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

                                    FORM 10-Q

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

                      For the Period Ended: March 31, 1997

                         Commission File Number 01-16532

               EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
      (Exact name of registrant as specified in its governing instruments)

              Delaware                            13-3486106
      (State or other jurisdiction      (IRS Employer Identification No.)
    of incorporation or organization)

                           1345 Avenue of the Americas
                            New York, New York 10105
              (Address of principal executive offices and zip code)

        Registrant's telephone number, including area code:(212) 979-1000

           Securities registered pursuant to Section 12(b) of the Act:

        Title of each class         Name of each exchange on which registered
               None                              Not Applicable

           Securities registered pursuant to Section 12(g) of the Act
                      Units of Limited Partnership Interest
                                (Title of class)

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.

Selected  information  from the Prospectus,  dated July 15, 1988, and filed with
the Securities and Exchange Commission on July 19, 1988 (File No. 33-20093),  is
incorporated  by reference into Parts I, II and III of this Quarterly  Report on
Form 10-Q.


<PAGE>
               EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.

                                TABLE OF CONTENTS

                         PART I - FINANCIAL INFORMATION

                                                           Page
Item 1.  Financial Statements

Statements of Assets, Liabilities and Partners'
  Capital as of March 31, 1997 and December 31, 1996        5

Statements of Operations - For the Three Months
  Ended March 31, 1997 and 1996                             6

Statements of Changes in Net Assets - For the Three
  Months Ended March 31, 1997 and 1996                      7

Statements of Cash Flows - For the Three Months Ended
  March 31, 1997 and 1996                                   8

Statement of Changes in Partners' Capital -
  For the Three Months Ended March 31, 1997                 9

Schedule of Portfolio Investments - March 31, 1997         10

Supplemental Schedule of Realized Gains and Losses
  For the Three Months Ended March 31, 1997                13

Notes to Financial Statements                              14


Item 2.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations     21


                           PART II - OTHER INFORMATION

Item 6.  Exhibits                                          25



<PAGE>
<TABLE>
<CAPTION>
               EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
             STATEMENTS OF ASSETS, LIABILITIES AND PARTNERS' CAPITAL

<S>                                                            <C>                <C>                    <C>
                                                                                     March 31, 1997
ASSETS:                                                          Notes                  Unaudited          December 31, 1996

    Investments                                                2,10,12
        Enhanced Yield Investments at Value-
            Managed Companies
               (amortized cost of $19,485,541 at
               March 31, 1997 and $46,361,524
               at December 31, 1996)                                                 $   6,183,310          $  47,988,305
            Non-Managed Companies
               (amortized cost of $13,007,781 at
               March 31, 1997 and $12,961,638
               at December 31, 1996)                                                    14,840,699             14,814,796
        Temporary Investments
               (at amortized cost)                                                      45,751,616             20,550,637

    Cash                                                                                    70,725                 62,948
    Interest Receivable                                           2,12                      95,606                876,677
    Note Receivable                                               3,4                    1,130,967              1,178,728
    Prepaid Expenses & Other Assets                                                          5,126                 80,223

TOTAL ASSETS                                                                         $  68,078,049          $  85,552,314
                                                                                     =============          =============


LIABILITIES AND PARTNERS' CAPITAL

    Liabilities
        Professional Fees Payable                                     9              $      55,905          $      52,641
        Independent General Partners' Fees Payable                    8                     13,208                 20,846
        Fund Administrative Expenses Payable                          7                     32,831                 43,085
        Other Accrued Liabilities                                                          101,376                  6,101
            Total Liabilities                                                              203,320                122,673

    Partners' Capital
        Managing General Partner                                    3,4                  1,027,516              1,099,814
        Limited Partners (221,072 Units)                              4                 66,847,213             84,329,827
            Total Partners' Capital                                                     67,874,729             85,429,641

TOTAL LIABILITIES AND PARTNERS' CAPITAL                                              $  68,078,049          $  85,552,314
                                                                                     =============          =============




             See the Accompanying Notes to Financial Statements.

</TABLE>



<PAGE>
<TABLE>
<CAPTION>
               EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<S>                                                                            <C>                     <C>
                                                                                      For the Three Months Ended

                                                                                March 31, 1997            March 31, 1996
INVESTMENT INCOME- Notes 2,12:
      Interest                                                                   $   1,172,266             $   1,149,706
      Discount                                                                              --                     5,780
      Dividend                                                                          60,536                        --
                    TOTAL INVESTMENT INCOME                                          1,232,802                 1,155,486

EXPENSES:
      Investment Advisory Fee- Note 6                                                  250,434                   236,152
      Fund Administration Fees and Expenses- Note 7                                     57,831                   185,572
      Independent General Partners'
       Fees and Expenses - Note 8                                                       35,000                    48,603
      Professional Fees - Note 9                                                        88,618                     6,175
      Insurance Fees                                                                        --                     4,410
      Valuation Expenses                                                                 2,700                     6,646
                    TOTAL EXPENSES                                                     434,583                   487,558

NET INVESTMENT INCOME                                                                  798,219                   667,928

NET CHANGE IN UNREALIZED DEPRECIATION ON INVESTMENTS - Note 12                     (14,949,252)               (3,736,918)

NET REALIZED GAINS ON INVESTMENTS - Note 10                                         12,656,880                 1,077,600

NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS                             $  (1,494,153)            $  (1,991,390)
                                                                                 =============             =============




               See the Accompanying Notes to Financial Statements.
</TABLE>



<PAGE>
<TABLE>
<CAPTION>
               EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
                       STATEMENTS OF CHANGES IN NET ASSETS
                                   (UNAUDITED)

<S>                                                      <C>                  <C>
                                                                                 For the Three Months Ended

                                                                            March 31, 1997         March 31, 1996
FROM OPERATIONS:

     Net Decrease in Net Assets
       Resulting from Operations                                             $  (1,494,153)         $  (1,991,390)

     Cash Distributions to Partners                                            (16,012,999)           (10,274,966)

     Reduction in Managing General Partners'
       Contribution                                                                (47,760)               (36,462)

     Total Decrease                                                            (17,554,912)           (12,302,818)

NET ASSETS:

     Beginning of Period                                                        85,429,641             88,842,112

     End of Period                                                            $ 67,874,729           $ 76,539,294
                                                                              ============           ============



               See the Accompanying Notes to Financial Statements.


</TABLE>



<PAGE>
<TABLE>
<CAPTION>
                                         EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
                                                       STATEMENTS OF CASH FLOWS
                                                              (UNAUDITED)

<S>                                                                               <C>                      <C>
                                                                                          For the Three Months Ended

INCREASE (DECREASE) IN CASH                                                           March 31, 1997            March 31, 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
       Interest and Discount Income                                                  $     5,778,306           $       912,024
       Fund Administration Fees & Expenses                                                   (68,085)                 (196,078)
       Investment Advisory Fee                                                              (155,328)                 (236,152)
       Independent General Partners' Fees and Expenses                                       (42,638)                  (43,328)
       Valuation Expenses                                                                     (2,531)                     --
       Sale (Purchase) of Temporary Investments, Net                                     (24,905,926)                8,445,152
       Proceeds from Sales and Principal Payments of
            Enhanced Yield Investments                                                    35,504,946                 1,359,506
       Professional Fees                                                                     (85,353)                   (4,484)
       Insurance Fees                                                                         (2,615)                     --
Net Cash Provided by Operating Activities                                                 16,020,776                10,236,640
CASH FLOWS FROM FINANCING ACTIVITIES:
       Cash Distributions to Partners                                                    (16,012,999)              (10,274,966)
Net Cash Used in Financing Activities                                                    (16,012,999)              (10,274,966)
Net Increase (Decrease) in Cash                                                                7,777                   (38,326)
Cash at the Beginning of the Period                                                           62,948                    39,181
Cash at the End of the Period                                                        $        70,725           $           855
                                                                                     ===============           ===============


                                 RECONCILIATION OF NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
                                        OPERATIONS TO NET CASH PROVIDED BY OPERATING ACTIVITIES

Net Decrease In Net Assets
     Resulting From Operations                                                       $    (1,494,153)           $   (1,991,390)

Adjustments to Reconcile Net Decrease in Net Assets
       Resulting from Operations to Net Cash Provided by Operating
       Activities:
(Increase) Decrease in Investments                                                        (2,057,861)                8,727,055
Decrease (Increase) in Accrued Interest                                                    4,545,505                  (243,462)
Increase in Other Accrued Liabilities                                                         95,275                     6,646
Decrease in Fund Administration Expenses Payable                                             (10,254)                  (10,506)
(Increase) Decrease in Prepaid Expenses                                                       (2,615)                    4,412
Net Change in Unrealized Depreciation on Investments                                      14,949,252                 3,736,918
(Decrease) Increase in Independent General
    Partners' Fees Payable                                                                    (7,638)                    5,276
Increase in Professional Fees Payable                                                          3,265                     1,691
Total Adjustments                                                                         17,514,929                12,228,030
Net Cash Provided by Operating Activities                                            $    16,020,776           $    10,236,640
                                                                                     ===============           ===============



               See the Accompanying Notes to Financial Statements.

</TABLE>



<PAGE>
<TABLE>
<CAPTION>
               EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
                    STATEMENT OF CHANGES IN PARTNERS' CAPITAL
                                   (UNAUDITED)

<S>                                                                <C>          <C>                 <C>              <C>
                                                                                        Managing        Limited
                                                                      Notes        General Partner      Partners           Total


FOR THE THREE MONTHS ENDED MARCH 31, 1997

Partners' Capital at January 1, 1997                                               $  1,099,814      $ 84,329,827      $ 85,429,641
Cash Distributions to Partners                                                           (9,597)      (16,003,402)      (16,012,999)
Reduction in Managing General Partners' Contribution                        3           (47,760)             --             (47,760)
Allocation of Net Investment Income                                        11             7,983           790,236           798,219 
Allocation of Net Unrealized Depreciation
  on Investments                                                           12          (149,493)      (14,799,759)      (14,949,252)
Allocation of Net Realized Gains on Investments                                         126,569        12,530,311        12,656,880
Partners' Capital at March 31, 1997                                                $  1,027,516      $ 66,847,213      $ 67,874,729
                                                                                   ============      ============      ============




               See the Accompanying Notes to Financial Statements.
</TABLE>




<PAGE>
<TABLE>
<CAPTION>
                                                EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
                                                       SCHEDULE OF PORTFOLIO INVESTMENTS
                                                                MARCH 31, 1997
                                                                 (UNAUDITED)

<S>                 <C>                                            <C>         <C>            <C>           <C>         <C>
    PRINCIPAL                                                      INVESTMENT   INVESTMENT    AMORTIZED      VALUE      % OF TOTAL
  AMOUNT/SHARES                            INVESTMENT                 DATE         COST          COST       (NOTE 2)    INVESTMENTS
------------------ ----------------------------------------------  ----------  ------------  ------------ ------------- -----------

                   ENHANCED YIELD INVESTMENTS
                   MANAGED COMPANIES

                   MISCELLANEOUS MANUFACTURING

                   QUANTEGY ACQUISITION CORP.
                    (FORMERLY AMPEX RECORDING MEDIA)
    123.50 Shares  Quantegy Acquisition Corp., Common Stock        11/13/95    $  2,722,290   $ 2,722,290  $  2,722,290
                                                                               ------------   -----------  ------------
                                                                                  2,722,290     2,722,290     2,722,290        4.08%
                                                                               ------------   -----------  ------------------------
                     RI HOLDINGS, INC. 
   $  12,972,582     RI Holdings, Inc.,
                      Sr. Sub. Nts. 16% due 08/31/01*(a)(b)         04/25/94      5,823,918     5,823,918       240,232
      150,191 Shares RI Holdings, Inc., Common Stock**              09/01/89      1,501,910     1,501,910             0
   104,211.03 Shares RI Holdings, Inc., Common Stock**               various          1,044         1,044             0
     22,687.5 Shares RI Holdings, Inc., Common Stock**              04/25/94            227           227             0
    92,045.09 Shares RI Holdings, Inc., Common Stock**              05/09/95            920           920             0
   223,212.92 Shares RI Holdings, Inc., Common Stock**              05/01/96          2,232         2,232             0
                                                                                -----------  ------------    ----------
                                                                                  7,330,251     7,330,251       240,232        0.36
                                                                                -----------  ------------    ----------------------

                     LEATHER AND LEATHER PRODUCTS

                     LEATHER U.S., INC. - NOTE 12
                     (FORMERLY UNITED STATES LEATHER HOLDINGS, INC.)
       621.90 Shares Leather U.S., Inc., Common Stock               04/09/96     7,308,000      7,308,000     1,095,788
                                                                               -----------   ------------    ----------
                                                                                 7,308,000      7,308,000     1,095,788       1.64
                                                                               -----------   ------------    ---------------------
                    MISCELLANEOUS RETAIL

                     R&S/STRAUSS, INC.
                     (FORMERLY WSR ACQUISITION CORP.)
   $       935,000   R&S/Strauss, Inc.,
                      Sr. Sub. Nt. 15% due 05/31/00*                06/13/90       935,000       935,000       935,000
   $     1,190,000   R&S/Strauss, Inc.,
                      Sr. Sub. Nt. 15% due 05/31/00*                06/13/90     1,190,000     1,190,000     1,190,000
                                                                               -----------   -----------   -----------
                                                                                 2,125,000     2,125,000     2,125,000         3.19
                                                                               -----------   -----------   ------------------------



                     TOTAL INVESTMENT IN  MANAGED  COMPANIES                   $19,485,541   $19,485,541   $ 6,183,310         9.27%
                     ---------------------------------------                   -----------   -----------   -------------------------


</TABLE>
                             See the Accompanying Notes to Financial Statements.


<PAGE>
<TABLE>
<CAPTION>
                              EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
                                        SCHEDULE OF PORTFOLIO INVESTMENTS
                                              MARCH 31, 1997
                                           (CONTINUED)(UNAUDITED)
<S>                 <C>                                          <C>            <C>           <C>           <C>         <C>
    PRINCIPAL                                                      INVESTMENT   INVESTMENT    AMORTIZED      VALUE       % OF TOTAL
  AMOUNT/SHARES                    INVESTMENT                         DATE         COST         COST        (NOTE 2)     INVESTMENTS
-------------------  -------------------------------------------- ------------  ---------- ------------- ------------- -------------


                     NON-MANAGED  COMPANIES

                     CONSUMER PRODUCTS MANUFACTURING

                     LEXMARK INTERNATIONAL GROUP, INC. - NOTES 10,12
    393,269 Shares   Lexmark International Group, Inc.,
                     Class B Common Stock (c)                       03/27/91   $ 2,621,774   $  2,621,774   $  9,536,773
                                                                               -----------   ------------   ------------
                                                                                 2,621,774      2,621,774      9,536,773      14.28%
                                                                               -----------   ------------   -----------------------

                     DISTRIBUTION SERVICES

                     WESTERN PIONEER, INC.
   $     4,730,800   Western Pioneer, Inc.,
                       Sr. Sub. Nts. 10% due 11/30/07*(b)           11/30/94       653,289        653,289      2,365,400
     81,081 Warrants Western Pioneer, Inc.,
                       Common Stock Purchase Warrants **            11/30/94             0              0              0
                                                                                 ---------    -----------    -----------
                                                                                   653,289        653,289      2,365,400       3.54
                                                                                 ---------    -----------    ----------------------

                     HEALTH SERVICES

                     MTI HOLDINGS, INC. 
   $       113,386   MTI Holdings, Inc.,
                      Sr. Sec. Nt. 12% due 07/01/03*                08/06/96       113,386        113,386       113,386
      8,125 Shares   MTI Holdings, Inc., Common Stock**             08/06/96       121,875        121,875       121,875
     2,264 Warrants  MTI Holdings, Inc., Common Stock
                      Purchase Warrants                             08/06/96             0              0             0
                                                                                ----------     ----------   -----------
                                                                                   235,261        235,261       235,261        0.35
                                                                                ----------     ----------   -----------------------

                     MISCELLANEOUS RETAIL

                     PERGAMENT HOME CENTERS, INC.- NOTES 10,12
   $     2,543,200   Pergament Acq. Corp., Home Centers, Inc.
                      Floating Rate Demand Note due 07/31/00*(b)     10/18/91    2,439,833      2,439,833     1,271,600
      299.2 Shares   Pergament Holdings, Corp.,
                      Common Stock Class B **                        02/28/89    6,732,000      6,732,000             0
     109.2571 Shares Pergament Holdings, Corp.,
                      Common Stock Class C **                        02/28/89            0              0             0
                                                                               -----------    -----------   -----------
                                                                                 9,171,833      9,171,833     1,271,600        1.90
                                                                               -----------    -----------   -----------------------


                     BANKING AND FINANCE

                     BANK UNITED CORP. - NOTES 10,12
                     (FORMERLY USAT HOLDINGS INC.)
      48,531 Shares  Bank United Corp., Class A Common Stock (c)   01/05/90        325,624        325,624     1,431,665
                                                                               -----------   ------------  ------------
                                                                                   325,624        325,624     1,431,665        2.14
                                                                               -----------   ------------  ------------------------



                     TOTAL INVESTMENT IN NON-MANAGED  COMPANIES                $13,007,781    $13,007,781   $14,840,699       22.21%
                     ------------------------------------------                 ----------    -----------   ------------------------


                     TOTAL INVESTMENT IN ENHANCED YIELD INVESTMENTS            $32,493,322    $32,493,322   $21,024,009       31.48%
                     ----------------------------------------------            -----------    -----------   ------------------------
</TABLE>


                             See the Accompanying Notes to Financial Statements.

<PAGE>
<TABLE>
<CAPTION>
                              EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
                                        SCHEDULE OF PORTFOLIO INVESTMENTS
                                                 MARCH 31, 1997
                                             (CONCLUDED) (UNAUDITED)

<S>                 <C>                                          <C>            <C>           <C>         <C>           <C>

    PRINCIPAL                                                      INVESTMENT     INVESTMENT    AMORTIZED       VALUE   % OF TOTAL
  AMOUNT/SHARES                    INVESTMENT                         DATE          COST          COST        (NOTE 2)   INVESTMENTS
-------------------  ------------------------------------------   ------------   -----------  ------------  ---------- -------------



                     TEMPORARY INVESTMENTS

                     COMMERCIAL PAPER

   $    1,200,000    Certain Funding Corp., 5.40% due 4/02/97         1/22/97   $ 1,187,400   $    1,199,820   $  1,199,820
   $    7,500,000    Dakota Funding Inc., 5.33% due 4/07/97           2/11/97     7,438,927        7,493,338      7,493,338
   $    1,300,000    ASCC Commercial Paper, 5.40% due 4/16/97         3/19/97     1,294,540        1,297,075      1,297,075
   $    3,500,000    Ranger Funding Corp., 5.65% due 4/07/97          3/25/97     3,492,859        3,496,704      3,496,704
   $    3,500,000    Clipper Receivables, 5.58% due 4/22/97           3/25/97     3,484,810        3,488,607      3,488,607
   $    3,500,000    Sheffield Receivables Corp., 5.57% due 4/25/97   3/25/97     3,483,213        3,487,003      3,487,003
   $    3,500,000    Eureka Corp., 5.56% due 5/13/97                  3/25/97     3,473,513        3,477,297      3,477,297
   $    3,500,000    Old Line Funding, 5.62% due 4/21/97              3/25/97     3,485,248        3,489,072      3,489,072
   $    3,500,000    Barton Capital Corp., 5.57% due 5/07/97          3/25/97     3,476,714        3,480,505      3,480,505
   $    3,500,000    Windmill Funding Corp., 5.58% due 5/01/97        3/25/97     3,479,927        3,483,725      3,483,725
   $    3,500,000    Triple A Funding, 5.70% due 4/10/97              3/25/97     3,491,133        3,495,013      3,495,013
   $    2,300,000    Greenwich Funding, 5.57% due 4/28/97             3/25/97     2,287,901        2,290,392      2,290,392
   $    3,500,000    Delaware Funding Corp., 5.60%  due 4/30/97       3/25/97     3,480,400        3,484,211      3,484,211
   $    2,100,000    PHH Group Inc., 5.62% due 5/05/97                3/31/97     2,088,526        2,088,854      2,088,854    
                                                                               ------------   --------------   ------------
                     TOTAL INVESTMENT IN COMMERCIAL PAPER                      $ 45,645,111   $   45,751,616   $ 45,751,616   68.52%
                     ------------------------------------                      ------------   --------------   --------------------


                     TOTAL TEMPORARY INVESTMENTS                               $ 45,645,111   $   45,751,616   $ 45,751,616   68.52%
                     ---------------------------                               ------------   --------------   --------------------

                     TOTAL INVESTMENT PORTFOLIO                                $ 78,138,433   $   78,244,938   $ 66,775,625  100.00%
                     --------------------------                                ============   ==============   ====================




                     SUMMARY OF  INVESTMENTS
                     Subordinated Notes                                        $ 11,155,426   $   11,155,426   $  6,115,618    9.16%
                     Common Stock and Warrants                                   21,337,896       21,337,896     14,908,391   22.32
                     Temporary Investments                                       45,645,111       45,751,616     45,751,616   68.52
                                                                               ------------   --------------   --------------------

                     TOTAL INVESTMENT IN ENHANCED YIELD INVESTMENTS            $ 78,138,433   $   78,244,938   $ 66,775,625  100.00%
                     ----------------------------------------------            ============   ==============   ====================


                       * Restricted Security
                      ** Restricted Non-income Producing Security
                     (a) Includes receipt of payment-in-kind securities.
                     (b) Non-accrual investment status.
                     (c) Pubicly traded class of securities.

</TABLE>
                             See the Accompanying Notes to Financial Statements.


<PAGE>
<TABLE>
<CAPTION>
               EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
               SUPPLEMENTAL SCHEDULE OF REALIZED GAINS AND LOSSES
                    FOR THE THREE MONTHS ENDED MARCH 31, 1997
                                   (UNAUDITED)

<S>                                              <C>              <C>           <C>            <C>              <C>
                                                                   PAR VALUE OR
                                                   DATE OF          NUMBER OF     AMORTIZED         NET             REALIZED
SECURITY                                         TRANSACTION          SHARES        COST         PROCEEDS         GAIN (LOSS)

Polaris Pool Systems, Inc. 
   Common Stock                                     1/15/97       $        --     $      --     $     542  (A)   $       542

Lexmark International Group, Inc. 
   Class B Common Stock                             various            22,641       150,941       582,684            431,743

Bank United Corp. 
   Class A Common Stock                             various           383,872     2,575,631    10,740,739          8,165,108

Lexmark International, Inc. 
   14.25% Sr. Sub. Note                             3/24/97       $24,103,269    24,103,269    28,162,756          4,059,487

Total Net Realized Gains for the
   Three Months Ended March 31, 1997                                            $26,829,841   $39,486,721        $12,656,880
                                                                                ===========   ===========        ===========

(A) Proceeds represent a distribution to the Retirement Fund from the escrow account.

               See the Accompanying Notes to the Financial Statements.




</TABLE>


<PAGE>


               EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1997
                                   (UNAUDITED)

1.  Organization and Purpose

    Equitable  Capital  Partners,  L.P.  (the  "Fund")  was  formed  along  with
Equitable Capital Partners  (Retirement  Fund), L.P. (the "Retirement Fund," and
collectively  with the Fund referred to as the "Funds") and the  Certificates of
Limited  Partnership  were filed  under the  Delaware  Revised  Uniform  Limited
Partnership Act on February 2, 1988. The Funds' operations  commenced on October
13, 1988.

    On July 22,  1993,  Equitable  Capital  Management  Corporation  ("Equitable
Capital"),  formerly the Managing General Partner and investment  adviser of the
Funds,  transferred   substantially  all  of  the  assets  comprising  Equitable
Capital's business to Alliance Capital Management L.P. ("Alliance  Capital") and
its  wholly-owned  subsidiary,  Alliance  Corporate  Finance Group  Incorporated
("Alliance  Corporate").  In  connection  with  such  transaction,  the  limited
partners  (the  "Limited  Partners"),  of  the  Funds  voted  to  approve  a new
investment  advisory agreement between the Funds and Alliance Corporate and also
voted to admit Alliance  Corporate as Managing  General  Partner of the Funds to
succeed Equitable  Capital.  Accordingly,  on July 22, 1993, the closing date of
the  transaction  described  above,  (i) Alliance  Corporate was admitted as the
successor  Managing General Partner of the Funds (ii) Equitable Capital withdrew
from the Funds as Managing  General  Partner and assigned all of its interest as
General  Partner to Alliance  Corporate and (iii) Alliance  Corporate  succeeded
Equitable  Capital  as the  investment  adviser to the Funds  pursuant  to a new
investment advisory agreement.  Alliance Corporate (the "Investment Adviser") is
a registered investment adviser under the Investment Advisers Act of 1940.

    Prior to July 22, 1993,  Equitable  Capital was responsible,  subject to the
supervision of the independent  general partners of the Funds (the  "Independent
General Partners"), for the management of the Funds' investments. As of July 22,
1993,  Alliance  Corporate  assumed  such  responsibilities  in its  capacity as
Managing General Partner and Investment Adviser of the Funds.

    The Funds have elected to operate as business  development  companies  under
the  Investment  Company Act of 1940, as amended.  The Funds seek current income
and capital appreciation potential through investments in  privately-structured,
friendly leveraged acquisitions and other leveraged transactions. The Funds have
pursued this objective by investing  primarily in subordinated  debt and related
equity securities  ("Enhanced Yield Investments") issued in conjunction with the
"mezzanine   financing"  of  friendly   leveraged   acquisitions  and  leveraged
recapitalizations.

    As stated in the Partnership  Agreement,  the Retirement Fund will terminate
on October 13, 1998, subject to the right of the Independent General Partners to
extend  the  term of the  Retirement  Fund  for up to two  additional  one  year
periods,   after  which  the  Retirement   Fund  will  liquidate  any  remaining
investments within five years.


<PAGE>
2.  Significant Accounting Policies

Basis of Accounting

    For financial  reporting  purposes,  the Fund's records are maintained using
the accrual method of accounting.

Valuation of Investments

     Securities  are valued at market or fair  value.  Market  value is used for
securities  for which market  quotations are readily  available.  For securities
without a readily  ascertainable  market value,  fair value is determined,  on a
quarterly  basis, in good faith by the General  Partners of the Retirement Fund.
The total value of securities  without a readily  ascertainable  market value is
$10,055,571  and  $40,903,485  as of March  31,  1997  and  December  31,  1996,
respectively,  representing  14.8% and 47.8% of total assets,  respectively.  In
connection with such determination, the Managing General Partner has established
a valuation  committee  comprised of senior  executives to assess the Retirement
Fund's portfolio and make recommendations  regarding the value of the Retirement
Fund's  portfolio  securities.  This valuation  committee uses available  market
information and appropriate valuation  methodologies.  In addition, the Managing
General  Partner has retained  Arthur D. Little,  Inc., a nationally  recognized
independent valuation consultant, to review such valuations.

    For privately  issued  securities  in which the  Retirement  Fund  typically
invests,  the fair value of an  investment  is its initial  cost,  adjusted  for
amortization of discount or premium and as subsequently  adjusted to reflect the
occurrence of significant developments. "Significant developments" are business,
economic or market events that may affect a company in which an  investment  has
been made or the securities comprising such investment. For example, significant
developments  that could  result in a writedown  in value  include,  among other
things,  events  of  default  with  respect  to  payment  obligations  or  other
developments indicating that a portfolio company's performance may fall short of
acceptable  levels.  A writeup in value of an investment could take place when a
significant favorable development occurs, such as a transaction representing the
partial sale of an  investment  that would result in a capital  gain, or company
performance exceeding expected levels on a sustained basis. Although the General
Partners  use  their  best  judgment  in  determining  the fair  values of these
investments, there are inherent limitations in any valuation technique involving
securities of the type in which the Retirement Fund invests. Therefore, the fair
values presented  herein are not necessarily  indicative of the amount which the
Retirement Fund could realize in a current transaction.

    Temporary  Investments  with  maturities  of 60 days or less are  valued  at
amortized cost, which  approximates  market value.  Temporary  Investments which
mature in more than 60 days, for which market quotations are readily  available,
are valued at the most recent bid price or the equivalent  quoted yield obtained
from one or more of the market makers.

    Interest Receivable on Investments

    Investments will generally be placed on non-accrual status in the event of a
default  (after  applicable  grace period  expires) or if the  Managing  General
Partner  determines  that  there  is no  reasonable  expectation  of  collecting
interest.


<PAGE>



    Payment-In-Kind Securities

    All  payment-in-kind  securities  received in lieu of cash interest payments
from the  Retirement  Fund's  portfolio  companies  are  recorded at face value,
unless the  Managing  General  Partner  determines  that there is no  reasonable
expectation of collecting the full principal amounts of such securities.

    Income Taxes

     As discussed in Note 13, no provision  for income taxes has been made since
all  income  and  losses  are  allocated  to  the  Retirement   Fund's  partners
("Partners") for inclusion in their respective tax returns.

    Investment Transactions

    Enhanced Yield Investments - The Retirement Fund records transactions on the
date on which it  obtains  an  enforceable  right to demand  the  securities  or
payment thereof.

    Temporary  Investments - The  Retirement  Fund records  transactions  on the
trade date.

    Realized  gains and losses on  investments  are  determined  on the basis of
specific identification for accounting and tax purposes.

    Sales, Marketing and Offering Expenses and Sales Commissions

    Sales  commissions and selling discounts have been allocated to the specific
Partners' accounts to which they are applicable.  Sales,  marketing and offering
expenses are  allocated  between the Funds in  proportion to the number of units
issued  by  each  Fund  and to the  Partners  in  proportion  to  their  capital
contributions.

3.  Note Receivable

     On July 22, 1993,  pursuant to the terms of the  Retirement  Fund's Amended
and  Restated  Agreement  of Limited  Partnership,  Alliance  Corporate,  as the
successor  Managing  General  Partner of the Retirement  Fund, has contributed a
non-interest  bearing  promissory note (the "Note") to the Retirement Fund in an
aggregate  amount equal to 1.01% of the aggregate Net Capital  Contributions  of
all Limited Partners (less distributions  representing returns of capital).  Net
Capital  Contributions  are comprised of gross offering  proceeds,  after giving
effect  to  volume   discounts   (and  after   netting  of  sales   commissions,
organization,  offering  and sales and  marketing  expenses),  less  returns  of
capital  distributed to Limited  Partners.  The principal  amount of the Note is
reduced   proportionally   as  such  Limited  Partners   receive   distributions
representing  additional returns of capital. Such distributions received for the
three  months  ended  March 31,  1997,  resulted in a $47,760  reduction  of the
principal  amount of the Note.  The  promissory  note of  Equitable  Capital was
canceled upon the contribution of Alliance Corporate's Note.

4.  Capital Contributions

    On October 13, 1988, the Retirement  Fund closed the initial public offering
of its units of Limited Partner  interests  ("Units").  Equitable  Capital,  the
Retirement Fund's Managing General Partner at that time, accepted  subscriptions
for 221,072 Units and admitted 26,304 Limited Partners.

    The Limited Partners' total capital  contributions were $220,848,730,  after
giving  effect to volume  discounts  allowed of  $223,270.  Equitable  Capital's
aggregate  capital  contribution  was in the  form of a  promissory  note in the
principal amount of $2,051,783.  On July 22, 1993,  Equitable Capital's note was
canceled and Alliance Corporate,  as successor Managing General Partner,  made a
capital  contribution  in the  form  of a  promissory  note,  on such  date,  as
described  in Note  3.  Sales,  marketing  and  offering  expenses  and  selling
commissions  have  been  charged  against  proceeds  resulting  in  net  capital
contributed by Limited Partners of $203,146,793.

    Allocation of income,  loss and distributions of cash are made in accordance
with the Partnership Agreement as further discussed in Note 11.
<PAGE>

5.  Sales, Marketing and Offering Expenses and Sales Commissions

    The Retirement  Fund expended a total of $416,052 for the  reimbursement  of
sales and marketing  expenses.  Aggregate  sales and  marketing  expenses of the
Funds may not exceed $2,528,415 or 0.5% of the aggregate  capital  contributions
and were allocated  proportionately  to the number of Units issued by each Fund.
Aggregate sales and marketing expenses for the Funds totaled $951,683.

    The Retirement Fund also paid $1,627,385 for the  reimbursement  of offering
expenses.  These expenses, along with the offering expenses of Equitable Capital
Partners,  L.P.  and the  organizational  expenses of the Funds,  may not exceed
$6,000,000. Aggregate offering and organizational expenses for the Funds totaled
$4,711,806.

    For their  services  as  selling  agent,  the  Retirement  Fund  paid  sales
commissions to Merrill Lynch, Pierce,  Fenner & Smith Incorporated in the amount
of  $15,251,770,  of  which  Equico  Securities  Corporation,  an  affiliate  of
Equitable Capital, a related party, received $168,150 as a selected dealer.

6.  Investment Advisory Fee

     As of July 22,  1993,  Alliance  Corporate  has been  receiving a quarterly
Investment  Advisory  Fee, at the annual rate of 1.0% of the  Retirement  Fund's
Available Capital, with a minimum annual payment of $2,000,000  collectively for
the Retirement Funds, less 80% of commitment,  transaction,  investment  banking
and "break-up" or other fees related to the Retirement  Fund's  investments (the
"Minimum Amount").  Available Capital is defined as the sum of the aggregate Net
Capital  Contributions of the Partners less the cumulative  amount of returns of
capital distributed to Partners and realized losses from investments.

     As stated in the Partnership  Agreement,  the Retirement  Fund's  allocable
share of the Minimum  Amount is $874,350,  or $218,588  per quarter.  Investment
Advisory  Fees at March 31,  1997,  reflect  an  adjustment  for the  difference
between the Minimum Amount due to the  Investment  Advisor and what was paid for
quarters ending December 31, 1996 and March 31, 1997.

     The Investment  Advisory Fee is paid  quarterly in advance.  The Investment
Advisory Fees incurred by the  Retirement  Fund for the three months ended March
31, 1997 and 1996 were $250,434 and $236,152, respectively.

7. Fund Administration Fee and Expenses

     As compensation  for its services during the fourth through seventh year of
operation  of  the  Funds,  ML  Fund  Administrators,  Inc.  ("MLFAI"),  as  the
Retirement Fund  administrator,  is entitled to receive from the Funds an annual
amount equal to the greater of the (i) Minimum Fee and (ii) the Funds'  prorated
proportion  (based on the  number of Units  issued by the Funds) of 0.45% of the
excess of the aggregate  net offering  proceeds of the Units issued by the Funds
over 50% of the aggregate amount of capital  reductions of the Funds (subject to
an  annual  maximum  of $3.2  million).  The  Minimum  Fee is 1.0% of the  gross
offering  price  of Units in the  Funds,  but not  greater  than  $500,000.  The
Retirement Fund Administration Fee is calculated and paid quarterly, in advance.
The Retirement  Fund  Administration  Fees paid by the  Retirement  Fund for the
three  months  ended  March  31,  1997  and  1996  were  $25,000  and  $169,610,
respectively.

     In addition to the Retirement Fund Administration Fee, MLFAI is entitled to
receive reimbursement for a portion of direct out-of-pocket expenses incurred in
connection with the administration of the Retirement Fund, commencing on October
13, 1992.  For the three months  ended March 31, 1997 and 1996,  the  Retirement
Fund  incurred  Administrative  expenses of $32,831 and  $15,962,  respectively,
which  consisted  primarily of printing,  audit and tax return  preparation  and
custodian fees paid for by MLFAI on behalf of the Retirement Fund.
<PAGE>

8.  Independent General Partners' Fees and Expenses

    As compensation  for their  services,  each  Independent  General Partner is
entitled to a $30,000 annual fee (payable quarterly) from the Retirement Fund in
addition  to  $500  for  each  meeting  attended  and   reimbursement   for  any
out-of-pocket  expenses.  In accordance with the Retirement  Fund's  Partnership
Agreement,  the amount of the annual fee is reviewed annually by the Independent
General Partners.

     For the three months  ended March 31, 1997 and 1996,  the  Retirement  Fund
incurred $35,000 and $48,603,  respectively,  of Independent  General  Partners'
Fees and Expenses.

9.  Related Party Transactions

     For the three months  ended March 31, 1997 and 1996,  the  Retirement  Fund
paid expenses of $8,566 and $6,175,  respectively,  as reimbursement for amounts
paid for legal  services  provided  by  Equitable  Life in  connection  with the
Retirement  Fund's  Enhanced Yield  Investments.  The Retirement  Fund is paying
Alliance  Corporate an Investment  Advisory Fee for its services as described in
Note 6.  Additionally,  the  Retirement  Fund paid sales  commissions  to Equico
Securities, a related party, as described in Note 5.

10. Investment Transactions

    The Retirement  Fund is invested  primarily in Enhanced  Yield  Investments,
also known in the securities industry as "high yield securities". The securities
in which the Retirement  Fund has invested were issued in  conjunction  with the
mezzanine financing of privately  structured,  friendly leveraged  acquisitions,
recapitalizations and other leveraged financings,  and are generally linked with
an equity  participation.  Enhanced  Yield  Investments  are debt and  preferred
equity securities that are unrated or are rated by Standard & Poor's Corporation
as BB or lower and by Moody's Investor  Services,  Inc. as Ba or lower.  Risk of
loss upon default by the issuer is  significantly  greater with  Enhanced  Yield
Investments  than  with  investment  grade  securities  because  Enhanced  Yield
Investments  are  generally  unsecured  and  are  often  subordinated  to  other
creditors  of the  issuer.  Also,  these  issuers  usually  have high  levels of
indebtedness  and are more sensitive to adverse economic  conditions,  such as a
recession or increasing  interest rates, than investment grade issuers.  Most of
these  securities are subject to resale  restrictions  and generally there is no
quoted market for such securities.

    Although the  Retirement  Fund cannot  eliminate its risks  associated  with
participation in Enhanced Yield Investments,  it has established risk management
policies.  The Retirement Fund subjects each prospective  investment to rigorous
analysis, and will make only those investments that have been recommended by the
Managing  General  Partner  and  that  meet  the  Retirement  Fund's  investment
guidelines  or that have  otherwise  been  approved by the  Independent  General
Partners.  The  Retirement  Fund  investments  are  measured  against  specified
Retirement Fund investment and performance guidelines.  To limit the exposure of
the Retirement  Fund's capital in any single issuer,  the Retirement Fund limits
the amount of its investment in a particular  issuer.  The Retirement  Fund also
continually  monitors  portfolio  companies  in  order  to  minimize  the  risks
associated with participation in Enhanced Yield Investments.
<PAGE>
     On January 2, 1997,  the  Retirement  Fund received  $51,224 from Pergament
Home Centers,  Inc. as a principal paydown of the Floating Rate Demand Note held
by the  Retirement  Fund.  No gain,  loss or income  has been  recorded  on this
transaction.

    On January 15, 1997, the  Retirement  Fund received  additional  proceeds of
$542 from Polaris Pool Systems,  Inc. The money represents  proceeds from the
sale of the  investments  from  prior  years  that have been held in escrow  for
future  adjustments and expenses not paid on the sale dates. 

     During the first quarter of 1997, the Retirement Fund sold 22,641 shares of
Lexmark International Group, Inc. Class B Common Stock for $582,684 resulting in
a gain of $431,743 to the Retirement Fund.

     In February 1997,  the  Retirement  Fund sold 383,872 shares of Bank United
Corp. Class A Common Stock for $10,740,739  resulting in a gain of $8,165,108 to
the Retirement Fund.

     On March 24, 1997,  the  Retirement  Fund  received a prepayment on Lexmark
International,  Inc.'s  14.25% Senior  Subordinated  Notes  outstanding,  in the
principal amount of $24,103,269 together with a prepayment penalty of $4,059,487
and  $791,892  of  accrued  interest.  The  transaction  resulted  in a gain  of
$4,059,487 to the Retirement Fund.

     All of the  proceeds  received  during  the first  quarter  of 1997 will be
distributed to Limited Partners of record as of March 31, 1997 on May 14, 1997.

     As of March 31, 1997,  the  Retirement  Fund had  investments  in 4 Managed
Companies (a Managed  Company is one to which the Retirement  Fund, the Managing
General  Partner or other persons in the Retirement  Fund's  investor group make
significant  managerial  assistance  available)  and 5 Non-Managed  Companies (a
Non-Managed  Company is one to which such  assistance is not provided)  totaling
$32,493,322 (including $422,439 capitalized cost of payment-in-kind securities),
consisting of $11,155,426 in senior notes and subordinated notes and $21,337,896
in common stock and purchase warrants.

11. Allocation of Profits and Losses

    Pursuant to the terms of the Partnership  Agreement,  net investment  income
and gains and losses on investments are generally allocated between the Managing
General  Partner  and the  Limited  Partners  based upon cash  distributions  as
follows:

    first,  99% to the Limited  Partners and 1% to the Managing  General Partner
    until the Limited Partners have received a cumulative priority return of 10%
    non-compounded  on an annual basis on their  investments  in Enhanced  Yield
    Investments;

    second,  70% to the Limited Partners and 30% to the Managing General Partner
    until the Managing General Partner has received 20% of all current and prior
    distributions on such investments;

    and thereafter, 80% to the Limited Partners and 20% to the Managing
    General Partner.

    For the three months ended March 31, 1997,  earnings  were  allocated 99% to
the Limited Partners, as a class, and 1% to the Managing General Partner.
<PAGE>

12. Unrealized Appreciation/Depreciation and Non-Accrual of Investments

     For the three months ended March 31, 1997, the Retirement Fund recorded net
unrealized depreciation on Enhanced Yield Investments of $14,949,252 as compared
to $3,736,918 for the three months ended March 31, 1996. Such  depreciation  was
the  result  of  adjustments  in  value  made  with  respect  to  the  following
investments during the three months ended March 31, 1997:

     The amount  includes the reversal of $6,545,973 of unrealized  appreciation
of Bank United Corp.  Class A Common Stock, due to the sale of 383,872 shares in
February  1997.  Due to an  increase in the quoted  market  price of Bank United
Corp.  Class A Common  Stock and the equity  being valued at 100% of the closing
market  price as compared to 90% at  December  31,  1996,  the  Retirement  Fund
recorded unrealized appreciation of $143,167 at March 31, 1997.

     Due to the sale of 22,641 shares of Lexmark International Group, Inc. Class
B Common Stock in January  1997,  the  Retirement  Fund  reversed  $1,801,801 of
unrealized appreciation.

     On March 31, 1997,  Leather U.S.,  Inc.  common stock was written down from
100%  to  15%  of  remaining  cost,  resulting  in  unrealized  depreciation  of
$6,212,212 to the Retirement Fund.

     On March 31, 1997,  the Pergament Home Centers,  Inc.  Floating Rate Demand
Note  was  written  down  from  75% to  50%  of  par,  resulting  in  unrealized
depreciation of $532,433 to the Retirement Fund.

The following  investments have been on non-accrual  status as of the respective
dates:
    
    Pergament Home Centers, Inc.
      Floating Rate Demand Note            July 1, 1996
    Western Pioneer, Inc. 10%
      Senior Subordinated Note             November 30, 1994
    RI Holdings, Inc. 16%
      Senior Subordinated Notes            April 25, 1994

    Alliance  Corporate  continues to monitor the  Retirement  Fund's  portfolio
closely.  As a matter of standard  procedure,  Alliance  Corporate  reviews each
portfolio company's financial statements at least quarterly,  and often monthly.
Investment managers routinely review and discuss financial and operating results
with the companies' management and equity sponsors, and attend periodic board of
directors meetings, as appropriate.  In some cases, Alliance Corporate officers,
acting on behalf of the Funds,  serve as  directors  on the boards of  portfolio
companies. When problems arise, communication with management and sponsors often
occurs on a daily basis.

13. Income Taxes

    No provision  for income taxes has been made since all income and losses are
allocated to the Retirement  Fund's  partners for inclusion in their  respective
tax returns.

    Pursuant to Statement of Financial Accounting Standards No. 109 - Accounting
for Income Taxes,  the  Retirement  Fund is required to disclose any  difference
between the tax bases of the Retirement Fund's assets and liabilities versus the
amounts reported in the Financial  Statements.  Generally,  the tax bases of the
Retirement Fund's assets  approximate the amortized cost amounts reported in the
Financial  Statements.  This amount is computed  annually  and as of December 31
1996, the tax basis of the Retirement Fund's assets was greater than the amounts
reported  in  the  Financial  Statements  by  $21,205,814.  This  difference  is
primarily  attributable to unrealized  depreciation on investments which has not
been  recognized  for tax purposes.  Additionally,  certain  realized  gains and
losses due to restructurings  were treated differently for tax purposes than for
financial reporting purposes.

14. Subsequent Events

     On May 8, 1997, the Independent General Partners approved an aggregate cash
distribution of $39,727,934 for the three months ended March 31, 1997, which was
paid on May 14, 1997. The amount distributed to Limited Partners was $39,722,217
or $179.68 per Unit (of which  $26,625,912 is capital  returned from investments
during the first  quarter of 1997),  to Limited  Partners of record at March 31,
1997. On a per Unit basis, this distribution to Limited Partners includes $56.68
of  realized  gains,  $2.56 of income from  operations  and $120.44 of return of
capital.  The Managing General Partner's one percent  allocation of $401,235 was
reduced by its one percent  allocation  of realized  gains and capital  returned
from  investments  during the first quarter of 1997, of $395,517 (which is being
held as a Deferred  Distribution Amount pursuant to the Partnership  Agreement),
resulting in a net distribution of $5,717.
<PAGE>
Item 2.  Management's Discussion and Analysis
         of Financial Condition and Results of Operations

    Liquidity and Capital Resources

    Net Proceeds of Offering

    On October 13,  1988,  the  Retirement  Fund  completed  the initial  public
offering of Units,  admitting  26,304  Limited  Partners who  purchased  221,072
Units.  The net proceeds  available for investment by the Retirement  Fund after
such offering less return of capital to Limited Partners were $181,514,467 after
volume discounts,  sales  commissions and  organizational,  offering,  sales and
marketing expenses.

     Investments

     As of March 31, 1997, the  Retirement  Fund had a total of 9 Enhanced Yield
Investments at a net cost of $32,493,322 (inclusive of the receipt of securities
having a capitalized cost of $422,439  received as  payment-in-kind  interest on
certain Enhanced Yield Investments).

    Proceeds from Investments

    During the three months ended March 31, 1997, the  Retirement  Fund received
proceeds from the following investments:

     On January 2, 1997,  the  Retirement  Fund received  $51,224 from Pergament
Home Centers,  Inc. as a principal paydown of the Floating Rate Demand Note held
by the  Retirement  Fund.  No gain,  loss or income  has been  recorded  on this
transaction.

     On January 15, 1997, the Retirement  Fund received  additional  proceeds of
$542 from Polaris Pool Systems, Inc. The money represents proceeds from the sale
of the  investments  from  prior  years that have been held in escrow for future
adjustments and expenses not paid on the sale dates. 

     During the first quarter of 1997, the Retirement Fund sold 22,641 shares of
Lexmark International Group, Inc. Class B Common Stock for $582,684 resulting in
a gain of $431,743 to the Retirement Fund.

     In February 1997,  the  Retirement  Fund sold 383,872 shares of Bank United
Corp. Class A Common Stock for $10,740,739  resulting in a gain of $8,165,108 to
the Retirement Fund.

     On March 24, 1997,  the  Retirement  Fund  received a prepayment on Lexmark
International,  Inc.'s  14.25% Senior  Subordinated  Notes  outstanding,  in the
principal amount of $24,103,269 together with a prepayment penalty of $4,059,487
and  $791,892  of  accrued  interest.  The  transaction  resulted  in a gain  of
$4,059,487 to the Retirement Fund.

     All of the  proceeds  received  during  the first  quarter  of 1997 will be
distributed to Limited Partners of record as of March 31, 1997 on May 14, 1997.

    For additional  information,  refer to the Supplemental Schedule of Realized
Gains and Losses and Note 10 to the Financial Statements.

    The Retirement  Fund's Enhanced Yield  Investments  are typically  issued in
private  placement  transactions  and are  subject  to certain  restrictions  on
transfer, and are thus relatively illiquid. The balance of the Retirement Fund's
assets at the end of the period covered by this report was invested in Temporary
Investments,  comprised of commercial paper and time deposits with maturities of
less than sixty days.

    The  Retirement  Fund,  which is designed for tax-exempt  investors,  is not
permitted to borrow to finance  investments.  The Partnership  Agreement imposes
certain limits on the use of proceeds from the  disposition  of investments  for
reinvestments.

    All cash  dividends,  interest and other income  received by the  Retirement
Fund in excess of expenses of  operation  and  reserves for expenses and certain
investments  and  liabilities  are  distributed  to the Limited  Partners of the
Retirement  Fund and to Alliance  Corporate,  as the Managing  General  Partner,
within 45 days after the end of each  calendar  quarter.  Before each  quarterly
cash  distribution,  the  Retirement  Fund will  analyze the then  current  cash
projections  and  determine  the  amount  of any  additional  reserves  it deems
necessary.
<PAGE>
    Participation in Enhanced Yield Investments

    The Retirement  Fund is invested  primarily in Enhanced  Yield  Investments,
also known in the securities industry as "high yield securities". The securities
in which the Retirement  Fund has invested were issued in  conjunction  with the
mezzanine financing of privately  structured,  friendly leveraged  acquisitions,
recapitalizations and other leveraged financings,  and are generally linked with
an equity  participation.  Enhanced  Yield  Investments  are debt and  preferred
equity securities that are unrated or are rated by Standard & Poor's Corporation
as BB or lower and by Moody's Investor  Services,  Inc. as Ba or lower.  Risk of
loss upon default by the issuer is  significantly  greater with  Enhanced  Yield
Investments  than  with  investment  grade  securities  because  Enhanced  Yield
Investments  are  generally  unsecured  and  are  often  subordinated  to  other
creditors  of the  issuer.  Also,  these  issuers  usually  have high  levels of
indebtedness  and are more sensitive to adverse economic  conditions,  such as a
recession or increasing  interest rates, than investment grade issuers.  Most of
these securities are subject to resale  restrictions,  and generally there is no
quoted market for such securities.

    Although the  Retirement  Fund cannot  eliminate its risks  associated  with
participation in Enhanced Yield Investments,  it has established risk management
policies.  The Retirement Fund subjects each prospective  investment to rigorous
analysis,  and makes only those  investments  that have been  recommended by the
Managing  General  Partner  and  that  meet  the  Retirement  Fund's  investment
guidelines  or that have  otherwise  been  approved by the  Independent  General
Partners.

    The Retirement Fund  investments are measured against  specified  Retirement
Fund  investment  and  performance  guidelines.  To limit  the  exposure  of the
Retirement  Fund's capital in any single issuer,  the Retirement Fund limits the
amount of its  investment  in a  particular  issuer.  The  Retirement  Fund also
continually  monitors  portfolio  companies  in  order  to  minimize  the  risks
associated with participation in Enhanced Yield Investments.

    Results of Operations

     For the three months ended March 31, 1997, net investment  income increased
by $130,291 as compared  to the same period in 1996.  Net  investment  income is
comprised of investment income  (primarily  interest and dividend income) offset
by  expenses.  The  increase  in the  1997  net  investment  income  versus  the
comparative  period in 1996,  reflects  the  increase in interest  and  dividend
income  partially  offset  by the  decrease  in  Fund  Administration  Fees  and
Expenses.

     For the  three  months  ended  March  31,  1997,  the  Retirement  Fund had
investment  income of $1,232,802,  as compared to $1,155,486 for the same period
in 1996. The increase in 1997 investment  income of 6.7% was primarily due to an
increase in dividend income.

     The  Retirement  Fund  incurred  expenses of $434,583  for the three months
ended March 31, 1997,  as compared to $487,558 for the same period in 1996.  The
decrease in the 1997 expenses of $52,975 was primarily due to a decrease in Fund
Administration  Fees and Expenses paid by the  Retirement  Fund.  The Retirement
Fund's  major  expenses  consist  of  the  Investment  Advisory  Fee,  the  Fund
Administration Fees and Professional Fees.

     The  Retirement  Fund  experienced a decrease in net assets  resulting from
operations  for  the  three  months  ended  March  31,  1997  in the  amount  of
$1,494,153,  as compared to a decrease of $1,991,390 for the comparative  period
in 1996. The decrease in net assets for the three months ended March 31, 1997 is
comprised  of  net  investment  income  of  $798,219,   net  realized  gains  of
$12,656,880  offset by a net change in unrealized  depreciation  of $14,949,252.
For the  comparable  period in 1996, the decrease in net assets was comprised of
net investment income of $667,928,  net realized gains of $1,077,600 offset by a
net  change  in  unrealized   depreciation  of  $3,736,918  (see  Statements  of
Operations in the Financial Statements).
<PAGE>

     For the three months  ended March 31, 1997 and 1996,  the  Retirement  Fund
incurred  Investment Advisory Fees of $250,434 and $236,152,  respectively,  (as
described in Note 6 to the Financial Statements). The increase in the Investment
Advisory Fees is due an adjustment for the difference between the Minimum Amount
Due and the  Investment  Advisory Fee paid for the quarters  ended  December 31,
1996 and March 31, 1997.

     The Retirement Fund  Administration Fees and Expenses (as described in Note
7 to the  Financial  Statements)  for the three  months ended March 31, 1997 and
1996 were $57,831 and $185,572,  respectively. The decrease from 1996 to 1997 of
$127,741 is due  primarily  to a decrease  in the  Retirement  Fund's  Available
Capital on which the Fund Administation Fee is based,  resulting  primarily from
redemptions  of  debt  obligations  held  by the  Retirement  Fund  (which  is a
component of Available Capital).

     In accordance with the Partnership  Agreement,  beginning October 13, 1996,
the Fund Administation Fee was changed to an annual fee of $100,000 plus 100% of
all direct  out-of-pocket  expenses incurred by the Fund Administrator on behalf
of the Retirement Fund.

    Independent  General  Partners'  Fees and  Expenses  incurred  for the three
months ended March 31, 1997 and 1996, were $35,000 and $48,603, respectively.

     The Retirement  Fund incurred  Professional  Fees of $88,618 and $6,175 for
the three  months  ended  March 31, 1997 and 1996,  respectively.  For the three
months ended March 31, 1997,  the  Retirement  Fund  incurred  $8,566 of related
party legal fees. (See Note 9 to the Financial Statements).

    Unrealized Appreciation/Depreciation and Non-Accrual of Investments

    The General Partners of the Retirement Fund determine, on a quarterly basis,
the fair value of the Retirement Fund's portfolio  securities that do not have a
readily  ascertainable  market value.  They are assisted in connection with such
determination by the Managing General Partner, which has established a valuation
committee  comprised  of senior  executives  to  assess  the  Retirement  Fund's
portfolio  and  make  recommendations  regarding  the  value  of  its  portfolio
securities.  This  valuation  committee uses available  market  information  and
appropriate valuation  methodologies.  In addition, the Managing General Partner
has  retained  Arthur D.  Little,  Inc.,  a  nationally  recognized  independent
valuation consultant, to review such valuations.

    For privately  issued  securities  in which the  Retirement  Fund  typically
invests,  the fair value of an  investment  is its initial  cost,  adjusted  for
amortization of discount or premium and as subsequently  adjusted to reflect the
occurrence of significant developments. "Significant developments" are business,
economic or market events that may affect a company in which an  investment  has
been made or the securities comprising such investment. For example, significant
developments  that could result in a write-down  in value  include,  among other
things,  events  of  default  with  respect  to  payment  obligations  or  other
developments indicating that a portfolio company's performance may fall short of
acceptable  levels. A write-up in value of an investment could take place when a
significant favorable development occurs, such as a transaction representing the
partial  sale of an  investment  that would  result in a capital gain or company
performance exceeding expected levels on a sustained basis.

    Although the General  Partners use their best  judgment in  determining  the
fair value of these investments, there are inherent limitations in any valuation
technique involving securities of the type in which the Retirement Fund invests.
Therefore,  the fair values presented  herein are not necessarily  indicative of
the amount which the Retirement Fund could realize in a current transaction.

     For the three months ended March 31, 1997, the Retirement Fund recorded net
unrealized depreciation on Enhanced Yield Investments of $14,949,252 as compared
to  $3,736,918  for the  three  months  ended  March  31,  1996.  The  change in
unrealized  depreciation was primarily the result of unrealized  depreciation in
Leather  U.S.,  Inc.  and  Pergament  Home  Centers,  Inc.  and the  reversal of
unrealized  appreciation in Lexmark  International  Group,  Inc. and Bank United
Corp., offset by unrealized appreciation in Bank United Corp.
<PAGE>

     The  following  investments  have  been  on  non-accrual  status  as of the
respective dates:

    Pergament Home Centers, Inc.
      Floating Rate Demand Note            July 1, 1996 
    Western Pioneer, Inc. 10%
      Senior Subordinated Note             November 30, 1994
    RI Holdings, Inc. 16%
      Senior Subordinated Notes            April 25, 1994

    Alliance  Corporate  continues to monitor the  Retirement  Fund's  portfolio
closely.  As a matter of standard  procedure,  Alliance  Corporate  reviews each
portfolio company's financial statements at least quarterly,  and often monthly.
Investment managers routinely review and discuss financial and operating results
with the companies' management and equity sponsors, and attend periodic board of
directors meetings, as appropriate.  In some cases, Alliance Corporate officers,
acting on behalf of the Funds,  serve as  directors  on the boards of  portfolio
companies. When problems arise, communication with management and sponsors often
occurs on a daily basis.

Realized Gains and Losses on Investments

     During the three months ended March 31, 1997, the Retirement  Fund recorded
net realized gains of $12,656,880 on transactions involving three Enhanced Yield
Investments.  For the three  months ended March 31, 1996,  the  Retirement  Fund
recorded  net  realized  gains on  investments  of  $1,077,600  on  transactions
involving  two  Enhanced  Yield  Investments  (see  Note  10  to  the  Financial
Statements and the Supplemental Schedule of Realized Gains and Losses).


<PAGE>



                          PART II - OTHER INFORMATION


Items 1 though 5 are  herewith  omitted as the  response  to all items is either
none or not applicable for the March 31, 1997, Form 10-Q.

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits:
         Exhibit 27 - Financial Data Schedule for the quarter ending
         March 31, 1997.

 3.1     Amended and Restated Certificate of Limited Partnership, dated
         as of April 12, 1989*

 4.1     Amended and Restated Agreement of Limited Partnership, dated as
         of October 13, 1988**

10.1     Investment Advisory Agreement, dated July 22, 1993, between
         Registrant and Alliance Corporate Finance Group Incorporated***

10.2     Administrative Services Agreement, dated October 13, 1988, among
         the Registrant, Equitable Capital Management Corporation and
         ML Fund Administrators, Inc.**

*        Incorporated  by reference to the  Retirement  Fund's  Annual Report on
         Form 10-K for the fiscal year ended  December 31, 1989,  filed with the
         Securities and Exchange Commission on March 29, 1990.

**       Incorporated  by reference to the  Retirement  Fund's  Annual Report on
         Form 10-K for the fiscal year ended  December 31, 1988,  filed with the
         Securities and Exchange Commission on March 29, 1989.

***      Incorporated  by reference to the  Retirement  Fund's  Annual Report on
         Form 10-K for the fiscal year ended  December 31, 1993,  filed with the
         Securities and Exchange Commission on March 28, 1994.

(b)  Reports on Form 8-K - None.


<PAGE>


                                SIGNATURES

    Pursuant  to the  requirements  of  Section  13 or 15(d)  of the  Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on its
behalf by the  undersigned,  thereunto  duly  authorized on the 13th day of May,
1997.

                        EQUITABLE CAPITAL PARTNERS
                         (RETIREMENT FUND), L.P.

                        By:  Alliance Corporate Finance Group
                             Incorporated, as Managing General Partner

Dated: May 13, 1997    /s/  James R. Wilson
                            -----------------------------
                            James R. Wilson
                            Title:  President



Dated: May 13, 1997    /s/ Andy Pitsillos
                           ------------------------------        
                           Andy Pitsillos
                           Title:  Vice President and Chief
                                   Accounting Officer



<PAGE>


                                SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  Registrant  has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized on the 13th day of May, 1997.



                        EQUITABLE CAPITAL PARTNERS
                         (RETIREMENT FUND), L.P.

                        By:  Alliance Corporate Finance Group
                             Incorporated, as Managing General Partner




Dated: May 13, 1997
                             James R. Wilson
                             Title:  President



Dated: May 13, 1997
                             Andy Pitsillos
                             Title:  Vice President and Chief
                             Accounting Officer