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

                                    FORM 10Q

                Quarterly report pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
                  For the quarterly period ended March 31, 1999


                      BELAIR CAPITAL FUND LLC (THE "FUND")
                      ------------------------------------
             (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
                               ----------------------------

Securities to be registered pursuant to Section 12(b) of the Act:      NONE
                                                                 ---------------

Securities to be registered pursuant to Section 12(g) of the Act:

           LIMITED LIABILITY COMPANY INTERESTS IN THE FUND ("SHARES")
           ----------------------------------------------------------
                                (Title of class)


<PAGE>
                             Belair Capital Fund LLC
                                Index to Form 10Q

PART I - FINANCIAL  INFORMATION                                             Page

Item 1. Unaudited Consolidated Financial Statements                            2

     Consolidated  Statements  of Assets and  Liabilities
     as of March 31,  1999 (unaudited) and December 31, 1998                   2

     Consolidated  Statements of Operations For the Three
     Months Ended March 31, 1999 and 1998 (unaudited)                          3

     Consolidated Statements of Changes in Net Assets For
     the Three Months Ended March 31, 1999 and 1998 (unaudited)                4

     Consolidated  Statements of Cash Flows for the Three Months
     Ended March 31, 1999 and 1998 (unaudited)                                 5

     Notes to Financial Statements as of March 31, 1999                        6


Item 2. Management's  Discussion and Analysis of Financial
        Condition and Results of Operations                                   13

Item 3. Quantitative and Qualitative Disclosures About Market Risk            14

PART II - OTHER INFORMATION

Item 1. Legal Proceedings                                                     17

Item 2. Changes in Securities and Use of Proceeds                             17

Item 3. Defaults Upon Senior Securities                                       17

Item 4. Submission of Matters to a Vote of Security Holders                   17

Item 5. Other Information                                                     17

Item 6. Exhibits and Reports on Form 8-K                                      17

SIGNATURES                                                                    18



<PAGE>
PART I.           FINANCIAL INFORMATION

ITEM 1.           UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

BELAIR CAPITAL FUND LLC
 Consolidated Statements of Assets and Liabilities

<TABLE>
                                                                         March 31,
                                                                           1999                December 31,
                                                                        (Unaudited)                1998
                                                                    -------------------     -------------------
<S>                                                                    <C>                     <C>
 Assets:
     Total investments, at value (identified cost, $2,319,697,929      $ 2,608,076,250         $ 2,535,739,282
    at
       March 31, 1999 and $2,304,223,436 at December 31, 1998)
     Cash
                                                                             7,890,941               2,711,580
     Dividends and interest receivable
                                                                             2,593,584               1,008,985
     Other assets
                                                                               478,270                 508,884
                                                                    -------------------     -------------------
                                                                    -------------------     -------------------
           Total Assets                                                $ 2,619,039,045         $ 2,539,968,731
                                                                    -------------------     -------------------

 Liabilities:
     Loan payable                                                       $  618,000,000          $  583,000,000
     Payable for open swap contracts
                                                                             6,775,157              18,155,651
     Payable for fund shares redeemed
                                                                             1,080,920                       -
     Minority interest
                                                                               208,000                       -
     Interest payable
                                                                             5,184,658               4,926,762
     Other accrued expenses
                                                                               774,367               1,037,946
                                                                    -------------------     -------------------
                                                                    -------------------     -------------------
           Total                                                        $  632,023,102          $  607,120,359
          Liabilities
                                                                    -------------------     -------------------
                                                                    ===================     ===================
 Net assets                                                            $ 1,987,015,943         $ 1,932,848,372
                                                                    ===================     ===================

 Sources of Net Assets:
     Paid-in capital                                                   $ 1,763,258,613         $ 1,779,879,517
     Accumulated net realized loss on investments (computed
       on the basis of identified
    cost)                                                                 (55,182,551)            (55,088,152)
     Accumulated distributions in excess of net investment income
                                                                           (2,663,287)             (5,303,188)
     Net unrealized appreciation of investments (computed
       on the basis of identified
    cost)                                                                  281,603,168             213,360,195
                                                                    ===================     ===================
           Total                                                       $ 1,987,015,943         $ 1,932,848,372
                                                                    ===================     ===================

 Shares outstanding
                                                                            16,429,460              16,568,833

 Net Asset Value and Redemption
 Price Per Share                                                          $     120.94            $     116.66
</TABLE>


                                       2
<PAGE>



BELAIR CAPITAL FUND LLC
<TABLE>
 Consolidated Statements of Operations (Unaudited)                     Three months            Three months
                                                                           ended                   Ended
                                                                      March 31, 1999          March 31, 1998
                                                                    -------------------     -------------------
<S>                                                                      <C>                     <C>
 Investment Income:
     Dividends allocated from Belvedere Capital (net of foreign          $   4,618,526           $   1,777,687
      taxes, $46,659 and $0 for March 31, 1999 and 1998,
      respectively)

     Interest allocated from Belvedere
    Capital                                                                  1,253,833                       -
     Expenses allocated from Belvedere Capital
                                                                           (3,146,321)               (677,373)
                                                                    -------------------     -------------------
     Net investment income allocated from Belvedere Capital
                                                                             2,726,038               1,100,314
     Dividends from partnership preference units
                                                                            11,722,048                       -
     Interest
                                                                                40,434                       -
                                                                    ===================     ===================
           Total investment income                                      $   14,488,520           $   1,100,314
                                                                    ===================     ===================

 Expenses:
    Investment advisor fees                                              $   1,521,637            $    266,941
    Service fees
                                                                               230,289                  52,392
    Interest expense
                                                                             8,344,620               1,858,935
    Interest expense on swap contracts
                                                                             1,663,492                 159,470
    Custodian and transfer agent fees
                                                                                17,469                   5,681
    Legal and accounting services
                                                                                32,363                  16,570
    Printing and postage
                                                                                 1,229                   1,923
    Amortization of organization expenses
                                                                                30,614                   1,421
    Miscellaneous
                                                                                 6,906                 128,278
                                                                    -------------------     -------------------
          Total expenses                                                $   11,848,619           $   2,491,611
                                                                    -------------------     -------------------
                                                                    -------------------     -------------------
 Net investment income (loss)                                            $   2,639,901          $  (1,391,297)
                                                                    -------------------     -------------------

 Realized and Unrealized Gain (Loss)
 Net realized gain (loss)
-
     Investment transactions from Belvedere Capital                      $   5,206,357           $   (382,464)
     Investment transactions in partnership preference units
                                                                           (5,300,756)                       -
     Investment transactions in copper and aluminum
                                                                                     -             (1,315,184)
                                                                    -------------------     -------------------
           Net realized gain (loss)                                     $  (   94,399)          $  (1,697,648)
                                                                    -------------------     -------------------
 Change in unrealized appreciation (depreciation) -
     Investment in Belvedere Capital                                    $   51,330,957          $   61,139,352
     Investments in partnership preference units
                                                                             5,531,522
     Interest rate swap contracts
                                                                            11,380,494             (1,706,668)
                                                                    -------------------     -------------------
           Net change in unrealized appreciation                        $   68,242,973          $   59,432,684
                                                                    -------------------     -------------------

     Net realized and unrealized                                        $   68,148,574          $   57,735,036
    gain
                                                                    ===================     ===================
 Net increase in net assets from operations                             $   70,788,475          $   56,343,739
                                                                    ===================     ===================
</TABLE>

                                       3
<PAGE>
BELAIR CAPITAL FUND LLC
<TABLE>
 Consolidated Statements of Changes in Net Assets (Unaudited)
                                                                       Three months            Three months
                                                                           ended                   ended
                                                                      March 31, 1999          March 31, 1998
                                                                    -------------------     -------------------
<S>                                                                      <C>                    <C>
 Increase(Decrease) in Net Assets:
     Net investment income (loss)                                        $   2,639,901          $  (1,391,297)
     Net realized gain (loss) from investment transactions
                                                                              (94,399)             (1,697,648)
     Net change in unrealized appreciation (depreciation) of
      investments                                                           68,242,973              59,432,684
                                                                    -------------------     -------------------
           Net increase in net assets from operations                   $   70,788,475          $   56,343,739
                                                                    -------------------     -------------------

 Transactions in fund shares -
     Investment securities and cash contributed                             $        -          $  600,662,711
     Less - selling commissions
                                                                                     -             (2,393,365)
                                                                    -------------------     -------------------
     Net contributions
                                                                                     -             598,269,346
     Net asset value of shares redeemed
                                                                          (16,620,904)               (979,585)
                                                                    -------------------     -------------------
           Net increase in net assets from Fund share transactions     $  (16,620,904)          $  597,289,761
                                                                    -------------------     -------------------

 Net increase in net assets                                             $   54,167,571          $  653,633,500

 Net assets:
     Beginning of period
                                                                         1,932,848,372                  10,100
                                                                    ===================     ===================
     End of                                                            $ 1,987,015,943          $  653,643,600
    period
                                                                    ===================     ===================


 Accumulated distributions in excess of net investment
 income/(net investment loss)  included in net assets at end of
 period

                                                                         $   2,663,287          $  (1,391,297)
</TABLE>


                                       4
<PAGE>
BELAIR CAPITAL FUND LLC
<TABLE>
 Consolidated Statements of Cash Flows (Unaudited)
                                                                                 Three months               Three months
                                                                                     ended                     ended
                                                                                March 31, 1999             March 31, 1998
                                                                              -------------------       --------------------
<S>                                                                                <C>                       <C>
Cash flows from Operating Activities -
Net investment income                                                              $   2,639,901             $  (1,391,297)
Adjustments to reconcile net investment income to net
Cash flows from operations -
            Amortization of organization expense
                                                                                          30,614                      1,421
            Net investment income allocated from Belvedere Capital
                                                                                     (2,726,038)                (1,100,314)
            Increase in dividends receivable
                                                                                     (1,584,599)                          -
            Increase in interest payable for open swap contracts
                                                                                         520,185                    159,470
            Increase (decrease) in accrued interest and operating expenses
                                                                                       (525,868)                  2,404,753
            Increase in minority interest
                                                                                         208,000                          -
            Purchases of partnership preference units, copper and aluminum
                                                                                   (139,000,000)              (228,535,863)
            Sales of partnership preference units, copper and aluminum
                                                                                     104,049,244                 47,220,678
            Net (increase) decrease in investment in Belvedere Capital
                                                                                       8,168,879                (6,200,859)
                                                                              -------------------       --------------------
            Net cash flows used for operating activities                         $  (28,219,682)            $ (187,442,011)
Cash Flows From Financing Activities -
            Proceeds from loan                                                    $   35,000,000             $  190,000,000
            Payments on behalf of shareholders (selling commissions)
                                                                                               -                (2,393,365)
            Payments for Fund shares redeemed
                                                                                     (1,600,957)                  (174,724)
                                                                              -------------------       --------------------
            Net cash flows from financing activities                              $   33,399,043             $  187,431,911

Net increase in cash
                                                                                       5,179,361                   (10.100)

Cash beginning of period
                                                                                       2,711,580                    10.100
                                                                              ===================       ====================
Cash end of period                                                                 $   7,890,941                 $        -
                                                                              ===================       ====================


Supplemental Disclosure and Non-cash Investing and
Financing Activities
            Securities contributed by shareholders, invested in Belvedere          $           -            $  600,552,612
             Capital
            Unrealized appreciation of investments and open swap contracts
                                                                                     281,603,168                 59,432,684
            Interest paid for loan
                                                                                       8,606,909                     32,181
            Interest paid for swap contracts
                                                                                       1,143,307                          -
            Market value of securities distributed in payment of redemptions
                                                                                      13,939,027                    804,861
</TABLE>


                                       5
<PAGE>
BELAIR  CAPITAL FUND LLC As Of March 31, 1999
NOTES TO  CONSOLIDATED  FINANICIAL (UNAUDITED)

1. Belair  Capital Fund LLC (Belair  Capital) is  organized  as a  Massachusetts
limited liability company 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,  the Fund invests
indirectly  in  income-producing,  preferred  equity  interests  in real  estate
operating   partnerships   (partnership   preference   units)   affiliated  with
publicly-traded   real  estate  investment  trusts  (REITs).   Belair  Capital's
investment in partnership preference units is achieved through its investment in
Belair Real Estate Corporation (BREC).  BREC is a Delaware  corporation that has
been  organized  and  intends  to  operate  in such a manner as to  qualify  for
taxation as a REIT under the Internal  Revenue Code.  At March 31, 1999,  Belair
Capital  owned  all of  the  outstanding  voting  stock  of  BREC.  BREC   began
operations  on November 24, 1998.  Prior to November  24, 1998,  Belair  Capital
invested directly in partnership preference units.

The  accompanying  consolidated  financial  statements  include the  accounts of
Belair  Capital  and BREC  (collectively,  the Fund) for  periods  ending  after
November 24, 1998. All material intercompany accounts and transactions have been
eliminated.  For informational purposes, a summary of the Portfolio's operations
is included with these consolidated financial statements (see Note 8).

The  following  is a summary of  significant  accounting  policies  consistently
followed  by  the  Fund  in  the  preparation  of  its  consolidated   financial
statements.

A Investment  Security Costs -- The Fund's  investment  assets were  principally
acquired  on  February  6,  1998,  April  20,  1998 and June  25,  1998  through
contributions of common stock by Shareholders in exchange for Shares of the Fund
and in private purchases of partnership  preference units,  copper and aluminum.
The Fund immediately exchanged the contributed securities into Belvedere Capital
for shares  thereof,  and Belvedere  Capital,  in turn,  immediately  thereafter
exchanged the  contributed  securities into the Portfolio for an interest in the
Portfolio. The cost at which the Fund's investments are carried on the books and
in the financial statements is the value of the contributed securities as of the
close of business on the day prior to their contribution to the Fund and, in the
case of purchased  securities,  the acquisition  price thereof.  The initial tax
basis of the Fund's investment in the Portfolio through Belvedere Capital is the
same as the contributing  Shareholders' basis in securities and cash contributed
to the Fund.  The initial tax basis of  securities  purchased by the Fund is the
purchase cost.

B  Investment   Valuations  --The  Fund's  investments  consist  of  partnership
preference units and shares of Belvedere Capital.  Belvedere Capital's exclusive


                                       6
<PAGE>
investment is an interest in the Portfolio, the value of which is derived from a
proportional interest therein.  Additionally, the Fund has entered into interest
rate  swap  contracts  (see  Note 7).  The  valuation  policy  that  follows  is
applicable  to the  assets of the Fund,  Belvedere  Capital  and the  Portfolio.
Marketable  securities,  including  options,  that are listed on foreign or U.S.
securities  exchanges  or in the  NASDAQ  National  Market  System are valued at
closing  sale prices,  on the exchange  where such  securities  are  principally
traded.  Futures  positions on securities or currencies are generally  valued at
closing settlement prices.  Unlisted or listed securities for which closing sale
prices are not available are valued at the mean between the latest bid and asked
prices.  Short-term debt securities with a remaining maturity of 60 days or less
are valued at amortized cost, which  approximates  value. Other fixed income and
debt  securities,  including  listed  securities  and securities for which price
quotations  are  available,  will  normally be valued on the basis of valuations
furnished by a pricing  service.  Investments  held by the  Portfolio  for which
valuations or market  quotations are  unavailable are valued at fair value using
methods  determined  in  good  faith  by or at the  direction  of the  Trustees.
Investments  held by the Fund for  which  valuations  or market  quotations  are
unavailable  are valued at fair value using methods  determined in good faith by
the  Investment  Adviser.  Interest rate swap  contracts are valued by obtaining
dealer or counterparty quotes.

C Income -- Dividend  income is recorded on the  ex-dividend  date and  interest
income is recorded on the accrual  basis.  Belvedere  Capital's  net  investment
income  or loss  consists  of  Belvedere  Capital's  pro-rata  share  of the net
investment  income of the  Portfolio,  less all  actual or accrued  expenses  of
Belvedere Capital,  determined in accordance with generally accepted  accounting
principles.  The Fund's net  investment  income or loss  consists  of the Fund's
pro-rata  share of the net  investment  income of  Belvedere  Capital,  plus all
income  earned on the Fund's  direct  investments,  less all actual and  accrued
expenses of the Fund determined in accordance with generally accepted accounting
principles.

D Income  Taxes -- Belair  Capital,  Belvedere  Capital  and the  Portfolio  are
treated as  partnerships  for federal income tax purposes.  As a result,  Belair
Capital,  Belvedere  Capital and the Portfolio do not incur  federal  income tax
liability,   and  the   shareholders   and  partners  thereof  are  individually
responsible for taxes on items of partnership income, gain, loss, and deduction.
BREC  expects to qualify as a REIT under the Internal  Revenue Code of 1986,  as
amended.  BREC will generally not be subject to federal income tax to the extent
that  it  distributes  its  earnings  to  its  shareholders  and  maintains  its
qualification as a REIT.

E  Deferred  Organization  Expenses  -- Costs  incurred  by  Belair  Capital  in
connection with its  organization  are being amortized on a straight-line  basis
over five years.  Costs incurred in connection with the organization of BREC are
expensed as incurred.

F Interest Rate Swaps -- The Fund has entered into interest rate swap agreements
with  respect  to its  borrowings  and  investments  in  fixed-rate  partnership
preference  units.  Pursuant  to  these  agreements,  the Fund  makes  quarterly
payments to the  counterparty  at  predetermined  fixed  rates,  in exchange for
floating-rate  payments  from the  counterparty  at a  predetermined  spread  to
three-month  LIBOR, based on notional values  approximately  equal to the Fund's
acquisition cost for the fixed-rate  partnership  preference  units.  During the
terms of the outstanding  swap agreements,  changes in the underlying  values of
the swaps are  recorded as  unrealized  gains or losses.  The Fund is exposed to
credit loss in the event of non-performance  by the swap counterparty.  However,
the Fund does not anticipate non-performance by the counterparty.


                                       7
<PAGE>P
G  Written  Options  --  The  Portfolio  and  the  Fund  may  write  listed  and
over-the-counter call options on individual securities, on baskets of securities
and on stock market indices.  Upon the writing of a call option, an amount equal
to the premium received by the Portfolio or Fund is included in the Statement of
Assets  and  Liabilities  as  a  liability.  The  amount  of  the  liability  is
subsequently marked-to-market to reflect the current value of the option written
in accordance with the investment  valuation policies discussed above.  Premiums
received  from  writing  options  which  expire are treated as  realized  gains.
Premiums  received  from writing  options  which are exercised or are closed are
added to or offset  against the  proceeds or amount paid on the  transaction  to
determine  the realized  gain or loss.  The  Portfolio or Fund as a writer of an
option may have no control over whether the  underlying  securities  may be sold
and as a result bears the market risk of an  unfavorable  change in the price of
the securities underlying the written option.

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

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

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

K Interim Financial  Statements -- The interim financial  statements relating to
March 31, 1999 and March 31,  1998 and for the periods  then ended have not been
audited by independent  certified public accountants,  but in the opinion of the
Fund's management, reflect all adjustments,  consisting only of normal recurring
adjustments, necessary for the presentation of the financial statements.

2 Distributions to Shareholders

The Fund intends to make annual income distributions  approximately equal to the
amount  of  its  net  investment  income,  if  any,  and  annual  capital  gains
distributions  equal to  approximately  22% of the  amount  of its net  realized
capital  gains,  if  any,  other  than  precontribution  gains  allocated  to  a
shareholder in connection with a tender offer or other  extraordinary  corporate
event with respect to a security  contributed by such shareholder,  for which no
capital gain distribution will be made. In addition,  whenever a distribution in
respect  of a  precontribution  gain  is  made,  the  Fund  intends  to  make  a
supplemental    distribution   to   compensate   shareholders   receiving   such
distributions  for taxes that may be due in connection with the  precontribution
gain and supplemental distributions.

3 Shareholder Transactions

The  Fund  may  issue  an  unlimited  number  of  full  and  fractional  shares.
Transactions in Fund shares during the three months ended March 31, 1999 and the


                                       8
<PAGE>
period ended March 31, 1998,  including  contributions of securities and cash in
exchange for shares of the Fund were as follows:

                                        Three Months Ended    Period Ended
                                          March 31, 1999     March 31, 1998*
                                        -------------------- ----------------
   Issued at fund closing                                 -        5,982,694
   Redemptions                                    (139,373)          (9,345)
                                        -------------------- ----------------

   Net increase (decrease)                        (139,373)        5,973,449
                                        -------------------- ----------------

* For the period  from the start of  business,  February  6, 1998,  to March 31,
1998.

Redemptions  of shares  held less than three  years are  generally  subject to a
redemption fee of 1% of the net asset value of shares  redeemed.  The redemption
fee is paid to the  Investment  Adviser  by the Fund on behalf of the  redeeming
Shareholder.  No charge is levied on redemptions of shares acquired  through the
reinvestment  of  distributions,  shares  redeemed in  connection  with a Tender
Security or shares redeemed following the death of all of the initial holders of
the  shares  redeemed.   In  addition,  no  fee  applies  to  redemptions  by  a
Shareholder,  who, during any 12-month period,  redeem less than 8% of the total
number of shares held by the  Shareholder  as of the  beginning  of the 12-month
period. For the three months ended March 31, 1999 and the period ended March 31,
1998, the Investment  Adviser  received  $137,968 and $8,049,  respectively,  in
redemption fees.

4 Investment Transactions

Increases  and decreases of the Fund's  investment in Belvedere  Capital for the
three  months  ended  March 31,  1999  aggregated  $4,443,702  and  $26,551,608,
respectively,  and for the period ended March 31, 1998  aggregated  $604,562,198
and  $6,392,850,   respectively.   Purchases  and  sales  of  other  investments
(partnership  preference units, copper and aluminum) aggregated $139,000,000 and
$104,049,244,  respectively,  for the three  months  ended March 31,  1999,  and
$228,535,862 and $47,220,679, respectively, for the period ended March 31, 1998.
Sales of other  investments  during  the  three  months  ended  March  31,  1999
represent the sale of partnership preference units to Belcrest Capital Fund LLC,
a fund similar to the Fund that is sponsored  by Eaton Vance  Management.  There
were no such  sales  during  the  period  ended  March 31,  1998.  In  addition,
investments  were  distributed in payment of Fund shares  redeemed  resulting in
realized capital losses of $763,990 and $27,551 for book purposes, for the three
month  period  ended  March  31,  1999 and the  period  ended  March  31,  1998,
respectively.

5 Management Fee and Other Transactions With Affiliates

The Fund and the Portfolio have engaged Boston  Management and Research (BMR), a
wholly-owned  subsidiary of Eaton Vance Management (EVM) as investment  adviser.
Under the terms of the advisory  agreement  with the  Portfolio,  BMR receives a
monthly fee of 5/96 of 1% (0.625%  annually) of the average  daily net assets of


                                       9
<PAGE>
the Portfolio up to $500,000,000 and at reduced rates as daily net assets exceed
that level. For the three months ended March 31, 1999 and the period ended March
31, 1998 the  advisory  fee  applicable  to the  Portfolio  was 0.46% and 0.48%,
respectively,  of  average  net  assets for such  periods.  Belvedere  Capital's
allocated portion of the advisory fee amounted to $4,640,720 of which $2,296,510
was  allocated  to the Fund,  for the three  months  ended March 31,  1999,  and
$1,739,063,  of which  $460,110 was allocated to the Fund,  for the period ended
March 31, 1998.  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 its average gross investment  assets  (including the value of
all assets of BREC, minus the sum of BREC's liabilities other than any liability
with respect to Belair Capital's Credit  Facility).  The advisory fee payable by
the Portfolio in respect of the Fund's  indirect  investment in the Portfolio is
credited  toward the Fund's  advisory and  administrative  fee payment.  For the
three  months  ended  March 31,  1999 and the period  ended  March 31,  1998 the
advisory  and  administrative  fee  payable to BMR by the Fund,  less the Fund's
allocated  share  of  the  Portfolio's  advisory  fee,  totaled  $1,521,637  and
$266,941, respectively.

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

Pursuant  to a servicing  agreement  between  Belvedere  Capital and Eaton Vance
Distributors,  Inc.  (EVD),  Belvedere  Capital pays a servicing  fee to EVD for
providing certain services and information to shareholders. The servicing fee is
paid on a  quarterly  basis at an annual  rate of 0.15% of  Belvedere  Capital's
average  daily net assets and  totaled  $1,506,207  and  $525,837  for the three
months ended March 31, 1999 and the period  ended March 31, 1998,  respectively,
of which  $744,573  and $140,563  was  allocated  to the Belair  Capital for the
respective periods. Pursuant to a servicing agreement between the 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  Capitals  average  daily net  assets,  less the
Belair  Capitals  allocated  share of the  servicing  fee  payable by  Belvedere
Capital.  For the three  months  ended March 31, 1999 and the period ended March
31, 1998 the servicing fee paid directly by Belair Capital totaled  $230,289 and
$52,392, respectively. For shares sold through a subagent, EVD intends to assign
servicing  responsibilities and fees to the applicable subagent beginning twelve
months after the issuance of Fund shares to such  persons.  For the three months
ended March 31, 1999, EVD paid $191,209 in service fees to subagents. No service
fees were paid to subagents for the period ended March 31, 1998.

6 Credit Facility

The Fund has obtained a $625,000,000  Credit Facility with a term of seven years
from Merrill Lynch International Bank Limited.  The Fund's obligations under the
Credit  Facility  are  secured by a pledge of its  assets.  Interest on borrowed
funds is based on the prevailing  LIBOR rate for the respective  interest period
plus a spread of 0.45% per annum.  The Fund may borrow for  interest  periods of
one month to five years.  In addition,  the Fund pays a commitment fee at a rate
of 0.10%  per  annum  on the  unused  amount  of the  loan  commitment.  Initial
borrowings have been used to purchase qualifying assets (partnership  preference
units,  copper and  aluminum)  to 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


                                       10
<PAGE>
these  purposes.  At March 31, 1999 and December 31, 1998,  amounts  outstanding
under the Credit Facility totaled $618,000,000 and $583,000,000, respectively.

7 Interest Rate Swap Agreements

The Fund has entered into  interest  rate swap  agreements  with  Merrill  Lynch
Capital  Services,  Inc.,  with respect to each of its  holdings of  partnership
preference units and the associated borrowings.  Under such agreements, the Fund
has agreed to pay a fixed rate of interest in  exchange  for a floating  rate of
interest.  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.
The Fund has the right to terminate the interest rate swap agreements  beginning
in the first half of 2003, at dates  corresponding  approximately to the initial
call dates of the partnership preference units held by the Fund.

<TABLE>
                                                                          Unrealized      Unrealized
              NOTIONAL                             Initial               Appreciation/  Appreciation/
              AMOUNT                              Optional              (Depreciation)  (Depreciation)
    Effective  (000's     Fixed      Floating    Termination  Maturity   At March 31,  At December 31,
       Date   omitted)     Rate        Rate         Date        Date         1999            1998
    ----------------------------------------------------------------------------------------------------
       <S>      <C>        <C>         <C>          <C>         <C>          <C>           <C>
       2/98     $60,000     6.72%   Libor+.45%      2/03        2/05         $(667,666)    $(1,845,506)
       2/98     120,000    6.715%   Libor+.45%      2/03        2/05        (1,328,667)     (3,665,804)
       4/98      50,000     6.84%   Libor+.45%      2/03        2/05          (803,222)     (1,788,985)
       4/98     150,000    6.835%   Libor+.45%      4/03        4/05        (2,427,826)     (5,584,296)
       6/98      20,000     6.67%   Libor+.45%      6/03        2/05          (142,111)       (620,177)
       6/98      75,000     6.68%   Libor+.45%      6/03        2/05          (830,500)     (2,358,284)
       6/98      80,000    6.595%   Libor+.45%      6/03        2/05          (611,778)     (2,219,084)
      11/98      14,709     6.13%   Libor+.45%      11/03       2/05            (9,881)        (73,515)
       2/99      34,951     6.34%   Libor+.45%      2/04        2/05             46,494       -
</TABLE>

8 Indirect Investment in Portfolio

Belvedere   Capital's   interest  in  the  Portfolio  at  March  31,  1999,  was
$4,529,834,947,  representing  44.9% of the Portfolio's net assets, and at March
31,  1998 was  $1,817,330,753,  representing  37.6% of the  Portfolio's  assets.
Belair  Capital's  investment  in  Belvedere  Capital  at  March  31,  1999  was
$2,041,655,652,  representing  45.1% of Belvedere  Capital's net assets,  and at
March 31, 1998 was $667,439,285,  representing 36.7% of Belvedere  Capital's net
assets.  Investment income allocated to Belvedere Capital from the Portfolio for
the three months ended March 31, 1999 totaled  $12,010,208,  of which $5,872,359
was allocated to the Fund. Investment income allocated to Belvedere Capital from
the Portfolio for the period ended March 31, 1998 totaled  $5,931,190,  of which
$1,777,687 was allocated to the Fund.  Expenses  allocated to Belvedere  Capital
from the Portfolio for the three months ended March 31, 1999 totaled $4,771,888,
of which $2,361,466 was allocated to the Fund.  Expenses  allocated to Belvedere
Capital  from  the  Portfolio  for the  period  ended  March  31,  1998  totaled
$1,895,572,  of which  $511,865  was  allocated to the Fund.  Belvedere  Capital
allocated additional expenses to the Fund of $784,855 for the three months ended
March 31,  1999,  representing  $40,282 of  operating  expenses  and $744,573 of
service fees.  Belvedere  Capital allocated  additional  expenses to the Fund of
$165,508 for the period ended March 31, 1998,  representing $24,946 of operating
expenses and $140,562 of service fees (see Note 5).


                                       11
<PAGE>
A summary of the Portfolio's  Statement of Assets and Liabilities,  at March 31,
1999,  December  31,  1998 and March 31, 1998 and its  operations  for the three
months  ended March 31,  1999,  the year ended  December 31, 1998 and the period
ended March 31, 1998 follows:

<TABLE>
                                              March 31,       December 31, 1998        March 31,
                                                1999                                     1998
                                          ------------------ -------------------- --------------------
   <S>                                      <C>                   <C>                  <C>
   Investments, at value                    $10,118,166,710       $8,713,317,160       $4,828,513,953
   Other Assets                                  11,801,799            7,040,200            6,108,537

   Total Assets                             $10,129,968,509      $ 8,720,357,360      $ 4,834,622,490
   Total Liabilities                             44,583,965           15,498,025            1,640,860

   Net Assets                               $10,085,384,545      $ 8,704,859,335      $ 4,832,981,629
   ====================================== ================== ==================== ====================
   Dividends and interest                      $ 27,230,271         $ 70,963,640         $ 15,697,528

   Investment adviser fee                        10,581,529           26,313,762            4,773,371
   Other expenses                                   297,623            1,306,076              244,816

   Total expenses                              $ 10,879,152         $ 27,619,838           $5,018,187

   Net investment income                       $ 16,351,119         $ 43,343,802          $10,679,341
   Net realized gains (losses)                   18,042,697         (69,097,723)            3,388,200
   Net unrealized gains                         265,622,128        1,226,948,293          524,618,241

   Net increase in net assets from          $   300,015,944      $ 1,201,194,372       $  538,685,782
   operations
   ====================================== ================== ==================== ====================
</TABLE>


                                       12
<PAGE>
ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     Increases and decreases in the Fund's net asset value per Share are derived
from net  investment  income,  and realized and  unrealized  gains and losses on
investments,  including securities  investments held through the Fund's indirect
interest  (through the Company) in the Portfolio,  real estate  investments held
through  BREC and any  direct  investments  of the  Fund.  Expenses  of the Fund
include its pro-rata share of the expenses of BREC, the Company,  and indirectly
the  Portfolio,  as well as the actual and  accrued  expenses  of the Fund.  The
Fund's most  significant  expense is interest  incurred on borrowings  under the
Credit  Facility and, to a lesser degree,  interest rate swap  agreements.  Fund
borrowings are used primarily to finance the purchase of Partnership  Preference
Units  through  BREC.  The  interest  paid on Fund  borrowings  is offset by the
dividends earned from the Fund's indirect  investment in Partnership  Preference
Units.  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
the Company,  and indirectly  the Portfolio,  as well as realized and unrealized
gains and losses on investments in  Partnership  Preference  Units 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 holdings of the Portfolio
are broadly  diversified,  the performance of the Portfolio cannot be attributed
to one  particular  stock or one  particular  industry  or  market  sector.  The
performance  of the Portfolio and the Fund are  substantially  influenced by the
overall  performance  of the  United  States  stock  market,  as  well as by the
relative performance versus the overall market of specific stocks and classes of
stocks in which the Portfolio  maintains large positions.  Through the impact of
interest  rates  on the  valuation  of the  Fund's  investments  in  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 MARCH 31, 1999
----------------------------------------------------------

     The Fund achieved a total return of 3.6% during the quarter ended March 31,
1999.  This return  reflects an increase in the Fund's net asset value per share
from  $116.66 to  $120.94.  For  comparison,  the S&P 500,  an  unmanaged  index
commonly used to measure the performance of U.S.  stocks,  had a total return of
5.0% over the same period.

     During the first quarter of 1999, performance in the U.S. equity market was
led by the large capitalization  growth stocks that dominate the S&P 500 and, to
a lesser extent,  the holdings of the Portfolio.  Investors placed  increasingly
high  valuations on well-known,  industry-leading  companies  with  above-market
growth potentials. This continues the trend established during 1998.

     In the fixed income markets,  the first quarter was characterized by rising
interest rates on benchmark  government  bonds and a narrowing of credit spreads
for corporate issues.  The Fund's  performance during the quarter was positively
impacted by its  holdings of  Partnership  Preference  Units and the  associated
interest rate swap agreements, benefiting from the narrowing of credit spreads.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

     As of March 31, 1999, the Fund had  outstanding  borrowings of $618 million
and unused loan commitments of $7 million under the Credit Facility  established
with Merrill Lynch  International Bank Limited,  the term of which extends until


                                       13
<PAGE>
February 6, 2005.  The Credit  Facility is being used  primarily  to finance the
Fund's investments in Partnership  Preference Units and will continue to be used
for such  purposes  in the  future,  as well as to  provide  for any  short-term
liquidity  needs of the Fund.  In the future,  the Fund may increase the size of
the Credit  Facility  (subject to lender  consent) and the amount of outstanding
borrowings thereunder for these purposes.

     The Fund may redeem shares of the Company at any time. Both the Company and
the  Portfolio   follow  the  practice  of  normally   meeting   redemptions  by
distributing securities,  consisting,  in the case of the Company, of securities
drawn  from  the  Portfolio.  The  Company  and  the  Portfolio  may  also  meet
redemptions by  distributing  cash. As of March 31, 1999, the Portfolio had cash
and short-term  investments totaling $460.2 million. The Portfolio  participates
in a $130 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 $130 million line of credit at March 31,
1999,  and, as of that date, the net assets of the Portfolio  totaled  $10,085.4
million.  To ensure liquidity for investors in the Portfolio,  the Portfolio may
not invest more than 15% of its net assets in illiquid  assets.  As of March 31,
1999, restricted securities, which are considered illiquid,  constituted 4.5% of
the net assets of the Portfolio.

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

     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  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.

     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


                                       14
<PAGE>
contracts  and options on stock index  futures;  the purchase of put options and
the sale of call options on securities held;  equity swaps; and the purchase and
sale of forward currency exchange contracts and currency futures.  The Portfolio
may make short sales of securities  provided that an equal amount is held of the
security  sold  short  (a  covered  short  sale)  and may  also  lend  portfolio
securities.  The Fund utilizes  interest rate swap agreements to fix the cost of
its borrowings over the term of the Credit Facility. 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 these  investment  techniques is a
specialized activity that may be considered speculative and which can expose the
Fund and the  Portfolio to  significant  risk of loss.  Successful  use of these
investment  techniques  is  subject  to  the  ability  and  performance  of  the
investment  adviser.  The  Fund's  and the  Portfolio's  ability  to meet  their
investment  objectives may be adversely affected by the use of these techniques.
The  writer  of an option or a party to an  equity  swap may incur  losses  that
substantially exceed the payments, if any, received from a counterparty.  Swaps,
caps,  floors,  collars and  over-the-counter  options are private  contracts in
which there is also a risk of loss in the event of a default on an obligation to
pay by the  counterparty.  Such  instruments  may be difficult to value,  may be
illiquid and may be subject to wide swings in valuation caused by changes in the
price of the underlying security, index, instrument or currency. In addition, if
the Fund or the Portfolio has  insufficient  cash to meet margin,  collateral or
settlement  requirements,  it may have to sell assets to meet such requirements.
Alternatively, should the Fund or the Portfolio fail to meet these requirements,
the counterparty or broker may liquidate positions of the Fund or the Portfolio.
The Portfolio may also have to sell or deliver securities  holdings in the event
that it is not able to purchase securities on the open market to cover its short
positions or to close out or satisfy an exercise  notice with respect to options
positions it has sold.  In any of these cases,  such sales may be made at prices
or in circumstances that the investment adviser considers unfavorable.

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

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


                                       15
<PAGE>
     The Partnership Preference Units held by the Fund through its investment in
BREC  are  subject  to   restrictions  on  transfer,   including,   among  other
restrictions,  limitations on the manner of resale and the requirement  that the
general  partner of the issuer  consent to transfers.  In addition,  there is no
active  secondary  market for any Partnership  Preference Units that BREC holds.
Accordingly,  BREC's  investments in Partnership  Preference Units are illiquid.
The success of BREC's  investments  in Partnership  Preference  Units depends in
part on many  factors  related  to the real  estate  market  and to the  issuing
partnerships that may affect such partnerships'  profitability and their ability
to make distributions to holders of Partnership  Preference Units. These factors
include, without limitation,  general economic conditions, the supply and demand
for different types of real  properties,  the financial  health of tenants,  the
timing of lease expirations and  terminations,  fluctuations in rental rates and
operating costs,  exposure to adverse  environmental  conditions and losses from
casualty or condemnation,  interest rates, availability of financing, managerial
performance,  government rules and regulations, and acts of God. Although BREC's
investments in Partnership Preference Units are, to some degree,  insulated from
risk by virtue of their senior  position  relative to other equity  interests in
the issuing partnerships and by their diversification across a range of property
types and geographic  regions,  the  above-referenced  factors can substantially
affect the value and  marketability  of such investments over time. There can be
no assurance that the  investments in  Partnership  Preference  Units will be an
economic success.

     The valuations of Partnership Preference Units held by 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.  Fluctuations  in the value of  Partnership
Preference  Units derived from changes in general interest rates can be expected
to be offset in part (but not entirely) by changes in the value of interest rate
swap  agreements  or other  interest  rate hedges  entered into by the Fund with
respect to its borrowings under the Credit  Facility.  Fluctuations in the value
of  Partnership  Preference  Units  derived from other factors  besides  general
interest rate movements  (including  issuer-specific and sector-specific  credit
concerns and changes in interest rate spread  relationships)  will not be offset
by changes in the value of interest rate swap  agreements or other interest rate
hedges  entered into by the Fund.  Changes in the  valuation of the  Partnership
Preference  Units not offset by changes in the  valuation of interest  rate swap
agreements or other interest rate hedges entered into by 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.


                                       16
<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 of their assets are subject.

Item 2. Changes in Securities and Use of Proceeds.

     None.

Item 3. Defaults Upon Senior Securities.

     None.

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

     None.

Item 5. Other Information.

     None.

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

     27 Financial Data Schedules


                                       17
<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 thereunto duly authorized.

                              BELAIR CAPITAL FUND LLC




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



                                       18