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

                                    FORM 10-Q

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities  Exchange
    Act of 1934
               For the quarterly period ended June 30, 2004
                                              -------------


[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934
               For the transition period from _________ to _____________

                          Commission File No. 000-50258
                                              ---------


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


               Delaware                                04-3613468
               --------                                ----------
        (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 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 [ ]


Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934).

                                   YES [X]      NO [ ]

<PAGE>

                            BELROSE CAPITAL FUND LLC
                               Index to Form 10-Q

PART I    FINANCIAL INFORMATION                                            Page

Item 1.   Condensed Consolidated Financial Statements                        3

          Condensed Consolidated Statements of Assets and Liabilities
          as of June 30, 2004 (Unaudited) and December 31, 2003              3

          Condensed Consolidated Statements of Operations (Unaudited)
          for the Three Months Ended June 30, 2004 and 2003 and for the
          Six Months Ended June 30, 2004 and 2003                            4

          Condensed Consolidated Statements of Changes in Net Assets
          for the Six Months Ended June 30, 2004 (Unaudited) and the
          Year Ended December 31, 2003                                       6

          Condensed Consolidated Statements of Cash Flows (Unaudited)
          for the Six Months Ended June 30, 2004 and 2003                    7

          Financial Highlights (Unaudited) for the Six Months Ended
          June 30, 2004                                                      9

          Notes to Condensed Consolidated Financial Statements as of
          June 30, 2004 (Unaudited)                                         10

Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                         18

Item 3.   Quantitative and Qualitative Disclosures About Market Risk        23

Item 4.   Controls and Procedures                                           25

PART II   OTHER INFORMATION

Item 1.   Legal Proceedings                                                 25

Item 2.   Changes in Securities, Use of Proceeds and Issuer Purchases
          of Equity Securities                                              25

Item 3.   Defaults Upon Senior Securities                                   25

Item 4.   Submission of Matters to a Vote of Security Holders               25

Item 5.   Other Information                                                 25

Item 6.   Exhibits and Reports on Form 8-K                                  26

SIGNATURES                                                                  27

EXHIBIT INDEX                                                               28

                                        2
<PAGE>

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

BELROSE CAPITAL FUND LLC
Condensed Consolidated Statements of Assets and Liabilities

                                                 June 30, 2004     December 31,
                                                  (Unaudited)          2003
                                                 --------------   --------------
Assets:
 Investment in Belvedere Capital Fund
  Company LLC (Belvedere Company)                $1,684,553,263   $1,640,828,100
 Investment in Partnership Preference Units          69,354,420       56,717,736
 Investment in other real estate                    489,128,933      473,491,403
 Short-term investments                               2,334,000        7,614,214
                                                 --------------   --------------
Total investments                                $2,245,370,616   $2,178,651,453
 Cash                                                 6,340,643        6,535,905
 Escrow deposits - restricted                         2,457,140        2,436,133
 Distributions and interest receivable                       97          400,960
 Other assets                                         5,741,675        3,660,997
 Open interest rate swap agreements, at value         5,175,227        1,423,867
                                                 --------------   --------------
Total assets                                     $2,265,085,398   $2,193,109,315
                                                 --------------   --------------

Liabilities:
 Loan payable - Credit Facility                  $  216,000,000   $  183,300,000
 Mortgages payable                                  344,219,483      344,219,483
 Distributions payable to minority shareholders               -           16,800
 Security deposits                                    1,029,636          968,110
 Swap interest payable                                   92,600           79,280
 Accrued expenses:
  Interest expense                                    2,347,965        2,319,122
  Property taxes                                      2,525,736        1,959,252
  Other expenses and liabilities                      2,093,505        1,782,021
 Minority interests in controlled subsidiaries       29,643,431       26,010,489
                                                 --------------   --------------
Total liabilities                                $  597,952,356   $  560,654,557
                                                 --------------   --------------

Net assets                                       $1,667,133,042   $1,632,454,758

                                                 --------------   --------------
Shareholders' Capital                            $1,667,133,042   $1,632,454,758
                                                 --------------   --------------

Shares outstanding                                   16,934,881       17,032,796
                                                 --------------   --------------

Net asset value and redemption price per Share   $        98.44   $        95.84
                                                 --------------   --------------

       See notes to unaudited condensed consolidated financial statements

                                       3
<PAGE>

BELROSE CAPITAL FUND LLC
Condensed Consolidated Statements of Operations (Unaudited)
<TABLE>
<CAPTION>
                                                   Three Months    Three Months     Six Months     Six Months
                                                      Ended           Ended           Ended          Ended
                                                   June 30, 2004   June 30, 2003   June 30, 2004  June 30, 2003
                                                   -------------   -------------   -------------  -------------
<S>                                                <C>             <C>             <C>            <C>
Investment Income:
 Dividends allocated from Belvedere Company
  (net of foreign taxes of $138,823, $92,084,
  $207,839, and $151,447, respectively)            $  6,377,891    $  5,063,208    $ 12,145,956   $  9,806,609
 Interest allocated from Belvedere Company               19,225         158,393          47,208        246,968
 Expenses allocated from Belvedere Company           (2,477,944)     (2,128,086)     (4,978,269)    (4,044,132)
                                                   -------------   -------------   -------------  -------------
 Net investment income allocated from
  Belvedere Company                                $  3,919,172    $  3,093,515    $  7,214,895   $  6,009,445
 Rental income                                       16,312,522      16,086,495      32,523,311     32,420,280
 Distributions from Partnership Preference Units      1,177,774       1,198,457       3,952,184      2,195,038
 Interest                                                62,990          26,591         122,177         46,376
                                                   -------------   -------------   -------------  -------------
Total investment income                            $ 21,472,458    $ 20,405,058    $ 43,812,567   $ 40,671,139
                                                   -------------   -------------   -------------  -------------

Expenses:
 Investment advisory and administrative fees       $  1,428,580    $  1,234,123    $  2,836,163   $  2,368,839
 Property management fees                               654,243         649,248       1,300,770      1,301,734
 Distribution and servicing fees                        807,645         684,681       1,629,405      1,296,752
 Interest expense on mortgages                        6,579,658       6,579,443      13,159,099     13,158,882
 Interest expense on Credit Facility                    790,827         748,300       1,531,057      1,480,592
 Property and maintenance expenses                    4,536,233       4,471,340       8,995,593      8,728,038
 Property taxes and insurance                         2,030,302       2,126,971       4,060,504      4,316,313
 Miscellaneous                                          223,528         313,876         375,975        585,711
                                                   -------------   -------------   -------------  -------------
Total expenses                                     $ 17,051,016    $ 16,807,982    $ 33,888,566   $ 33,236,861
Deduct-
 Reduction of investment advisory
  and administrative fees                               409,847         344,919         820,842        650,361
                                                   -------------   -------------   -------------  -------------
Net expenses                                       $ 16,641,169    $ 16,463,063    $ 33,067,724   $ 32,586,500
                                                   -------------   -------------   -------------  -------------
Net investment income before
 minority interests in net income of
 controlled subsidiaries                           $  4,831,289    $  3,941,995    $ 10,744,843   $  8,084,639
Minority interests in net income
 of controlled subsidiaries                            (508,514)       (458,996)       (981,722)      (973,697)
                                                   -------------   -------------   -------------  -------------
Net investment income                              $  4,322,775    $  3,482,999    $  9,763,121   $  7,110,942
                                                   -------------   -------------   -------------  -------------
</TABLE>
       See notes to unaudited condensed consolidated financial statements

                                       4
<PAGE>

BELROSE CAPITAL FUND LLC
Condensed Consolidated Statements of Operations (Unaudited) (Continued)
<TABLE>
<CAPTION>
                                                   Three Months    Three Months     Six Months     Six Months
                                                      Ended           Ended           Ended          Ended
                                                   June 30, 2004   June 30, 2003   June 30, 2004  June 30, 2003
                                                   -------------   -------------   -------------  -------------
<S>                                                <C>             <C>             <C>            <C>
Realized and Unrealized Gain (Loss)
Net realized gain (loss) -
 Investment transactions and foreign
  currency transactions allocated from
  Belvedere Company (identified cost basis)        $  2,723,087    $  2,425,286    $  8,789,601   $ (2,920,634)
 Investment transactions in Partnership
  Preference Units (identified cost basis)           (4,828,100)              -      (1,779,381)             -
 Interest rate swap agreements(1)                    (1,068,524)   $ (1,131,355)     (2,063,952)    (2,182,638)
                                                   -------------   -------------   -------------  -------------
Net realized (loss) gain                           $ (3,173,537)   $  1,293,931    $  4,946,268   $ (5,103,272)
                                                   -------------   -------------   -------------  -------------

Change in unrealized appreciation
 (depreciation) -
  Investments and foreign currency
   allocated from Belvedere Company
   (identified cost basis)                         $ 14,549,114    $ 166,965,607   $ 39,351,842   $109,175,976
  Investments in Partnership Preference Units
   (identified cost basis)                            2,219,810         2,211,391    (1,616,796)     7,171,989
  Investments in other real estate (net of
   minority interests in unrealized gain (loss)
   of controlled subsidiaries of $1,353,009,
   $86,763, $333,924 and $(4,648,190),
   respectively)                                        738,813        3,138,098      1,088,037      3,947,885
  Interest rate swap agreements                       8,115,687       (4,300,825)     3,751,360     (4,942,316)
                                                   -------------   -------------   -------------  -------------
Net change in unrealized appreciation
 (depreciation)                                    $ 25,623,424    $ 168,014,271   $ 42,574,443   $115,353,534
                                                   -------------   -------------   -------------  -------------

Net realized and unrealized gain                   $ 22,449,887    $ 169,308,202   $ 47,520,711   $110,250,262
                                                   -------------   -------------   -------------  -------------

Net increase in net assets from operations         $ 26,772,662    $ 172,791,201   $ 57,283,832   $117,361,204
                                                   =============   =============   =============  =============
</TABLE>
(1)  Amounts  represent  periodic payments made in connection with interest rate
     swap agreements. (Note 5)

       See notes to unaudited condensed consolidated financial statements

                                       5
<PAGE>


BELROSE CAPITAL FUND LLC
Condensed Consolidated Statements of Changes in Net Assets

                                                   Six Months
                                                     Ended         Year Ended
                                                 June 30, 2004    December 31,
                                                  (Unaudited)         2003
                                                ---------------  ---------------
Increase (Decrease) in Net Assets:
 Net investment income                          $    9,763,121   $   15,279,642
 Net realized gain from investment
  transactions, foreign currency transactions
  and interest rate swap agreements                  4,946,268        2,449,130
 Net change in unrealized appreciation
  (depreciation) of investments, foreign
  currency and interest rate swap agreements        42,574,443      311,836,713
                                                ---------------  ---------------
Net increase in net assets from operations      $   57,283,832   $  329,565,485
                                                ---------------  ---------------

Transactions in Fund Shares -
 Investment securities contributed              $            -   $   95,047,136
 Less - Selling commissions                                  -         (325,083)
                                                ---------------  ---------------
 Net contributions                              $            -   $   94,722,053
 Net asset value of Fund Shares issued to
  Shareholders in payment of distributions
  declared                                      $    5,415,563   $      348,050
 Net asset value of Fund Shares redeemed           (14,905,858)     (33,374,471)
                                                ---------------  ---------------
Net (decrease) increase in net assets from
 Fund Share transactions                        $   (9,490,295)  $   61,695,632
                                                ---------------  ---------------

Distributions -
 Distributions to Shareholders                  $  (13,115,253)  $     (808,014)
                                                ---------------  ---------------
Total distributions                             $  (13,115,253)  $     (808,014)
                                                ---------------  ---------------

Net increase in net assets                      $   34,678,284   $  390,453,103

Net assets:
 At beginning of period                         $1,632,454,758   $1,242,001,655
                                                ---------------  ---------------
 At end of period                               $1,667,133,042   $1,632,454,758
                                                ===============  ===============

       See notes to unaudited condensed consolidated financial statements

                                       6
<PAGE>

BELROSE CAPITAL FUND LLC
Condensed Consolidated Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
                                                                         Six Months      Six Months
                                                                           Ended           Ended
                                                                        June 30, 2004   June 30, 2003
                                                                        -------------   --------------
<S>                                                                     <C>             <C>
Cash Flows From (For) Operating Activities -
Net increase in net assets from operations                              $ 57,283,832    $ 117,361,204
Adjustments to reconcile net increase in net assets from operations
 to net cash flows for operating activities -
  Net investment income allocated from Belvedere Company                  (7,214,895)      (6,009,445)
  (Increase) decrease in escrow deposits                                     (21,007)         602,632
  (Increase) decrease in other assets                                     (1,972,719)         224,340
  Decrease in distributions and interest receivable                          400,863           39,096
  Increase in interest payable for open swap agreements                       13,320           27,791
  Increase (decrease) in security deposits, accrued interest and
   other expenses and liabilities                                            363,141         (480,625)
  Increase in accrued property taxes                                         497,236          103,389
  Purchases of Partnership Preference Units                              (57,172,890)      (8,033,600)
  Proceeds from sales of Partnership Preference Units                     41,140,029                -
  Payment for investment in other real estate                             (9,339,576)               -
  Improvements to rental property                                         (2,541,096)      (1,870,841)
  Decrease (increase) in short-term investments                            5,280,214       (1,402,053)
  Net decrease in investment in Belvedere Company                                  -        1,651,420
  Net interest incurred on interest rate swap agreements                  (2,063,952)      (2,182,638)
  Minority interests in net income of controlled subsidiaries                981,722          973,697
  Net realized (gain) loss from investment transactions                   (4,946,268)       5,103,272
  Net change in unrealized (appreciation) depreciation of investments    (42,574,443)    (115,353,534)
                                                                        -------------   --------------
Net cash flows for operating activities                                 $(21,886,489)   $  (9,245,895)
                                                                        -------------   --------------

Cash Flows From (For) Financing Activities -
 Proceeds from Credit Facility                                          $ 32,700,000    $  13,000,000
 Payments on behalf of investors (selling commissions)                             -         (325,083)
 Payments for Fund Shares redeemed                                        (3,274,683)      (2,874,086)
 Distributions paid to minority shareholders                                 (34,400)               -
 Distributions paid to Shareholders                                       (7,699,690)        (459,964)
 Capital contributed to controlled subsidiaries                                    -          105,717
                                                                        -------------   --------------
Net cash flows from financing activities                                $ 21,691,227    $   9,446,584
                                                                        -------------   --------------

Net (decrease) increase in cash                                         $   (195,262)   $     200,689

Cash at beginning of period                                             $  6,535,905    $   7,214,141
                                                                        -------------   --------------
Cash at end of period                                                   $  6,340,643    $   7,414,830
                                                                        =============   ==============
</TABLE>
       See notes to unaudited condensed consolidated financial statements

                                       7
<PAGE>

BELROSE CAPITAL FUND LLC
Condensed Consolidated Statements of Cash Flows (Unaudited) (Continued)
<TABLE>
<CAPTION>
                                                                         Six Months      Six Months
                                                                           Ended           Ended
                                                                        June 30, 2004   June 30, 2003
                                                                        -------------   --------------
<S>                                                                     <C>             <C>
Supplemental Disclosure and Non-cash Investing and
 Financing Activities -
  Securities contributed by Shareholders, invested in
   Belvedere Company                                                    $          -    $  95,047,136
  Interest paid on loan - Credit Facility                               $  1,480,222    $   1,389,862
  Interest paid on mortgages                                            $ 12,952,482    $  12,952,265
  Interest paid on swap agreements                                      $  2,050,632    $   2,154,847
  Market value of securities distributed in payment of
   redemptions                                                          $ 11,631,175    $  19,075,753
  Market value of real property and other assets, net of
   current liabilities, assumed in conjunction with the
   acquisition of other real estate                                     $ 11,674,470    $           -
</TABLE>
       See notes to unaudited condensed consolidated financial statements

                                       8
<PAGE>

BELROSE CAPITAL FUND LLC as of June 30, 2004
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FINANCIAL HIGHLIGHTS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2004
--------------------------------------------------------------------------------
Net asset value - Beginning of period                                  $ 95.840
--------------------------------------------------------------------------------

INCOME (LOSS) FROM OPERATIONS
--------------------------------------------------------------------------------
Net investment income(6)                                               $  0.573
Net realized and unrealized gain                                          2.797
--------------------------------------------------------------------------------
TOTAL INCOME FROM OPERATIONS                                           $  3.370
--------------------------------------------------------------------------------

DISTRIBUTIONS
--------------------------------------------------------------------------------
Distributions to Shareholders                                          $ (0.770)
--------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS                                                    $ (0.770)
--------------------------------------------------------------------------------

NET ASSET VALUE - END OF PERIOD                                        $ 98.440
--------------------------------------------------------------------------------

TOTAL RETURN(1)                                                            3.54%
--------------------------------------------------------------------------------

                                               As a Percentage  As a Percentage
                                               of Average Net   of Average Gross
RATIOS                                           Assets(5)        Assets(2)(5)
--------------------------------------------------------------------------------
Expenses of Consolidated Real Property
Subsidiaries
 Interest and other borrowing costs(7)           1.29%(9)           0.99%(9)
 Operating expenses(7)                           1.42%(9)           1.10%(9)
Belrose Capital Fund LLC Expenses
 Interest and other borrowing costs(4)(8)        0.19%(9)           0.14%(9)
 Investment advisory and administrative fees,
  servicing fees and other Fund operating
  expenses(3)(4)                                 1.08%(9)           0.83%(9)
                                              ----------------------------------
Total expenses                                   3.98%              3.06%

Net investment income                            1.19%(9)           0.91%(9)
--------------------------------------------------------------------------------

SUPPLEMENTAL DATA
--------------------------------------------------------------------------------
Net assets, end of period (000's omitted)                            $1,667,133
Portfolio turnover of Tax-Managed Growth Portfolio (the Portfolio)         1.73%
--------------------------------------------------------------------------------

(1)  Returns are  calculated by determining  the percentage  change in net asset
     value with all distributions reinvested. Total return is not computed on an
     annualized basis.
(2)  Average  Gross Assets is defined as the average  daily amount of all assets
     of Belrose Capital Fund LLC (Belrose Capital)  (including Belrose Capital's
     interest in  Belvedere  Capital Fund  Company LLC  (Belvedere  Company) and
     Belrose  Capital's  ratable  share  of  the  assets  of  its  directly  and
     indirectly controlled subsidiaries),  without reduction by any liabilities.
     For this  purpose,  the assets of  Belrose  Realty  Corporation's  (Belrose
     Realty) controlled  subsidiaries are reduced by the proportionate interests
     therein of investors other than Belrose Realty.
(3)  Includes Belrose Capital's share of Belvedere Company's allocated expenses,
     including those expenses allocated from the Portfolio.
(4)  Includes  the  expenses of Belrose  Capital and  Belrose  Realty.  Does not
     include expenses of the real estate subsidiaries  majority-owned by Belrose
     Realty.
(5)  For the purpose of calculating  ratios,  the income and expenses of Belrose
     Realty's controlled  subsidiaries are reduced by the proportionate interest
     therein of investors other than Belrose Realty.
(6)  Calculated using average shares outstanding.
(7)  Includes Belrose Realty's  proportional  share of expenses  incurred by its
     majority-owned subsidiaries.
(8)  Ratios do not include  interest  incurred in  connection  with the interest
     rate swap  agreements.  Had such  amounts  been  included,  ratios would be
     higher.
(9)  Annualized.

       See notes to unaudited condensed consolidated financial statements

                                        9
<PAGE>

BELROSE CAPITAL FUND LLC as of June 30, 2004 Notes to Condensed Consolidated
Financial Statements (Unaudited)


1    Organization and Basis of Presentation

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

The balance  sheet at  December  31,  2003 and the  statement  of changes in net
assets for the year then ended have been  derived  from the  December  31,  2003
audited  financial  statements  but do not  include all of the  information  and
footnotes  required by accounting  principles  generally  accepted in the United
States  of  America  for  complete  financial  statements  as  permitted  by the
instructions to Form 10-Q and Article 10 of Regulation S-X.

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

During the quarter  ended June 30, 2004,  Belrose  Realty  Corporation  (Belrose
Realty) made an indirect investment in real property through a newly established
controlled subsidiary, Deerfield Property Trust (Deerfield), as described below.
The consolidated  financial statements include the accounts of Deerfield and all
material intercompany accounts and transactions have been eliminated.

SUBSIDIARY -

Deerfield  - On May 3,  2004,  Belrose  Realty  entered  into  an  agreement  to
establish and acquire a majority interest in a controlled subsidiary, Deerfield.
On June 30, 2004,  Deerfield  acquired a majority  interest in three  industrial
properties  located  in two  states  (Georgia  and  Ohio).  On August  4,  2004,
Deerfield acquired an additional  fifteen industrial  properties located in five
states (Florida,  New Jersey,  Ohio,  Pennsylvania and South Carolina).  Belrose
Realty  owns 100% of the  Class A Units of  Deerfield,  representing  60% of the
voting interests in Deerfield and a minority shareholder (the Deerfield Minority
Shareholder)  owns 100% of the  Class B units,  representing  40% of the  voting
interests in  Deerfield.  The Class B equity  interest is recorded as a minority
interest on the Consolidated  Statements of Assets and Liabilities.  The primary
distinctions between the two classes of shares are the distribution priority and
voting  rights.  Belrose  Realty has priority in  distributions  and has greater
voting  rights  than the holder of the Class B units.  From and after  August 4,
2013,  either Belrose Realty or the Deerfield  Minority  Shareholder may cause a
liquidation  of  Deerfield  and,  if Belrose  Realty  makes that  election,  the
Deerfield  Minority  Shareholder  has the right  either to  purchase  either the
shares  of  Deerfield  owned by  Belrose  Realty  or to  acquire  the  assets of
Deerfield,  in either case at a price  determined  through an  appraisal  of the
assets of Deerfield.

                                       10
<PAGE>

2    Estate Freeze

Shareholders  in Belrose  Capital are entitled to  restructure  their Fund Share
interests under what is termed an Estate Freeze  Election.  Under this election,
Fund Shares are  divided  into  Preferred  Shares and Common  Shares.  Preferred
Shares have a preferential  right over the corresponding  Common Shares equal to
(i) 95% of the original  capital  contribution  made in respect of the undivided
Shares from which the Preferred Shares and Common Shares were derived, plus (ii)
an annuity priority return equal to 7.75% of the Preferred Shares'  preferential
interest in the original capital  contribution of the undivided Fund Shares. The
associated  Common  Shares are  entitled  to the  remaining  5% of the  original
capital  contribution  in  respect of the  undivided  Shares,  plus any  returns
thereon in excess of the fixed  annual  priority of the  Preferred  Shares.  The
existence of restructured Fund Shares does not adversely affect Shareholders who
do not  participate  in the  election nor do the  restructured  Fund Shares have
preferential rights to Fund Shares that have not been restructured. Shareholders
who  subdivide  Fund Shares under this  election  sacrifice  certain  rights and
privileges  that they would  otherwise  have with  respect to the Fund Shares so
divided,  including  redemption  rights and voting and consent rights.  Upon the
twentieth anniversary of the issuance of the associated undivided Fund Shares to
the original  holders  thereof,  Preferred and Common Shares will  automatically
convert into full and  fractional  undivided  Fund  Shares.  The  allocation  of
Belrose  Capital's  net asset value per Share at June 30, 2004 and  December 31,
2003,  between  Preferred  and Common shares that have been  restructured  is as
follows:

                         Per Share Value At            Per Share Value At
                           June 30, 2004               December 31, 2003
                        --------------------------------------------------------
                        Preferred     Common          Preferred     Common
Date of Contribution     Shares       Shares           Shares       Shares
--------------------------------------------------------------------------------
 February 19, 2003       $ 76.74      $ 21.70          $ 74.80      $ 21.04

3    Investment Transactions

The following table  summarizes the Fund's  investment  transactions for the six
months ended June 30, 2004 and June 30, 2003:


                                              Six Months Ended  Six Months Ended
         Investment Transaction                June 30, 2004     June 30, 2003
--------------------------------------------------------------------------------
Increases in investment in Belvedere Company   $          -      $ 95,047,136
Decreases in investment in Belvedere Company   $ 11,631,175      $ 20,727,173
Acquisition of other real property(1)          $  9,339,576      $          -
Purchases of Partnership Preference Units(2)   $ 57,172,890      $  8,033,600
Sales of Partnership Preference Units(3)       $ 41,140,029      $          -

(1)  On June 30, 2004,  Belrose Realty purchased an indirect  investment in real
     property through a controlled subsidiary, Deerfield, as described below. At
     the date of the transaction,  the value of Belrose Realty's interest in its
     real property investment in Deerfield was $9,341,847.
(2)  Purchases of Partnership  Preference Units during the six months ended June
     30,  2004  and  June  30,  2003,  represent  Partnership  Preference  Units
     purchased  from other  investment  funds advised by Boston  Management  and
     Research (Boston Management).
(3)  Sales of  Partnership  Preference  Units for the six months  ended June 30,
     2004 include  Partnership  Preference Units sold to another investment fund
     advised by Boston Management for which a loss of $4,828,100 was recognized.
     There were no sales for the six months ended June 30, 2003.

On May 3, 2004,  Belrose  Realty  entered into an  agreement  to  establish  and
acquire a majority interest in a controlled subsidiary,  Deerfield.  On June 30,
2004,  Deerfield  acquired  a majority  interest  in three  separate  industrial
properties.  The seller  retained a minority  interest in the  properties and an
affiliate of the Deerfield  Minority  Shareholder  manages the properties.  When

                                       11
<PAGE>

Deerfield  acquired the real estate  investment,  a portion of the real estate's
purchase price was allocated to the estimated  fair value of in-place  leases in
accordance  with  Statement of Financial  Accounting  Standards 141. At June 30,
2004, the real estate  investment  balance  includes the estimated fair value of
net unfavorable in-place leases totaling $21,073 at acquisition.  The properties
are leased under  fixed-term  operating leases on a long-term basis. At June 30,
2004, the minimum lease payments  expected to be received by Deerfield on leases
with lease periods greater than one year are as follows:


          Twelve Months Ending June 30,             Amount
          --------------------------------------------------
          2005                                     $ 982,522
          2006                                       941,345
          2007                                       981,016
          2008                                       956,592
          2009                                       785,979
          Thereafter                               3,581,264
                                                  ----------
                                                  $8,228,718
                                                  ==========


On August 4,  2004,  the Fund made an  additional  investment  in  Deerfield  of
$153,542,090.   Deerfield  concurrently  acquired  a  majority  interest  in  an
additional fifteen industrial properties. An affiliate of the Deerfield Minority
Shareholder manages the properties.  All of the Deerfield  properties are leased
under fixed-term operating leases on a long-term basis.


4    Indirect Investment in the Portfolio

The following  table  summarizes  the Fund's  investment in  Tax-Managed  Growth
Portfolio (the Portfolio)  through Belvedere Capital Fund Company LLC (Belvedere
Company),  for the six months ended June 30, 2004 and June 30,  2003,  including
allocations of income,  expenses and net realized and unrealized  gains (losses)
for the respective periods then ended:
<TABLE>
<CAPTION>
                                                                               Six Months Ended     Six Months Ended
                                                                                 June 30, 2004       June 30, 2003
  ------------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>                  <C>
Belvedere Company's interest in the Portfolio(1)                               $ 11,762,239,521     $ 9,599,217,401
The Fund's investment in Belvedere Company(2)                                  $  1,684,553,263     $ 1,450,899,286
Income allocated to Belvedere Company from the Portfolio                       $     83,686,364     $    66,798,353
Income allocated to the Fund from Belvedere Company                            $     12,193,164     $    10,053,577
Expenses allocated to Belvedere Company from the Portfolio                     $     25,387,360     $    20,113,419
Expenses allocated to the Fund from Belvedere Company                          $      4,978,269     $     4,044,132
Net realized gain (loss) from investment transactions and foreign currency
 transactions allocated to Belvedere Company from the Portfolio                $     72,573,659     $   (17,889,099)
Net realized gain (loss) from investment transactions and foreign currency
 transactions allocated to the Fund from Belvedere Company                     $      8,789,601     $    (2,920,634)
Net change in unrealized appreciation (depreciation) of investments and
 foreign currency allocated to Belvedere Company from the Portfolio            $    255,505,090     $   698,962,649
Net change in unrealized appreciation (depreciation) of investments and
 foreign currency allocated to the Fund from Belvedere Company                 $     39,351,842     $   109,175,976
  ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)  As of June 30, 2004 and 2003, the value of Belvedere  Company's interest in
     the Portfolio  represents  64.7% and 61.7% of the  Portfolio's  net assets,
     respectively.
(2)  As of June 30, 2004 and 2003,  the Fund's  investment in Belvedere  Company
     represents 14.3% and 15.1% of Belvedere Company's net assets, respectively.

A summary of the  Portfolio's  Statement of Assets and  Liabilities  at June 30,
2004,  December 31, 2003 and June 30, 2003 and its operations for the six months
ended June 30, 2004, for the year ended December 31, 2003 and for the six months
ended June 30, 2003 follows:

                                       12
<PAGE>
<TABLE>
<CAPTION>
                                       June 30,          December 31,          June 30,
                                         2004                2003                2003
                                   ----------------------------------------------------------
<S>                                 <C>                 <C>                 <C>
Investments, at value               $18,156,546,589     $17,584,390,762     $15,616,951,272
Other assets                             30,174,170          25,462,745          26,660,614
---------------------------------------------------------------------------------------------
Total assets                        $18,186,720,759     $17,609,853,507     $15,643,611,886
Total liabilities                           138,607             264,502          93,843,137
---------------------------------------------------------------------------------------------
Net assets                          $18,186,582,152     $17,609,589,005     $15,549,768,749
=============================================================================================
Dividends and interest              $   131,109,908     $   232,925,912     $   109,393,140
---------------------------------------------------------------------------------------------
Investment adviser fee              $    38,780,667     $    67,584,543     $    31,979,032
Other expenses                            1,025,267           2,295,653             985,298
---------------------------------------------------------------------------------------------
Total expenses                      $    39,805,934     $    69,880,196     $    32,964,330
---------------------------------------------------------------------------------------------
Net investment income               $     91,303,974    $   163,045,716     $    76,428,810
Net realized gain (loss) from
 investment transactions and
 foreign currency transactions           118,166,339         70,909,770         (29,306,399)
Net change in unrealized
 appreciation (depreciation) of
 investments and foreign currency        397,547,485      3,174,709,110       1,126,151,279
---------------------------------------------------------------------------------------------
Net increase in net assets from
 operations                         $    607,017,798    $ 3,408,664,596     $ 1,173,273,690
---------------------------------------------------------------------------------------------
</TABLE>

5    Interest Rate Swap Agreements

Belrose  Capital has entered into  interest  rate swap  agreements  with Merrill
Lynch Capital Services,  Inc. in connection with its real estate investments and
the associated borrowings. Under such agreements,  Belrose Capital has agreed to
make  periodic  payments  at fixed rates in  exchange  for  payments at floating
rates.  The  notional  or  contractual  amounts  of  these  instruments  may not
necessarily  represent the amounts  potentially subject to risk. The measurement
of  the  risks  associated  with  these  investments  is  meaningful  only  when
considered in conjunction  with all related assets,  liabilities and agreements.
Interest  rate swap  agreements  open at June 30, 2004 and December 31, 2003 are
listed below.
<TABLE>
<CAPTION>
             Notional                                Initial
              Amount                                 Optional         Final         Unrealized          Unrealized
Effective     (000's     Fixed       Floating       Termination    Termination    Appreciation at     Appreciation at
  Date       omitted)    Rate          Rate            Date           Date         June 30, 2004     December 31, 2003
----------------------------------------------------------------------------------------------------------------------
  <S>        <C>         <C>       <C>                <C>            <C>            <C>                 <C>
  10/03      $ 31,588    4.180%    LIBOR + 0.30%       7/09          6/10           $  953,203          $  210,531
  10/03        37,943    4.160%    LIBOR + 0.30%      11/09          6/10            1,162,378             252,843
  10/03        83,307    4.045%    LIBOR + 0.30%        -            6/10            2,982,460             960,493
  06/04       108,168    4.875%    LIBOR + 0.00%        -            6/12               77,186*                  -
----------------------------------------------------------------------------------------------------------------------
Total                                                                               $5,175,227          $1,423,867
----------------------------------------------------------------------------------------------------------------------
</TABLE>
* On May 3, 2004,  Belrose  Capital  entered into a forward  interest  rate swap
agreement  with Merrill  Lynch Capital  Services,  Inc. in  anticipation  of its
future  investment  in a  controlled  subsidiary  Deerfield  for the  purpose of
hedging  the  interest  rate of  substantially  all of the  expected  fixed-rate
mortgage financing of the real property over the expected 8-year term. A portion
of this  agreement  was  terminated in July 2004 and the Fund realized a gain of
$60,454 upon the partial termination.

6    Credit Facility

In August 2004, additional borrowings under the Credit Facility in the amount of
$57,000,000  were used to  purchase  an  additional  interest in the real estate
investment Deerfield, a real estate subsidiary of Belrose Realty. This borrowing
accrues interest at a rate of one-month LIBOR plus 0.38% per annum.

                                       13
<PAGE>

On August 4, 2004,  Deerfield acquired a majority interest in fifteen industrial
properties  (see Note 3). To finance  the Fund's  investment  in the  properties
acquired by Deerfield,  Belrose Capital increased the amount available under its
credit arrangement with Merrill Lynch Mortgage Capital,  Inc. (Merrill Lynch) by
$66,000,000  under a  temporary  arrangement  (the  Temporary  Arrangement)  and
borrowed that amount.  The borrowing  under the  Temporary  Arrangement  accrues
interest  at a rate of  one-month  LIBOR  plus  0.90% and is for a term of sixty
days,  subject to a  thirty-day  extension.  Any unused  amount of the  increase
pertaining to the Temporary  Arrangement is subject to a commitment fee of 0.10%
per annum. The assets of Belrose Capital,  excluding the assets of Bel Apartment
Properties Trust (Bel Apartment),  Katahdin  Property Trust LLC (Katahdin),  Bel
Communities   Property  Trust  (Bel  Communities)  and  Deerfield,   secure  all
borrowings under the credit arrangement with Merrill Lynch.

Deerfield expects to obtain first mortgage  financing for its investment in real
properties  in the third and fourth  quarters of 2004.  The  proceeds  from such
first mortgage financing will be used to repay Belrose Capital, and accordingly,
Belrose Capital will repay its borrowings under the Temporary  Arrangement and a
portion of other borrowings under the Credit Facility.

7    Segment Information

Belrose  Capital  pursues  its  investment   objective  primarily  by  investing
indirectly  in the  Portfolio  through  Belvedere  Company.  The  Portfolio is a
diversified  investment company that emphasizes  investments in common stocks of
domestic and foreign growth  companies that are considered to be high in quality
and  attractive  in their  long-term  investment  prospects.  Separate  from its
investment in Belvedere  Company,  Belrose Capital invests in real estate assets
through its  subsidiary  Belrose  Realty.  Belrose  Realty  invests  directly in
Partnership  Preference Units and indirectly in real property through controlled
subsidiaries Bel Apartment, Katahdin, Bel Communities and Deerfield (Note 1).

Belrose Capital  evaluates  performance of the reportable  segments based on the
net increase (decrease) in net assets from operations of the respective segment,
which  includes net  investment  income  (loss),  net  realized  gain (loss) and
unrealized   appreciation   (depreciation).   The  accounting  policies  of  the
reportable  segments are the same as those for the Fund on a consolidated basis.
No reportable segments have been aggregated.  Reportable  information by segment
is as follows:
<TABLE>
<CAPTION>
                                                         Tax-Managed
For the Three Months Ended                                  Growth             Real
June 30, 2004                                             Portfolio*          Estate            Total
----------------------------------------------------------------------------------------------------------
<S>                                                      <C>               <C>               <C>
Revenue                                                  $  3,919,172      $ 17,513,176      $ 21,432,348
Interest expense on mortgages                                       -        (6,579,658)       (6,579,658)
Interest expense on Credit Facility                                 -          (641,076)         (641,076)
Operating expenses                                           (317,097)       (8,073,638)       (8,390,735)
Minority interest in net income of controlled
 subsidiaries                                                       -          (508,514)         (508,514)
----------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME                                    $  3,602,075      $  1,710,290      $  5,312,365
Net realized gain (loss)                                    2,723,087        (5,896,624)       (3,173,537)
Net change in unrealized appreciation (depreciation)       14,549,114        11,074,310        25,623,424
----------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS OF
 REPORTABLE SEGMENTS                                     $ 20,874,276      $  6,887,976      $ 27,762,252
----------------------------------------------------------------------------------------------------------

                                       14
<PAGE>

                                                         Tax-Managed
For the Three Months Ended                                  Growth             Real
June 30, 2003                                             Portfolio*         Estate            Total
----------------------------------------------------------------------------------------------------------
Revenue                                                  $  3,093,515      $ 17,306,971      $ 20,400,486
Interest expense on mortgages                                       -        (6,579,443)       (6,579,443)
Interest expense on Credit Facility                                 -          (710,885)         (710,885)
Operating expenses                                           (223,639)       (8,070,975)       (8,294,614)
Minority interest in net income of controlled
 subsidiaries                                                       -          (458,996)         (458,996)
----------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME                                    $  2,869,876      $   1,486,672     $  4,356,548
Net realized gain (loss)                                    2,425,286         (1,131,355)       1,293,931
Net change in unrealized appreciation (depreciation)      166,965,607          1,048,664      168,014,271
----------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS OF
 REPORTABLE SEGMENTS                                     $172,260,769      $  1,403,981      $173,664,750
----------------------------------------------------------------------------------------------------------


                                                         Tax-Managed
For the Six Months Ended                                    Growth            Real
June 30, 2004                                             Portfolio*         Estate            Total
----------------------------------------------------------------------------------------------------------
Revenue                                                  $  7,214,895      $ 36,534,481      $ 43,749,376
Interest expense on mortgages                                       -       (13,159,099)      (13,159,099)
Interest expense on Credit Facility                                 -        (1,255,467)       (1,255,467)
Operating expenses                                           (618,904)      (15,999,501)      (16,618,405)
Minority interest in net income of controlled
 subsidiaries                                                       -          (981,722)         (981,722)
----------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME                                    $  6,595,991      $  5,138,692      $ 11,734,683
Net realized gain (loss)                                    8,789,601        (3,843,333)        4,946,268
Net change in unrealized appreciation (depreciation)       39,351,842         3,222,601        42,574,443
----------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS OF
 REPORTABLE SEGMENTS                                     $ 54,737,434      $  4,517,960      $ 59,255,394
----------------------------------------------------------------------------------------------------------


                                                         Tax-Managed
For the Six Months Ended                                    Growth            Real
June 30, 2003                                             Portfolio*         Estate            Total
----------------------------------------------------------------------------------------------------------
Revenue                                                  $  6,009,445      $ 34,653,882     $ 40,663,327
Interest expense on mortgages                                       -       (13,158,882)     (13,158,882)
Interest expense on Credit Facility                                 -        (1,406,562)      (1,406,562)
Operating expenses                                           (419,053)      (15,964,270)     (16,383,323)
Minority interest in net income of controlled
 subsidiaries                                                       -          (973,697)        (973,697)
----------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME                                    $  5,590,392      $  3,150,471     $  8,740,863
Net realized loss                                          (2,920,634)       (2,182,638)      (5,103,272)
Net change in unrealized appreciation (depreciation)      109,175,976         6,177,558      115,353,534
----------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS OF
 REPORTABLE SEGMENTS                                     $111,845,734      $  7,145,391     $118,991,125
----------------------------------------------------------------------------------------------------------

                                       15
<PAGE>

                                      Tax-Managed Growth          Real
At June 30, 2004                          Portfolio*             Estate             Total
----------------------------------------------------------------------------------------------
Segment assets                        $1,684,553,263         $578,189,649       $2,262,742,912
Segment liabilities                                -          563,450,625          563,450,625
----------------------------------------------------------------------------------------------

Net assets of reportable segments     $1,684,553,263         $ 14,739,024       $1,699,292,287
----------------------------------------------------------------------------------------------


At December 31, 2003
----------------------------------------------------------------------------------------------
Segment assets                        $1,640,828,100         $544,254,775       $2,185,082,875
Segment liabilities                                -          533,483,765          533,483,765
----------------------------------------------------------------------------------------------

Net assets of reportable segments     $1,640,828,100         $ 10,771,010       $1,651,599,110
----------------------------------------------------------------------------------------------
</TABLE>
*    Belrose Capital invests  indirectly in Tax-Managed Growth Portfolio through
     Belvedere Company.

The following tables reconcile the reported segment information to the condensed
consolidated financial statements for the periods indicated:
<TABLE>
<CAPTION>
                                           Three Months      Three Months       Six Months        Six Months
                                               Ended             Ended             Ended             Ended
                                           June 30, 2004     June 30, 2003     June 30, 2004     June 30, 2003
                                         -----------------------------------------------------------------------
<S>                                        <C>               <C>               <C>               <C>
Revenue:
 Revenue from reportable segments          $ 21,432,348      $ 20,400,486      $ 43,749,376       $ 40,663,327
 Unallocated amounts:
  Interest earned on cash not invested
   in the Portfolio or in subsidiaries           40,110             4,572            63,191              7,812
                                         -----------------------------------------------------------------------
Total revenue                              $ 21,472,458      $ 20,405,058      $ 43,812,567       $ 40,671,139
                                         -----------------------------------------------------------------------
Net increase (decrease) in net assets
  from operations:
 Net increase in net assets from
  operations of reportable segments        $ 27,762,252      $173,664,750      $ 59,255,394       $118,991,125
 Unallocated amounts:
  Interest earned on cash not invested
   in the Portfolio or in subsidiaries           40,110             4,572            63,191              7,812
 Unallocated amounts (1):
  Distribution and servicing fees              (807,645)         (684,681)       (1,629,405)        (1,296,752)
  Audit, tax and legal fees                     (39,115)         (118,413)          (75,888)          (203,661)
  Interest expense on Credit Facility          (149,751)          (37,415)         (275,590)           (74,030)
  Other operating expenses                      (33,189)          (37,612)          (53,870)           (63,290)
                                         -----------------------------------------------------------------------
Total net increase in net assets from
 operations                                $ 26,772,662      $172,791,201      $ 57,283,832       $117,361,204
                                            --------------------------------------------------------------------
</TABLE>

                                       June 30, 2004        December 31, 2003
                                       --------------------------------------
Net assets:
 Net assets of reportable segments     $1,699,292,287        $1,651,599,110
 Unallocated cash(2)                            8,486               412,226
 Short-term investments(2)                  2,334,000             7,614,214
 Loan payable - Credit Facility(3)        (34,353,989)          (27,026,426)
 Other liabilities                           (147,742)             (144,366)
                                       --------------------------------------
Total net assets                       $1,667,133,042        $1,632,454,758
                                       --------------------------------------

(1)  Unallocated amounts represent expenses incurred that pertain to the overall
     operation  of  Belrose  Capital,  and do not  pertain  to either  operating
     segment.

(2)  Unallocated  cash  and  short-term  investments  represent  cash  and  cash
     equivalents not invested in the Portfolio or real estate assets.

                                       16
<PAGE>

(3)  Unallocated amount of loan payable-Credit  Facility  represents  borrowings
     not specifically used to fund real estate investments.  Such borrowings are
     generally used to pay selling commissions,  organization expenses and other
     liquidity needs of the Fund.

                                       17
<PAGE>

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

THE INFORMATION IN THIS REPORT CONTAINS  FORWARD-LOOKING  STATEMENTS  WITHIN THE
MEANING OF THE FEDERAL SECURITIES LAWS. FORWARD-LOOKING STATEMENTS TYPICALLY ARE
IDENTIFIED BY USE OF TERMS SUCH AS "MAY," "WILL," "SHOULD,"  "MIGHT,"  "EXPECT,"
"ANTICIPATE,"  "ESTIMATE,"  AND SIMILAR  WORDS,  ALTHOUGH  SOME  FORWARD-LOOKING
STATEMENTS ARE EXPRESSED DIFFERENTLY. THE ACTUAL RESULTS OF BELROSE CAPITAL FUND
LLC  (THE  FUND)  COULD   DIFFER   MATERIALLY   FROM  THOSE   CONTAINED  IN  THE
FORWARD-LOOKING  STATEMENTS DUE TO A NUMBER OF FACTORS.  THE FUND  UNDERTAKES NO
OBLIGATION  TO UPDATE  PUBLICLY  ANY  FORWARD-LOOKING  STATEMENTS,  WHETHER AS A
RESULT OF NEW INFORMATION,  FUTURE EVENTS,  OR OTHERWISE,  EXCEPT AS REQUIRED BY
APPLICABLE  LAW.  FACTORS  THAT COULD  AFFECT THE FUND'S  PERFORMANCE  INCLUDE A
DECLINE IN THE U.S.  STOCK MARKETS OR IN GENERAL  ECONOMIC  CONDITIONS,  ADVERSE
DEVELOPMENTS  AFFECTING THE REAL ESTATE  INDUSTRY,  OR  FLUCTUATIONS IN INTEREST
RATES.

The following discussion should be read in conjunction with the Fund's unaudited
condensed consolidated financial statements and related notes in Item 1 above.

RESULTS  OF  OPERATIONS  FOR THE  QUARTER ENDED JUNE 30, 2004  COMPARED  TO  THE
QUARTER ENDED JUNE 30, 2003
--------------------------------------------------------------------------------

(a) RESULTS OF OPERATIONS.
--------------------------

Increases and decreases from  operations in the Fund's net asset value per share
are derived from net  investment  income (or loss) and  realized and  unrealized
gains and losses on investments.  The Fund's net investment  income (or loss) is
determined by subtracting  the Fund's total expenses from its investment  income
and  then  deducting  the  minority  interest  in net  income  (or  loss) of the
controlled  subsidiaries of Belrose Realty  Corporation  (Belrose  Realty).  The
Fund's  investment  income includes the net investment  income  allocated to the
Fund from Belvedere Capital Fund Company LLC (Belvedere Company),  rental income
from  the  properties  owned  by  Belrose  Realty's   controlled   subsidiaries,
partnership income allocated to the income-producing  preferred equity interests
in real estate operating  partnerships  (Partnership  Preference Units) owned by
Belrose  Realty and interest  earned on the Fund's  short-term  investments  (if
any).  The net  investment  income of  Belvedere  Company  allocated to the Fund
includes  dividends,  interest  and expenses  allocated to Belvedere  Company by
Tax-Managed  Growth  Portfolio  (the  Portfolio)  less the expenses of Belvedere
Company  allocated  to the Fund.  The Fund's total  expenses  include the Fund's
investment  advisory and administrative  fees,  distribution and servicing fees,
interest  expense  from  mortgages  on  properties  owned  by  Belrose  Realty's
controlled  subsidiaries,  interest  expense on the Fund's  Credit  Facility (as
described  in Item  2(b)  below),  property  management  fees,  property  taxes,
insurance,  maintenance and other expenses  relating to the properties  owned by
Belrose Realty's controlled subsidiaries,  and other miscellaneous expenses. The
Fund's  realized and unrealized  gains and losses are the result of transactions
in, or  changes  in value of,  security  investments  held  through  the  Fund's
indirect  interest  (through  Belvedere  Company) in the Portfolio,  real estate
investments  held  through  Belrose  Realty,   the  Fund's  interest  rate  swap
agreements  and any other direct  investments  of the Fund,  as well as periodic
payments made by the Fund pursuant to interest rate swap agreements.

Realized  and  unrealized   gains  and  losses  on  investments  have  the  most
significant  impact on the Fund's net asset value per share and result primarily
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 U.S. 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.

PERFORMANCE  OF THE  FUND.(1)  The  Fund's  investment  objective  is to achieve
long-term,  after-tax  returns for  Shareholders.  Eaton Vance Management (Eaton
Vance),  as the Fund's  manager,  measures the Fund's  success in achieving  its
objective  based on the  investment  returns of the Fund,  using the  Standard &
Poor's  500  Composite  Index (the S&P 500) as the  Fund's  primary  performance
benchmark.  The S&P 500 is a broad-based unmanaged index of common stocks widely
used as a measure of U.S. stock market performance.  Eaton Vance's primary focus
in pursuing total return is on the Fund's common stock portfolio, which consists
of its indirect  interest in the Portfolio.  In measuring the performance of the
Fund's  real  estate  investments  held  through  Belrose  Realty,  Eaton  Vance
considers  whether,  through current returns and changes in valuation,  the real











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

                                       18
<PAGE>

estate  investments  achieve returns that over the long-term  exceed the cost of
the  borrowing  incurred  to acquire  such  investments  and thereby add to Fund
returns. The Fund has entered into interest rate swap agreements to fix the cost
of borrowings  under the Credit Facility used to acquire Belrose Realty's equity
in its real  estate  investments  and to mitigate in part the impact of interest
rate changes on the Fund's net asset value.

The Fund's  total  return was 1.62% for the quarter  ended June 30,  2004.  This
return  reflects an increase in the Fund's net asset value per share from $96.87
to $98.44 during the period.  For comparison,  the S&P 500 had a total return of
1.72% over the same period.  The  performance  of the Fund  exceeded that of the
Portfolio by  approximately  0.31% during the period.  Last year, the Fund had a
total return  performance  of 13.63% for the quarter  ended June 30, 2003.  This
return reflected an increase in the Fund's net asset value per share from $73.42
to $83.43 during the period.  For comparison,  the S&P 500 had a total return of
15.39% over the same period.  The  performance  of the Fund exceeded that of the
Portfolio by approximately 0.09% during that period.

PERFORMANCE  OF THE  PORTFOLIO.  For  the  quarter  ended  June  30,  2004,  the
Portfolio's total return was 1.31%. This compares to a total return of 1.72% for
the S&P 500. In the second  quarter,  U.S.  equity  returns  were  supported  by
strengthening  employment  trends,  robust  manufacturing  activity  and  rising
corporate profits. At the same time,  uncertainty over the situation in Iraq and
the prospect of rising  interest  rates and  inflation  weighed on investors and
held back returns.  During the quarter, growth stocks outperformed value stocks,
and small-caps performed better than large-caps and mid-caps.

The Portfolio's modest  underperformance  during the quarter was attributable in
part to a relative  overweighting of certain weaker performing  industry groups,
specifically  specialty  retail  and  media.  In  addition,  the  Portfolio  was
underweight internet software and communications equipment stocks, which rallied
during the period.  Concerns about future trends in consumer spending caused the
Portfolio to trim its relative  overweighting of the  discretionary  and staples
sectors during the quarter. The Portfolio also reduced healthcare and technology
investments during the quarter, mainly in the lagging biotech and semi-conductor
groups. During the quarter, the Portfolio continued to overweight airfreight and
machinery holdings, which contributed positively to the Portfolio's performance.
The  Portfolio  benefited  from the  strong  performance  of stocks in the food,
staples retailing and commercial bank industries during the quarter,  as well as
from  increased  exposure  to energy  stocks.  Material  stocks  were also solid
performers  during the quarter and,  despite the Portfolio's  underweight of the
sector versus the S&P 500, the  performance of the  Portfolio's  holdings in the
metals  and  mining  group was  noteworthy.  Valuation  and  regulatory  concern
prompted a continued de-emphasis of multi-line utilities and diversified telecom
companies.

For the quarter  ended June 30, 2003,  the  Portfolio's  total return was 13.54%
compared to the 15.39% total return for the S&P 500. During the quarter, the S&P
500 posted its best quarterly  return in five years,  with favorable  fiscal and
monetary policy developments, progress in Iraq and signs of an improving economy
contributing to a stronger market. The Portfolio's relative underperformance was
attributable primarily to its lower exposure to higher-volatility, lower-quality
stocks that were the strongest performers in the sharp market rally.

PERFORMANCE OF REAL ESTATE  INVESTMENTS.  The Fund's real estate investments are
held  through  Belrose  Realty.  As of June 30,  2004,  real estate  investments
included  three real estate joint ventures that operate  multifamily  properties
(the Multifamily  Joint Ventures),  a portfolio of Partnership  Preference Units
issued by partnerships  affiliated  with publicly traded real estate  investment
trusts  (REITs)  and a  real  estate  joint  venture  that  operates  industrial
properties, Deerfield Property Trust (Deerfield). The Multifamily Joint Ventures
and Deerfield are referred to as the Real Estate Joint Ventures.  As of June 30,
2004, the estimated fair value of the Fund's real estate investments represented
24.7% of the Fund's total assets on a consolidated  basis.  After  adjusting for
minority  interests in the Multifamily Joint Ventures and Deerfield,  the Fund's
real estate  investments  represented  27.8% of the Fund's net assets as of June
30, 2004. The Multifamily Joint Ventures and Deerfield are collectively referred
to herein as the Real Estate Joint Ventures.

On June 30, 2004, Belrose Realty's newly formed subsidiary  Deerfield acquired a
majority   interest  in  certain   industrial   properties   from  ProLogis,   a
publicly-traded  REIT,  for  approximately  $9.3  million.  ProLogis  retained a
minority  interest in the properties.  In May 2004,  Belrose Realty entered into
agreements  with ProLogis to form ProLogis Six Rivers Limited  Partnership  (Six
Rivers) (in association  with  subsidiaries of other investment funds advised by
Boston  Management)  and to merge Six Rivers with  Keystone  Property  Trust,  a
publicly-traded  REIT  (Keystone).   The  transactions   contemplated  by  these
agreements were consummated on August 4, 2004. As a result of the  transactions,
Deerfield acquired a partnership  interest in Six Rivers. In addition,  ProLogis
acquired a minority  interest in Deerfield.  Through its interest in Six Rivers,
Deerfield owns 100% of the economic  interest in certain  industrial  properties
acquired through the merger of Six Rivers and Keystone for approximately  $191.9
million.  It is  anticipated  that in the  third  and  fourth  quarters  of 2004
Deerfield will obtain first mortgage  financing  secured by the properties equal
to  approximately  60-65% of the property value.  The Fund has provided  interim
financing  for  Deerfield,   as  described   below  in  "Liquidity  and  Capital
Resources."

                                       19
<PAGE>

Rental income from real estate  operations  of the  Multifamily  Joint  Ventures
increased to  approximately  $16.3  million for the quarter  ended June 30, 2004
compared to approximately  $16.1 million for the quarter ended June 30, 2003, an
increase of $0.2 million or 1%. This increase in rental income was due to modest
increases  in  apartment  rental rates net of  concessions.  Property  operating
expenses for Belrose Realty's Multifamily Joint Ventures were approximately $7.2
million  for the  quarters  ended  June 30,  2004 and 2003  (property  operating
expenses  are  before   certain   operating   expenses  of  Belrose   Realty  of
approximately $0.9 million for each of the quarters ended June 30, 2004 and June
30, 2003). The near-term outlook for multifamily  property operations  continues
to be weak.  While the  recent  pick-up in  economic  and  employment  growth is
expected to lead to improved  supply-demand  balance in the apartment  industry,
oversupply  conditions  continue  to exist in most major  markets.  As a result,
Boston Management expects that multifamily real estate operating results in 2004
will continue to be similar to 2003.

Because Deerfield held no investments in property until June 30, 2004, it had no
significant  impact on real estate  operations during the quarter then ended. As
of August 4, 2004, Deerfield owns an interest in 18 industrial properties, which
consist of industrial distribution  properties located in six states.  ProLogis,
the largest REIT specializing in industrial  distribution  properties,  provides
day-to-day operating management of these properties.  The terms of the Deerfield
joint venture are similar to those of the Multifamily  Joint  Ventures.  Belrose
Realty's investment in Deerfield will be valued in substantially the same manner
as its  investment  in the  Multifamily  Joint  Ventures  and it is  subject  to
substantially  similar  risks,  as well as risks  specifically  associated  with
industrial   distribution   properties  (such  as  changing  transportation  and
logistics patterns and tenant credit).  The mortgage financing to be obtained by
Deerfield  will be  secured  by the  properties  it owns and is  expected  to be
without recourse to Belrose Realty, the Fund or its Shareholders. Pursuant to an
agreement  between  Belrose Realty and ProLogis,  Belrose Realty is obligated to
make capital  contributions  to Deerfield if required to fund certain items such
as debt service,  insurance or property taxes. In 2004, industrial properties in
the United States have  experienced  increased  demand for space in most markets
after three years of occupancy and rental rate declines.  However,  reduced rent
levels may continue over the near term as  above-market  leases mature and space
is released at current market rates. As a result, Boston Management expects that
improvements in industrial  property operating  performance will occur gradually
over the longer term.

At June 30, 2004,  the estimated  fair value of the real  properties  indirectly
held  through  Belrose  Realty was  approximately  $489.1  million  compared  to
approximately  $471.8  million at June 30, 2003, a net increase of $17.3 million
or 4%. The modest net increase in  estimated  real  property  values at June 30,
2004 resulted  principally  from the  acquisition  of properties by Deerfield on
June 30, 2004.

Belrose  Realty saw unrealized  appreciation  in the estimated fair value of its
other real estate investments (which includes the Real Estate Joint Ventures) of
approximately  $1.0 million  during the quarter  ended June 30, 2004 compared to
approximately $3.1 million in unrealized  appreciation  during the quarter ended
June 30, 2003. Changes in estimated asset values for multifamily properties have
generally been modest as decreases in  capitalization  rates have largely offset
declining earnings  expectations.  The capitalization rate, a term commonly used
in the real estate industry,  is the rate of return percentage applied to actual
or projected income levels to estimate the value of a real estate investment.

During the quarter  ended June 30,  2004,  Belrose  Realty  sold  certain of its
Partnership  Preference Units totaling approximately $21.6 million (representing
sales to another  investment fund advised by Boston  Management),  recognizing a
loss of $4.8  million on the  transactions.  During the  quarter  ended June 30,
2004,  Belrose  Realty  also  acquired   interests  in  additional   Partnership
Preference Units (including  acquisitions from other investment funds advised by
Boston Management)  totaling  approximately $12.6 million. At June 30, 2004, the
estimated fair value of the Partnership  Preference Units held by Belrose Realty
totaled $69.4 million compared to $57.1 million at June 30, 2003, a net increase
of $12.3  million or 22%. The net increase in value was  principally  due to the
increase in the number of Partnership Preference Units held at June 30, 2004.

The  Fund  saw  unrealized  appreciation  in the  estimated  fair  value  of its
Partnership  Preference Units of  approximately  $2.2 million during each of the
quarters  ended June 30, 2004 and June 30, 2003.  For the quarter ended June 30,
2004, net unrealized  appreciation  of $2.2 million  consisted of  approximately
$1.0  million of  unrealized  depreciation  as a result of decreases in per unit
values of the  Partnership  Preference  Units held by Belrose Realty at June 30,
2004, and approximately $3.2 million of unrealized  appreciation  resulting from
the  recharacterization  of  previously  recorded  unrealized   depreciation  to
realized losses due to sales of Partnership  Preference Units during the quarter
ended  June 30,  2004.  During the  quarter  ended  June 30,  2004,  Partnership
Preference  Unit values  were  negatively  affected by the rising  trend in U.S.
interest  rates,  partly offset by tighter spreads for  credit-sensitive  income
securities,  including real estate-related securities. In a rising interest rate

                                       20
<PAGE>

environment, values of outstanding Partnership Preference Units generally can be
expected to decline.  During the quarter ended June 30, 2003,  Belrose  Realty's
investments in Partnership  Preference Units generally  benefited from declining
interest rates and tightening  spreads in  credit-sensitive  income  securities,
particularly in real estate-related securities.

Distributions from Partnership  Preference Units were approximately $1.2 million
for each of the quarters ended June 30, 2004 and 2003.

PERFORMANCE  OF INTEREST  RATE SWAP  AGREEMENTS.  For the quarter ended June 30,
2004,  net  realized  and  unrealized  gains on the  Fund's  interest  rate swap
agreements  totaled  approximately  $7.0  million,  compared to net realized and
unrealized  losses of approximately  $5.4 million for the quarter ended June 30,
2003. Net realized and unrealized gains on swap agreements for the quarter ended
June 30,  2004  consisted  of $8.1  million of  unrealized  appreciation  due to
changes in swap agreement  valuations offset in part by $1.1 million of periodic
payments  made  pursuant to  outstanding  swap  agreements  (and  classified  as
realized net losses on interest  rate swap  agreements).  For the quarter  ended
June 30, 2003, net realized and unrealized  losses on swap agreements  consisted
of unrealized  depreciation of $4.3 million on swap agreement  valuation changes
and $1.1 million of swap agreement periodic payments.  The positive contribution
to Fund  performance  for the quarter  ended June 30, 2004 from  changes in swap
agreement  valuations was  attributable  to an increase in swap rates during the
quarter.  The negative impact on Fund performance for the quarter ended June 30,
2003 was attributable to a decline in swap rates during the quarter.

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2004 COMPARED TO THE SIX
MONTHS ENDED JUNE 30, 2003
--------------------------------------------------------------------------------

PERFORMANCE  OF THE FUND.  The Fund's  total return was 3.54% for the six months
ended June 30,  2004.  This return  reflects an increase in the Fund's net asset
value per share  from  $95.84 to $98.44  and a  distribution  of $0.77 per share
during the period. For comparison,  the S&P 500 had a total return of 3.44% over
the same period.  The  performance of the Fund exceeded that of the Portfolio by
approximately  0.09% during the period.  Last year,  the Fund had a total return
performance  of 8.62%  for the six  months  ended  June 30,  2003.  This  return
reflected  an  increase  in the Fund's net asset  value per share from $76.86 to
$83.43 and a distribution of $0.05 per share. For comparison,  the S&P 500 had a
total  return  of  11.75%  over the same  period.  The  performance  of the Fund
exceeded that of the Portfolio by 0.43% during that period.

PERFORMANCE  OF THE  PORTFOLIO.  For the six  months  ended June 30,  2004,  the
Portfolio's  total return was 3.45%,  in line with the 3.44% total return of the
S&P 500. In the period,  U.S.  equity returns were supported by a  strengthening
economy and rising corporate  profits.  Geopolitical  concerns,  higher interest
rates and rising inflation were negative factors that held back returns.  In the
period, small-cap stocks sharply outperformed large-caps and mid-caps, and value
stocks performed modestly better than growth stocks.

The  Portfolio's  performance  during  the first six  months of 2004 was  driven
primarily by its  diversified  industry  exposure and positive stock  selection.
Concerns about future trends in consumer  spending  caused the Portfolio to trim
its relative  overweighting of the  discretionary and staples sectors during the
period.  The Portfolio  also  decreased  positions in healthcare  and technology
stocks during the period.  The  underweighting  of  semiconductor  equipment and
software   industries  added  to  performance.   The  Portfolio   maintained  an
overweighting of industrials  stocks, and benefited from advances in airfreight,
machinery and building stocks. While the consumer staples and financials sectors
generally did not perform well during the period,  the  Portfolio's  holdings in
those  sectors were  positive  contributors  to  performance.  Another  positive
contributor  was the  Portfolio's  growing  exposure to the energy  sector.  The
Portfolio's  oil  exploration  and gas  investments  benefited  from the current
supply-demand  imbalances  and  associated  energy price  increases.  The strong
performance  of the  Portfolio's  holdings  in the  cyclical  metals  and mining
industries  during the period was also  noteworthy.  The Portfolio  continued to
underweight the utilities and telecom sectors.

For the six months ended June 30, 2003, the  Portfolio's  total return was 8.19%
compared to an 11.75% total return for the S&P 500.  Market  performance  during
the first six  months  of 2003 was  volatile,  with war  angst,  a  questionable
economic recovery and the SARS outbreak among the concerns weighing on investors
toward the beginning of the year. From mid-March  through the end of the period,
the U.S.  market  rallied  sharply,  with favorable  fiscal and monetary  policy
developments, progress in Iraq and signs of an improving economy contributing to
the strength.  The Portfolio's relative  underperformance  during the period was
attributable primarily to its lower exposure to higher-volatility, lower-quality
stocks that were the strongest performers in the market rally.

PERFORMANCE  OF  REAL  ESTATE  INVESTMENTS.   Rental  income  from  real  estate
operations  of  Belrose  Realty's   Multifamily  Joint  Ventures   increased  to
approximately  $32.5  million for the six months ended June 30, 2004 compared to
approximately  $32.4 million for the six months ended June 30, 2003, an increase
of $0.1  million  or 0.3%.  This  increase  in rental  income  was due to modest

                                       21
<PAGE>

increases  in  apartment  rental  rates net of  concessions  during the  period.
Property   operating   expenses  for  the   Multifamily   Joint   Ventures  were
approximately  $14.4 for the each of the six months  ended June 30, 2004 and the
six months ended June 30, 2003 (property  operating  expenses are before certain
operating  expenses of Belrose Realty of approximately  $1.6 million for each of
the six months ended June 30, 2004 and June 30, 2003). As discussed  above,  the
near-term  outlook for  multifamily  property  operations  continues to be weak.
While the recent pick-up in economic and  employment  growth is expected to lead
to  improved  supply-demand  balance  in  the  apartment  industry,   oversupply
conditions  continue  to  exist  in most  major  markets.  As a  result,  Boston
Management  expects that multifamily real estate operating  results in 2004 will
continue to be similar to 2003.

As noted above, in a series of transactions on and after June 30, 2004,  Belrose
Realty  acquired  an  interest  in  Deerfield,  which  owns  certain  industrial
properties.  The properties owned by Deerfield had no significant impact on real
estate operations during the six months ended June 30, 2004.

At June 30, 2004,  the estimated  fair value of the real  properties  indirectly
held  through  Belrose  Realty was  approximately  $489.1  million  compared  to
approximately  $471.8  million at June 30, 2003, a net increase of $17.3 million
or 4%. The modest net increase in  estimated  real  property  values at June 30,
2004 resulted  principally from the properties acquired by Deerfield on June 30,
2004.

Belrose  Realty saw unrealized  appreciation  in the estimated fair value of its
other real estate  investments  (which  includes Real Estate Joint  Ventures) of
approximately $1.1 million during the six months ended June 30, 2004 compared to
approximately  $3.9  million in  unrealized  appreciation  during the six months
ended  June  30,  2003.  Changes  in  estimated  asset  values  for  multifamily
properties have generally been modest as decreases in capitalization  rates have
largely offset declining earnings expectations.

During the six months ended June 30, 2004,  Belrose Realty sold (or  experienced
scheduled  redemptions of) certain of its Partnership  Preference Units totaling
approximately  $41.1 million (including sales to another investment fund advised
by Boston  Management),  recognizing a loss of $1.8 million on the transactions.
During  the six  months  ended  June 30,  2004,  Belrose  Realty  also  acquired
interests in additional  Partnership  Preference Units  (including  acquisitions
from other investment funds advised by Boston Management) totaling approximately
$57.2 million.  At June 30, 2004,  the estimated  fair value of the  Partnership
Preference  Units totaled  $69.4  million  compared to $57.1 million at June 30,
2003,  an increase of $12.3 million or 22%. The increase in value was due to the
increase in the number of Partnership Preference Units held.

The  Fund  saw  unrealized  depreciation  in the  estimated  fair  value  of its
Partnership Preference Units of approximately $1.6 million during the six months
ended June 30, 2004 compared to unrealized  appreciation of  approximately  $7.2
million for the six months  ended June 30,  2003.  For the six months ended June
30, 2004, net unrealized depreciation of $1.6 million consisted of approximately
$0.9  million of  unrealized  appreciation  as a result of increases in per unit
values of the  Partnership  Preference  Units held by Belrose Realty at June 30,
2004, and approximately $2.5 million of unrealized  depreciation  resulting from
the  recharacterization  of  previously  recorded  unrealized   appreciation  to
realized  gains due to sales of  Partnership  Preference  Units  during  the six
months  ended  June 30,  2004.  During  the six  months  ended  June  30,  2004,
Partnership  Preference Unit values were negatively affected by the rising trend
in U.S.  interest rates,  partly offset by tighter spreads for  credit-sensitive
income  securities,  including  real  estate-related  securities.  In  a  rising
interest rate environment,  values of outstanding  Partnership  Preference Units
generally can be expected to decline. During the six months ended June 30, 2003,
Belrose Realty's investments in Partnership Preference Units generally benefited
from declining interest rates and tightening spreads in credit-sensitive  income
securities, particularly in real estate-related securities.

Distributions  from  Partnership  Preference Units for the six months ended June
30, 2004 totaled $4.0 million  compared to $2.2 million for the six months ended
June 30,  2003,  an increase of $1.8 million or 82%. The increase was due to the
larger number of Partnership  Preference  Units held during the six months ended
June 30,  2004 and to a one-time  special  distribution  from one issuer made in
connection with a restructuring of its Partnership Preference Units.

PERFORMANCE OF INTEREST RATE SWAP AGREEMENTS.  For the six months ended June 30,
2004,  net  realized  and  unrealized  gains on the  Fund's  interest  rate swap
agreements  totaled  approximately  $1.7  million,  compared to net realized and
unrealized  losses of  approximately  $7.1 million for the six months ended June
30, 2003.  Net  realized and  unrealized  gains on swap  agreements  for the six
months ended June 30, 2004 consisted of $3.8 million of unrealized  appreciation
due to changes in swap  agreement  valuations  offset in part by $2.1 million of
periodic  payments made pursuant to outstanding  swap agreements (and classified
as net realized  losses on interest  rate swap  agreements).  For the six months
ended June 30,  2003,  net  realized and  unrealized  losses on swap  agreements
consisted of unrealized depreciation of $4.9 million on swap agreement valuation

                                       22
<PAGE>

changes and $2.2  million of swap  agreement  periodic  payments.  The  positive
contribution  to Fund  performance  for the six months  ended June 30, 2004 from
changes in swap  agreement  valuations was  attributable  to an increase in swap
rates during the period.  The negative  impact on Fund  performance  for the six
months ended June 30, 2003 from changes in swap valuations was attributable to a
decline in swap rates during the period.

(b) LIQUIDITY AND CAPITAL RESOURCES.
------------------------------------

OUTSTANDING BORROWINGS.  The Fund has entered into credit arrangements with DrKW
Holdings,  Inc. and Merrill Lynch  Mortgage  Capital,  Inc.  (collectively,  the
Credit  Facility)  primarily  to finance  the Fund's  equity in its real  estate
investments and will continue to use the Credit Facility for such purpose in the
future.  The Credit Facility may also be used for other purposes,  including any
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. As of June 30, 2004, the Fund had outstanding
borrowings of $216.0 million and unused loan  commitments of $54.9 million under
the Credit Facility.

In August  2004,  the Fund made  borrowings  under its credit  arrangement  with
Merrill Lynch Mortgage Capital,  Inc. (MLMC) in the amount of $57.0 million.  At
that time, the Fund also  temporarily  increased the amount  available under its
credit  arrangement with MLMC by $66 million and borrowed that amount.  The Fund
used the total  proceeds from these  borrowings to finance the  acquisitions  by
Deerfield of interests in certain  industrial  properties.  The additional $66.0
million of borrowings is at a rate of LIBOR plus 0.90% and is for a period of up
to sixty-days (subject to a 30-day extension,  if needed).  Deerfield expects to
obtain  first  mortgage  financing  for its  properties  in the third and fourth
quarters  of 2004,  the  proceeds  from which  will be used to repay  borrowings
obtained by the Fund in August 2004 to facilitate the Deerfield acquisitions.

The Fund has entered into interest rate swap agreements with respect to its real
estate investments and associated borrowings.  Pursuant to these agreements, the
Fund makes periodic  payments to the counterparty at predetermined  fixed rates,
in exchange for floating-rate  payments at a predetermined spread plus one-month
LIBOR.  During  the terms of the  outstanding  interest  rate  swap  agreements,
changes in the  underlying  values of the  agreements are recorded as unrealized
appreciation or depreciation.  As of June 30, 2004, the unrealized  appreciation
related to the interest rate swap agreements was approximately $5.2 million.  As
of June 30, 2003, the unrealized  depreciation related to the interest rate swap
agreements was approximately $16.5 million.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
-------------------------------------------------------------------

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

The following table summarizes the contractual  maturities and  weighted-average
interest rates  associated  with the Fund's  significant  non-trading  financial
instruments.  The Fund has no market risk sensitive instruments held for trading
purposes.  This information should be read in conjunction with Note 5 and Note 6
to the Fund's unaudited condensed  consolidated  financial  statements in Item 1
above.

                                       23
<PAGE>

                            Interest Rate Sensitivity
                        Cost, Principal (Notional) Amount
                    by Contractual Maturity and Callable Date
                      for the Twelve Months Ended June 30,*
<TABLE>
<CAPTION>
                                                                                                                      Estimated
                                                                                                                   Fair Value as of
                                                                                                                      June 30,
                                                    2005          2006-2009        Thereafter        Total              2004
------------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>             <C>              <C>            <C>              <C>
Rate sensitive
liabilities:
------------------------
Long-term debt:
------------------------
Fixed-rate mortgages                                                               $344,219,483   $344,219,483     $386,500,000

Average interest rate                                                                      7.53%          7.53%
------------------------
Variable-rate Credit Facility                                                      $216,000,000   $216,000,000     $216,000,000

Average interest rate                                                                      1.67%          1.67%
------------------------------------------------------------------------------------------------------------------------------------
Rate sensitive derivative financial instruments:
------------------------
Pay fixed/receive variable interest rate
swap agreements(**)                                                                $261,006,000   $261,006,000     $  5,175,227

Average pay rate(**)                                                                       4.42%          4.42%

Average receive rate(**)                                                                   1.64%          1.64%
------------------------------------------------------------------------------------------------------------------------------------
Rate sensitive investments:
------------------------
Fixed-rate Partnership Preference Units:
------------------------
Essex Portfolio, L.P., 7.875% Series B
Cumulative Redeemable Preferred Units,
Callable 12/31/09, Current Yield: 7.82%                                            $ 16,616,170   $ 16,616,170     $  20,132,880

Essex Portfolio, L.P., 9.3% Series D
Cumulative Redeemable Preferred Units,
Callable 7/28/10, Current Yield: 9.16%(1)                                          $ 12,642,150   $ 12,642,150     $  12,690,300

Kilroy Realty, L.P., 7.45% Series A
Cumulative Redeemable Preferred Units,
Callable 9/30/09, Current Yield: 7.88%                                             $ 15,898,220   $ 15,898,220     $ 18,898,240

Liberty Property L.P., 9.25% Series B
Cumulative Redeemable Preferred Units,
Callable 7/28/04, Current Yield: 9.18%            $18,130,840                                     $ 18,130,840     $ 17,633,000
</TABLE>

*    The amounts  listed  reflect the Fund's  positions as of June 30, 2004. The
     Fund's current positions may differ.

**   The terms disclosed are those of the interest rate swap agreements that are
     in  effect  as of June  30,  2004.  As  discussed  in Note 5 to the  Fund's
     unaudited  condensed  consolidated  financial  statements  in Item 1 above,
     during July 2004 a portion of a certain  interest  rate swap  agreement was
     terminated,  resulting  in a change  of the  average  pay rate and  average
     receive rate to 4.26% and 1.66%, respectively.

1    On July 28, 2004, the coupon rate reset to 7.875%.

                                       24
<PAGE>

ITEM 4. CONTROLS AND PROCEDURES.
--------------------------------

Eaton Vance, as the Fund's manager, conducted an evaluation of the effectiveness
of the Fund's  disclosure  controls and procedures (as defined by Rule 13a-15(e)
of the 1934 Act) as of the end of the period  covered by this  report,  with the
participation of the Fund's Chief Executive Officer and Chief Financial Officer.
Based on that  evaluation,  the Chief  Executive  Officer  and  Chief  Financial
Officer  concluded  that the Fund's  disclosure  controls  and  procedures  were
effective.  There were no changes in the Fund's internal  control over financial
reporting  that  occurred  during  the  quarter  ended  June 30,  2004 that have
materially  affected,  or are reasonably likely to materially affect, the Fund's
internal control over financial reporting.

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

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.
--------------------------

Although  in the  ordinary  course of  business,  the Fund,  Belrose  Realty and
Belrose   Realty's   controlled   subsidiaries  may  become  involved  in  legal
proceedings,  the Fund is not aware of any material pending legal proceedings to
which any of them is subject.

ITEM 2. CHANGES IN SECURITIES,  USE OF PROCEEDS  AND ISSUER  PURCHASES OF EQUITY
        SECURITIES.
--------------------------------------------------------------------------------

As  described  in the  Fund's  Annual  Report  on Form  10-K for the year  ended
December 31, 2003,  shares of the Fund may be redeemed by Fund  shareholders  on
any business  day.  Redemptions  are met at the net asset value per share of the
Fund (less any applicable  redemption  fee). The right to redeem is available to
all shareholders and all outstanding Fund shares are eligible (except for shares
subject to an estate freeze election as described in Item 5 of the Fund's Report
on Form 10-K for the fiscal year ending December 31, 2003). During each month in
the quarter  ended June 30, 2004,  the total  number of shares  redeemed and the
average price paid per share were as follows:

--------------------------------------------------------------------------------
                               Total No. of Shares    Average Price Paid
    Month Ended                    Redeemed(1)            Per Share
--------------------------------------------------------------------------------
    April 30, 2004                  13,348.84              $98.76
--------------------------------------------------------------------------------
    May 31, 2004                    62,236.88              $96.83
--------------------------------------------------------------------------------
    June 30, 2004                   19,008.88              $98.07
--------------------------------------------------------------------------------
    Total                           94,594.60              $97.82
--------------------------------------------------------------------------------
(1)  All shares  redeemed  during the  periods  were  redeemed  at the option of
     shareholders  pursuant to the Fund's  redemption  policy.  The Fund has not
     announced  any plans or programs  to  repurchase  shares  other than at the
     option of shareholders.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
----------------------------------------

None.

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

No matters were submitted to a vote of security  holders during the three months
ended June 30, 2004.

ITEM 5. OTHER INFORMATION.
--------------------------

None.

                                       25
<PAGE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
-----------------------------------------

(a)  The following is a list of all  exhibits  filed as part of this Form 10-Q:

4.2(b)    Form of  Amendment  No. 2 dated  August 3, 2004 to Loan  and  Security
          Agreement  among  the Fund,  Merrill Lynch Mortgage  Capital, Inc., as
          Agent,  the Lenders  referred to therein  and  Merrill  Lynch  Capital
          Services, Inc.

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

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

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

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

(b)  Reports on Form 8-K:

     None.

                                       26
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned duly authorized officer on August 9, 2004.





                                     BELROSE CAPITAL FUND LLC



                                     /s/ Michelle A. Alexander
                                     -------------------------
                                     Michelle A. Alexander
                                     Chief Financial Officer
                                     (Duly Authorized Officer and
                                     Principal Financial Officer)

                                       27
<PAGE>

                                  EXHIBIT INDEX
                                 -------------

4.2(b)    Form of  Amendment  No. 2 dated  August 3, 2004  to Loan and  Security
          Agreement  among  the Fund, Merrill Lynch Mortgage  Capital,  Inc., as
          Agent,  the Lenders  referred to therein  and  Merrill  Lynch  Capital
          Services, Inc.

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

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

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

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

                                       28