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, 2000
                          Commision File No. 0002-25767

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


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


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


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


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

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


                                  Page 1 of 24

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

PART I - FINANCIAL INFORMATION
                                                                            Page

Item 1. Consolidated Financial Statements                                      3

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

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

        Consolidated Statements of Changes in Net Assets For the Six
        Months Ended June 30, 2000 and 1999 (unaudited)                        5

        Consolidated Statements of Cash Flows for the Six Months
        Ended June 30, 2000 and 1999 (unaudited)                               6

        Notes to Financial Statements as of June 30, 2000 (unaudited)          7


Item 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations                                             16

Item 3. Quantitative and Qualitative Disclosures About Market Risk            18

PART II - OTHER INFORMATION

Item 1. Legal Proceedings                                                     22

Item 2. Changes in Securities and Use of Proceeds                             22

Item 3. Defaults Upon Senior Securities                                       22

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

Item 5. Other Information                                                     22

Item 6. Exhibits and Reports                                                  22


SIGNATURES                                                                    23

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

 BELAIR CAPITAL FUND LLC

 Consolidated Statements of Assets and Liabilities

<TABLE>
                                                                                June 30,
                                                                                  2000              December 31,
                                                                               (Unaudited)              1999
                                                                           -------------------   ------------------
<S>                                                                            <C>                  <C>
 Assets:
     Investment in Belvedere Capital LLC                                       $2,234,901,756       $2,228,073,699
     Investment in real estate partnership preference units                       587,848,146          502,999,255
     Investment in other real estate                                              157,100,000                    -
     Short-term investments                                                         5,855,757                    -
                                                                           -------------------   ------------------
                    Total Investments                                          $2,985,705,659       $2,731,072,954
     Cash                                                                          10,884,613            3,802,594
     Receivable for open swap contracts                                            23,682,823           23,158,186
     Dividends receivable                                                           2,221,355              608,281
     Deferred expenses                                                              2,672,634              338,678
     Escrow deposits - restricted                                                   2,663,377                    -
     Swap interest receivable                                                         390,177               24,814
     Other assets                                                                      68,731
                                                                           -------------------   ------------------
             Total Assets                                                      $3,028,289,369       $2,759,005,507
                                                                           -------------------   ------------------
 Liabilities:
    Loan payable                                                                 $781,000,000         $655,000,000
    Mortgage payable                                                              112,630,517                    -
    Minority interest in controlled subsidiaries                                   12,054,350              208,000
    Special distributions payable                                                   1,091,752                    -
    Security deposits                                                                 390,589                    -
    Payable for Fund shares redeemed                                                        -            1,072,380
    Rents received in advance                                                         178,277                    -
    Accrued Expenses
        Interest expense                                                            7,726,685            8,156,260
        Other accrued expenses                                                      2,445,801              199,114
                                                                           -------------------   ------------------
             Total Liabilities                                                   $917,517,971         $664,635,754
                                                                           -------------------   ------------------
 Net assets                                                                    $2,110,771,398       $2,094,369,753
                                                                           ===================   ==================

 Shareholders' Capital
                                                                           -------------------   ------------------
     Shareholders' capital                                                     $2,110,771,398       $2,094,369,753
                                                                           -------------------   ------------------

                                                                           -------------------   ------------------
Shares Outstanding                                                                 15,234,397           15,900,744
                                                                           -------------------   ------------------

                                                                           -------------------   ------------------
Net Asset Value and Redemption Price Per Share                                        $138.55              $131.72
                                                                           -------------------   ------------------
</TABLE>


                                       3
<PAGE>
<TABLE>
BELAIR CAPITAL FUND LLC
 Consolidated Statements of Operations
 (Unaudited)                                               Three months      Three months        Six months         Six months
                                                               ended             ended              ended              ended
                                                             June 30,          June 30,           June 30,           June 30,
                                                               2000              1999               2000               1999
                                                         ----------------- ------------------ ------------------ -----------------
 <S>                                                     <C>               <C>                 <C>               <C>
 Investment Income:
     Dividends allocated from Belvedere Capital                $4,805,694         $4,740,033         $9,793,831        $9,358,559
        (net of foreign taxes of $48,532, $94,698,
         $88,422 and $141,357, respectively)
     Interest allocated from Belvedere Capital                  1,238,677          1,165,695          2,074,393         2,419,528
     Expenses allocated from Belvedere Capital                (3,349,395)        (3,217,522)        (6,652,288)       (6,363,843)
                                                         ----------------- ------------------ ------------------ -----------------
     Net investment income allocated from
     Belvedere Capital                                         $2,694,976         $2,688,206         $5,215,936        $5,414,244
     Dividends from partnership preference units               15,496,609         11,934,026         29,185,203        23,656,074
     Interest                                                     128,886            125,136            207,628           165,570
                                                         ----------------- ------------------ ------------------ -----------------
             Total investment income                          $18,320,471        $14,747,368        $34,608,767       $29,235,888
                                                         ----------------- ------------------ ------------------ -----------------

 Expenses:
    Investment advisor fees                                    $1,809,910         $1,653,140         $3,527,449        $3,174,777
    Service fees                                                  207,095            238,792            427,406           469,081
    Interest expense                                           12,762,520          8,586,283         23,798,763        16,930,903
    Interest expense/(income) on swap contracts                 (177,548)          1,809,076             94,232         3,472,568
    Custodian and transfer agent fees                              65,895              9,874             80,139            31,951
    Legal and accounting services                                 264,553            394,053            404,217           426,416
    Printing and postage                                            2,307              3,631              4,800             4,860
    Amortization of deferred expenses                              27,466              8,156             54,831            38,770
    Miscellaneous                                                  16,901                  -             49,701             2,298
                                                         ----------------- ------------------ ------------------ -----------------
            Total expenses                                    $14,979,099        $12,703,005        $28,441,538       $24,551,624
                                                         ----------------- ------------------ ------------------ -----------------
 Net investment income                                         $3,341,372         $2,044,363         $6,167,229        $4,684,264
                                                         ----------------- ------------------ ------------------ -----------------

 Realized and Unrealized Gain (Loss)
 Net realized gain (loss) -
     Investment transactions from Belvedere                   $16,445,271         $1,187,438        $48,297,917        $6,393,795
     Capital
     Investment transactions in partnership                      (48,619)        (2,940,672)        (2,946,213)       (8,241,428)
     preference units                                    ----------------- ------------------ ------------------ -----------------
             Net realized gain (loss)                         $16,396,652       $(1,753,234)        $45,351,704      $(1,847,633)
                                                         ----------------- ------------------ ------------------ -----------------
 Change in unrealized appreciation
 (depreciation) -
     Investment in Belvedere Capital                        $(33,067,459)       $109,647,685       $ 60,470,766      $160,978,642
     Investments in partnership preference units               12,313,512       (19,294,500)        (1,367,252)      (13,762,978)
     Interest rate swap contracts                             (4,727,393)         16,715,449            524,637        28,095,943
                                                         ----------------- ------------------ ------------------ -----------------
    Net change in unrealized
                appreciation/(depreciation)                 $(25,481,340)       $107,068,634        $59,628,151      $175,311,607
                                                         ----------------- ------------------ ------------------ -----------------

     Net realized and unrealized gain (loss)                 $(9,084,688)       $105,315,400      $ 104,979,855      $173,463,974
                                                         ----------------- ------------------ ------------------ -----------------
      Net increase (decrease) in net assets from
                      operations                             $(5,743,316)       $107,359,763       $111,147,084      $178,148,238
                                                         ================= ================== ================== =================
</TABLE>


                                       4
<PAGE>
BELAIR CAPITAL FUND LLC
Consolidated Statements of Changes in Net Assets   (unaudited)
<TABLE>
                                                                              Six Months          Six Months
                                                                                 ended               ended
                                                                            June 30, 2000        June 30, 1999
                                                                          -------------------  ------------------
 <S>                                                                       <C>                 <C>
 Increase (Decrease) in Net Assets:
     Net investment income                                                        $6,167,229          $4,684,264
     Net realized gain (loss) from investment transactions                        45,351,704         (1,847,633)
     Net change in unrealized appreciation (depreciation) of
      investments                                                                 59,628,151         175,311,607
                                                                          -------------------  ------------------
             Net increase in net assets from operations                         $111,147,084        $178,148,238
                                                                          -------------------  ------------------

 Transactions in Fund shares -
     Net asset value of shares redeemed                                        $(89,640,998)       $(26,953,923)
                                                                          -------------------  ------------------
    Net decrease in net assets from Fund share transactions                    $(89,640,998)       $(26,953,923)
                                                                          -------------------  ------------------

Distributions to shareholders -
   Special distributions to Shareholders                                        $(5,104,441)                  -
                                                                          -------------------  ------------------
                  Total distributions                                           $(5,104,441)                  -
                                                                          -------------------  ------------------

 Net increase in net assets                                                      $16,401,645        $151,194,315

 Net assets:
    Beginning of period                                                        2,094,369,753       1,932,848,372
                                                                          -------------------  ------------------
     End of period                                                            $2,110,771,398   $2,084,042,687
                                                                          ===================  ==================
</TABLE>


                                       5
<PAGE>
BELAIR CAPITAL FUND LLC
Consolidated Statements of Cash Flows (unaudited)
<TABLE>
                                                                                       Six months         Six months
                                                                                         ended               ended
                                                                                       June 30,            June 30,
                                                                                         2000                1999
                                                                                   ------------------  ------------------
<S>                                                                                     <C>                 <C>
Cash flows from (for) Operating Activities -
Net investment income                                                                   $  6,167,229        $  4,684,264
Adjustments to reconcile net investment income to net
Cash flows used for operating activity -
       Amortization of organization and other deferred expenses                               54,831              38,770
       Net investment income allocated from Belvedere Capital                            (5,215,936)         (5,414,244)
       Payment of organization and offering expenses                                               -           (443,560)
       Increase in dividends receivable                                                  (1,613,074)         (6,048,718)
       Increase in interest receivable for open swap contracts                             (365,363)                   -
       Increase in interest payable for open swap contracts                                        -             372,345
       Increase in deferred expenses                                                     (2,388,784)                   -
       Increase in other receivables                                                               -            (12,089)
       Increase (decrease) in accrued interest and operating expenses                        859,523           (374,262)
       Increase in minority interest                                                         159,500                   -
       Purchases of partnership preference units                                       (101,895,368)       (209,000,000)
       Payments for investments in other real property                                  (33,988,289)                   -
       Sales of partnership preference units                                              12,733,012         168,858,572
       Net decrease in investment in Belvedere Capital                                    17,126,405          10,035,713
       Increase in short-term investments                                                (5,855,757)                   -
                                                                                   --------------------------------------
       Net cash flows used for operating activities                                   $(114,222,071)      $ (37,303,209)
Cash Flows From (for) Financing Activities -
       Proceeds from loan                                                               $126,000,000        $ 42,000,000
       Payments for Fund shares redeemed                                                   (683,221)         (7,275,444)
       Special distributions paid                                                        (4,012,689)                   -
                                                                                   --------------------------------------
       Net cash flows from financing activities                                    $   121,304,090          $ 34,724,556

Net increase (decrease) in cash                                                            7,082,019         (2,578,653)

Cash at beginning of period                                                                3,802,594           2,711,580
                                                                                   ------------------  ------------------
Cash at end of period                                                                   $ 10,884,613          $  132,927
                                                                                   ==================  ==================

Supplemental Disclosure and Non-cash Investing and
Financing Activities-
       Unrealized appreciation of investments and open swap contracts                  $ 566,163,232     $ 388,671,802
       Interest paid for loan                                                          $  24,228,338     $  17,095,071
       Interest paid for swap contracts                                                $     459,595     $   3,100,223
       Market value of securities distributed in payment of redemptions                $  90,030,157     $  19,672,166
       Market value of real property and other assets, net of current
          liabilities, contributed to Bel Residential                                  $ 158,305,656                 -
       Mortgage assumed in connection with acquisition of real property                $ 112,630,517                 -
       Minority interest in exchange for contribution of real property and
          related assets, net of liabilities                                           $  11,686,850                 -
</TABLE>


                                       6
<PAGE>
BELAIR CAPITAL FUND LLC as of June 30, 2000
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS  (UNAUDITED)

1 Organization

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

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

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

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

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


                                       7
<PAGE>
2 Significant Accounting Policies
The  following  is a summary of  significant  accounting  policies  consistently
followed  by the  Fund  in the  preparation  of its  financial  statements.  The
policies are in conformity with generally accepted accounting principles.

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

B  Investment   Valuations--The   Fund's  investments   consist  of  partnership
preference units, other real property  investments,  shares of Belvedere Capital
and  short-term  debt  securities.  Belvedere  Capital's  only  investment is an
interest in the  Portfolio,  the value of which is derived  from a  proportional
interest  therein.  Additionally,  the Fund has entered into  interest rate swap
contracts  (see Note 7). The valuation  policy  followed by the Fund,  Belvedere
Capital  and the  Portfolio  for all  assets,  other than real  property,  is as
follows. Marketable securities, including options, that are listed on foreign or
U.S. securities  exchanges or in the NASDAQ National Market System are valued at
closing  sale prices,  on the exchange  where such  securities  are  principally
traded.  Futures  positions on securities or currencies are generally  valued at
closing settlement prices.  Unlisted or listed securities for which closing sale
prices are not available are valued at the mean between the latest bid and asked
prices.  Short-term debt securities with a remaining maturity of 60 days or less
are valued at amortized cost, which  approximates  value. Other fixed income and
debt  securities,  including  listed  securities  and securities for which price
quotations  are  available,  are  normally  valued  on the  basis of  valuations
furnished by a pricing  service.  Investments  held by the  Portfolio  for which
valuations or market  quotations are  unavailable are valued at fair value using
methods  determined  in  good  faith  by or at the  direction  of the  Trustees.
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.

The value of the Fund's real estate  assets is determined in good faith by Eaton
Vance as Manager of BREC,  taking into  account all relevant  factors,  data and
information,  including,  with respect to investments in partnership  preference
units,  information from dealers and similar firms with knowledge of such issues
and the prices of  comparable  preferred  equity  securities  and other fixed or


                                       8
<PAGE>
adjustable rate  instruments  having similar  investment  characteristics.  Real
estate investments other than partnership  preference units are generally stated
at estimated market values based on independent valuations.  Detailed investment
valuations,  which include the  discounted  cash flow method of  appraisal,  are
performed  annually and reviewed  periodically  and adjusted if there has been a
significant change in economic  circumstances since the previous valuation.  The
discounted  cash flow  method of  appraisal  projects  future  cash  inflows and
outflows,  and  presumes  a sales  price at the end of a  holding  period.  Such
amounts are  discounted  at an  appropriate  rate of return that a prudent buyer
would  currently  require to purchase the real estate  assets.  The valuation of
investments assumes the orderly disposition of all assets.

C Escrow  Accounts--The  escrow accounts  related to Bel Residential  consist of
deposits for real estate taxes, insurance,  reserve for replacements and capital
repairs required under the mortgage agreement.  Bel Residential has no access to
these funds once  deposited  into the escrow  accounts.  Amounts are held by the
financial institution and controlled by the lender (Note 8).

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

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

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


                                       9
<PAGE>
G Rental Operations--The  apartment units held indirectly by Bel Residential are
leased to residents  generally for a term of one year  renewable upon consent of
both parties on a year-to-year or month-to-month basis.

H  Income--Dividend  income is recorded on the ex-dividend date and interest and
rental 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 investments  (including
partnership  preference  units and other  real  property),  less all  actual and
accrued  expenses of the Fund determined in accordance  with generally  accepted
accounting principles.

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

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

K Income Taxes--Belair Capital,  Belvedere Capital and the Portfolio are treated
as partnerships  for federal income tax purposes.  As a result,  Belair Capital,
Belvedere  Capital and the Portfolio do not incur federal  income tax liability,
and the shareholders and partners thereof are individually responsible for taxes
on items of partnership  income,  gain, loss, and deduction.  The policy of BREC
and Bel  Residential is to comply with the Internal  Revenue Code  applicable to
REITs.  BREC and Bel Residential will generally not be subject to federal income
tax to the extent that they distribute their earnings to their stockholders each
year and maintain their qualification as a REIT.

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

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

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


                                       10
<PAGE>
2 Distributions to Shareholders

The Fund intends to distribute  each year all of its net  investment  income for
the year, if any, and  approximately  22% of its net realized  capital gains for
such year, if any, other than  precontribution  gains allocated to a shareholder
in connection  with a tender offer or other  extraordinary  corporate event with
respect to a security contributed by such shareholder, for which no capital gain
distribution  is made. In addition,  whenever a  distribution  with respect to a
precontribution  gain  is  made,  the  Fund  makes  a  special  distribution  to
compensate  shareholders  receiving such distributions for taxes that may be due
in connection  with the  precontribution  gain and  supplemental  distributions.
Special distributions accrued for or paid during the six month period ended June
30, 2000 totaled $5,104,441.

3 Shareholder Transactions

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

                                         Six Months Ended     Six Months Ended
                                             June 30,             June 30,
                                               2000                 1999
                                       -------------------- --------------------
   Redemptions                               (666,347)                 (222,480)
                                       -------------------- --------------------
   Net decrease                              (666,347)                 (222,480)
                                       -------------------- --------------------


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 shareholders,
who,  during any  12-month  period,  redeems less than 8% of the total number of
shares held by the shareholder as of the beginning of the 12-month  period.  For
the six months ended June 30, 2000 and June 30,  1999,  the  Investment  Adviser
received $683,221 and $137,888, respectively, in redemption fees.

4 Investment Transactions

Increases  and decreases of the Fund's  investment in Belvedere  Capital for the
six  months  ended  June  30,  2000  aggregated   $14,761,240  and  $121,917,802
respectively,  and for the six months ended June 30, 1999 aggregated $20,703,023
and  $49,785,902,  respectively.  Purchases and sales of partnership  preference
units aggregated  $101,895,368 and $12,733,012 for the six months ended June 30,
2000, and  $209,000,000 and $168,858,852 for the six months ended June 30, 1999.
For the six months ended June 30,  2000,  acquisitions  of other real  property,
through  purchases  and  contributions,  totaled  $157,100,000.  There  were  no
acquisitions of real property other than  partnership  preference  units for the
six months ended June 30, 1999.


                                       11
<PAGE>
Purchases and sales of partnership preference units during the period ended June
30, 2000 and sales of partnership  preference units during the period ended June
30, 1999 include  amounts  purchased  from and sold to other funds  sponsored by
Eaton Vance Management.

5 Indirect Investment in Portfolio

Belvedere   Capital's   interest  in  the   Portfolio   at  June  30,  2000  was
$8,894,702,269,  representing  52.4% of the Portfolio's net assets,  and at June
30, 1999 was  $5,209,972,269,  representing 45.0% of the Portfolio's assets. The
Fund's  investment  in  Belvedere  Capital at June 30, 2000 was  $2,234,901,756,
representing  25.1% of Belvedere  Capital's net assets, and at June 30, 1999 was
$2,148,204,008, representing 41.2% of Belvedere Capital's net assets. 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.  Investment  income allocated to Belvedere  Capital from the portfolio
for the six months ended June 30, 1999 totaled $26,073,997, of which $11,778,087
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.  Expenses  allocated to Belvedere  Capital
from the Portfolio  for the six months ended June 30, 1999 totaled  $10,461,875,
of which  $4,769,940  was  allocated to the Fund.  Belvedere  Capital  allocated
additional  expenses to the Fund of $1,698,367 for the six months ended June 30,
2000, representing $55,385 of operating expenses and $1,642,982 of service fees.
Belvedere  Capital allocated  additional  expenses to the Fund of $1,593,903 for
the six months ended June 30, 1999,  representing  $71,990 of operating expenses
and $1,521,913 of service fees (see Note 9).

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

<TABLE>
                                         June 30,             December 31,              June 30,
                                           2000                   1999                    1999
                                    -------------------- ------------------------ ---------------------
<S>                                     <C>                      <C>                   <C>
Investments, at value                   $16,968,560,668          $15,009,514,121       $11,600,175,904
Other Assets                                129,856,981              105,404,490            23,965,371
----------------------------------- -------------------- ------------------------ ---------------------
Total Assets                            $17,098,417,649          $15,114,918,611       $11,624,141,275
Total Liabilities                           122,641,585                  269,652            44,412,722
----------------------------------- -------------------- ------------------------ ---------------------
Net Assets                              $16,975,776,064          $15,114,648,959       $11,579,728,553
=================================== ==================== ======================== =====================
Dividends and interest                      $85,182,083             $135,795,086           $58,144,116
Investment adviser fee                       34,563,622               51,368,943            22,746,571
Other expenses                                1,049,805                1,599,875               682,895
----------------------------------- -------------------- ------------------------ ---------------------
Total expenses                              $35,613,427              $52,968,818           $23,429,466
----------------------------------- -------------------- ------------------------ ---------------------
Net investment income                       $49,568,656              $82,826,268           $34,714,650
Net realized gains (losses)                 528,149,257               19,281,587            31,011,816
Net unrealized gains                      1,165,290,091            1,954,982,313           800,339,021
----------------------------------- -------------------- ------------------------ ---------------------
Net increase in net assets from
operations                               $1,743,008,004           $2,057,090,168          $866,065,487
----------------------------------- -------------------- ------------------------ ---------------------
</TABLE>


                                       12
<PAGE>
6 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, 2000. The carrying
value of real  property  owned by the Fund through Bel  Residential  at June 30,
2000 is as follows:

Land                                                                $ 23,565,000
Buildings, improvements and other depreciable assets                 133,535,000
                                                              ------------------
Carrying value                                                      $157,100,000
                                                              ------------------

7 Cancelable Interest Rate Swap Agreements

The Fund may enter into  cancelable  interest rate swap agreements in connection
with  its  investments  in  partnership  preference  units  and  the  associated
borrowings. Under such agreements, the Fund has agreed to make periodic payments
at fixed rates in exchange  for  payments at  floating  rates.  The  notional or
contractual  amounts of these  instruments  may not  necessarily  represent  the
amounts  potentially  subject to risk. The  measurement of the risks  associated
with these  investments is meaningful only when  considered in conjunction  with
all related assets,  liabilities  and agreements.  As of June 30, 2000, the Fund
has entered into  cancelable  interest rate swap  agreements  with Merrill Lynch
Capital  Services,  Inc.  (MLCS)  with  respect  to  each  of  its  holdings  of
partnership  preference  units and the associated  borrowings.  The Fund has the
right to terminate the interest rate swap agreements beginning in the first half
of 2003, at dates  corresponding  approximately to the initial call dates of the
partnership preference units held by the Fund.

<TABLE>
                                                                                       Unrealized       Unrealized
               Notional                                      Initial                 Appreciation/     Appreciation/
                Amount                                       Optional                (Depreciation)   (Depreciation)
 Effective      (000's          Fixed         Floating     Termination    Maturity    At June 30,     At December 31,
   Date        omitted)         Rate            Rate           Date         Date         2000              1999
------------------------------------------------------------------------------------------------------------------------
<S>                 <C>            <C>             <C>         <C>          <C>         <C>                <C>
   2/98             $ 60,000       6.72%     Libor+.45%        2/03         2/05        $  2,431,800       $  2,190,325
   2/98              120,000      6.715%     Libor+.45%        2/03         2/05           4,884,750          4,404,500
   4/98               50,000       6.84%     Libor+.45%        2/03         2/05           1,820,667          1,579,937
   4/98              150,000      6.835%     Libor+.45%        4/03         4/05           3,791,582          4,983,531
   6/98               20,000       6.67%     Libor+.45%        6/03         2/05             826,850            747,192
   6/98               75,000       6.68%     Libor+.45%        6/03         2/05           3,075,000          2,768,906
   6/98               80,000      6.595%     Libor+.45%        6/03         2/05           3,518,900          3,236,267
   11/98              14,709       6.13%     Libor+.45%       11/03         2/05             883,399            871,658
   2/99               34,951       6.34%     Libor+.45%        2/04         2/05           1,813,943          1,732,927
   4/99                5,191       6.49%     Libor+.45%        2/04         2/05             239,966            223,114
   7/99               24,902      7.077%     Libor+.45%        7/04         2/05             580,760            396,636
   9/99               10,471       7.37%     Libor+.45%        9/04         2/05             121,880             23,193
   3/00               19,149       7.89%     Libor+.45%        2/04         2/05            (73,282)                  -
   3/00               70,000       7.71%     Libor+.45%         -           2/05           (233,392)                  -
------------------------------------------------------------------------------------------------------------------------
Total                                                                                   $ 23,682,823       $ 23,158,186
------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       13
<PAGE>
8 Debt

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

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

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

B Credit  Facility--Belair  Capital has obtained a $790,000,000  Credit Facility
with a term of seven years from Merrill Lynch International Bank Limited. Belair
Capital's  obligations  under the Credit Facility are secured by a pledge of its
assets,  excluding the assets of Bel Residential.  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,  2000,  and December 31,
1999,  amounts  outstanding  under the Credit Facility totaled  $781,000,000 and
$655,000,000, respectively.

9 Management Fee and Other Transactions with Affiliates

The Fund and the Portfolio have engaged Boston  Management and Research (BMR), a
wholly-owned  subsidiary of Eaton Vance Management (EVM) as investment  adviser.
Under the terms of the advisory  agreement  with the  Portfolio,  BMR receives a
monthly fee of 5/96 of 1% (0.625%  annually) of the average  daily net assets of
the Portfolio up to $500,000,000 and at reduced rates as daily net assets exceed
that  level.  For the six months  ended  June 30,  2000,  and June 30,  1999 the
advisory  fee  applicable  to the  Portfolio  was 0.44%  (annualized)  and 0.46%
(annualized),  respectively,  of  average  daily net  assets  for such  periods.
Belvedere  Capital's  allocated portion of the advisory fee was $17,845,464,  of
which  $4,806,934  was allocated to the Fund,  for the six months ended June 30,
2000, and  $10,155,976,  of which  $4,619,261 was allocated to the Fund, for the
six months ended June 30, 1999. In addition,  Belair  Capital pays BMR a monthly
advisory and  administrative  fee of 1/20 of 1% (0.60%  annually) of the average
daily gross  investment  assets of Belair  Capital  (including  the value of all
assets of Belair Capital other than Belair  Capital's  investment in BREC, minus
the sum of Belair Capital's liabilities other than the principal amount of money
borrowed) and BREC pays BMR a monthly  management  fee at a rate of 1/20th of 1%
(equivalent to 0.60% annually) of the average daily gross  investment  assets of
BREC  (which  consist of all assets of BREC minus the sum of BREC's  liabilities
other than the principal amount of money borrowed.  For this purpose, the assets
and  liabilities  of  BREC's   controlled   subsidiaries   are  reduced  by  the
proportionate interests therein of investors other than BREC.). The advisory fee
payable by the Portfolio in respect of Belair Capital's  indirect  investment in
the Portfolio is credited toward Belcrest  Capital's advisory and administrative
fee  payment.  For the six  months  ended  June 30,  2000 and June 30,  1999 the


                                       14
<PAGE>
advisory  and  administrative  fee  payable to BMR by the Fund,  less the Fund's
allocated  share  of  the  Portfolio's  advisory  fee,  totaled  $3,527,449  and
$3,174,777, respectively.

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

Pursuant  to a servicing  agreement  between  Belvedere  Capital and 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  $6,089,747  and  $3,343,263  for the six
months ended June 30, 2000 and June 30, 1999, respectively,  of which $1,642,982
and  $1,521,913  was  allocated to Belair  Capital for the  respective  periods.
Pursuant to a servicing agreement between Belair Capital and EVD, Belair Capital
pays a servicing  fee to EVD on a quarterly  basis at an annual rate of 0.20% of
Belair Capital's average daily net assets, less Belair Capital's allocated share
of the servicing fee payable by Belvedere Capital. For the six months ended June
30, 2000 and June 30, 1999 the  servicing  fee paid  directly by Belair  Capital
totaled  $427,406 and $469,081,  respectively.  Of the amounts  allocated to and
incurred by the Fund,  for the six months ended June 30, 2000 and June 30, 1999,
$2,066,178 and $828,542, respectively, were paid to subagents.

Equity  Residential  Properties  Management Corp. (ERPM) an affiliate of the Bel
Residential  minority  holder  provides day to day management of Bel Residential
pursuant to a management  agreement (Note 1B). The management agreement provides
for a  management  fee in the amount of 4% of gross  collections  and allows for
reimbursement to the of payroll expenses incurred by ERPM.


                                       15
<PAGE>
ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Increases  and  decreases  in Belair  Capital's  net  asset  value per share are
derived from net investment income, and realized and unrealized gains and losses
on Belair Capital's interest (through Belvedere Capital) in the Portfolio,  real
estate  investments  held  through  BREC and any  direct  investments  of Belair
Capital.  Expenses of Belair Capital  include its pro-rata share of the expenses
of Belvedere  Capital,  and indirectly the Portfolio,  as well as the actual and
accrued  expenses  of Belair  Capital and BREC,  including  its  subsidiary  Bel
Residential.  Belair Capital's most significant  expense is interest incurred on
borrowings  incurred  in  connection  with its real estate  investments.  Belair
Capital's  realized and unrealized  gains and losses on investments are based on
its allocated share of the realized and unrealized gains and losses of Belvedere
Capital, and indirectly, the Portfolio, as well as realized and unrealized gains
and  losses on  investments  in real  estate  through  BREC.  The  realized  and
unrealized gains and losses on investments  have the most significant  impact on
Belair  Capital's  net  asset  value per share  and  result  from  sales of such
investments  and  changes in their  underlying  value.  The  investments  of the
Portfolio  consist  primarily of common  stocks of domestic  and foreign  growth
companies  that are  considered  to be high in quality and  attractive  in their
long-term investment prospects.  Because the securities holding of the Portfolio
are broadly  diversified,  the performance of the Portfolio cannot be attributed
to one  particular  stock or one  particular  industry  or  market  sector.  The
performance of the Portfolio and Belair Capital are substantially  influenced by
the overall  performance  of the United States stock  market,  as well as by the
relative performance versus the overall market of specific stocks and classes of
stocks in which the Portfolio  maintains large positions.  Through the impact of
interest rates on the valuation of Belair  Capital's  investments in Partnership
Preference   Units  through  BREC  and  its  positions  in  interest  rate  swap
agreements,  the  performance of Belair Capital is also affected by movements in
interest rates, and particularly,  changes in credit spread relationships.  On a
combined basis, Belair Capital's Partnership  Preference Units and interest rate
swaps  generally  decline in value when credit  spreads  widen (as fixed  income
markets  grow more  risk-averse)  and  generally  increase  in value when credit
spreads tighten.

Results of  Operations  For the  Quarter  ended June 30, 2000 and the Six Months
Ended June 30, 2000

Belair Capital achieved total return  performance of -0.2% for the quarter ended
June 30, 2000.  This return  reflects a decrease in the Belcrest  Capital's  net
asset value per share from $138.86 to $138.55.  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 -2.7% over the same period. Belair
Capital had a total return of 5.4% for the quarter ended June 30, 1999.

During  the  second  quarter  of  2000,  U.S.   equity  market   leadership  was
concentrated  in health  care stocks and  defensive  consumer  products  stocks.
Concerns about a peaking of economic growth pulled money away from other sectors
more  exposed to a weakening  economy.  Technology  stocks were mixed,  with the
strong  momentum  of  previous  quarters  focused  on a narrow  slice of telecom
equipment  and computer  networking  stocks.  A number of  tech-oriented  stocks
experienced  dismal second  quarter  performance,  as growth  expectations  were
revised  downward  or  valuations  more  carefully  scrutinized.   The  relative
performance of Belair Capital versus the S&P 500 was aided by Tax-Managed Growth


                                       16
<PAGE>
Portfolio's  large  holdings  of drug  and  consumer  products  stocks,  and its
valuation-sensitive investment approach.

In the fixed income  markets,  the second  quarter saw stable  interest rates on
benchmark  government bonds and stable credit spreads. The performance of Belair
Capital  during the quarter was little  impacted by changes in  valuation of its
holdings of partnership preference units.

Belair  Capital  achieved  total return  performance  of 5.2% for the six months
ended June 30, 2000.  This return  reflects an increase in Belair  Capital's net
asset value per share from $131.72 to $138.55.  For comparison,  the S&P 500, an
unmanaged index of large capitalization  stocks commonly used as a benchmark for
U.S.  stocks,  had a total return of -0.4% over the same period.  Belair Capital
had a total return of 9.3% for the six months ended June 30, 1999.

During the six months ended June 30, 2000, the U.S.  equity markets were lead by
health care, semiconductor and semiconductor equipment,  computer networking and
energy  stocks.  Gains  during the period were  primarily  achieved in the first
three months.  Growth  stocks  outperformed  value  stocks,  and small cap stock
benchmarks bested their large cap counterparts.  Compared to the euphoric fourth
quarter  of  1999,  markets  showed   considerably  more  caution  in  assessing
valuations,  and more  skepticism  in  embracing  story  stocks  lacking  strong
business  fundamentals  and a clear  growth  strategy.  During the  period,  the
relative  performance  of  Belair  Capital  versus  the S&P 500  benefited  from
Tax-Managed   Growth   Portfolio's  large  holdings  of  drug  stocks,  and  its
valuation-sensitive investment approach.

In the fixed income markets, the first half of 2000 saw declining interest rates
on government bonds, particularly  longer-maturity issues. Concerns about future
availability created a scarcity value for 30-year Treasuries. At the long end of
the maturity spectrum,  credit spreads for corporate issues widened.  The market
for preferred  securities in general,  and real estate preferreds in particular,
improved modestly.  The Belair Capital's  investments in real estate partnership
preference  units and  associated  borrowings  had minimal  impact on the Fund's
performance during the first half of 2000.

Liquidity and Capital Resources

As of June 30, 2000, Belair Capital had outstanding borrowings of $781.0 million
under the Credit  Facility  established  with Merrill Lynch  International  Bank
Limited,  the term of which extends until  February 6, 2005.  Belair Capital has
available under the Credit  Facility $9.0 million to meet  short-term  liquidity
need and for other purposes.

Belair  Capital  may  redeem  shares of  Belvedere  Capital  at any  time.  Both
Belvedere  Capital and the  Portfolio  follow the  practice of normally  meeting
redemptions  by  distributing  securities  drawn from the  Portfolio.  Belvedere
Capital and the Portfolio may also meet redemptions by distributing  cash. As of
June 30, 2000, the Portfolio had cash and short-term investments totaling $731.5
million. The Portfolio  participates in a $150 million multi-fund unsecured line
of credit agreement with a group of banks. The Portfolio may temporarily  borrow
from the line of  credit to  satisfy  redemption  requests  in cash or to settle
investment  transactions.  The Portfolio had no outstanding borrowings under the
$150  million  line of credit at June 30,  2000,  and, as of that date,  the net
assets of the  Portfolio  totaled  $16,975.8  million.  To ensure  liquidity for
investors in the  Portfolio,  the  Portfolio may not invest more than 15% of its


                                       17
<PAGE>
net assets in illiquid assets. As of June 30, 2000, restricted securities, which
are considered illiquid, constituted 4.4% of the net assets of the Portfolio.

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

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

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

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

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

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

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


                                       18
<PAGE>
security  sold  short  (a  covered  short  sale)  and may  also  lend  portfolio
securities.  Belair Capital  utilizes  interest rate swap  agreements to fix the
cost of its  borrowings  over the term of the Credit  Facility.  In the  future,
Belair Capital may use other interest rate hedging  arrangements  (such as caps,
floors and collars) to fix or limit borrowing costs. The use of these investment
techniques is a specialized  activity  that may be  considered  speculative  and
which can expose Belair Capital and the Portfolio to  significant  risk of loss.
Successful  use of these  investment  techniques  is subject to the  ability and
performance  of the investment  adviser.  Belair  Capital's and the  Portfolio's
ability to meet their investment objectives may be adversely affected by the use
of these  techniques.  The writer of an option or a party to an equity  swap may
incur losses that  substantially  exceed the payments,  if any,  received from a
counterparty.  Swaps, caps,  floors,  collars and  over-the-counter  options are
private  contracts  in  which  there  is also a risk of loss in the  event  of a
default on an obligation to pay by the  counterparty.  Such  instruments  may be
difficult  to  value,  may be  illiquid  and may be  subject  to wide  swings in
valuation  caused by changes  in the price of the  underlying  security,  index,
instrument  or currency.  In addition,  if Belair  Capital or the  Portfolio has
insufficient cash to meet margin, collateral or settlement requirements,  it may
have to sell  assets to meet such  requirements.  Alternatively,  should  Belair
Capital or the Portfolio fail to meet these  requirements,  the  counterparty or
broker may liquidate positions of Belair Capital or the Portfolio. The Portfolio
may also have to sell or deliver securities holdings in the event that it is not
able to purchase  securities on the open market to cover its short  positions or
to close out or satisfy an exercise notice with respect to options  positions it
has  sold.  In any of  these  cases,  such  sales  may be made at  prices  or in
circumstances that the investment adviser considers unfavorable.

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

Although  intended  to add to  returns,  the  borrowing  of  funds  to  purchase
Partnership  Preference  Units through BREC exposes  Belair  Capital to the risk
that the returns achieved on the Partnership Preference Units will be lower than
the cost of borrowing to purchase such assets and that the  leveraging of Belair
Capital to buy such assets will therefore diminish the returns to be achieved by
Belair Capital as a whole. In addition, there is a risk that the availability of
financing will be interrupted at some future time,  requiring  Belair Capital to
sell assets to repay  outstanding  borrowings  or a portion  thereof.  It may be
necessary to make such sales at unfavorable prices. Belair Capital's obligations
under the Credit  Facility and  mortgages are secured by a pledge of its assets.
In the event of default,  a lender could elect to sell assets of Belair  Capital
without regard to consequences of such action for shareholders.  The rights of a
lender to receive  payments  of  interest  on and  repayments  of  principal  of


                                       19
<PAGE>
borrowings is senior to the rights of the  shareholders.  Under the terms of the
Credit Facility,  Belair Capital is not permitted to make  distributions of cash
or securities  while there is  outstanding  an event of default under the Credit
Facility.  During  such  periods,  Belair  Capital  would  not be able to  honor
redemption requests or make cash distributions.

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

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

While  Belair  Capital's   manager  intends  that  BREC's   investments  in  Bel
Residential will reduce overall  portfolio risk and volatility and contribute to
returns over time, this investment  exposes Belair Capital to certain additional
risks as well.  The  performance  of  BREC's  investment  may be  influenced  by


                                       20
<PAGE>
decisions which Bel Residential's minority shareholder may make on behalf of Bel
Residential,  and potential changes in the submarkets in which Bel Residential's
buildings are located. The debt of Bel Residential is fixed-rate, secured by the
underlying  properties and with limited  recourse to BREC.  However,  changes in
interest rates, the availability of financing and other financial conditions can
have a material  impact on property  values and therefore on the value of BREC's
equity  interest.  Other  factors  bearing  on the value of BREC's  real  estate
investments,  include,  without  limitation,  general economic  conditions,  the
supply and demand of comparable  real  properties,  fluctuations in rental rates
and operating  costs,  exposure to adverse  environmental  conditions and losses
from casualty or condemnation,  government  rules and  regulations,  and acts of
God.  There can be no assurance that BREC's real estate  investments  will be an
economic success.

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


                                       21
<PAGE>
PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

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

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

         None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

         None.

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

         None

ITEM 5. OTHER INFORMATION.

         None.

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

     10(2)(a)  Amendment  No.  1 dated as of  December  28,  1999 to  Management
               Agreement

     27        Financial Data Schedules


                                       22
<PAGE>
                                   SIGNATURES

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

                                BELAIR CAPITAL FUND LLC
                                (Registrant)

                                By:     EATON VANCE MANAGEMENT,
                                        its Manager

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



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


                                       23
<PAGE>
                                  EXHIBIT INDEX

10(2)(a) Amendment No. 1 dated as of December 28, 1999 to Management Agreement

27   Financial Data Schedules


                                       24