices at which they
sell  properties  to Real Estate  Joint  Ventures  and to minimize the prices at
which  they  acquire  properties  from Real  Estate  Joint  Ventures.  Operating
Partners  may devote  greater  attention  or more  resources  to managing  their
wholly-owned  properties  than  properties  held by Real Estate Joint  Ventures.
Future  investment  opportunities  identified  by Operating  Partners  will more
likely be pursued  independently,  rather than  through,  the Real Estate  Joint
Ventures.  Financial  difficulties  encountered  by Operating  Partners in their
other  businesses  may  interfere  with  the  operations  of Real  Estate  Joint
Ventures.

Although  intended to add to returns,  the  borrowing of funds to purchase  real
estate investments exposes the Fund to the risk that the returns achieved on the
real estate  investments  will be lower than the cost of  borrowing  to purchase
such  assets  and  that the  leveraging  of the  Fund to buy  such  assets  will
therefore  diminish  the  returns  to be  achieved  by the Fund as a  whole.  In
addition, there is a risk that the availability of financing will be interrupted
at some future  time,  requiring  the Fund to sell  assets to repay  outstanding


                                       19
<PAGE>
borrowings  or a portion  thereof.  It may be  necessary  to make such  sales at
unfavorable prices. The Fund's obligations under the Credit Facility are secured
by a pledge of its assets.  In the event of default,  the lender  could elect to
sell  assets of the Fund  without  regard to  consequences  of such  action  for
Shareholders.  The rights of the lender to receive  payments  of interest on and
repayments   of  principal  of  borrowings  is  senior  to  the  rights  of  the
Shareholders.  Under the terms of the Credit Facility, the Fund is not permitted
to make  distributions of cash or securities while there is outstanding an event
of default under the Credit Facility. During such periods, the Fund would not be
able to honor redemption requests or make cash distributions.

The  valuations  of  Partnership  Preference  Units held by the Fund through its
investment in BREC fluctuate over time to reflect, among other factors,  changes
in interest rates,  changes in the perceived  riskiness of such units (including
call  risk),  changes  in the  perceived  riskiness  of  comparable  or  similar
securities trading in the public market and the relationship  between supply and
demand for  comparable  or  similar  securities  trading  in the public  market.
Increases in interest  rates and  increases in the  perceived  riskiness of such
units or comparable or similar securities will adversely affect the valuation of
the Partnership  Preference  Units.  The ongoing value of BREC's  investments in
Real Estate Joint Ventures will be substantially  uncertain.  BREC's investments
in Real Estate Joint Ventures generally will be stated at estimated market value
based on  independent  valuations,  assuming an orderly  disposition  of assets.
Detailed  investment   evaluations  will  be  performed  annually  and  reviewed
periodically.   Interim  valuations  will  reflect  results  of  operations  and
distributions,  and may be adjusted to reflect  significant  changes in economic
circumstances since the most recent independent evaluation.  Fluctuations in the
value of real estate investments  derived from changes in general interest rates
can be expected to be offset in part (but not  entirely) by changes in the value
of interest rate swap  agreements or other  interest rate hedges entered into by
the Fund with respect to its borrowings under the Credit Facility.  Fluctuations
in the value of real  estate  investments  derived  from other  factors  besides
general interest rate movements  (including  issuer-specific and sector-specific
credit concerns,  property-specific concerns and changes in interest rate spread
relationships)  will not be offset by changes in the value of interest rate swap
agreements or other  interest rate hedges  entered into by the Fund.  Changes in
the valuation of real estate  investments not offset by changes in the valuation
of interest rate swap  agreements or other  interest rate hedges entered into by
the Fund will cause the  performance of the Fund to deviate from the performance
of the Portfolio.  Over time, the  performance of the Fund can be expected to be
more volatile than the performance of the Portfolio.


                                       20
<PAGE>
PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

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

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

     None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

     None.

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

     None.

ITEM 5. OTHER INFORMATION.

     None.

ITEM 6. THE FOLLOWING IS A LIST OF ALL EXHIBITS FILED AS PART OF THIS FORM 10Q:

     (a)        Exhibits
     21         List of subsidiaries


                                       21
<PAGE>
                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned  officer of its  Manager,  Eaton  Vance  Management  thereunto  duly
authorized on August 14, 2001.


                                BELAIR CAPITAL FUND LLC
                                (Registrant)

                                By: EATON VANCE MANAGEMENT,
                                    its Manager


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


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


                                       22
<PAGE>
                                  EXHIBIT INDEX


21      List of subsidiaries







                                       23