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


                                    FORM 10-Q


(Mark One)

/x/            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended March 31, 2001

                                       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 0-21874

                          London Pacific Group Limited

             (Exact name of registrant as specified in its charter)
                             ----------------------


       Jersey, Channel Islands                         Not applicable
    (State or other jurisdiction            (I.R.S. Employer Identification No.)
  of incorporation or organization)

                          Minden House, 6 Minden Place
                           St. Helier, Jersey JE2 4WQ
                                 Channel Islands
                    (Address of principal executive offices)
                                   (Zip Code)

                              011 44 (1534) 607700
              (Registrant's 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 May 15, 2001,  the  registrant had  outstanding  64,439,073  Ordinary
Shares, par value $0.05 per share.




<PAGE>



                                TABLE OF CONTENTS


                                     PART I

                              FINANCIAL INFORMATION


<TABLE>
<CAPTION>
<S>                                                                              <C>
Item 1.    Financial Statements:                                                 Page


           Condensed Consolidated Balance Sheets as of March 31, 2001
               and December 31, 2000 ...........................................    3

           Condensed Consolidated Statements of Income for the three months
               ended March 31, 2001 and 2000....................................    4

           Condensed Consolidated Statements of Cash Flows for the three
               months ended March 31, 2001 and 2000.............................    5

           Consolidated Statements of Changes in Shareholders' Equity for
               the three months ended March 31, 2001 and 2000...................    6

           Consolidated Statements of Comprehensive Income for the
               three months ended March 31, 2001 and 2000.......................    7

           Notes to Interim Consolidated Financial Statements...................    8

Item 2.    Management's Discussion and Analysis of Financial Condition
               and Results of Operations .......................................   12

Item 3.    Quantitative and Qualitative Disclosures About Market Risk ..........   19


                                     PART II

                                OTHER INFORMATION

Item 6.    Exhibits and Reports on Form 8-K ....................................   20

Signature  .....................................................................   21
</TABLE>
<PAGE>


                         PART I - FINANCIAL INFORMATION

                          Item 1. FINANCIAL STATEMENTS



                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
                      (In thousands, except share amounts)
<TABLE>
<CAPTION>
                                                                                  March 31,     December 31,
                                                                                     2001          2000
                                                                                -------------  -------------
                                            ASSETS
<S>                                                                             <C>            <C>
Cash and cash equivalents...................................................... $      71,653  $     114,285

Investments, principally of life insurance subsidiaries:
   Fixed maturities:
     Available-for-sale, at fair value (amortized cost: $1,502,985 and
       $1,352,313 as of March 31, 2001 and December 31, 2000, respectively)....     1,473,965      1,292,015
     Held-to-maturity, at amortized cost (fair value: $113,625 and $129,400
       as of March 31, 2001 and December 31, 2000, respectively)...............       110,597        127,514
   Equity securities:
     Trading, at fair value (cost: $79,128 and $99,747 as of March 31,
       2001 and December 31, 2000, respectively) ..............................       114,633        353,896
     Available-for-sale, at fair value (cost: $285,941 and $238,942 as of
       March 31, 2001 and December 31, 2000, respectively) ....................       277,005        229,403
   Policy loans ...............................................................        10,416         10,301
                                                                                -------------  -------------
Total investments .............................................................     1,986,616      2,013,129

Accrued investment income .....................................................        31,900         28,629
Deferred policy acquisition costs .............................................       155,683        168,102
Assets held in separate accounts ..............................................       220,522        206,325
Receivables and other assets...................................................        35,597         32,518
                                                                                -------------  -------------
Total assets .................................................................. $   2,501,971  $   2,562,988
                                                                                -------------  -------------
                                                                                -------------  -------------
                        LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Life insurance policy liabilities ............................................. $   1,795,360  $   1,691,601
Liabilities related to separate accounts ......................................       213,010        203,806
Income taxes payable ..........................................................        27,924          2,674
Deferred income tax liabilities ...............................................        10,008         41,587
Accounts and notes payable, accruals and other liabilities ....................        59,686         55,578
                                                                                -------------  -------------
Total liabilities .............................................................     2,105,988      1,995,246
                                                                                -------------  -------------
Commitments and contingencies

Shareholders' equity:
Ordinary shares, $0.05 par value per share: authorized 86,400,000 shares;
   issued and outstanding 64,436,193 and 64,433,313 shares as of March
   31, 2001 and December 31, 2000, respectively................................         3,222          3,222
Additional paid-in capital ....................................................        68,238         67,591
Retained earnings .............................................................       399,950        580,176
Employee benefit trusts, at cost (shares: 13,503,181 and 12,811,381 as of
   March 31, 2001 and December 31, 2000, respectively) ........................       (62,377)       (58,003)
Accumulated other comprehensive income (loss) .................................       (13,050)       (25,244)
                                                                                -------------  -------------
Total shareholders' equity ....................................................       395,983        567,742
                                                                                -------------  -------------
Total liabilities and shareholders' equity .................................... $   2,501,971  $   2,562,988
                                                                                -------------  -------------
                                                                                -------------  -------------

<FN>
      See accompanying Notes to Interim Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>


                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
                (In thousands, except per share and ADS amounts)
<TABLE>
<CAPTION>
                                                                                         Three Months
                                                                                        Ended March 31,
                                                                                ----------------------------
                                                                                    2001           2000
                                                                                -------------  -------------

<S>                                                                             <C>            <C>
Revenues:
Investment income.............................................................. $      34,988  $      25,785
Insurance policy charges.......................................................         1,381          1,827
Financial advisory services, asset management and other fee income.............         6,604          9,765
Net realized investment gains .................................................        31,101          8,784
Change in net unrealized investment gains (losses) on trading securities ......      (218,645)       (72,145)
                                                                                -------------  -------------
                                                                                     (144,571)       (25,984)
Expenses:
Interest credited on insurance policyholder accounts...........................        27,450         20,445
Amortization of deferred policy acquisition costs..............................         5,682          5,295
Operating expenses.............................................................        13,180         13,221
Goodwill amortization..........................................................            57             58
Interest expense...............................................................           678             12
                                                                                -------------  -------------
                                                                                       47,047         39,031
                                                                                -------------  -------------
Income (loss) before income tax expense........................................      (191,618)       (65,015)

Income tax expense (benefit)...................................................       (11,392)        (9,477)
                                                                                -------------  -------------
Net income (loss).............................................................. $    (180,226) $     (55,538)
                                                                                -------------  -------------
                                                                                -------------  -------------


Basic earnings (loss) per share and ADS........................................       $ (3.50)       $ (1.11)
Diluted earnings (loss) per share and ADS......................................       $ (3.50)       $ (1.11)

<FN>
      See accompanying Notes to Interim Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>


                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                                         Three Months
                                                                                        Ended March 31,
                                                                                ----------------------------
                                                                                    2001           2000
                                                                                -------------  -------------
<S>                                                                             <C>            <C>
Net cash provided by operating activities ..................................... $      63,234  $       5,680

Cash flows from investing activities:
Purchases of held-to-maturity fixed maturity securities .......................        (2,157)        (1,131)
Purchases of available-for-sale fixed maturity securities .....................      (225,960)       (60,148)
Purchases of available-for-sale equity securities..............................       (51,100)       (38,942)
Proceeds from redemption of held-to-maturity fixed maturity securities.........         7,003         21,353
Proceeds from sale of available-for-sale fixed maturity securities ............        75,635         32,976
Proceeds from sale of available-for-sale equity securities ....................             -          1,384
Capital expenditures...........................................................          (251)          (458)
Other cash flows from investing activities ....................................          (115)            59
                                                                                -------------  -------------
Net cash provided by (used in) investing activities ...........................      (196,945)       (44,907)
                                                                                -------------  -------------

Cash flows from financing activities:
Insurance policyholder contract deposits ......................................       143,650         96,708
Insurance policyholder benefits paid ..........................................       (48,129)       (54,528)
Issue of Ordinary Shares ......................................................            16              -
Purchases of Ordinary Shares by the employee benefit trusts....................        (4,669)        (1,831)
Proceeds from disposal of shares by the employee benefit trusts................           327          2,571
Bank overdrafts................................................................             -            196
                                                                                -------------  -------------
Net cash provided by financing activities .....................................        91,195         43,116
                                                                                -------------  -------------

Net increase (decrease) in cash and cash equivalents ..........................       (42,516)         3,889
Cash and cash equivalents at beginning of period ..............................       114,285         49,703
Foreign currency translation adjustment .......................................          (116)             -
                                                                                -------------  -------------
Cash and cash equivalents at end of period .................................... $      71,653  $      53,592
                                                                                -------------  -------------
                                                                                -------------  -------------


<FN>
      See accompanying Notes to Interim Consolidated Financial Statements.
</FN>
</TABLE>


<PAGE>


                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                   (Unaudited)
                                 (In thousands)
<TABLE>
<CAPTION>

                                                                                          Accumulated
                                                                                             Other
                                        Ordinary    Additional                Employee      Compre-       Total
                                       Shares at     Paid-in     Retained      Benefit      hensive   Shareholders'
                                       Par Value     Capital     Earnings      Trusts    Income (Loss)   Equity
                                      -----------  -----------  -----------  -----------  -----------  -----------

<S>                                   <C>          <C>          <C>          <C>          <C>          <C>
Balance as of January 1, 2000 .....   $     3,222  $    62,307  $   559,344  $   (54,033) $   (18,365) $   552,475

Net income (loss)..................             -            -      (55,538)           -            -      (55,538)
Change in net unrealized gains
   (losses) on available-for-sale
   securities......................             -            -            -            -       (3,683)      (3,683)
Exercise of employee share
   options, including income
   tax effect......................             -        1,475            -        2,784            -        4,259
Net realized gains (losses) on
   disposal of shares held by the
   employee benefit trusts.........             -         (213)           -            -            -         (213)
Purchase of shares by the
   employee benefit trusts.........             -            -            -       (1,831)           -       (1,831)
                                      -----------  -----------  -----------  -----------  -----------  -----------
Balance as of March 31, 2000.......   $     3,222  $    63,569  $   503,806  $   (53,080) $   (22,048) $   495,469
                                      -----------  -----------  -----------  -----------  -----------  -----------
                                      -----------  -----------  -----------  -----------  -----------  -----------
</TABLE>

<TABLE>
<CAPTION>

                                                                                          Accumulated
                                                                                             Other
                                        Ordinary    Additional                Employee      Compre-       Total
                                       Shares at     Paid-in     Retained      Benefit      hensive   Shareholders'
                                       Par Value     Capital     Earnings      Trusts    Income (Loss)   Equity
                                      -----------  -----------  -----------  -----------  -----------  -----------

<S>                                   <C>          <C>          <C>          <C>          <C>          <C>
Balance as of January 1, 2001 .....   $     3,222  $    67,591  $   580,176  $   (58,003) $   (25,244) $   567,742

Net income (loss)..................             -            -     (180,226)           -            -     (180,226)
Change in net unrealized gains
   (losses) on available-for-sale
   securities......................             -            -            -            -       12,202       12,202
Foreign currency translation
   adjustment......................             -            -            -            -           (8)          (8)
Exercise of employee share
   options, including income
   tax effect......................             -          615            -          295            -          910
Net realized gains (losses) on
   disposal of shares held by the
   employee benefit trusts.........             -           32            -            -            -           32
Purchase of shares by the
   employee benefit trusts.........             -            -            -       (4,669)           -       (4,669)
                                      -----------  -----------  -----------  -----------  -----------  -----------
Balance as of March 31, 2001.......   $     3,222  $    68,238  $   399,950  $   (62,377) $   (13,050) $   395,983
                                      -----------  -----------  -----------  -----------  -----------  -----------
                                      -----------  -----------  -----------  -----------  -----------  -----------

<FN>
      See accompanying Notes to Interim Consolidated Financial Statements.
</FN>
</TABLE>


<PAGE>


                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                   (Unaudited)
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                                     Three Months Ended
                                                                                           March 31,
                                                                                ----------------------------
                                                                                     2001          2000
                                                                                -------------  -------------
<S>                                                                             <C>            <C>
Net income (loss).............................................................. $    (180,226) $     (55,538)

Other comprehensive income (loss), net of deferred income taxes:

Foreign currency translation adjustments, net of income taxes of $0............            (8)             -

Change in net unrealized gains (losses) on available-for-sale securities
   arising during the quarter, net of income taxes and deferred policy
   acquisition cost amortization adjustments of $(23,693) and
   $7,584, respectively .......................................................        12,202         (3,683)
                                                                                -------------  -------------
Other comprehensive income (loss) .............................................        12,194         (3,683)
                                                                                -------------  -------------
Comprehensive income (loss) ................................................... $    (168,032) $     (59,221)
                                                                                -------------  -------------
                                                                                -------------  -------------

<FN>
      See accompanying Notes to Interim Consolidated Financial Statements.
</FN>
</TABLE>

<PAGE>


                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

Item 1.   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1.   Basis of Presentation and Principles of Consolidation

     The accompanying  interim  consolidated  financial statements are unaudited
and have been  prepared by London  Pacific  Group  Limited  (the  "Company")  in
conformity with United States generally  accepted  accounting  principles ("U.S.
GAAP").  These  consolidated  financial  statements  include the accounts of the
Company, its subsidiaries, the Employee Share Option Trust and the Agent Loyalty
Opportunity Trust  (collectively,  the "Group").  All intercompany  transactions
have been eliminated in consolidation.  Certain information and note disclosures
normally included in the Group's annual consolidated  financial  statements have
been condensed or omitted. The interim consolidated financial statements, in the
opinion  of  management,  reflect  all  adjustments  (consisting  only of normal
recurring  accruals) which are necessary for a fair statement of the results for
the interim periods presented.

     While the Group  believes  that the  disclosures  presented are adequate to
make the  information  not  misleading,  these  interim  consolidated  financial
statements should be read in conjunction with the audited  financial  statements
and related notes for the year ended  December 31, 2000,  which are contained in
the Company's  Annual Report on Form 10-K,  filed with the U.S.  Securities  and
Exchange Commission on March 30, 2001. The year end condensed balance sheet data
was  derived  from  audited  financial  statements  but  does  not  include  all
disclosures required by U.S. GAAP.

     The results  for the three  month  period  ended  March 31,  2001,  are not
necessarily indicative of the results to be expected for the full fiscal year.

     Certain reclassifications were made to prior period amounts to conform with
the current year's presentation.  These  reclassifications have no effect on the
prior period's net income or shareholders' equity.


Note 2.   Comprehensive Income

     Comprehensive income consists of net income; changes in unrealized gains or
losses on available-for-sale securities, net of income taxes and deferred policy
acquisition cost  amortization  adjustments;  and foreign  currency  translation
gains or losses  arising  on the  translation  of the  Group's  Jersey,  Channel
Islands insurance subsidiary.


Note 3.   Earnings Per Share and ADS

     The Group  calculates  earnings per share in accordance  with  Statement of
Financial Accounting Standards No. 128 ("SFAS 128"),  "Earnings per Share." This
statement  requires the  presentation  of basic and diluted  earnings per share.
Basic  earnings  per share is  calculated  by dividing net income or loss by the
weighted  average number of Ordinary  Shares  outstanding  during the applicable
period,  excluding  shares held by the Employee Share Option Trust and the Agent
Loyalty  Opportunity Trust which are regarded as treasury stock for the purposes
of this  calculation.  The Group has issued  employee share  options,  which are
considered  potential common stock under SFAS 128. Diluted earnings per share is
calculated  by dividing  net income by the weighted  average  number of Ordinary
Shares   outstanding   during  the  applicable  period  as  adjusted  for  these
potentially  dilutive  options which are determined based on the "Treasury Stock
Method."

     A  reconciliation  of the  numerators  and  denominators  for the basic and
diluted earnings per share calculations is as follows:


<PAGE>

                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

Item 1.   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
         (Continued)

<TABLE>
<CAPTION>
                                                                                     Three Months Ended
                                                                                          March 31,
                                                                                ----------------------------
                                                                                    2001            2000
                                                                                -------------  -------------
                                                                              (In thousands, except share and
                                                                                 per share and ADS amounts)

<S>                                                                             <C>            <C>
Net income (loss).............................................................. $    (180,226) $     (55,538)

Basic earnings per share and ADS:
Weighted average number of Ordinary Shares outstanding,
  excluding shares held by the employee benefit trusts.........................    51,557,999     50,083,932
                                                                                -------------  -------------
Basic earnings (loss) per share and ADS ....................................... $       (3.50) $       (1.11)
                                                                                -------------  -------------
                                                                                -------------  -------------

Diluted earnings per share and ADS:
Weighted average Ordinary Shares used in diluted earnings per
  share calculations...........................................................    51,557,999     50,083,932
                                                                                -------------  -------------
Diluted earnings (loss) per share and ADS ..................................... $       (3.50) $       (1.11)
                                                                                -------------  -------------
                                                                                -------------  -------------
</TABLE>

Note 4.   Investments

Equity Securities

     Equity   securities  are  comprised  of   available-for-sale   and  trading
securities. An analysis of equity securities is as follows:
<TABLE>
<CAPTION>


                                               March 31, 2001                                   December 31, 2000
                             ------------------------------------------------    ------------------------------------------------
                                            Gross       Gross      Estimated                     Gross      Gross      Estimated
                                          Unrealized  Unrealized     Fair                     Unrealized  Unrealized     Fair
                                Cost        Gains       Losses       Value          Cost         Gains      Losses       Value
                             -----------  ----------  ----------  -----------    -----------  ----------  ----------  -----------
                                                                        (In thousands)
<S>                          <C>          <C>         <C>         <C>            <C>          <C>         <C>         <C>
Private corporate equity
  securities...............  $   273,798  $        -  $        -  $   273,798    $   226,799  $        -  $        -  $   226,799
Listed equity securities ..       12,143           -      (8,936)       3,207         12,143         124      (9,663)       2,604
                             -----------  ----------  ----------  -----------    -----------  ----------  ----------  -----------
Total available-for-sale
  equity securities........      285,941           -      (8,936)     277,005        238,942         124      (9,663)     229,403

Trading securities.........       79,128      52,645     (17,140)     114,633         99,747     264,433     (10,284)     353,896
                             -----------  ----------  ----------  -----------    -----------  ----------  ----------  -----------
Total equity securities....  $   365,069  $   52,645  $  (26,076) $   391,638    $   338,689  $  264,557  $  (19,947) $   583,299
                             -----------  ----------  ----------  -----------    -----------  ----------  ----------  -----------
                             -----------  ----------  ----------  -----------    -----------  ----------  ----------  -----------
</TABLE>

     Trading securities are carried at fair value with changes in net unrealized
gains (losses) of $(218,645,000) and $(72,145,000)  included in earnings for the
three month periods ended March 31, 2001 and 2000, respectively.


<PAGE>



                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

Item 1.   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
          (Continued)

Realized Gains and Losses

     Information   about  gross   realized   gains  and  losses  on   securities
transactions is as follows:
<TABLE>
<CAPTION>
                                                                                      Three Months Ended
                                                                                            March 31,
                                                                                ----------------------------
                                                                                     2001             2000
                                                                                -------------  -------------
                                                                                       (In thousands)
<S>                                                                             <C>            <C>
Gross realized gains (losses) on securities transactions:
Fixed maturities, available-for-sale:
    Gross gains................................................................ $       3,600  $          31
    Gross losses...............................................................          (356)           (13)
Fixed maturities, held-to-maturity:
    Gross losses...............................................................           (12)          (134)
Trading securities:
    Gross gains................................................................        43,665          8,784
    Gross losses...............................................................        (1,646)             -
Equity securities, available-for-sale:
    Gross gains................................................................           400            116
    Gross losses...............................................................       (14,550)             -
                                                                                -------------  -------------
Net realized investment gains on securities transactions....................... $      31,101  $       8,784
                                                                                -------------  -------------
                                                                                -------------  -------------
</TABLE>
Note 5.   Recently Issued Accounting Pronouncements

     On January 1, 2001,  the Group  adopted  Statement of Financial  Accounting
Standards No. 133 ("SFAS  133"),  "Accounting  for  Derivative  Instruments  and
Hedging  Activities."  This  standard,  as amended,  establishes  accounting and
reporting  standards  for  derivative  instruments  and hedging  activities.  It
requires  that all  derivative  instruments  be recorded on the balance sheet at
fair value unless the derivative  qualifies as a hedge. The adoption of SFAS 133
did not have a material impact on the Group's consolidated  financial statements
for the three month period ended March 31, 2001.


Note 6.   Business Segment and Geographical Information

     The Group's reportable  operating segments are classified  according to its
principal  businesses,  which  are:  life  insurance  and  annuities,  financial
advisory services, asset management and venture capital management.

     During the three month  periods  ended March 31, 2001 and 2000,  there were
included  in the asset  management  and  venture  capital  management  segments,
portfolio  management  fees from the life  insurance  and  annuities  segment of
$2,724,000  and  $2,417,000,  respectively.  These  management  fees  have  been
approved by the insurance  regulatory body in the life insurance  company's U.S.
state of domicile.  Realized  investment gains in the amount of $37,763,000 were
recorded by the life insurance and annuities segment,  related to intersegmental
investment  sales to the venture  capital  management  segment.  These  realized
investment  gains  were  offset  by  a  corresponding   decrease  in  unrealized
investment gains for the same amount.

<PAGE>

                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

Item 1.   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
          (Continued)

     Summary  revenue and  investment  gain  (loss)  information  by  geographic
segment,  based on the domicile of the Group company  generating those revenues,
is as follows:
<TABLE>
<CAPTION>

                                                                                      Three Months Ended
                                                                                           March 31,
                                                                                ----------------------------
                                                                                     2001            2000
                                                                                -------------  -------------
                                                                                       (In thousands)

<S>                                                                             <C>            <C>
Jersey......................................................................... $     (99,459) $       4,384
Guernsey.......................................................................       (55,560)       (38,372)
United States..................................................................        10,448          8,004
                                                                                -------------  -------------
Consolidated revenues and net investment gains (losses)........................ $    (144,571) $     (25,984)
                                                                                -------------  -------------
                                                                                -------------  -------------

       Total assets by geographic segment were as follows:

                                                                                   March 31,    December 31,
                                                                                     2001          2000
                                                                                -------------  -------------
                                                                                       (In thousands)

Jersey......................................................................... $      94,187  $     251,255
Guernsey.......................................................................       158,665        176,173
United States..................................................................     2,249,119      2,135,560
                                                                                -------------  -------------
Consolidated total assets ..................................................... $   2,501,971  $   2,562,988
                                                                                -------------  -------------
                                                                                -------------  -------------

     Revenues and income before tax expense for the Group's reportable operating
segments, based on management's internal reporting structure, were as follows:

                                                                                     Three Months Ended
                                                                                           March 31,
                                                                                ----------------------------
                                                                                     2001             2000
                                                                                -------------  -------------
                                                                                       (In thousands)

Revenues:
Life insurance and annuities (1) (2)........................................... $     (97,390) $      (1,704)
Financial advisory services....................................................         5,065          6,044
Asset management (1) ..........................................................         1,785          1,902
Venture capital management (2) ................................................       (54,479)       (32,785)
                                                                                -------------  -------------
                                                                                     (145,019)       (26,543)
Reconciliation of segment amounts to consolidated amounts:
Interest income ...............................................................           448            559
                                                                                -------------  -------------
Consolidated revenues and net investment gains (losses)........................ $    (144,571) $     (25,984)
                                                                                -------------  -------------
                                                                                -------------  -------------
-------------------------------------
(1) Intersegmental revenue in asset management segment
    from life insurance and annuities segment ................................. $         529  $         535


(2) Intersegmental revenue in venture capital management
    segment from life insurance and annuities segment ......................... $       2,195  $       1,882
</TABLE>
<PAGE>

                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

Item 1.   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
          (Continued)
<TABLE>
<CAPTION>

                                                                                     Three Months Ended
                                                                                          March 31,
                                                                                ----------------------------
                                                                                     2001            2000
                                                                                -------------  -------------
                                                                                       (In thousands)
<S>                                                                             <C>            <C>
Income (loss) before income tax expense:
Life insurance and annuities (1) (2)........................................... $    (133,023) $     (29,441)
Financial advisory services ...................................................        (1,455)          (639)
Asset management (1)...........................................................           287            647
Venture capital management (2) ................................................       (55,317)       (34,642)
                                                                                -------------  -------------
                                                                                     (189,508)       (64,075)
Reconciliation of segment amounts to consolidated amounts:
Interest income ...............................................................           448            559
Corporate expenses ............................................................        (1,823)        (1,429)
Goodwill amortization .........................................................           (57)           (58)
Interest expense ..............................................................          (678)           (12)
                                                                                -------------  -------------
Consolidated income (loss) before income tax expense .......................... $    (191,618) $     (65,015)
                                                                                -------------  -------------
                                                                                -------------  -------------
-------------------------------------
(1) Intersegmental revenue in asset management segment
    from life insurance and annuities segment ................................. $         529  $         535


(2) Intersegmental revenue in venture capital management
    segment from life insurance and annuities segment ......................... $       2,195  $       1,882
</TABLE>

     The only  material  change in segmental  assets during the first quarter of
2001 was in the venture capital  management  segment,  where assets decreased by
$37,703,000 from $109,604,000 to $71,901,000,  primarily caused by the change in
net unrealized gains on listed equity securities in the trading account.


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

     This  Management's  Discussion  and  Analysis of  Financial  Condition  and
Results of Operations  should be read in conjunction with the unaudited  interim
consolidated financial statements, and the notes thereto, presented elsewhere in
this  report.  The interim  consolidated  financial  statements  are prepared in
accordance with generally accepted  accounting  principles in the United States.
This  item  should  also  be  read  in  conjunction  with  the  "Forward-Looking
Statements and Factors That May Affect Future Results" which are set forth below
and in the  Company's  other  filings  with the  U.S.  Securities  and  Exchange
Commission ("SEC").

Forward-Looking Statements and Factors That May Affect Future Results

     This  Management's  Discussion  and  Analysis of  Financial  Condition  and
Results of Operations and other sections of this report contain  forward-looking
statements  within  the  meaning  of  Section  21E of  the  Exchange  Act.  Such
forward-looking  statements  are  based  on  current  expectations,   estimates,
forecasts and  projections  about the  industries  in which the Group  operates,
management's  current beliefs and assumptions made by management.  Words such as
"expects,"  "anticipates," "intends," "plans," "believes," "seeks," "estimates,"
"goals,"  variations  of such words and  similar  expressions  are  intended  to
identify such forward-looking statements. These statements are not guarantees of
future performance and involve certain risks, uncertainties
<PAGE>

and assumptions  that are difficult to predict.  Future outcomes and results may
differ  materially  from what is expressed  or forecast in such  forward-looking
statements.  The Group  undertakes no  obligation to update any  forward-looking
statements,  whether  as a result of new  information,  future  developments  or
otherwise.

     Factors   that  could  cause  or   contribute   to   deviations   from  the
forward-looking statements include those discussed in this section, elsewhere in
this  report  and in the  Company's  other  filings  with the SEC.  The  factors
include, but are not limited to, (i) the risks described in Item 3 "Quantitative
and  Qualitative  Disclosures  About Market Risk," (ii) variations in demand for
the  Group's  products  and  services,  (iii) the  success of new  products  and
services provided by the Group, (iv) the credit ratings of the Group's insurance
subsidiaries, (v) significant changes in net cash flows in or out of the Group's
businesses,  (vi)  fluctuations  in the  performance  of debt and equity markets
worldwide,  (vii) the enactment of adverse state,  federal or foreign regulation
or changes in government policy or regulation  (including  accounting standards)
affecting the Group's  operations,  (viii) the effect of economic conditions and
interest rates in the U.S., the U.K. or internationally, (ix) the ability of the
Group's  subsidiaries  to compete in their  respective  businesses,  and (x) the
ability of the Group to attract and retain key personnel.

RESULTS OF OPERATIONS BY BUSINESS SEGMENT

Life Insurance and Annuities

     Certain  information  regarding the life insurance and annuities  segment's
results of operations is as follows:
<TABLE>
<CAPTION>
                                                                                      Three Months Ended
                                                                                           March 31,
                                                                                ----------------------------
                                                                                     2001             2000
                                                                                -------------  -------------
                                                                                       (In thousands)
<S>                                                                             <C>            <C>
Revenues:
Investment income.............................................................. $      31,817  $      22,664
Insurance policy charges ......................................................         1,381          1,827
Net realized investment gains, including related amortization (1) (2)..........        66,744          8,765
Change in net unrealized investment gains (losses) on trading securities,
  including related amortization (1) (2).......................................      (199,734)       (38,603)
Other fee income ..............................................................           282            430
                                                                                -------------  -------------
Total revenues and investment gains (losses), including related
  amortization (1).............................................................       (99,510)        (4,917)

Expenses:
Interest credited on insurance policyholder accounts ..........................        27,450         20,445
Amortization of deferred policy acquisition costs related to operations (1)....         3,562          2,082
Mortality expenses.............................................................            50             33
General and administrative expenses ...........................................         2,451          1,964
                                                                                -------------  -------------
Total expenses related to operations (1).......................................        33,513         24,524
                                                                                -------------  -------------
Income (loss) before income tax expense ....................................... $    (133,023) $     (29,441)
                                                                                -------------  -------------
                                                                                -------------  -------------
</TABLE>

  (1)  As  a result  of  net  realized  investment  gains on  available-for-sale
securities  and  the  change  in net  unrealized  investment  gains  on  trading
securities which back the life insurance and annuities segment's investment-type
products,  amortization  of deferred policy  acquisition  costs was increased by
$2,120,000 and $3,213,000 in the first quarters of 2001 and 2000,  respectively.
For  purposes  of the  above  business  segment  presentation,  this  additional
amortization  is not shown in operating  expenses in accordance with the Group's
accounting  policy used to prepare the  consolidated  income  statement,  but is
netted against net realized investment gains (losses)  ($2,120,000 and ($65,000)
in the first  quarters  of 2001 and 2000,  respectively)  and the  change in net
unrealized investment gains (losses) ($0 and $3,278,000 in the first quarters of
2001 and 2000, respectively).


<PAGE>


  (2) Realized  investment  gains in  the amount of $37,763,000 were recorded by
the life insurance and annuities segment,  related to intersegmental  investment
sales to the venture capital management segment. These realized investment gains
were offset by a corresponding  decrease in unrealized  investment gains for the
same amount.  These gains are eliminated in the Group's  consolidated  financial
statements.

First quarter of 2001 compared to first quarter of 2000

     For the quarter  ended March 31, 2001,  the life  insurance  and  annuities
segment,  which consists of London Pacific Life & Annuity  Company  ("LPLA") and
London  Pacific  Assurance  Limited  ("LPAL"),  contributed a loss before income
taxes of $133.0 million to the Group's overall loss before taxes,  compared to a
loss of $29.4  million in the first  quarter of 2000.  Net  realized  investment
gains,  including  related  amortization  of deferred policy  acquisition  costs
("DPAC"),  increased  by $58.0  million,  while  the loss  from  the  change  in
unrealized  investment  gains and losses,  including  related DPAC amortization,
increased by $161.1 million.  The spread between  investment income and interest
credited to  policyholder  accounts  increased by $2.1 million;  amortization of
DPAC, excluding  amortization related to investment gains and losses,  increased
by $1.5  million;  and general and  administrative  expenses  increased  by $0.5
million over the same period in 2000.  Policy  charges for the first  quarter of
2001  decreased by $0.4 million and other fee income  decreased by $0.1 million,
each as compared with the first quarter of 2000.

     In accordance with U.S. GAAP,  premiums  collected on annuity and universal
life  contracts  are not  reported as  revenues,  but as  deposits to  insurance
liabilities. Revenues for these products are recognized over time in the form of
investment  income  and  surrender  or other  charges.  LPLA  offers  both fixed
annuities  which  typically  have an interest rate  guaranteed  for one to seven
years,  after  which the  company  has the  discretionary  ability to change the
crediting rate to any rate not below a guaranteed  rate, and variable  annuities
which allows the contract  holders the ability to direct  premiums into specific
investment portfolios with rates of return being based on the performance of the
portfolio.  LPAL began selling  guaranteed bond contracts,  which are similar to
LPLA's fixed annuity  products,  in the U.K. markets during the first quarter of
2000.

     Premiums for all life,  annuity and  guaranteed  bond  products were $153.6
million for the first  quarter of 2001,  an increase of 45.9% over the  premiums
received in the same period in 2000.  LPAL  accounted  for $27.8  million of the
total premium volume  received during the first quarter of 2001. The increase in
LPLA's  premiums  reflects a shift in its mix of business.  Sales of traditional
annuities in the first  quarter of 2001,  which  typically  guarantee  crediting
rates for one year,  increased to $61.9 million compared to $42.2 million in the
first quarter of 2000. Sales of the multi-year  guaranteed rate annuity products
in the first  quarter of 2001  increased  to $57.7  million,  compared  to $54.9
million  in the  first  quarter  of  2000.  LPLA has been  able to  attract  new
distribution  sources for its  traditional  annuities  due in part to its strong
track record in the industry. LPAL continues to increase its number of financial
intermediaries.  Over 200 financial intermediaries have now signed agreements to
sell  LPAL's  products,  which  gives  LPAL  access  to over  6,000  independent
financial advisors in the U.K. and Jersey.

     Interest and dividend  income on securities was $31.8 million for the first
quarter of 2001 as compared  with $22.7  million for the first  quarter of 2000.
This $9.1 million  increase was  primarily due to asset growth from new business
and  higher  reinvestment  rates.  The  carrying  value  of the  private  equity
portfolio as of March 31, 2001 was $247.2 million,  compared with $234.2 million
as of December 31, 2000.

     Net investment  losses,  including related DPAC  amortization,  were $133.0
million in the first  quarter of 2001,  compared  to $29.8  million in the first
quarter  of 2000.  Net  investment  losses  in the  first  quarter  of 2001 were
comprised of net realized  investment  gains of $68.9 million,  a $199.7 million
loss from the change in net  unrealized  gains and  losses on the listed  equity
securities held in the trading portfolio,  and related DPAC amortization of $2.1
million. The market value of the trading portfolio decreased from $248.7 million
as of December 31, 2000, to $69.9 million as of March 31, 2001. Additions to the
trading  portfolio  during the first quarter of 2001 of $55.7  million  resulted
from the purchase of certain listed equity  securities  from the venture capital
management  segment.  LPLA and LPAL sold certain trading  positions in the first
quarter of 2001 that  resulted in net realized  gains of $42.0  million based on
their  aggregate  original cost of $20.6  million. Disposals

<PAGE>

of certain listed equity  securities to the venture capital  management  segment
resulted in realized  gains of $37.8  million based on their  aggregate  cost of
$14.2  million.  These gains were  partially  offset by a  permanent  impairment
writedown of $14.6 million on one private  placement equity  security.  The life
insurance  and annuities  segment also  recorded $3.6 million in realized  gains
from the sale of certain of its corporate bonds and other investments during the
first quarter of 2001. All intersegmental  investment gains have been eliminated
in the Group's consolidated  income statement.  As of March 31, 2001, LPLA's and
LPAL's investment portfolios included seven former private preferred stocks that
have been converted to listed common equities and one  convertible  bond holding
in a publicly  traded  company.  During the first  quarter of 2001,  one private
equity company was acquired for preferred stock by a publicly traded company.

     Total invested  assets (defined as total assets  excluding  deferred policy
acquisition  costs,  other  assets  and income tax  related  accounts)  remained
unchanged at $2.2  billion as of March 31, 2001,  compared to December 31, 2000.
On total  average  invested  assets for the first  quarter of 2001,  the average
annualized net return,  including both realized and unrealized  investment gains
and losses was -18.37%, as compared with -1.01% for the first quarter of 2000.

     Policy  surrender and mortality charge income decreased by $0.4 million for
the first quarter of 2001 to $1.4 million, as compared with $1.8 million for the
first quarter of 2000. Full policy surrenders totaled $27.2 million in the first
quarter of 2001, a $4.8 million  decrease  over the first  quarter of 2000.  The
majority of the surrenders occurred in older blocks of business that were in the
later stages of their surrender penalty periods. Annuity surrenders may increase
as the portion of the business  that can be withdrawn by  policyholders  without
incurring  a  surrender  charge  penalty  grows.   Internal  policy  conversions
accounted for $9.9 million of the full  surrenders in the first quarter of 2001,
compared to $8.6 million in the first quarter of 2000.

     Interest  credited on policyholder  accounts  increased by $7.0 million for
the first quarter of 2001 to $27.4  million,  as compared with $20.4 million for
the first quarter of 2000. The increase was primarily due to new business growth
in the multi-year annuity products,  which generally have higher crediting rates
than traditional annuity products but lower acquisition costs and an increase in
overall policy crediting  rates. The average rate credited to policyholders  was
5.90%  for the first  quarter  of 2001,  as  compared  with  5.50% for the first
quarter of 2000.

     Amortization of DPAC,  excluding  amortization  related to investment gains
and losses,  was $3.6 million for the first quarter of 2001, an increase of $1.5
million  from the same period in 2000.  The increase  was  primarily  due to new
business growth.  Realized and unrealized  investment gains were included in the
gross  profits used to calculate the  amortization  of DPAC.  This  inclusion of
investment  gains resulted in amortization of $2.1 million for the first quarter
of 2001, compared to $3.2 million in the first quarter of 2000.

     General and administrative expenses were $2.5 million for the first quarter
of 2001,  compared  with $2.0  million in the first  quarter of 2000.  This $0.5
million  increase was primarily due to higher  employee  compensation  costs and
expenses involved with technology consultants.  The annualized expense ratio for
the first  quarter  of 2001,  which is defined  as  general  and  administrative
expenses  divided by the average  book value of total cash and  investments, was
0.40% as compared with 0.48% for the first quarter of 2000.

     LPAL,  which began its  operations  in the first  quarter of 2000,  sells a
single  premium term life  insurance  bond designed to offer a yield higher than
bank deposits. The single premium investment, the Guaranteed Return Bond, offers
a  guaranteed  yield and a  guaranteed  return of capital at maturity for either
three or five  years.  The yield can be taken as either a regular  payment or as
capital appreciation. LPAL had 1,305 policies in force as of March 31, 2001, and
premiums totaling $80.6 million have been generated since inception.  Sales have
been made in the Channel Islands, the U.K. and the Isle of Man, with over 57% of
the premiums from Jersey, Channel Island investors.


<PAGE>


Financial Advisory Services

     Certain  information  regarding the financial  advisory services  segment's
results of operations is as follows:
<TABLE>
<CAPTION>

                                                                                      Three Months Ended
                                                                                           March 31,
                                                                                ----------------------------
                                                                                     2001             2000
                                                                                -------------  -------------
                                                                                        (In thousands)
<S>                                                                             <C>            <C>
Revenues:
Financial advisory services revenues........................................... $       5,065  $       6,044
Allocation to independent advisors.............................................        (3,596)        (4,373)
                                                                                -------------  -------------
Net financial advisory services revenues after amounts allocated...............         1,469          1,671

Operating expenses.............................................................         2,924          2,310
                                                                                -------------  -------------
Income (loss) before income tax expense ....................................... $      (1,455) $        (639)
                                                                                -------------  -------------
                                                                                -------------  -------------
</TABLE>

First quarter of 2001 compared to first quarter of 2000

     The loss from the financial  advisory  services segment increased from $0.6
million  in the first  quarter of 2000 to $1.5  million in the first  quarter of
2001, primarily due to an increase in operating expenses (largely related to the
initiatives  discussed below), as well as a decrease in brokerage and commission
product revenues.

     Asset  management and  consulting fee income  increased from the prior year
period as a result of a shift  toward  higher  margin  managed  accounts,  while
income from brokerage and commission  product sales decreased due to a change in
focus toward fee based (rather than commission based) services and the generally
difficult  market  conditions  prevailing  during  the  quarter.   Assets  under
management or  administration  decreased from $1.6 billion as of March 31, 2000,
to $1.4 billion as of March 31, 2001, primarily due to market movements.

     Operating  expenses increased to $2.9 million in the first quarter of 2001,
compared to $2.3 million in the first  quarter of 2000.  Excluding  staff costs,
operating  expenses actually  decreased by 7%, but staffing  additions were made
over  the  course  of 2000 to  support  the  institutional  and  internet  based
initiatives discussed below.

     In late 1999, the Group decided to make the LPA business the foundation for
an internet  based  initiative  that could then be  migrated  to other  vertical
markets in which the Group has expertise. This initiative aims to deliver a full
complement of consulting and back office services to institutions  and financial
advisors  through the  internet.  An overview  of the  project is  available  at
www.lpadvisors.com.

     The  internet  based  initiative  has  opened  the  door for  marketing  of
financial  advisory  services to institutions  and large groups of advisors.  To
date,  service  contracts  have been signed with three major  institutions,  and
additional  contracts  are  currently  under  negotiation.  The  impact of these
contracts  will  start  to be  realized  in the  second  quarter  of 2001 as new
contracted business begins to come on line.


<PAGE>


Asset Management

       Certain information regarding the asset management segment's results of
operations is as follows:
<TABLE>
<CAPTION>

                                                                                      Three Months Ended
                                                                                           March 31,
                                                                                ----------------------------
                                                                                     2001           2000
                                                                                -------------  -------------
                                                                                       (In thousands)

<S>                                                                             <C>            <C>
Revenues ...................................................................... $       1,785  $       1,902
Operating expenses ............................................................         1,498          1,255
                                                                                -------------  -------------
Income before income tax expense .............................................. $         287  $         647
                                                                                -------------  -------------
                                                                                -------------  -------------
</TABLE>

First quarter of 2001 compared to first quarter of 2000

     Income from the asset management segment decreased from $0.6 million in the
first quarter of 2000 to $0.3 million in the first quarter of 2001. The decrease
of $0.3 million was primarily attributable to lower pre-tax results for Berkeley
Capital  Management  ("BCM"),  the Group's U.S.  asset  manager.  BCM's revenues
remained level at $1.5 million,  but expenses  increased by $0.3 million to $1.5
million,  primarily as a result of higher  commissions paid to BCM's wholesalers
under a revised commission structure.

     Increased profitability at BCM was hindered by lower than planned growth in
the wrap fee account  business.  Average  wrap assets under  management  for the
first  quarter of 2001 were  approximately  the same as for the first quarter of
2000.  Although  BCM was able to attract  net new wrap  assets in both its Value
Equity and Growth Equity  investment  products during the first quarter of 2001,
total wrap assets fell from $955 million as of December 31, 2000 to $906 million
as of March 31, 2001, due to the decrease in market value of the accounts during
the period.

     Other revenue in the asset management  segment decreased by $0.1 million in
the first  quarter  of 2001  following  the  conclusion  at the end of the third
quarter of 2000 of a development  capital fund  management  contract  handled by
Berkeley International Limited in Jersey.

Venture Capital Management

     Certain  information  regarding the venture  capital  management  segment's
results of operations is as follows:
<TABLE>
<CAPTION>
                                                                                     Three Months Ended
                                                                                           March 31,
                                                                                ----------------------------
                                                                                     2001          2000
                                                                                -------------  -------------
                                                                                       (In thousands)
Revenues:
<S>                                                                             <C>            <C>
Management fees................................................................ $       2,195  $       3,806
Investment income..............................................................             -            145
Net realized investment gains (1)..............................................        37,269             84
Change in net unrealized investment gains (losses) (1).........................       (93,943)       (36,820)
                                                                                -------------  -------------
Total revenues and net investment gains (losses)...............................       (54,479)       (32,785)
Operating expenses.............................................................           838          1,857
                                                                                -------------  -------------
Income (loss) before income tax expense........................................ $     (55,317) $     (34,642)
                                                                                -------------  -------------
                                                                                -------------  -------------
</TABLE>

  (1) Realized  investment  gains in  the amount of $37,269,000 were recorded by
the venture capital  management  segment,  related to intersegmental  investment
sales to the life insurance and annuities  segment.  These  realized  investment
gains were offset by a corresponding decrease in unrealized investment gains for
the same amount.
<PAGE>

First quarter of 2001 compared to first quarter of 2000

     The loss before taxes from the venture capital management segment increased
from $34.6  million in the first  quarter of 2000 to a loss of $55.3  million in
the first  quarter  of 2001.  This loss was  attributable  to the  change in net
unrealized  gains and losses for the first  quarter of 2001 on the listed equity
securities  held in the trading  portfolio.  These  positions  in listed  equity
securities  were  the  result  of  private  equity  transactions  in  technology
companies.  The losses  reflected the general  downward  trend in the market for
technology stocks during the first quarter of 2001.

     The change in net unrealized  gains and losses in the listed equity trading
portfolio  during  the first  quarter of 2001 was a loss of $93.9  million.  The
market  value of the  trading  portfolio  decreased  from  $105.2  million as of
December  31,  2000,  to $44.7  million as of March 31,  2000.  Additions to the
trading  portfolio  during the first quarter of 2001 of $51.9  million  resulted
from the purchase of certain  listed equity  securities  from the life insurance
and annuities segment. Disposals of certain listed equity securities to the life
insurance  and  annuities  segment  resulted in realized  gains of $37.3 million
based on their aggregate cost of $18.5 million.  All  intersegmental  investment
gains have been eliminated in the Group's consolidated income statement.

     Significant  fluctuations  in net  unrealized  gains in the  listed  equity
trading  portfolio  are  likely in future  quarters,  reflecting  equity  market
volatility, especially in the technology sector.

     Included in the revenues of the venture capital  management segment for the
first quarter of 2001 are portfolio  management fees from the life insurance and
annuities segment of $2.2 million, compared to $1.9 million in the first quarter
of  2000.  Berkeley  International  Capital  Corporation  ("BICC")  sources  and
monitors private investments for LPLA, for which LPLA pays BICC management fees.
Total  financings  completed  by BICC  for the  insurance  subsidiaries  and for
Berkeley  International  Capital  Limited  during the first quarter of 2001 were
$51.1 million, compared to $32.6 million during the first quarter of 2000. Other
non-recurring fees of $1.9 million were received in the first quarter of 2000.

     Operating expenses in the first quarter of 2001 were $0.8 million, compared
to $1.9 million in the first  quarter of 2000.  This $1.1  million  decrease was
primarily  attributable to lower employee  compensation  which resulted from the
decline in  unrealized  appreciation  on employees'  investments  in the Group's
deferred compensation plan.

Corporate and Other

First quarter of 2001 compared to first quarter of 2000

     Corporate  expenses  increased by $0.4 million to $1.8 million in the first
quarter of 2001 as compared with the first  quarter of 2000,  primarily due to a
grant of employee  share options at an exercise price below fair market value on
the date of the grant.  Under U.S.  GAAP,  the  difference  between the exercise
price and the fair market value on the date of grant is considered  compensation
expense.

     Interest  income  earned by the Group  (excluding  the life  insurance  and
annuities  segment)  decreased  by $0.1  million  to $0.4  million  in the first
quarter of 2001 as compared with the first quarter of 2000, primarily due to the
decrease  in cash and  cash  equivalents  held by the  Group.  Interest  expense
incurred by the Group  (excluding  the life  insurance  and  annuities  segment)
increased  by $0.7  million  to $0.7  million  in the first  quarter  of 2001 as
compared  with the  first  quarter  of 2000,  primarily  due to bank  borrowings
outstanding during the first quarter of 2001.

Consolidated Income (Loss) Before Income Tax Expense (Benefit)

First quarter of 2001 compared to first quarter of 2000

     The consolidated loss before income taxes increased by $126.6 million, from
a loss of $65.0 million in the first quarter of 2000 to a loss of $191.6 million
in the first quarter of 2001. These large losses were primarily

<PAGE>

attributable  to the  change in net  unrealized  investment  gains  and  losses,
partially offset by net realized investment gains.

     Consolidated  income  before  income tax expense for the full year 2001 and
future  years may be  volatile  due to the  Group's  holdings  of listed  equity
securities  primarily in the technology sector,  which are marked to market with
changes  in their  market  value  recognized  in the income  statement  for each
period. For more information on the possible effects of volatility in the prices
of equity securities, see Item 3 "Quantitative and Qualitative Disclosures About
Market Risk" below.

Income Taxes

     The Group is subject to taxation on its income in all countries in which it
operates  based  upon the  taxable  income  arising  in each  country.  However,
realized  gains on certain  investments  are  exempt  from  Jersey and  Guernsey
taxation.  The Group is subject to income tax in Jersey at a rate of 20%. In the
United  States,  the Group is subject to both  federal and  California  taxes at
34-35% and 8.84%, respectively.

First quarter of 2001 compared to first quarter of 2000

     The  effective  tax credit rate,  as a percentage of the loss before income
taxes for the first quarter of 2001,  was 6%. This low effective tax credit rate
was primarily attributable to losses of $159.1 million contributed by the Jersey
and  Guernsey  operations  during  the first  quarter of 2001,  which  primarily
consisted of investment  losses for which no tax benefits will be realized.  The
effective  tax credit rate,  as a percentage of loss before income taxes for the
first quarter of 2000,  was 15%. This effective rate reflected the fact that 45%
of the first quarter of 2000 loss was  contributed  by the U.S. life and annuity
company,  and that 57% of the first quarter of 2000 loss represented net capital
losses from the Jersey and Guernsey  operations  for which no tax benefits  were
realized.


Liquidity and Capital Resources

     On a consolidated  basis as of March 31, 2001, cash and cash equivalents of
the Group,  excluding the life insurance segment,  amounted to $20.1 million. As
of March 31, 2001, the Group,  excluding the life insurance and annuity segment,
also held $43.6 million of listed equity securities which could be sold within a
short period of time.  Management  believes  that the  balances of cash,  liquid
resources  and   borrowings,   should  be  sufficient  to  satisfy  the  Group's
anticipated financing requirements during the next twelve months.

     Shareholders'  equity decreased in the first three months of 2001 by $171.8
million  to  $396.0  million,  primarily  due to the net loss for the  period of
$180.2 million. The value of the Company's Ordinary Shares, held by the employee
benefit  trusts,  valued  at cost of  $62.4  million,  has been  netted  against
shareholders'  equity.  Upon exercise of employee share  options,  shareholders'
equity will be increased by the cost of the shares  transferred to the employees
and the proceeds received will increase Group cash.


Item 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The nature of the  Group's  businesses  exposes  the Group to market  risk.
Market risk is the risk of loss that may occur when  changes in  interest  rates
and public equity prices adversely affect the value of invested assets.

Interest Rate Risk

     The Group's  life  insurance  and  annuity  segment is subject to risk from
interest  rate  fluctuations  when there is a  difference  between the amount of
interest earning assets and the amount of interest bearing  liabilities that are
prepaid,  mature or are repriced in specific  periods.  LPLA and LPAL attempt to
minimize  their  exposure  to  interest  rate   fluctuations   by  managing  the
characteristics  of their assets and  liabilities so that the effects of

<PAGE>

changes  are  reasonably  likely  to be  offset.  LPLA's  and  LPAL's  principal
asset/liability  management  goals are to  achieve  sufficient  cash  flows from
invested assets to fund contractual  obligations,  while  maximizing  investment
returns. LPLA and LPAL have not used derivative financial instruments to achieve
their  asset/liability  management  goals.  Exposure  to  interest  rate risk is
estimated by performing  sensitivity  tests based on duration analysis of LPLA's
investment and product portfolios.

     Duration  is an option  adjusted  measure of the  percentage  change in the
market  value of the assets or  liabilities  in  response  to a given  change in
interest rates.  For LPAL,  given that  policyholder  liabilities are only $78.3
million,  interest  rate risk is considered to be minimal.  To  demonstrate  the
sensitivity of LPLA's assets and  liabilities,  tests performed on LPLA's assets
and  liabilities  indicated that, as of March 31, 2001, if market interest rates
had suddenly  increased by 100 basis  points,  the fair value of the  investment
portfolio that is subject to interest rate risk,  which was  approximately  $1.8
billion,  would have  decreased by $83.6  million,  compared  with a decrease of
$61.0  million  for the  calculated  market  value  of  liabilities,  which  was
approximately  $1.7 billion.  Conversely,  a sudden decrease of 100 basis points
would have  increased the  investment  portfolio's  fair value by $85.8 million,
compared with an increase in the calculated market value of liabilities of $78.0
million.  These  results  depend upon  certain  key  assumptions  regarding  the
behavior of interest sensitive cash flows. Although LPLA has attempted to ensure
that the  assumptions  used are based on the best  available  data,  cash  flows
cannot be forecasted with certainty, and can deviate materially from the assumed
results.

Equity Price Risk

     The Group,  including LPLA and LPAL, is exposed to equity price risk on the
listed equity securities held almost entirely in its trading portfolio.  Changes
in the level or  volatility  of equity  prices  affect  the value of the  listed
equity securities. These changes in turn directly affect the Group's net income,
because the Group's  holdings of listed equity  securities are marked to market,
with changes in their market value  recognized  in the income  statement for the
period in which the changes occur.  These listed equity securities are primarily
in companies in the high  technology  industry  sector,  many of which are small
capitalization stocks.

     If the market price of the Group's listed equity  portfolio as of March 31,
2001 and 2000,  which totaled $117.8 million and $339.4  million,  respectively,
had  abruptly  increased  or  decreased  by 50%,  the market value of the listed
equity  portfolio  would have increased or decreased by $58.9 million and $169.7
million,  respectively.  Of the value of the listed equity portfolio as of March
31, 2001,  $26.6 million  represented  unrealized  market  appreciation.  Of the
listed equity  securities held as of March 31, 2001, $57.7 million  consisted of
an equity holding in New Focus, Inc., with an unrealized gain of $42.7 million.



                           PART II - OTHER INFORMATION


Item 6.    EXHIBITS AND REPORTS ON FORM 8-K

(a)  EXHIBITS

     None.


(b)  REPORTS ON FORM 8-K:

     No reports on Form 8-K were filed by the Company  during the first  quarter
of 2001.





<PAGE>


                                    SIGNATURE


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



                                      LONDON PACIFIC GROUP LIMITED
                                      (Registrant)

 Date:  May 15, 2001                  By:    /s/  Ian K. Whitehead

                                             Ian K. Whitehead
                                             Chief Financial Officer

                                             (Principal Financial and Accounting
                                              Officer and Duly Authorized
                                              Officer of the Registrant)