Item 1. Business
General
Prudential Securities Aggressive Growth Fund L.P. (the 'Registrant'), a Delaware limited partnership, was formed on February 17, 1993 and will terminate on December 31, 2013 unless terminated sooner under the provisions of the Amended and Restated Agreement of Limited Partnership (the 'Partnership Agreement'). The Registrant was formed to engage in the speculative trading of a portfolio consisting primarily of commodity futures, forward and options contracts. On August 2, 1993, the Registrant completed its initial offering with sales of 102,383 units of limited partnership interest and 1,500 units of general partnership interest (collectively, 'Units') which resulted in net proceeds to the Registrant of $10,180,534. The Registrant continued to offer Units on a monthly basis until the continuous offering was terminated on January 31, 1995. Additional contributions raised through the continuous offering resulted in additional net proceeds to the Registrant of $9,988,243. The Registrant's fiscal year for book and tax purposes ends on December 31.
Since October 1, 1997, trading decisions for the Registrant are made by Eagle Trading Systems, Inc. ('Eagle') and Welton Investment Systems Corporation, independent commodity trading managers. Eagle replaced Sjo, Inc. ('Sjo') as a trading manager effective October 1, 1997. Eagle receives management fees at the same rate ad did Sjo (a monthly fee on traded assets equal to a 2% annual rate). In addition, Eagle earns a quarterly incentive fee equal to 23% of New High Net Trading Profits (as defined in the Advisory Agreement among the Registrant, the General Partner and Eagle) as compared to a monthly incentive fee of 15% paid to Sjo. Except for the October 1, 1997 replacement of Sjo, there were no changes in trading managers during the three years ended December 31, 1997. The General Partner retains the authority to override trading instructions that violate the Registrant's trading policies.
The Registrant is engaged solely in the business of commodity futures, forward and options trading; therefore, presentation of industry segment information is not applicable.
General Partner
The general partner of the Registrant is Prudential Securities Futures Management Inc. (the 'General Partner'). The General Partner is a wholly owned subsidiary of Prudential Securities Incorporated ('PSI'), which in turn is a wholly owned subsidiary of Prudential Securities Group Inc. ('PSGI'). PSI was the principal underwriter of the limited partnership units and is the commodity broker of the Registrant. The General Partner is required to maintain at least a 1% interest in the Registrant as long as it is acting as the Registrant's general partner.
Competition
The General Partner and its affiliates have formed and may continue to form various entities to engage in the speculative trading of futures, forward and options contracts which, in part, have certain of the same investment policies as the Registrant.
The Registrant is a closed-ended fund which solicited the sale of additional Units on a monthly basis until the continuous offering was terminated and does not intend to solicit the sale of additional Units in the future. As such, the Registrant does not compete with other entities to attract new fund participants. However, to the extent that the trading managers recommend similar or identical trades to the Registrant and other accounts which they manage, the Registrant may compete with those accounts for the execution of the same or similar trades.
Employees
The Registrant has no employees. Management and administrative services for the Registrant are performed by the General Partner and its affiliates pursuant to the Partnership Agreement. See Notes A, C and D to the Registrant's annual report to limited partners for the year ended December 31, 1997 ('Registrant's 1997 Annual Report') which is filed as an exhibit hereto.
Item 2.
Item 2. Properties
The Registrant does not own or lease any property.
Item 3.
Item 3. Legal Proceedings
There are no material legal proceedings pending by or against the Registrant or the General Partner.
Item 4.
Item 4. Submission of Matters to a Vote of Limited Partners
None
PART II
Item 5.
Item 5. Market for the Registrant's Units and Related Limited Partner Matters
As of March 5, 1998, there were 544 holders of record owning 66,363.974 Units which include 664 units of general partnership interest. A significant secondary market for the Units has not developed, and it is not expected that one will develop in the future. There are also certain restrictions set forth in the Partnership Agreement limiting the ability of a partner to transfer Units. The Partnership Agreement provides that a limited partner may redeem its units as of the last business day of any full calendar quarter at the then current net asset value per Unit reduced by each Unit's pro rata portion of unamortized organizational costs. Consequently, holders of Units may not be able to liquidate their investment in the event of an emergency or for any other reason.
There are no material restrictions upon the Registrant's present or future ability to make distributions in accordance with the provisions of the Partnership Agreement. No distributions have been made since inception and no distributions are anticipated in the future.
Item 6.
Item 6. Selected Financial Data
The following table presents selected financial data of the Registrant. This data should be read in conjunction with the financial statements of the Registrant and the notes thereto on pages 2 through 10 of the Registrant's 1997 Annual Report which is filed as an exhibit hereto. The data presented for the period ended December 31, 1993 does not represent a full year's operations.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
This information is incorporated by reference to pages 11 and 12 of the Registrant's 1997 Annual Report which is filed as an exhibit hereto.
Item 8.
Item 8. Financial Statements and Supplementary Data
The financial statements are incorporated by reference to pages 2 through 10 of the Registrant's 1997 Annual Report which is filed as an exhibit hereto.
Supplementary data specified by Item 302 of Regulation S-K (selected quarterly financial data) is not applicable.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Reference is made to the Registrant's Current Report on Form 8-K dated May 14, 1996, as filed with the Securities and Exchange Commission on May 16, 1996 regarding the change in the Registrant's certifying accountant from Deloitte & Touche LLP to Price Waterhouse LLP.
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant
There are no directors or executive officers of the Registrant. The Registrant is managed by the General Partner.
The General Partner's directors and executive officers, and any persons holding more than 10% of the Registrant's Units ('Ten Percent Owners') are required to report their initial ownership of such Units and any subsequent changes in that ownership to the Securities and Exchange Commission on Forms 3, 4, or 5. Such executive officers, directors and Ten Percent Owners are required by Securities and Exchange Commission regulations to furnish the Registrant with copies of all Forms 3, 4 and 5 they file. All of these filing requirements were satisfied on a timely basis. In making these disclosures, the Registrant has relied solely on written representations of the General Partner's directors and executive officers or copies of the reports that they have filed with the Securities and Exchange Commission during and with respect to its most recent fiscal year.
The directors and executive officers of Prudential Securities Futures Management Inc. and their positions with respect to the Registrant are as follows:
Name Position Thomas M. Lane, Jr. President and Director Barbara J. Brooks Treasurer and Chief Financial Officer Steven Carlino Vice President and Chief Accounting Officer A. Laurence Norton, Jr. Director Guy S. Scarpaci Director
THOMAS M. LANE, JR., age 49, is the President and a Director of Prudential Securities Futures Management Inc. He is also the President and a Director of Seaport Futures Management, Inc. Mr. Lane has been a Senior Vice President of Futures Sales and Execution Services in the Futures Division since joining PSI in September 1995. Prior to joining PSI, Mr. Lane was employed by Merrill Lynch as the Vice President of Group Future Sales and Marketing from November 1983 until September 1995, and prior to that, Imperial Chemical as a Marketing Manager.
BARBARA J. BROOKS, age 49, is the Treasurer and Chief Financial Officer of Prudential Securities Futures Management Inc. She is a Senior Vice President of PSI. She is also the Treasurer and Chief Financial Officer of Seaport Futures Management, Inc. and serves in various capacities for other affiliated companies. She has held several positions within PSI since April 1983. Ms. Brooks is a certified public accountant.
STEVEN CARLINO, age 34, is a Vice President of Prudential Securities Futures Management Inc. He is a First Vice President of PSI. He is also a Vice President of Seaport Futures Management, Inc. and serves in various capacities for other affiliated companies. Prior to joining PSI in October 1992, he was with Ernst & Young for six years. Mr. Carlino is a certified public accountant.
A. LAURENCE NORTON, JR., age 59, is a Director of Prudential Securities Futures Management Inc. He is an Executive Vice President of PSI and head of its Futures Division. He is also a Director of Seaport Futures Management, Inc. Most recently, he held the position of Executive Director of Retail Development and Retail
Strategies at PSI. Prior to joining PSI in 1991, Mr. Norton was a Senior Vice President and Branch Manager of Shearson Lehman Brothers.
GUY S. SCARPACI, age 51, is a Director of Prudential Securities Futures Management Inc. He is a First Vice President of the Futures Division of PSI. He is also a Director of Seaport Futures Management, Inc. Mr. Scarpaci has been employed by PSI in positions of increasing responsibility since August 1974.
During December 1997, Thomas M. Lane, Jr. replaced James M. Kelso as President and as a Director of Prudential Securities Futures Management Inc.
There are no family relationships among any of the foregoing directors or executive officers. All of the foregoing directors and/or executive officers have indefinite terms.
Item 11.
Item 11. Executive Compensation
The Registrant does not pay or accrue any fees, salaries or any other form of compensation to directors and executive officers of the General Partner for their services. Certain officers and directors of the General Partner receive compensation from affiliates of the General Partner, not from the Registrant, for services performed for various affiliated entities, which may include services performed for the Registrant; however, the General Partner believes that any compensation attributable to services performed for the Registrant is immaterial. (See also Item 13, 'Certain Relationships and Related Transactions,' for information regarding compensation to the General Partner.)
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
As of March 5, 1998, no director or executive officer of the General Partner owns directly or beneficially any interest in the voting securities of the General Partner.
As of March 5, 1998, no director or executive officer of the General Partner owns directly or beneficially any of the Units issued by the Registrant.
As of March 5, 1998, no partner beneficially owns more than five percent of the outstanding limited partnership units of the Registrant.
Item 13.
Item 13. Certain Relationships and Related Transactions
The Registrant has and will continue to have certain relationships with the General Partner and its affiliates. However, there have been no direct financial transactions between the Registrant and the directors or executive officers of the General Partner.
Reference is made to Notes A, C and D to the financial statements of the Registrant's 1997 Annual Report which is filed as an exhibit hereto, which identify the related parties and discuss the services provided by these parties and the amounts paid or payable for their services.
PART IV
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Prudential Securities Aggressive Growth Fund L.P.
By: Prudential Securities Futures Management Inc. A Delaware Corporation, General Partner
By: /s/ Steven Carlino Date: March 30, 1998 ------------------------------------ Steven Carlino Vice President and Chief Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities (with respect to the General Partner) and on the dates indicated.
By: Prudential Securities Futures Management Inc. A Delaware Corporation, General Partner
By: /s/ Thomas M. Lane, Jr. Date: March 30, 1998 ----------------------------------------- Thomas M. Lane, Jr. President and Director
By: /s/ Barbara J. Brooks Date: March 30, 1998 ---------------------------------------- Barbara J. Brooks Treasurer and Chief Financial Officer
By: /s/ Steven Carlino Date: March 30, 1998 --------------------------------------- Steven Carlino Vice President
By: Date: March , 1998 --------------------------------------- A. Laurence Norton, Jr. Director
By: /s/ Guy S. Scarpaci Date: March 30, 1998 ---------------------------------------- Guy S. Scarpaci Director