N-CSR 1 g31616technology_ncsr.txt UBS PW TECHNOLOGY UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-21201 --------- UBS Technology Partners Fund L.L.C. -------------------------------------------------- (Exact name of registrant as specified in charter) 1285 Avenue of the Americas, 37th Floor New York, NY 10019 -------------------------------------------------- (Address of principal executive offices) (Zip code) James Dwyer c/o UBS Financial Services, Inc. 1285 Avenue of the Americas New York, NY 10019 -------------------------------------------------- (Name and address of agent for service) registrant's telephone number, including area code: 212-882-5819 ------------ Date of fiscal year end: December 31, 2005 ----------------- Date of reporting period: December 31, 2005 ----------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. The Report to Investors is attached herewith. UBS TECHNOLOGY PARTNERS, L.L.C. FINANCIAL STATEMENTS WITH REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM YEAR ENDED DECEMBER 31, 2005 UBS TECHNOLOGY PARTNERS, L.L.C. FINANCIAL STATEMENTS WITH REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM YEAR ENDED DECEMBER 31, 2005 CONTENTS Report of Independent Registered Public Accounting Firm.......................1 Statement of Assets, Liabilities and Members' Capital.........................2 Statement of Operations.......................................................3 Statements of Changes in Members' Capital.....................................4 Statement of Cash Flows.......................................................5 Notes to Financial Statements.................................................6 Schedule of Portfolio Investments.............................................12 [GRAPHIC OMITTED] ERNST & YOUNG [GRAPHIC OMITTED] Ernst & Young LLP [GRAPHIC OMITTED] Phone: (212) 773-3000 5 Times Square www.ey.com New York, New York 10036-6530
To the Members and Board of Directors of UBS Technology Partners, L.L.C. We have audited the accompanying statement of assets, liabilities and members' capital of UBS Technology Partners, L.L.C. (the "Fund"), including the schedule of portfolio investments, as of December 31, 2005, and the related statement of operations and cash flows for the year then ended and the statements of changes in members' capital for each of the two years in the period then ended and financial highlights for each of the years indicated therein. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Fund's internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2005 by correspondence with management of the investment funds or by other appropriate auditing procedures where replies were not received. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of UBS Technology Partners, L.L.C. at December 31, 2005, the results of its operations and its cash flows for the year then ended and the changes in its members' capital for each of the two years in the period then ended, and the financial highlights for each of the indicated years, in conformity with U.S. generally accepted accounting principles. /s/ ERNST & YOUNG LLP New York, NY February 20, 2006 A Member Practice of Ernst & Young Global UBS TECHNOLOGY PARTNERS, L.L.C. STATEMENT OF ASSETS, LIABILITIES AND MEMBERS' CAPITAL -------------------------------------------------------------------------------- DECEMBER 31, 2005 -------------------------------------------------------------------------------- ASSETS Investments in Investment Funds, at value (cost $161,550,000) $ 240,952,467 Receivable from Investment Funds 23,172,350 Investmets paid in advance 9,705,832 Cash and cash equivalents 5,885,312 Interest receivable 12,933 Other assets 879 -------------------------------------------------------------------------------- TOTAL ASSETS 279,729,773 -------------------------------------------------------------------------------- LIABILITIES Payables: Withdrawals payable 23,968,010 Management fee 226,115 Professional fees 225,021 Administration fee 47,726 Other 58,046 -------------------------------------------------------------------------------- TOTAL LIABILITIES 24,524,918 -------------------------------------------------------------------------------- NET ASSETS $ 255,204,855 -------------------------------------------------------------------------------- MEMBERS' CAPITAL Represented by: Net capital contributions $ 175,802,388 Accumulated net unrealized appreciation on investments 79,402,467 -------------------------------------------------------------------------------- MEMBERS' CAPITAL $ 255,204,855 -------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements. 2 UBS TECHNOLOGY PARTNERS, L.L.C. STATEMENT OF OPERATIONS --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 2005 ------------------------------------------------------------------------------------------ INVESTMENT INCOME Interest $ 215,732 ------------------------------------------------------------------------------------------ TOTAL INVESTMENT INCOME 215,732 ------------------------------------------------------------------------------------------ EXPENSES Management fee 2,874,058 Professional fees 356,807 Administration fee 277,881 Miscellaneous 291,261 ------------------------------------------------------------------------------------------ TOTAL EXPENSES 3,800,007 ------------------------------------------------------------------------------------------ NET INVESTMENT LOSS (3,584,275) ------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN FROM INVESTMENTS Net realized gain from investments 27,264,382 Change in net unrealized appreciation/depreciation from investments 11,381,475 ------------------------------------------------------------------------------------------ NET REALIZED AND UNREALIZED GAIN FROM INVESTMENTS 38,645,857 ------------------------------------------------------------------------------------------ NET INCREASE IN MEMBERS' CAPITAL DERIVED FROM OPERATIONS $35,061,582 ------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 3 UBS TECHNOLOGY PARTNERS, L.L.C. STATEMENTS OF CHANGES IN MEMBERS' CAPITAL YEARS ENDED DECEMBER 31, 2005 AND 2004 --------------------------------------------------------------------------------
UBS FUND ADVISOR, L.L.C. MEMBERS TOTAL ---------------------------------------------------------------------------------------------------------------------------- MEMBERS' CAPITAL AT JANUARY 1, 2004 $15,120 $ 503,364,980 $ 503,380,100 INCREASE (DECREASE) FROM OPERATIONS Pro rata allocation: Net investment loss (84) (5,471,163) (5,471,247) Net realized gain from investments 2,328 64,415,630 64,417,958 Change in net unrealized appreciation/depreciation from investments (1,868) (51,491,849) (51,493,717) ---------------------------------------------------------------------------------------------------------------------------- NET INCREASE IN MEMBERS' CAPITAL DERIVED FROM OPERATIONS 376 7,452,618 7,452,994 ---------------------------------------------------------------------------------------------------------------------------- MEMBERS' CAPITAL TRANSACTIONS Proceeds from Members' subscriptions -- 5,629,497 5,629,497 Members' withdrawals -- (206,791,505) (206,791,505) Offering costs (3) (96,121) (96,124) ---------------------------------------------------------------------------------------------------------------------------- NET DECREASE IN MEMBERS' CAPITAL FROM CAPITAL TRANSACTIONS (3) (201,258,129) (201,258,132) ---------------------------------------------------------------------------------------------------------------------------- MEMBERS' CAPITAL AT DECEMBER 31, 2004 $15,493 $ 309,559,469 $ 309,574,962 ---------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) FROM OPERATIONS Pro rata allocation: Net investment loss (202) (3,584,073) (3,584,275) Net realized gain from investments 364 27,264,018 27,264,382 Change in net unrealized appreciation/depreciation from investments 1,895 11,379,580 11,381,475 ---------------------------------------------------------------------------------------------------------------------------- NET INCREASE IN MEMBERS' CAPITAL DERIVED FROM OPERATIONS 2,057 35,059,525 35,061,582 ---------------------------------------------------------------------------------------------------------------------------- MEMBERS' CAPITAL TRANSACTIONS Proceeds from Members' subscriptions -- 3,394,220 3,394,220 Members' withdrawals -- (92,804,191) (92,804,191) Offering costs (1) (21,717) (21,718) ---------------------------------------------------------------------------------------------------------------------------- NET DECREASE IN MEMBERS' CAPITAL DERIVED FROM CAPITAL TRANSACTIONS (1) (89,431,688) (89,431,689) ---------------------------------------------------------------------------------------------------------------------------- MEMBERS' CAPITAL AT DECEMBER 31, 2005 $17,549 $ 255,187,306 $ 255,204,855 ----------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 4 UBS TECHNOLOGY PARTNERS, L.L.C. STATEMENT OF CASH FLOWS --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 2005 ------------------------------------------------------------------------------------------------------ CASH FLOWS FROM OPERATING ACTIVITIES Net increase in Members' capital derived from operations $ 35,061,582 Adjustments to reconcile net increase in Members' capital derived from operations to net cash provided by operating activities: Purchases of investments (52,000,000) Proceeds from disposition of investments 232,228,717 Net realized gain from investments (27,264,382) Change in net unrealized appreciation/depreciation from investments (11,381,475) Changes in assets and liabilities: (Increase) decrease in assets: Receivable from Investment Funds (23,172,350) Investmets paid in advance (9,705,832) Interest receivable 10,337 Other assets 1,585 Increase (decrease) in payables: Management fee (118,464) Professional fees (18,008) Administration fee (20,712) Other 29,965 ------------------------------------------------------------------------------------------------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 143,650,963 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from Members' subscriptions 3,394,220 Members' withdrawals (180,345,375) Offering costs (21,718) ------------------------------------------------------------------------------------------------------- NET CASH USED IN FINANCING ACTIVITIES (176,972,873) Net decrease in cash and cash equivalents (33,321,910) Cash and cash equivalents--beginning of year 39,207,222 ------------------------------------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS--END OF YEAR $ 5,885,312 ------------------------------------------------------------------------------------------------------- Supplemental cash flow Disclosures: Interest Paid $ 30,416 -------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 5 UBS TECHNOLOGY PARTNERS, L.L.C. NOTES TO FINANCIAL STATEMENTS -------------------------------------------------------------------------------- DECEMBER 31, 2005 -------------------------------------------------------------------------------- 1. ORGANIZATION UBS Technology Partners, L.L.C. (the "Fund") was initially organized as a limited partnership under the laws of Delaware on December 28, 1998 and was subsequently reorganized as a limited liability company effective October 15, 2002. The Fund is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a closed-end, non-diversified, management investment company. The Fund's investment objective is to maximize capital appreciation over the long-term. The Fund pursues its investment objective by deploying its assets primarily among a select group of portfolio managers who invest primarily in, or who have particular knowledge within, the technology sector. Generally, such portfolio managers conduct their investment programs through unregistered investment funds (collectively, the "Investment Funds") in which the Fund invests as a limited partner or member along with other investors. The Fund commenced operations on April 1, 1999. The Fund's Board of Directors (the "Directors") has overall responsibility to manage and control the business affairs of the Fund, including the exclusive authority to oversee and to establish policies regarding the management, conduct and operation of the Fund's business. The Directors have engaged UBS Fund Advisor, L.L.C. (the "UBSFA" or "Manager"), a Delaware limited liability company and the Manager of the Fund, to provide investment advice regarding the selection of Investment Funds and to be responsible for the day-to-day management of the Fund. The Manager is an indirect wholly-owned subsidiary of UBS Americas, Inc., which is a wholly-owned subsidiary of UBS AG, and is registered as an investment adviser under the Investment Advisers Act of 1940, as amended. Initial and additional applications for interests by eligible investors may be accepted at such times as the Manager may determine and are generally accepted monthly. The Fund reserves the right to reject any application for interests in the Fund. The Fund from time to time may offer to repurchase interests pursuant to written tenders to Members. These repurchases will be made at such times and on such terms as may be determined by the Directors, in their complete and exclusive discretion. The Manager expects that generally, it will recommend to the Directors that the Fund offer to repurchase interests from Members twice in each year, near mid-year and year-end. Members can only transfer or assign their membership interests, or a portion thereof, (i) by operation of law pursuant to the death, bankruptcy, insolvency or dissolution of a Member, or (ii) with the written approval of the Directors, which may be withheld in their sole and absolute discretion. Such transfers may be made even if the balance of the capital account to such transferee is equal to or less than the transferor's initial capital contribution. 2. SIGNIFICANT ACCOUNTING POLICIES A. PORTFOLIO VALUATION Net asset value of the Fund is determined by or at the direction of the Manager as of the close of business at the end of any fiscal period in accordance with the valuation principles set forth below or as may be determined from time to time pursuant to policies established by the Directors. 6 UBS TECHNOLOGY PARTNERS, L.L.C. NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- DECEMBER 31, 2005 -------------------------------------------------------------------------------- 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) A. PORTFOLIO VALUATION (CONTINUED) The Fund's investments in Investment Funds are subject to the terms and conditions of the respective operating agreements and offering memoranda, as appropriate. The Fund's investments in Investment Funds are carried at fair value as determined by the Fund's pro-rata interest in the net assets of each Investment Fund. All valuations utilize financial information supplied by each Investment Fund and are net of management and performance incentive fees or allocations payable to the Investment Funds' managers or pursuant to the Investment Funds' agreements. The Fund's valuation procedures require the Manager to consider all relevant information available at the time the Fund values its portfolio. The Manager and/or the Board will consider such information and consider whether it is appropriate, in light of all relevant circumstances, to value such a position at its net asset value as reported or whether to adjust such value. The underlying investments of each Investment Fund are accounted for at fair value as described in each Investment Fund's financial statements. (See Schedule of Portfolio Investments) Distributions received or withdrawals from Investment Funds, whether in the form of cash or securities, are first applied as a reduction of the investment's cost. B. INCOME RECOGNITION Interest income is recorded on the accrual basis. Realized gains and losses from Investment Fund transactions are calculated on the identified cost basis. C. FUND COSTS The Fund bears all expenses incurred in its business, including, but not limited to, the following: all costs and expenses related to portfolio transactions and positions for the Fund's account; legal fees; accounting and auditing fees; custodial fees; costs of computing the Fund's net asset value; costs of insurance; registration expenses; certain organization costs; due diligence, including travel and related expenses; expenses of meetings of Directors and Members; all costs with respect to communications to Members; and other types of expenses approved by the Directors. Offering costs are charged to capital as incurred. D. INCOME TAXES No provision for the payment of Federal, state or local income taxes has been provided, since the Fund is not subject to income tax. Each Member is individually required to report on its own tax return its distributive share of the Fund's taxable income or loss. The Fund has reclassified $3,584,275 and $6,474,200 from accumulated net investment loss and accumulated net realized gain from investments, respectively, to net capital contributions during the year ended December 31, 2005. The reclassification was to reflect, as an adjustment to net capital contributions, the amount of taxable income or loss that have been allocated to the Fund's Members and had no effect on net assets. 7 UBS TECHNOLOGY PARTNERS, L.L.C. NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- DECEMBER 31, 2005 -------------------------------------------------------------------------------- 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E. CASH AND CASH EQUIVALENTS Cash and cash equivalents consist of monies invested in a PNC Bank, NA account which pays money market rates and are accounted for at cost plus accrued interest which is included in interest receivable on the Statement of Assets, Liabilities and Members' Capital. F. REPURCHASE AGREEMENTS From time to time the Fund may enter into repurchase agreements. In connection with such transactions it is the Fund's policy that its custodian take possession of the underlying collateral securities, the fair value of which exceeds the principal amount of the repurchase transaction, including accrued interest, at all times. If the seller defaults, and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. As of December 31, 2005 there were no open repurchase agreements. G. USE OF ESTIMATES The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires the Manager to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Manager believes that the estimates utilized in preparing the Fund's financial statements are reasonable and prudent; however, actual results could differ from these estimates. 3. RELATED PARTY TRANSACTIONS UBSFA provides certain management and administrative services to the Fund, including, among other things, providing office space and other support services. In consideration for such services, the Fund pays UBSFA a monthly management fee (the "Fee") at an annual rate of 1% of the Fund's net assets, excluding assets attributable to the Manager's capital account. The Fee is paid to UBSFA out of the Fund's assets and debited against the Members' capital accounts, excluding the Manager's capital account. A portion of the fee is paid by UBSFA to its affiliates. UBS Financial Services Inc. ("UBS FSI"), a wholly-owned subsidiary of UBS Americas, Inc., acts as a placement agent for the Fund, without special compensation from the Fund, and bears its own costs associated with its activities as placement agent. Placement fees, if any, charged on contributions are debited against the contribution amounts, to arrive at a net subscription amount. The placement fee does not constitute assets of the Fund. The net increase (or decrease) in members' capital derived from operations (net income or loss) is initially allocated to the capital accounts of all Members on a pro-rata basis, other than the Fee which is similarly allocated to all Members other than the Manager as described above. In accordance with the Limited Liability Company Agreement, the Manager is then allocated an amount based on the performance of the Fund (the "Performance Bonus") for the Measurement Period, as defined in the 8 UBS TECHNOLOGY PARTNERS, L.L.C. NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- DECEMBER 31, 2005 -------------------------------------------------------------------------------- 3. RELATED PARTY TRANSACTIONS (CONTINUED) Confidential Memorandum (i.e., the period commencing on the admission of a Member to the Fund, and thereafter each period commencing on the day following the last Measurement Period and ending generally on the first to occur of (1) a fiscal year-end or (2) a whole or partial redemption). The Performance Bonus is calculated separately with respect to each Member. The Performance Bonus is equal to 1% of the balance of the Member's capital account at the end of the Measurement Period, provided that appreciation in the Member's capital account (net of any Performance Bonus) exceeds the Member's threshold return. The threshold return is the amount that a Member would have earned for a fiscal year if it had received an annualized rate of return of 20% on its opening capital account balance, as adjusted. No Performance Bonus was earned for the year ended December 31, 2005. Each Director of the Fund receives a retainer of $5,000 plus a fee for each meeting attended. All Directors are reimbursed by the Fund for all reasonable out-of-pocket expenses. Total amounts expensed by the Fund related to Directors for the year ended December 31, 2005 were $23,000, included in miscellaneous on the Statements Of Operations. 4. ADMINISTRATION AND CUSTODIAN FEES PFPC Trust Company (an affiliate of PNC Bank, NA) serves as custodian (the "Custodian") of the Fund's assets and provides custodial services for the Fund. PFPC Inc. (also an affiliate of PNC Bank, NA) serves as Administrator and Accounting Agent to the Fund and in that capacity provides certain administrative, accounting, record keeping, tax and investor related services. PFPC Inc. receives a monthly fee primarily based upon (i) the average net assets of the Fund, subject to a minimum monthly fee, and (ii) the aggregate net assets of the Fund and certain other investment funds sponsored or advised by UBS Americas, Inc. or it affiliates. Additionally, the Fund reimburses certain out of pocket expenses incurred by PFPC Inc. 5. CREDIT FACILITY Effective July 1, 2005, the Fund, along with other UBS sponsored funds, entered into a $150,000,000 committed, unsecured revolving line of credit with Harris Trust and Savings Bank. Under the most restrictive arrangement, the Fund may borrow an amount that combined with the other borrowings of the Fund would not exceed 20% of its net assets. The Fund's borrowing capacity is also limited to the portion of the unused line of credit at any point in time. The Fund is only liable under the line of credit to the extent of its own borrowing there under. The interest rate on the borrowing is based on the Federal Funds rate plus 150 basis points per annum. The expiration date of such credit agreements is June 30, 2006. The committed facility also requires a fee to be paid by the Fund, on a pro-rata basis, based on the amount of the aggregate commitment which has not been utilized of 25 basis points per annum. For the year ended December 31, 2005, the fund's average interest rate on borrowings was 4.76% per annum and average borrowings outstanding were $638,337. Interest expense for the year 2005 was $30,416, all of which was paid during the year. 9 UBS TECHNOLOGY PARTNERS, L.L.C. NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- DECEMBER 31, 2005 -------------------------------------------------------------------------------- 6. SECURITIES TRANSACTIONS Aggregate purchases and sales of Investment Funds for the year ended December 31, 2005, amounted to $52,000,000 and $232,228,717, respectively. The cost of investments for Federal income tax purposes is adjusted for items of taxable income allocated to the Fund from the Investment Funds. The allocated taxable income is reported to the Fund by the Investment Funds on Schedules K-1. The Fund has not yet received all such schedule K-1 for the year ended December 31, 2005. 7. INVESTMENTS As of December 31, 2005, the Fund had investments in Investment Funds, none of which were related parties. The Fund's investments are summarized below based on the investment objectives of the specific Investment Funds at December 31, 2005. Investment Objective Cost Fair Value -------------------- ---- ---------- Long/Short Equity $161,550,000 $240,952,467 The agreements related to investments in Investment Funds provide for compensation to the general partners/managers in the form of management fees of 1% to 2% (per annum) of net assets and performance incentive fees or allocations of 20% of net profits earned. The Investment Funds provide for periodic redemptions, with lock up provisions ranging up to three years from initial investment. Detailed information about the Investment Funds' portfolios is not available. 8. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK In the normal course of business, the Investment Funds in which the Fund invests trade various financial instruments and enter into various investment activities with off-balance sheet risk. These include, but are not limited to, short selling activities, writing option contracts, contracts for differences, and equity swaps. The Fund's risk of loss in these Investment Funds is limited to the value of these investments as reported by the Fund. 9. INDEMNIFICATION In the ordinary course of business, the Fund may enter into contracts or agreements that contain indemnifications or warranties. Future events could occur that lead to the execution of these provisions against the Fund. Based on its history and experience, management feels the likelihood of such an event is remote. 10 UBS TECHNOLOGY PARTNERS, L.L.C. NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- DECEMBER 31, 2005 -------------------------------------------------------------------------------- 10. FINANCIAL HIGHLIGHTS The following represents the ratios to average net assets and other supplemental information for the periods indicated:
YEARS ENDED DECEMBER 31, 2005 2004 2003 2002 2001 ----- ---- ---- ---- ---- Ratio of net investment loss to average net assets**** (1.23)% (1.19)% (1.14)% (1.11)% (1.06)% Ratio of total expenses to average net assets (a),**** 1.30% 1.23% 1.22% 1.16% 1.15% Portfolio turnover rate 18.08% 10.84% 27.53% 26.80% 9.74% Total return pre incentive allocation** 13.27% 1.82% 3.02% (1.90)% (4.80)% Total return post incentive allocation*** 13.27% 1.82% 3.02% (1.90)% (4.80)% Average debt ratio**** 0.22% 0.04% -- -- -- Net asset value at end of year $255,204,855 $309,564,962 $503,380,100 $653,040,209 $832,173,503 a. Ratio of total expenses to average net assets does not include the impact of expenses for incentive allocations or incentive fees related to the underlying Investment Funds. ** Total return assumes a purchase of an interest in the Fund at the beginning of the period and a sale of the Fund interest on the last day of the period noted and does not reflect the deduction of placement fees, if any, incurred when subscribing to the Fund. Total returns for a period of less than a full year are not annualized. An individual member's ratios and return may vary from the above based on incentive allocation, if applicable and the timing of capital transactions. *** Total return assumes a purchase of an interest in the Fund at the beginning of the period and a sale of the Fund interest on the last day of the period noted, after Performance Bonus to the Manager, and does not reflect the deduction of placement fees, if any, incurred when subscribing to the Fund. Total returns for a period of less than a full year are not annualized. **** The average net assets used in the above ratios are calculated by adding any withdrawals payable effective at the end of a period to the net assets for such period.
11 UBS TECHNOLOGY PARTNERS, L.L.C. SCHEDULE OF PORTFOLIO INVESTMENTS -------------------------------------------------------------------------------- DECEMBER 31, 2005 --------------------------------------------------------------------------------
REALIZED AND UNREALIZED % OF GAIN/(LOSS) MEMBERS' FROM INVESTMENT FUND: COST FAIR VALUE CAPITAL INVESTMENTS LIQUIDITY ------------------------------------------------------------------------------------------------------------------ Artis Technology Qualified Partners, L.P. 8,250,000 16,744,277 6.56 2,290,741 Quarterly Artis Technology Qualified 2X, L.P. 10,750,000 14,464,599 5.67 2,992,242 Quarterly Cavalry Technology, L.P. 15,000,000 20,616,578 8.08 1,963,916 Quarterly Coatue Qualified Partners, L.P. 9,000,000 19,681,484 7.71 8,880,916 Quarterly Intrepid Capital Fund (QP), L.P. -- 12,763,051 5.00 3,108,547 Quarterly Intrepid Capital Multi-Sector Fund LP. 10,000,000 10,151,618 3.98 151,618 Quarterly Loch Fund, L.P. 25,550,000 30,028,989 11.77 2,110,654 Quarterly Mosaic Technology Fund, L.P. -- 27,954 0.01 56,792 * Seligman Technology 17,000,000 19,371,319 7.59 2,371,319 Quarterly Shannon River Partner II, L.P. 10,000,000 10,579,023 4.15 579,023 Quarterly Sidus Investments, Ltd. Series A1 10,000,000 11,200,625 4.39 624,807 Quarterly Sidus Investments, Ltd. Series A2 1,000,000 1,150,170 0.45 232,327 Quarterly Sidus Investments, Ltd. Series A3 5,000,000 5,285,913 2.07 296,949 Quarterly Semi Special Situation 10,000,000 10,088,395 3.95 88,395 Annually Semi TCS Capital II, L.P. 20,000,000 33,474,120 13.12 5,036,498 Annually Tiger Technology Fund, L.P. 10,000,000 25,324,352 9.92 6,719,629 Annually Redeemed Investment Funds: 1,141,484 --------------------------------------------------------- TOTAL $161,550,000 $240,952,467 94.42% $38,645,857 ========================================================= * The liquidity of the Fund's investments is driven by the Investment Fund's ability to liquidate its Private Investments.
The preceding notes are an integral part of these financial statements. 12 This page intentionally left blank UBS TECHNOLOGY PARTNERS, L.L.C.: ADVISORY CONTRACT RENEWAL RIDER The Directors (including the Independent Directors) last evaluated the Investment Advisory Agreement at a meeting on September 15, 2005. The Directors met in an executive session during which they were advised by and had the opportunity to discuss with independent legal counsel the approval of the Investment Advisory Agreement. The Directors reviewed materials furnished by the Adviser, including information regarding the Adviser, its affiliates and its personnel, operations and financial condition. The Directors also reviewed, among other things, the nature of the services to be provided by the Adviser, including its investment process, and the experience of the investment advisory and other personnel proposing to provide services to the Fund. The Directors felt that the quality of service offered by the Adviser to the Fund was appropriate and that the Adviser's personnel had sufficient expertise to manage the Fund. The Directors also reviewed the performance of the Fund and compared that performance to the performance of another investment company presented by the Adviser which has objectives and strategies similar to those of the Fund and which is managed by a third-party investment adviser (the "Comparable Fund"). The Directors determined that the performance of the Fund was consistent with that of the Comparable Fund. Although the Fund's performance since inception was less than that of the Comparable Fund, the Directors acknowledged the limitations in such comparison because the Comparable Fund was not registered under the Investment Company Act of 1940 and therefore, it is not subject to investment restrictions that are applicable to the Fund and which can adversely affect the Fund's performance relative to that of the Comparable Fund. The Directors also compared the volatility of the Fund to that of the Comparable Fund presented. They noted that the Fund's volatility was higher than the volatility of the Comparable Fund. The Directors also considered the advisory fees being charged by the Adviser for its services as compared to those charged to the Comparable Fund, and as compared to the advisory fees charged by the Adviser and its affiliates for other UBS alternative products. The information presented to the Directors showed that the advisory fees being charged to the Fund were less than those being charged to the Comparable Fund. In comparing the advisory fees being charged to the Fund to the fees being charged by the Adviser and its affiliates for other UBS alternative investment products, the Directors noted that the management fee being charged to the Fund was equal to the lowest management fee being charged to each of the Alternative Investment Group's other multi-manager funds, and the Fund's incentive fee was below the median incentive fee being charged other multi-manager funds. In light of the foregoing, the Directors felt that the combination of management fee and incentive fee being charged to the Fund was appropriate. The Directors also considered the profitability of the Adviser both before payment to brokers and after payment to brokers and concluded that the profits to be realized by the Adviser and its affiliates under the Investment Advisory Agreement and from other relationships between the Fund and the Adviser were within a range the Directors considered reasonable and appropriate. The Directors also discussed the fact that the Fund was not large enough at that time to support a request for breakpoints due to economies of scale. The Directors determined that the fees under the Investment Advisory Agreement do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm's-length bargaining, and concluded that the fees were reasonable. The Directors concluded that approval of the Investment Advisory Agreement was in the best interests of the Fund and its investors. 2 DIRECTORS AND OFFICERS (UNAUDITED) Information pertaining to the Directors and officers of the Fund is set forth below. The statement of additional information (SAI) includes additional information about the Directors and is available without charge, upon request, by calling UBS Financial Services Inc.'s, Alternative Investment Group at 800-580-2359.
------------------------------------------------------------------------------------------------------------------------------------ NUMBER OF PORTFOLIOS IN FUND OTHER TRUSTEESHIPS/ TERM OF OFFICE COMPLEX DIRECTORSHIPS HELD BY AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTOR OUTSIDE FUND NAME, AGE AND ADDRESS TIME SERVED 1 DURING PAST 5 YEARS DIRECTOR 2 COMPLEX ------------------------------------------------------------------------------------------------------------------------------------ INDEPENDENT DIRECTORS ------------------------------------------------------------------------------------------------------------------------------------ George W. Gowen (76) Term--Indefinite Law partner of Dunnington, Bartholow 14 None UBS Financial Services Inc. Length--since & Miller 1285 Avenue of the Americas Commencement of New York, NY 10019 Operations Director ------------------------------------------------------------------------------------------------------------------------------------ Stephen H. Penman (59) Term--Indefinite Professor of Financial Accounting of 14 None UBS Financial Services Inc. Length--since the Graduate School of Business, 1285 Avenue of the Americas July 1, 2004 Columbia University New York, NY 10019 Director ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED DIRECTOR ------------------------------------------------------------------------------------------------------------------------------------ Meyer Feldberg (63) 3 Term--Indefinite Dean (Emeritus since March 2005) and 36 Director of: UBS Financial Services Inc. Length--since Sanford C. Bernstein Professor of Primedia, Inc., 1285 Avenue of the Americas Commencement of Leadership and Ethics of the Graduate Federated Department New York, NY 10019 Operations School of Business, Columbia Stores, Inc., Director University; Senior Advisor for Morgan Revlon, Inc. and SAPPI, Stanley & Co. Incorporated since Ltd. March 2005 ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS WHO ARE NOT DIRECTORS ------------------------------------------------------------------------------------------------------------------------------------ Douglas Lindgren (44) Term--Indefinite Managing Director of UBS Financial N/A N/A UBS Financial Services Inc. Length--since Services Inc. since June 2005 1285 Avenue of the Americas July 19, 2005 Prior to June 2005, Managing Director New York, NY 10019 and Head of Alternative Investments at Principal Executive Officer United States Trust Company, N.A. ------------------------------------------------------------------------------------------------------------------------------------ Michael Mascis (38) Term--Indefinite First Vice President of UBS Financial N/A N/A UBS Financial Services Inc. Length--since Services Inc. since July 2002 1285 Avenue of the Americas July 18, 2002 Prior to July 2002, Partner of Arthur New York, NY 10019 Andersen LLP Principal Accounting Officer ------------------------------------------------------------------------------------------------------------------------------------ Frank S. Pluchino (46) Term--Indefinite Assistant Director of Compliance of N/A N/A UBS Financial Services Inc. Length--since UBS Financial Services Inc. since 2003 1285 Avenue of the Americas July 19, 2005 Prior to 2003, Chief Compliance New York, NY 10019 Officer of Liberty View Capital Chief Compliance Officer Management, Inc., an investment adviser, and LibertyView Alternative Asset Management, Inc., an NASD broker-dealer ------------------------------------------------------------------------------------------------------------------------------------
1 For Directors, their terms are for the duration of the term of the Fund, unless his status as a Director shall be sooner terminated by death, adjudicated incompetent, voluntarily withdraw, physically unable to perform duties, removed either by vote or written consent of at two-thirds of the Directors or vote or written consent of Members holding not less than two-thirds of the total number of votes eligible to the cast by all Members. 2 Of the 36 funds/portfolios in the complex as of December 31, 2004, 22 are advised by an affiliate of UBS Financial Services Inc. and 14 comprise UBS Financial Services' Alternative Investment Group of Funds. 3 Mr. Feldberg is an "interested person" of the Fund because he is an affiliated person of a broker-dealer with which the UBS Financial Services Alternative Investment Group of Funds does business. Mr. Feldberg is not an affiliated person of UBS Financial Services or its affiliates. The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission ("SEC") for the first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q are available on the SEC's website at http://www.sec.gov and may be reviewed or copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. UBS Financial Services Inc. is a subsidiary of UBS AG DIRECTORS AND OFFICERS (UNAUDITED) (Continued) Proxy Voting A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge upon request by calling the UBS Financial Services Inc.'s Alternative Investment Group at 800-580-2329. UBS Financial Services Inc. is a subsidiary of UBS AG 2 ITEM 2. CODE OF ETHICS. (a) The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. The code of ethics may be obtained without charge by calling 800-486-2608. (c) There have been no amendments, during the period covered by this report, to a provision of the code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics. (d) The registrant has not granted any waivers, including an implicit waiver, from a provision of the code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of this item's instructions. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. As of the end of the period covered by the report, the registrant's Board had determined that Professor Stephen Penman, a member of the audit committee of the Board, is the audit committee financial expert and that he is "independent," as defined by Item 3 of Form N-CSR. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. AUDIT FEES (a) The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are $77,000 for 2004 and $83,160 for 2005. Such audit fees include fees associated with annual audits for providing a report in connection with the registrant's report on form N-SAR. AUDIT-RELATED FEES (b) The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of this Item are $4,500 for 2004 and $4,500 for 2005. Audit related fees principally include fees associated with reviewing and providing comments on semi-annual reports. TAX FEES (c) The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning are $156,000 for 2004 and $163,000 for 2005. Tax fees include fees for tax compliance services and assisting management in preparation of tax estimates. ALL OTHER FEES (d) The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item are $8,000 for 2004 and $0 for 2005. (e)(1) The registrant's audit committee pre-approves the principal accountant's engagements for audit and non-audit services to the registrant, and certain non-audit services to service Affiliates that are required to be pre-approved, on a case-by-case basis. Pre-approval considerations include whether the proposed services are compatible with maintaining the principal accountant's independence. (e)(2) There were no services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, because such services were pre-approved. (f) Not Applicable (g) The aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant was $1.5 million for 2004 and $3.1 million for 2005. (h) The registrant's audit committee of the board of directors has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. The Proxy Voting Policies are as follows: UBS FUND ADVISOR, L.L.C. PROXY-VOTING POLICIES AND PROCEDURES A. INTRODUCTION UBS Fund Advisor, L.L.C. (the "Adviser") votes proxies for each fund (each a "Fund," collectively, the "Funds") for which it acts as the Adviser and as such, has adopted these Proxy-Voting Policies and Procedures (these "Policies and Procedures"). The Funds are funds of funds that invest primarily in unregistered investment vehicles ("Investment Funds") which have investors other than the Fund. Generally, each of the Funds may invest a majority of its assets in non-voting securities of Investment Funds. The Investment Funds typically do not submit matters to investors for vote; however, should a matter be submitted for vote and provided the Fund holds voting interests in the Investment Fund, the Adviser will vote proxies in what it views to be in the best interest of the Fund and in accordance with these Policies and Procedures. B. FIDUCIARY DUTY Proxy-voting is an integral part of the Adviser's investment management process. The Adviser is under a fiduciary duty to act in the best interest of the Fund(s) and to vote in a manner it believes to be consistent with efforts to maximize shareholder value. This authority carries with it a responsibility on the Adviser's part to analyze the issues connected with the votes and to evaluate the probable impact of its vote on the value of the investment. C. VOTING PROCEDURES Generally speaking, where the Adviser holds voting rights, it will vote consistent with management's recommendations on routine matters, absent a particular reason to the contrary. Non-routine matters will be voted on a case-by-case basis taking into consideration the best interests of the Fund(s) and the maximization of shareholder value. D. CONFLICTS OF INTEREST Any circumstance or relationship which would compromise a portfolio manager's objectivity in voting proxies in the best interest of the Fund(s) would constitute a conflict of interest. In such situations, the Adviser will address any material conflicts before voting proxies on behalf of the Fund(s). As a matter of policy, the Adviser will presume the existence of a conflict of interest for proxy-voting purposes in situations where: o A current investor of the Adviser is affiliated with an Investment Fund soliciting proxies or has communicated its view to the Adviser on an impending proxy vote; o The portfolio manager responsible for proxy-voting has identified a personal interest in the Investment Fund soliciting proxies or in the outcome of a shareholder vote; o Members of the portfolio management team, including the portfolio manager responsible for proxy-voting, and/or members of senior management, have a personal interest through investment in the Investment Fund soliciting proxies; o Members of the Investment Fund or a third party with an interest in the outcome of a shareholder vote have attempted to influence either the Adviser or the portfolio manager responsible for voting a proxy. Employees of the Adviser should be aware of the potential for conflicts of interest that may result, on the part of the Adviser, from employees' personal relationships or special circumstances that may result as part of the Adviser's normal course of business. Employees who become aware of any such conflicts of interest are under obligation to bring them to the attention of the Chief Compliance Officer, Legal or the Risk Control Manager (or designees thereof) who will work with appropriate personnel of the Adviser to determine the materiality of the conflict. ADDRESSING MATERIAL CONFLICTS OF INTEREST. A conflict of interest will be considered material to the extent it is determined that such conflict has the potential to influence the Adviser's decision-making in the proxy-voting process and the determination will be based on an assessment of the particular facts and circumstances. If it is determined that a conflict of interest is not material, the Adviser may vote proxies notwithstanding the existence of the conflict. The Adviser shall maintain a written record of all conflicts of interest identified, the materiality determination, and the method used to resolve the material conflict of interest. If it is determined that a conflict of interest is material, the Adviser's Chief Compliance Officer or Legal will work with appropriate personnel of the Adviser to determine a resolution before voting proxies affected by such conflict of interest. Resolutions may include: o Disclosing the conflict and obtaining consent before voting (which consent in the case of the Fund(s) may be obtained from the Fund's board of directors); o Engaging another party on behalf of the Fund(s) to vote the proxy on its behalf; o Engaging a third party to recommend a vote with respect to the proxy based on application of the policies set forth herein; or o Such other method as is deemed appropriate under the circumstances given the nature of the conflict. E. ANNUAL FILING OF PROXY VOTING RECORD The Adviser will file an annual report of each proxy voted with respect to the Fund(s) during the preceding twelve-month period ended June 30 on Form N-PX, no later than August 31st of the then year. F. PROXY-VOTING DISCLOSURES Where the Funds hold voting rights, the Funds shall include in their Form N-CSR (Certified Shareholder Report) : (i) a description of these Policies and Procedures; (ii) a statement that a description of these Policies and Procedures is available without charge, upon request by taking the specified action; and (iii) a statement that information regarding how the Adviser voted proxies relating to the Funds during the most recent 12-month period, is available upon request, without charge by taking the specified action. G. CONTROL PROCESS To ensure compliance with these Policies and Procedures, at the time of a fund's investment in an Investment Fund, the subscription document will be reviewed to ensure that voting rights have been waived, as is current practice. In the event a fund does not waive voting rights, the Adviser will adhere to these Policies and Procedures. H. RECORD-KEEPING The Adviser shall maintain the following records relating to proxy-voting in an easily accessible place for a period of not less than six years from the end of the fiscal year during which the last entry was made on such record, the first two years on-site: o A copy of the Adviser's current Proxy-Voting Policies and Procedures; o A record of each vote cast by the Adviser on behalf of the Fund(s); o A copy of each proxy solicitation (including proxy statements) and related materials with regard to each vote; o A copy of any document relating to the identification and resolution of conflicts of interest; o A copy of any document created by the Adviser that was material to a proxy -voting decision or that memorialized the basis for that decision; and o A copy of each written investor request for information on how the Adviser voted proxies on behalf of the Fund(s), and a copy of any written response from the Adviser to any (written or oral) investor request for information on how the Adviser voted proxies on behalf of the Fund(s). ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. UBS TECHNOLOGY PARTNERS, L.L.C. PORTFOLIO MANAGER DISCLOSURE The registrant (also referred to as the "Fund") is managed by a portfolio management team, each member of which (each, a "Portfolio Manager" and together, the "Portfolio Managers") is responsible for the day-to-day management of the Fund's portfolio. Norman E. Sienko, Jr., the lead member of the portfolio management team, is primarily responsible for the selection of the Fund's investments, and is jointly responsible for the allocation of the Fund's assets among Investment Funds. Russell Sinder, the other member of the portfolio management team, is primarily responsible for the allocation of the Fund's investments. Mr. Sienko has been associated with UBS Fund Advisor, L.L.C., the Fund's Adviser since prior to 2000, and he is also a Senior Vice President of UBS Financial Services Inc. ("UBS Financial Services"). Mr. Sinder has been associated with the Adviser since 1998, and he is also a First Vice President of UBS Financial Services. The Fund's Portfolio Managers manage multiple accounts for the Adviser, including registered closed-end funds and private domestic and offshore pooled investment vehicles. Potential conflicts of interest may arise because of the Portfolio Managers' management of the Fund and other accounts. For example, conflicts of interest may arise with the allocation of investment transactions and allocation of limited investment opportunities. Allocations of investment opportunities generally could raise a potential conflict of interest to the extent that the Portfolio Managers may have an incentive to allocate investments that are expected to increase in value to preferred accounts. Conversely, a Portfolio Manager could favor one account over another in the amount or the sequence in which orders to redeem investments are placed. The Portfolio Managers may be perceived to have a conflict of interest if there are a large number of other accounts, in addition to the Fund, that they are managing on behalf of the Adviser. In addition, each Portfolio Manager could be viewed as having a conflict of interest to the extent that one or more Portfolio Managers have an investment in accounts other than the Fund. The Adviser periodically reviews the Portfolio Managers' overall responsibilities to ensure that they are able to allocate the necessary time and resources to effectively manage the Fund. Other accounts may have investment objectives, strategies and risks that differ from those of the Fund. For these or other reasons, the Portfolio Managers may purchase different investments for the Fund and the other accounts, and the performance of investments purchased for the Fund may vary from the performance of the investments purchased for other accounts. The Portfolio Managers may place transactions on behalf of other accounts that are directly or indirectly contrary to investment decisions made for the Fund, which could have the potential to adversely impact the Fund, depending on market conditions. A potential conflict of interest may be perceived if the Adviser receives a performance-based advisory fee as to one account but not another, because a Portfolio Manager may favor the account subject to the performance fee, whether or not the performance of that account directly determines the Portfolio Manager's compensation. The Adviser's goal is to provide high quality investment services to all of its clients, while meeting its fiduciary obligation to treat all clients fairly. The Adviser has adopted and implemented policies and procedures, including brokerage and trade allocation policies and procedures, that it believes address the conflicts associated with managing multiple accounts for multiple clients. In addition, the Adviser monitors a variety of areas, including compliance with Fund guidelines. Furthermore, senior investment and business personnel at UBS Financial Services periodically review the performance of the Portfolio Managers. The Portfolio Managers' compensation is comprised primarily of a fixed salary and a discretionary bonus paid by UBS Financial Services or its affiliates and not by the Fund. A portion of the discretionary bonus may be paid in shares of stock or stock options of UBS AG, the ultimate parent company of the Adviser, subject to certain vesting periods. The amount of a Portfolio Manager's discretionary bonus, and the portion to be paid in shares or stock options of UBS AG, is determined by senior officers of UBS Financial Services. In general, the amount of the bonus will be based on a combination of factors, none of which is necessarily weighted more than any other factor. These factors may include: the overall performance of UBS Financial Services and its Alternative Investment Group; the overall performance of UBS AG; the profitability to UBS Financial Services derived from the management of the Fund and the other accounts managed by the Alternative Investment Group; the absolute performance of the Fund and such other accounts for the preceding year; contributions by the Portfolio Manager to assisting in managing the Alternative Investment Group; participation by the Portfolio Manager in training of personnel; and support by the Portfolio Manager generally to colleagues. The bonus is not based on a precise formula, benchmark or other metric. The following table lists the number and types of other accounts advised by the Fund's Portfolio Managers and approximate assets under management in those accounts as of the end of the Fund's most recent fiscal year.
NORMAN E. SIENKO, JR. REGISTERED INVESTMENT COMPANIES POOLED ACCOUNTS OTHER ACCOUNTS Number of Number of Number of Accounts(1) Assets Managed Accounts(2) Assets Managed Accounts Assets Managed ----------- -------------- ----------- -------------- -------- -------------- 7 $1.76 billion 3 $145 million 0 N/A RUSSELL SINDER REGISTERED INVESTMENT COMPANIES POOLED ACCOUNTS OTHER ACCOUNTS Number of Number of Number of Accounts(3) Assets Managed Accounts(2) Assets Managed Accounts Assets Managed ----------- -------------- ----------- -------------- -------- -------------- 3 $654.7 million 1 $24.2 million 0 N/A
(1) Of these accounts, 4 accounts with total assets of approximately $940.7 million charge performance-based advisory fees. (2) All of these accounts charge performance-based advisory fees. (3) Of these accounts, 1 account with total assets of approximately $339.6 million charges a performance-based advisory fee. None of the Fund's Portfolio Managers beneficially owns any interests in the Fund. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant's board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or this Item. ITEM 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant's second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a)(1) Not applicable. (a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. (a)(3) Not applicable. (b) Not applicable. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (registrant) UBS Technology Partners Fund L.L.C. ------------------------------------------------------------------- By (Signature and Title)* /s/ Douglas Lindgren ------------------------------------------------------- Douglas Lindgren, Principal Executive Officer (principal executive officer) Date February 27, 2006 ---------------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Douglas Lindgren ------------------------------------------------------- Douglas Lindgren, Principal Executive Officer (principal executive officer) Date February 27, 2006 ---------------------------------------------------------------------------- By (Signature and Title)* /s/ Michael Mascis ------------------------------------------------------- Michael Mascis, Principal Accounting Officer (principal financial officer) Date February 27, 2006 ---------------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature.