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 January 31, 1999

                                       OR

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                 For the Transition Period from ______ to ______
                         Commission File Number 0-24856


                   ------------------------------------------

                     UST PRIVATE EQUITY INVESTORS FUND, INC.
             (Exact name of Registrant as specified in its charter)


                  MARYLAND                             13-3786385
       (State or other jurisdiction of                 (IRS Employer
       incorporation or organization)                  Identification No.)



                              114 West 47th Street
                             New York, NY 10036-1532
          (Address of principal executive offices, including zip code)

                                 (212) 852-1000
                     (Telephone number, including area code)



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 |_|

As of January 31, 1999, there were 40,463 shares of the Registrant's Common
Stock, $.001 par value, outstanding.


805571.3

<PAGE>


                     UST PRIVATE EQUITY INVESTORS FUND, INC.

This  Quarterly  Report  on  Form  10-Q  contains  historical   information  and
forward-looking  statements.  Statements looking forward in time are included in
this  Form  10-Q  pursuant  to the  "safe  harbor"  provisions  of  the  Private
Securities  Litigation  Reform Act of 1995. They involve known and unknown risks
and  uncertainties  that may cause the Company's  actual  results to differ from
future   performance   suggested  herein.  In  the  context  of  forward-looking
information provided in this Form 10-Q and in other reports, please refer to the
discussion  of risk  factors  detailed  in,  as well  as the  other  information
contained in, the Company's filings with the Securities and Exchange  Commission
during the past 12 months.



<TABLE>
<CAPTION>
          INDEX                                                                 PAGE NO.
          -----                                                                 --------

<S>      <C>                                                                    <C>
 PART I.  FINANCIAL INFORMATION

  Item 
 Financial  Statements  (Unaudited).  

          Portfolio  of  Investments  as of January 31, 1999  (Unaudited)  and
          October 31, 1998.  

          Statement  of  Assets  and   Liabilities  as  of  January  31,  1999
          (Unaudited)  and October 31, 1998.  

          Statement of Operations for the three month period ended January 31,
          1999  (Unaudited)  and the three month period ended January 31, 1998
          (Unaudited).  

          Statement  of Changes in Net Assets for the three month period ended
          January  31,  1999  (Unaudited)  and the three  month  period  ended
          January  31,  1998  (Unaudited).   

          Notes to  Financial  Statements  (Unaudited).  

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

  Item 3. Quantitative and Qualitative  Disclosures About
          Market Risk.

PART II.  OTHER INFORMATION 

  Item 1. Legal Proceedings.

  Item 2. Changes in Securities. 

  Item 3. Defaults upon Senior Securities. 

  Item 4. Submission  of Matters to a Vote of  Securityholders.  

  Item 5. Other Information. 

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

SIGNATURES
</TABLE>

                                      ii
805571.3

<PAGE>


PART I.        FINANCIAL INFORMATION

Item 1.        Financial Statements.


<TABLE>
UST Private Equity Investors Fund, Inc.                                                          Fiscal Year End:  October 31, 1999
Portfolio of Investments                                                                           Quarter Ended:  January 31, 1999
-----------------------------------------------------------------------------------------------------------------------------------



<CAPTION>
                                                                       January 31, 1999                    October 31, 1998
                                                            -----------------------------------    ------------------------------

PORTFOLIO STRUCTURE
-------------------

<S>                                                      <C>                        <C>               <C>                <C>
     PORTFOLIO COMPANIES                                 $       20,207,559         53.92%       $    20,245,817          53.41%

     PRIVATE FUNDS                                               10,342,252         27.60%            10,290,156          27.14%

     SHORT-TERM INVESTMENTS:

       Commercial Paper                                           4,994,133         13.33%             1,000,000           2.64%

       Corporate Bonds                                              386,534          1.03%               386,917           1.02%

       U.S. Government & Agency Obligations                       6,001,904         16.02%            11,954,587          31.54%

       Investment Companies                                       1,435,866          3.83%               581,913           4.17%
                                                           ----------------     ------------      ----------------    ----------

                   TOTAL INVESTMENTS                             43,368,248        115.73%            45,459,390         119.92%
               OTHER ASSETS & LIABILITIES (NET)                  (5,893,870)       -15.73%            (7,552,198)        -19.92%
                                                           ----------------     ------------      ----------------    ----------

         NET ASSETS                                      $       37,474,378        100.00%       $    37,907,192         100.00%
                                                           ================     ============      ================    ==========
</TABLE>



805571.3

<PAGE>




<TABLE>
UST Private Equity Investors Fund, Inc.                                               Fiscal Year End:  October 31, 1999
Statement of Assets and Liabilities                                                     Quarter Ended:  January 31, 1999
------------------------------------------------------------------------------------------------------------------------

<CAPTION>
ASSETS                                                                 January 31, 1999             October 31, 1998
--------------------------------------

<S>                                                                 <C>                           <C>               
Investment Securities, at Cost                                      $       43,378,282            $       47,979,593
                                                                     =================              ================

Investment Securities, at Value                                             43,368,248                    45,459,390


Cash                                                                           270,420                       603,540
Receivables:
  Interest                                                                      30,632                        29,488
Prepaid Assets                                                                  16,058                        19,248
                                                                     -----------------              ----------------
                  TOTAL ASSETS                                              43,685,358                    46,111,846
                                                                     -----------------              ----------------

LIABILITIES
--------------------------------------

Loan Payable                                                                 6,000,000                     8,000,000
Payable For Investments Purchased                                               85,616                            --
Managing Investment Advisory Fees Payable                                       68,548                        91,688
Administration & Shareholder Servicing Fees Payable                             15,602                        15,531
Directors Fees Payable                                                          10,965                        30,000
Accrued Expenses and Other Payables                                             30,249                        67,435
                                                                     -----------------              ----------------

                  TOTAL LIABILITIES                                          6,210,980                     8,204,654
                                                                     -----------------              ----------------

      NET ASSETS                                                    $       37,474,378            $       37,907,192
                                                                     =================              ================


NET ASSETS CONSIST OF
--------------------------------------

Accumulated Undistributed Net Investment Income                     $          351,631            $          417,716
Accumulated Net Realized Gain(Loss) on Investments                          (2,636,981)                      239,917
Net Unrealized Depreciation of Investments                                     (10,034)                   (2,520,203)
Allowance for Management Incentive                                                  --                            --
Par Value                                                                          405                           405
Paid In Capital in Excess of Par Value                                      39,769,357                    39,769,357
                                                                     -----------------              ----------------

                  TOTAL NET ASSETS                                  $       37,474,378            $       37,907,192
                                                                     =================              ================

Shares of Common Stock Outstanding                                              40,463                        40,463
                                                                     -----------------              ----------------
NET ASSET VALUE PER SHARE                                                     $926.14                         936.84      
                                                                     =================            $ ================
</TABLE>



805571.3

<PAGE>


<TABLE>
UST Private Equity Investors Fund, Inc.                                                          Fiscal Year End:  October 31, 1999
Statement of Operations                                                                            Quarter Ended:  January 31, 1999
-----------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
                                                                                  Quarter Ended               Quarter Ended
      INVESTMENT INCOME                                                         January 31, 1999            January 31, 1998

<S>                                                                            <C>                       <C>                   
      Interest Income                                                          $            99,699       $              156,694
                                                                                ------------------        ---------------------

                TOTAL INCOME                                                                99,699                      156,694
                                                                                ------------------        ---------------------

      EXPENSES

      Management Investment Advisory Fees                                                  128,877                      155,454
      Administrative Fees & Shareholder Servicing Fees                                      15,322                       15,178
      Custodial Fees                                                                         1,893                        2,144
      Legal Fees                                                                            56,094                       12,603
      Audit and Other Professional Service Fees                                              6,553                        6,553
      Directors' Fees and Expenses                                                          10,965                        7,562
      Shareholder Reports                                                                    1,512                        1,260
      Organization Expenses                                                                     --                        1,511
      Insurance Expense                                                                      3,370                        3,685
      Miscellaneous Expense                                                                    150                           --
      Interest Expense                                                                       2,651                       13,772
                                                                                ------------------        ---------------------

                TOTAL EXPENSES                                                             227,387                      219,722

      Fees Waived and Reimbursed by Advisor                                                (61,603)                      (7,716)
                                                                                ------------------        ---------------------

                NET EXPENSES                                                               165,784                      212,006
                                                                                ------------------        ---------------------

      NET INVESTMENT LOSS                                                                  (66,085)                     (55,312)
                                                                                ------------------        ---------------------

      REALIZED AND UNREALIZED GAIN/(LOSS)
      ON INVESTMENTS

      Net Realized Gain(Loss) on Security Transactions                                  (2,509,688)                     224,690

      Change in Unrealized Appreciation/(Depreciation)
      on Investments                                                                     2,510,169                   (3,047,383)
                                                                                ------------------        ---------------------

      NET REALIZED AND UNREALIZED GAIN/(LOSS)
      ON INVESTMENTS                                                                           481                   (2,822,693)

      Change in Management Incentive Fee                                                         0                      (22,469)
                                                                                ------------------        ---------------------

      NET INCREASE (DECREASE) IN NET ASSETS                                                                                     
      RESULTING FROM OPERATIONS                                                $           (65,604)      $           (2,900,474)
                                                                                ==================        =====================
</TABLE>




805571.3

<PAGE>



<TABLE>
UST Private Equity Investors Fund, Inc.                                                           Fiscal Year End:  October 31, 1999
Statement of Changes in Net Assets                                                                  Quarter Ended:  January 31, 1999
------------------------------------------------------------------------------------------------------------------------------------


<CAPTION>
                                                                                    Quarter Ended                     Quarter Ended
                                                                                   January 31, 1999                 January 31, 1998

OPERATIONS:

<S>                                                                           <C>                              <C>                
Net Investment Income(Loss)                                                   $               (66,085)         $          (55,312)
Net Realized Gain(Loss) on Investments                                                     (2,509,688)                    224,690
Change in Unrealized Appreciation/(Depreciation) on Investments                           2,510,169                  (3,047,383)
Change in Allowance for Management Incentive Fee                                                    0                     (22,469)
                                                                                ---------------------           -----------------

Net Increase/(Decrease) in Net Assets
   Resulting From Operations                                                                  (65,604)                 (2,900,474)

DISTRIBUTIONS TO SHAREHOLDERS:

From Net Realized Gain on Investments                                                        (367,210)                 (1,883,686)
                                                                                ---------------------           -----------------

NET DECREASE IN NET ASSETS                                                                   (432,814)                 (4,784,160)

NET ASSETS:
   Beginning of Period                                                                     37,907,192                  47,179,471
                                                                                ---------------------           -----------------

   End of Period                                                              $            37,474,378          $       42,395,311
                                                                                =====================           =================
</TABLE>



805571.3

<PAGE>


UST Private Equity Investors Funds, Inc.   Fiscal Year Ended:  October 31, 1999
Notes to Financial Statements                  Quarter Ended:  January 31, 1999
-------------------------------------------------------------------------------



1.   Significant Accounting Policies

     UST Private Equity  Investors Fund,  Inc. (the "Company") was  incorporated
under the laws of the State of Maryland on September  16, 1994 and is registered
under the Securities Act of 1933, as amended,  as a non-diversified,  closed-end
management  investment  company  which has  elected  to be treated as a business
development  company under the Investment  Company Act of 1940, as amended.  The
Company commenced operations on August 1, 1995.

     Certain  information  and  footnote  disclosures  normally  included in the
financial  statements  prepared in accordance with generally accepted accounting
principles  have been  condensed or omitted.  Reference is made to the Company's
annual report  included in Form 10-K as filed with the  Securities  and Exchange
Commission for the Notes to the Financial Statements that remain unchanged.

     The  following  is  a  summary  of  the  Company's  significant  accounting
policies.

     (a) Portfolio valuation:

     The Company values portfolio  securities  quarterly and at other such times
as, in the Board of  Directors'  view,  circumstances  warrant.  Investments  in
unrestricted securities that are traded on a recognized stock exchange or on the
national securities market are valued at the last sale price for such securities
on the valuation date.  Short-term debt instruments with remaining maturities of
60 days or less are valued at amortized cost, which  approximates  market value.
Securities  and  other  assets  for  which  market  quotations  are not  readily
available or that are restricted are valued,  pursuant to guidelines  adopted by
the Investment Advisor, under the supervision of the Board of Directors.

     (b) Federal income taxes:

     It is the policy of the  Company  to  continue  to qualify as a  "regulated
investment  company"  under  Subchapter  M of  the  Internal  Revenue  Code  and
distribute  substantially  all  of  its  taxable  income  to  its  shareholders.
Therefore, no federal income or excise tax provision is required.

2.   Purchases and Sales of Securities

     Purchase and sales of  securities  for the three month period ended January
31, 1999, excluding short-term investments,  for the Company aggregated $767,269
and $316,228,  respectively.  At January 31, 1999,  the Company had  outstanding
investment commitments totaling $2,502,553.


805571.3

<PAGE>


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

Results of Operations
---------------------

THREE-MONTH PERIOD ENDED JANUARY 31, 1999 AS COMPARED TO THE SIMILAR PERIOD IN
1998

The  Company's net asset value per common share was $926.14 at January 31, 1999,
down  $10.70 per share from the net asset  value per common  share of $936.84 at
October 31, 1998. The decrease  resulted from the capital gains  distribution to
shareholders  on December 23,  1998.  The  Company's  net asset value per common
share was  $1,047.76  at January 31,  1998,  down $118.23 per share from the net
asset value per common share of $1,165.99 at October 31, 1997.

Realized and Unrealized Gains and Losses from Portfolio Investments
-------------------------------------------------------------------

For the three  months  ended  January 31,  1999 and 1998,  the Company had a net
realized  gain/(loss) on security  transactions  of  ($2,509,688)  and $224,690,
respectively.  For the three months ended January 31, 1999 and 1998, the Company
had a net change in unrealized  appreciation/(depreciation)  on  investments  of
$2,510,169 and ($3,047,383), respectively. The realized loss and unrealized gain
were  primarily the result of the  write-off of the  Company's  investment in P2
Holdings Corp. in the quarter.

Investment Income and Expenses
------------------------------

For the three months ended January 31, 1999, the Company had interest  income of
$99,699 and net operating  expenses of $165,784 resulting in net investment loss
of $66,085 as compared to interest income of $156,694 and net operating expenses
of $212,006,  resulting in net investment  loss of $55,312 for the quarter ended
January 31, 1998. The primary reason for the decline in interest  income was the
decline of assets  invested in short-term  instruments and an increase in assets
invested in private companies and private funds.

United  States Trust  Company of New York (the  "Managing  Investment  Adviser")
provides  investment  management and  administrative  services  required for the
operation  of the Company.  In  consideration  of the  services  rendered by the
Managing  Investment  Adviser,  the Company pays a  management  fee based upon a
percentage of the net assets of the Company invested or committed to be invested
in  certain  types  of  investments  and an  incentive  fee  based  in part on a
percentage of realized capital gains of the Company.  Such fee is determined and
payable  quarterly.  For the  quarters  ended  January  31,  1999 and 1998,  the
Managing  Investment  Adviser earned  $128,877 and $155,454 in management  fees,
respectively. In addition, for the quarters ended January 31, 1999 and 1998, the
change in  allowance  for the  Management  Incentive  Fee was $0 and  ($22,469),
respectively.  For the same periods,  the Managing Investment Adviser reimbursed
other  operating  expenses  of the  Company in the amount of $61,603 and $7,716,
respectively,  as a result of  expenses  incurred  in excess of those  permitted
pursuant to the Company's Prospectus.

Net Assets
----------

At January 31, 1999,  the Company's net assets were  $37,474,378,  a decrease of
$432,814 from net assets of  $37,907,192  at October 31, 1998. The Company's net
assets at January 31, 1998 were $42,395,311,  down $4,784,160 from net assets of
$47,179,471 at October 31, 1997.

805571.3

<PAGE>


Liquidity and Capital Resources
-------------------------------

The  Company  focuses  its  investments  in the  private  equity  securities  of
later-stage  venture  capital  companies and  middle-market  companies which the
Company believes offer significant long-term capital  appreciation.  The Company
may offer  managerial  assistance  to certain of these  companies.  The  Company
invests its available cash in short-term investments of marketable securities to
provide the  liquidity  necessary to make  portfolio  investments  as investment
opportunities arise.

During the  quarter  ended  January  31,  1999,  the  Company  made a  follow-on
investment in Best Friends Pet Care Inc.

At January 31,  1999,  the Company  held  $270,420  in cash and  $43,368,248  in
investments  as compared to $603,540 in cash and  $45,459,390  in investments at
October 31, 1998.  These changes from October 31, 1998 were primarily the result
of the Company's investment activities for the quarter ended January 31, 1999.

In connection  with the Company's  commitments to private funds in the amount of
$12,000,000 since inception,  a total of $9,609,926  representing capital calls,
has been paid by the Company through January 31, 1999.

On December  23,  1998,  the Company  distributed  $367,210 in capital  gains to
shareholders of record as of December 18, 1998.

Other
-----

Year 2000:
---------

     Like other investment companies,  financial and business  organizations and
individuals  around the world,  the Company  could be affected  adversely if the
computer systems used by the Investment  Adviser and the Company's other service
providers do not properly  process and calculate  date-related  information  and
data from and after  January 1, 2000.  This is commonly  known as the "Year 2000
Problem."  Based on the Company's  current  assessment,  the costs of addressing
potential  problems are not currently expected to have a material adverse impact
on the  Company's  financial  position,  results of  operations or cash flows in
future periods. The Investment Adviser and the Company's other service providers
have  informed  the Company  that they are taking steps to address the Year 2000
Problem  with  respect  to the  computer  systems  that they use.  At this time,
however,  there can be no assurance that these steps will be sufficient to avoid
any adverse impact on the Company as a result of the Year 2000 Problem.


Item 3.        Quantitative and Qualitative Disclosures About Market Risk.

Equity Price Risk:
-----------------


     The  majority  of the  Company's  investment  portfolio  consists of equity
securities  in private  companies  and  private  investment  funds which are not
publicly traded.  These  investments are recorded at fair value as determined by
the Investment  Adviser in accordance with valuation  guidelines  adopted by the
Board of  Directors.  This method of  valuation  does not result in increases or
decreases in the fair value of these equity securities in response to changes in
market  prices.  Thus,  these equity  securities are not subject to equity price
risk.  Nevertheless,  the  Company is exposed to equity  price risk  through its
investment in the equity securities of one public company.  At October 31, 1998,
these publicly traded equity  securities were valued at $1,715,401.  Thus, there
is exposure to equity price risk,  which is estimated as the  potential  loss in
fair value due to a hypothetical 10% decrease in quoted market prices,

805571.3
<PAGE>

and would result in a decrease of  approximately  $171,540 in the value of these
securities. Actual results may differ.


PART II.       OTHER INFORMATION


Item 1.        Legal Proceedings.

     There are no legal proceedings pending or, to the Company's best knowledge,
threatened against the Company.



Item 2.        Changes in Securities.

               None.



Item 3.        Defaults upon Senior Securities.

               None.



Item 4.        Submission of Matters to a Vote of Securityholders.

               None.



Item 5.        Other Information.

               Not applicable.



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

               (a)  Exhibits.

                    Exhibit No.
                    -----------

                    (27)  Financial  Date  Schedule  (for EDGAR filing  purposes
                          only).


               (a)  The  following  reports  on Form 8-K were  filed  during the
                    quarter ended January 31, 1999:

                    None.



805571.3

<PAGE>



                              CONFORMED SIGNATURES







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








                             UST PRIVATE EQUITY INVESTORS FUND, INC.


Date:    March 5, 1999               /s/ David I. Fann
                                    -------------------------------------------
                             By:    David I. Fann
                                    President and Principal Executive Officer


Date:    March 5, 1999               /s/ Brian Schmidt
                                    -------------------------------------------
                             By:    Brian Schmidt
                                    Treasurer and Principal Financial and
                                    Accounting Officer


805571.3