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 April 30, 1998

                                       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 April 30, 1998, there were 40,463 shares of the Registrant's Common
                      Stock, $.001 par value, outstanding.


717410.3

<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>
PART I.  FINANCIAL INFORMATION

 Item 1. Financial Statements (Unaudited).
         Portfolio of Investments as of April 30, 1998 (Unaudited) and
         October 31, 1997. Statement of Assets and Liabilities as of April
         30, 1998 (Unaudited) and October 31, 1997. Statement of
         Operations for the three month period ended April 30, 1998
         (Unaudited) and the three month period ended April 30, 1997
         (Unaudited). Statement of Changes in Net Assets for the three
         month period ended April 30, 1998 (Unaudited) and the three month
         period ended April 30, 1997 (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>



717410.3

<PAGE>




PART I.      FINANCIAL INFORMATION

Item 1.      Financial Statements.

<TABLE>

UST Private Equity Investors Fund, Inc.                               Fiscal Year End:  October 31, 1998
Portfolio of Investments                                                  Quarter Ended:  April 30, 1998
--------------------------------------------------------------------------------------------------------
<CAPTION>

                                            April 30, 1998
                                              (unaudited)                        October 31, 1997
                                   ---------------------------------    --------------------------------

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

<S>                                 <C>                   <C>         <C>                    <C>
PORTFOLIO COMPANIES                 $    28,583,432       64.69%      $    30,123,439        63.85%

PRIVATE FUNDS                             7,654,877       17.33%            5,312,037        11.26%

SHORT-TERM INVESTMENTS:

      Commercial Paper                    2,440,097        5.52%            1,986,001         9.54%

   Corporate Bonds                          468,520        1.06%            4,497,794         4.20%

      U.S. Government & Agency            5,796,422       13.12%            4,049,484         8.58%
      Obligations

  Investment Companies                      271,444        0.61%            1,047,435         2.22%

  Demand Notes                              250,000        0.57%                   --            --
                                     --------------  -----------       --------------    ----------

TOTAL INVESTMENTS                        45,464,792      102.90%           47,016,190        99.65%
OTHER ASSETS & LIABILITIES               (1,281,377)     (-2.90%)             163,281         0.35%
(NET)
                                     --------------  -----------       --------------    ----------

NET ASSETS                          $    44,183,415      100.00%    $      47,179,471       100.00%
                                     ==============  ===========     ==============      ==========
</TABLE>


717410.3

<PAGE>



<TABLE>
UST Private Equity Investors Fund, Inc.                                      Fiscal Year End: October 31, 1998
Statement of Assets and Liabilities                                              Quarter Ended: April 30, 1998
--------------------------------------------------------------------------------------------------------------

<CAPTION>

                                                                          April 30, 1998
ASSETS                                                                     (unaudited)        October 31, 1997
-------------------------------------------------------------------

<S>                                                                    <C>                   <C>
Investment Securities, at Cost                                         $        42,308,045   $      41,829,598
                                                                        ==================    ================


Investment Securities, at Value                                                 45,464,792          47,016,190



Cash                                                                               490,449                  --

Receivables:

  Interest                                                                          38,088             207,725

  For Investments Sold                                                           1,003,694             348,462

Prepaid Assets                                                                      31,566              37,024

Unamortized Organization Costs                                                          --              16,490



TOTAL ASSETS                                                                    47,028,589          47,625,891
                                                                        ------------------    ----------------

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


Loan Payable                                                                     2,500,000                  --

Managing Investment Advisory Fees Payable                                          275,434             258,424

Administration & Shareholder Servicing Fees Payable                                 15,367              15,330

Directors Fees Payable                                                              14,876              30,000

Accrued Expenses and Other Payables                                                 39,497             142,666
                                                                        ------------------    ----------------


TOTAL LIABILITIES                                                                2,845,174             446,420
                                                                        ------------------    ----------------

NET ASSETS                                                             $        44,183,415   $      47,179,471
                                                                        ==================    ================


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

Accumulated Undistributed Net Investment Income                        $           177,711   $         229,824
Accumulated Net Realized Gain on Investments                                       875,627           1,767,041
Net Unrealized Appreciation/(Depreciation) of Investments                        3,156,747           5,186,592
Allowance for Management Incentive                                               (144,779)           (122,095)
Par Value                                                                              405                 405
Paid In Capital in Excess of Par Value                                          40,117,704          40,117,704
                                                                        ------------------    ----------------

TOTAL NET ASSETS                                                       $        44,183,415   $      47,179,471
                                                                        ==================    ================

Shares of Common Stock Outstanding                                                  40,463              40,463
                                                                        ------------------    ----------------

NET ASSET VALUE PER SHARE                                                       $1,091.95           $1,165.99
                                                                                ==========          =========
</TABLE>


717410.3

<PAGE>



<TABLE>
<CAPTION>
UST Private Equity Investors Fund, Inc.                                                          Fiscal Year End:  October 31, 1998
Statement of Operations (unaudited)                                                                  Quarter Ended:  April 30, 1998
------------------------------------------------------------------- ---------------------------------------------------------------

                                                                             Fiscal
                                                      Quarter Ended       Year To Date                            Prior Fiscal
                                                     April 30, 1998      April 30, 1998         Quarter Ended     Year To Date
                                                        (unaudited)       (unaudited)          April 30, 1997    April 30, 1997

INVESTMENT INCOME

<S>                                              <C>                  <C>                  <C>                 <C>
Interest Income                                  $          208,364   $           365,058  $          251,654  $            605,945
                                                  -----------------    ------------------   -----------------   -------------------

          TOTAL INCOME                                      208,364               365,058             251,654               605,945
                                                  -----------------    ------------------   -----------------   -------------------


EXPENSES

Management Investment Advisory Fees                         150,531               305,985             136,471               262,808
Administrative Fees & Shareholder Servicing Fees             14,684                29,862              14,674                29,842
Custodial Fees                                                2,143                 4,287               2,109                 4,209
Legal Fees                                                   12,192                24,795              35,261                58,835
Audit and Other Professional Service Fees                     6,340                12,893               6,803                13,734
Directors' Fees and Expenses                                  7,314                14,876               7,315                14,876
Shareholder Reports                                           1,220                 2,480               2,926                 5,951
Organization Expenses                                        14,979                16,490               1,461                 2,972
Insurance Expense                                             3,260                 6,945              18,337                37,292
Interest Expense                                             13,917                27,689                  --                    --
                                                  -----------------    ------------------   -----------------   -------------------

   TOTAL EXPENSES                                           226,580               446,302             225,357               430,519

Fees Waived and Reimbursed by Advisor                       (21,415)              (29,131)            (53,717)             (101,530)
                                                  -----------------    ------------------   -----------------   -------------------

   NET EXPENSES                                             205,165               417,171             171,640               328,989
                                                  -----------------    ------------------   -----------------   -------------------

NET INVESTMENT INCOME (LOSS)                     $            3,199   $           (52,113)  $          80,014  $            276,956
                                                  -----------------    ------------------   -----------------   -------------------


REALIZED AND UNREALIZED GAIN/( LOSS)
  ON INVESTMENTS

Net Realized Gain (Loss) on Security Transactions$          767,582   $           992,272   $              --  $           (12,048)

Change in Unrealized Appreciation /
  (Depreciation) on Investments                           1,017,538            (2,029,845)          1,418,516            1,644,666
                                                  -----------------   --------------------  ------------------  ------------------

NET REALIZED AND UNREALIZED
  GAIN/(LOSS) ON INVESTMENTS
                                                          1,785,120            (1,037,573)          1,418,516            1,632,618

Change in Management Incentive Fee                             (215)              (22,684)                 --                1,204
                                                  -----------------    ------------------   -----------------   ------------------

NET INCREASE (DECREASE) IN NET
  ASSETS RESULTING FROM OPERATIONS
                                                 $        1,788,104   $        (1,112,370)   $      1,498,530  $         1,910,778
                                                  =================    ==================    ================  ===================
</TABLE>


717410.3

<PAGE>



<TABLE>

UST Private Equity Investors Fund, Inc.                                                          Fiscal Year End:  October 31, 1998
Statement of Changes in Net Assets (unaudited)                                                       Quarter Ended:  April 30, 1998
-------------------------------------------------------- --------------------------------------------------------------------------

<CAPTION>
                                                                                     Fiscal                            Prior Fiscal
                                                           Quarter Ended          Year To Date       Quarter Ended     Year To Date
                                                           April 30, 1998        April 30, 1998     April 30, 1997   April 30, 1997

OPERATIONS:
<S>                                                        <C>               <C>                 <C>               <C>

Net Investment Income (Loss)                               $       3,199     $         (52,113)  $         80,014  $        276,956
Net Realized Gain (Loss) on Investments                          767,582               992,272                 --           (12,048)
Change in Unrealized Appreciation / (Depreciation)             1,017,538            (2,029,845)         1,418,516         1,644,666
  on Investments
Change in Allowance for Management Incentive Fee                    (215)              (22,684)                --             1,204
                                                            ------------      -----------------    --------------    --------------

Net Increase (Decrease) in Net Assets
   Resulting From Operations                                   1,788,104            (1,112,370)         1,498,530         1,910,778

DISTRIBUTIONS TO SHAREHOLDERS:

From Net Investment Income                                            --                  --                   --        (1,429,792)
From Net Realized Gain on Investments                                 --            (1,883,686)                --           (43,640)
                                                            ------------   -------------------    ---------------    --------------

NET INCREASE (DECREASE) IN NET ASSETS                          1,788,104            (2,996,056)         1,498,530           437,346

NET ASSETS:
   Beginning of Period                                        42,395,311            47,179,471         41,658,436        42,719,620
                                                            ------------     -----------------     --------------    --------------

   End of Period                                           $  44,183,415     $     44,183,415    $     43,156,966  $     43,156,966
                                                            ============     ================    ================  ================
</TABLE>


717410.3

<PAGE>



UST Private Equity Investors Funds, Inc.   Fiscal Year Ended:  October 31, 1998
Notes to Financial Statements                    Quarter Ended:  April 30, 1998
-------------------------------------------------------------------------------



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 April 30,
1998, excluding short-term  investments,  for the Company aggregated  $3,185,359
and  $2,003,694,  respectively.  At April 30, 1998, the Company had  outstanding
investment commitments totaling $5,756,912.

717410.3

<PAGE>



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

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


THREE-MONTH  PERIOD ENDED APRIL 30, 1998 AS COMPARED TO THE SIMILAR  PERIOD
IN 1997

The  Company's net asset value per common share was $1,091.95 at April 30, 1998,
up $44.19 per share from the net asset value per common  share of  $1,047.76  at
January 31, 1998. This increase resulted from the marking to market of CommSite,
distributions  of Cisco  Systems  Inc.  from Sevin Rosen V, L.P. and Vanguard V,
L.P., and increases in the value of the Company's position in Bruckmann, Rosser,
Sherrill & Co., L.P., which offset the write-off of the Company's  investment in
Abtox,  Inc. The  Company's  net asset value per common  share was  $1,066.58 at
April 30, 1997, up $37.04 per share from the net asset value per common share of
$1,029.54 at January 31, 1997.

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

For the three  months  ended  April 30,  1998 and 1997,  the  Company  had a net
realized gain/(loss) from investments of $767,582 and $0, respectively.  For the
three  months  ended  April 30,  1998 and 1997,  the Company had a net change in
realized   appreciation/(depreciation)   on   investments   of  $1,017,538   and
$1,418,516,  respectively.  The realized  gains were primarily the result of the
sale of Rental  Services  Corp.  and Cisco  Systems  Inc.  The  unrealized  loss
resulted  primarily from the  writing-off of the Company's  investment in Abtox,
Inc.

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

For the three months ended April 30,  1998,  the Company had interest  income of
$208,364 and net  operating  expenses of $205,165  resulting  in net  investment
income/(loss)  of $3,199 as  compared to interest  income of  $251,654,  and net
operating  expenses of $171,640,  resulting in net investment  income of $80,014
for the quarter  ended  April 30,  1997.  The primary  reason for the decline in
interest income was the decline of assets invested in short-term instruments and
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 April 30, 1998 and 1997, the Managing
Investment   Adviser   earned   $150,531  and  $136,471  in   management   fees,
respectively.  In addition,  for the quarters ended April 30, 1998 and 1997, the
change  in  allowance  for  the  Management  Incentive  Fee was  $(215)  and $0,
respectively.  For the same periods,  the Managing Investment Adviser reimbursed
other  operating  expenses  of  the  Company  in the  amount  of  $(21,415)  and
$(53,717),  respectively,  as a result of  expenses  incurred in excess of those
permitted pursuant to the Company's Prospectus.

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

At April 30, 1998,  the  Company's net assets were  $44,183,415,  an increase of
$1,788,104 from net assets of $42,395,311 at January 31, 1998. The Company's net
assets at April 30,  1997 were  $43,156,966,  up  $1,498,530  from net assets of
$41,658,436 at January 31, 1997.

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.

717410.3

<PAGE>



At April  30,  1998,  the  Company  held  $490,449  in cash and  $45,464,792  in
investments as compared to $0 in cash and  $47,016,190 in investments at October
31, 1997.  These changes from October 31, 1997 were  primarily the result of the
Company's investment activities for the quarter ended April 30, 1998.

In connection  with the Company's  commitments to private funds in the amount of
$12,000,000 since inception, a total of $6,705,567,  representing capital calls,
has been paid by the Company through April 30, 1998.

On December 23, 1997,  the Company  distributed  $1,883,686  in capital gains to
shareholders of record as of December 18, 1997.

Other
-----

In 1996, the Managing  Investment Adviser established a Year 2000 Committee with
responsibility  for  developing an effective plan for  identifying,  renovating,
testing  and  implementing  solutions  for Year 2000  processing.  The  Managing
Investment  Adviser is working with Chase Global Fund Services (as administrator
to the Company and as provider of certain of the Managing  Investment  Adviser's
most significant data processing  systems),  as well as other vendors, to ensure
compliance  with  required  systems  changes.  The Managing  Investment  Adviser
presently  believes that with modifications to existing software and compliance,
by vendors who provide significant processing systems to the Managing Investment
Adviser,  the  Managing  Investment  Adviser's  systems  will  continue  without
disruption.  However,  if such  modifications are not made, or are not completed
timely,  the Year 2000 issue could have a material  impact on the  operations of
the Managing Investment Adviser, and consequently, the Company. Specific factors
that might  cause such a material  impact  include,  but are not  limited to the
availability  and cost of personnel  trained in this area, the ability to locate
and correct all relevant computer codes and similar uncertainties.  The Managing
Investment  Adviser's Year 2000 plan  anticipates that software code remediation
and testing of all critical systems will be  substantively  completed by the end
of 1998. The Managing  Investment  Advisers's  total Year 2000 project costs and
its  estimated  time  frame  to  complete  are  based  on  presently   available
information.  However,  there  can be no  guarantee  that the  systems  of other
companies,  on which the Managing  Investment  Adviser's  systems rely,  will be
converted timely, or that a failure to convert by another company would not have
a material adverse effect on the Managing Investment Adviser or the Company.



Item 3.   Quantitative and Qualitative Disclosure About Market Risk.

          Not Applicable.



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.

717410.3

<PAGE>



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

          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 April 30, 1998:

                None.



717410.3

<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 thereunto duly authorized.








                                 UST PRIVATE EQUITY INVESTORS FUND, INC.


Date:      June 12, 1998         --------------------------------------------
                                 By:  David I. Fann
                                      President and Principal Executive Officer


Date:      June 12, 1998         --------------------------------------------
                                 By:  Brian Schmidt
                                      Chief Financial Officer




717410.3

<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:     June 12, 1998       /s/ David I. Fann
                              -------------------------------------------------
                              By:  David I. Fann
                                   President and Principal Executive Officer


Date:     June 12, 1998       /s/ Brian Schmidt
                              -------------------------------------------------
                              By:  Brian Schmidt
                                   Chief Financial Officer




717410.3

<PAGE>


                                                                      Exhibit 27





717410.3

<PAGE>