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+Proc-Type: 2001,MIC-CLEAR
+Originator-Name: webmaster@www.sec.gov
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+<SEC-DOCUMENT>0000950172-01-000118.txt : 20010130
+<SEC-HEADER>0000950172-01-000118.hdr.sgml : 20010130
+ACCESSION NUMBER:		0000950172-01-000118
+CONFORMED SUBMISSION TYPE:	10-K
+PUBLIC DOCUMENT COUNT:		2
+CONFORMED PERIOD OF REPORT:	20001031
+FILED AS OF DATE:		20010129
+
+FILER:
+
+	COMPANY DATA:	
+		COMPANY CONFORMED NAME:			UST PRIVATE EQUITY INVESTORS FUND INC
+		CENTRAL INDEX KEY:			0000930454
+		STANDARD INDUSTRIAL CLASSIFICATION:	 []
+		IRS NUMBER:				133786385
+		STATE OF INCORPORATION:			MD
+		FISCAL YEAR END:			1031
+
+	FILING VALUES:
+		FORM TYPE:		10-K
+		SEC ACT:		
+		SEC FILE NUMBER:	000-24856
+		FILM NUMBER:		1518187
+
+	BUSINESS ADDRESS:	
+		STREET 1:		114 WEST 47TH ST
+		CITY:			NEW YORK
+		STATE:			NY
+		ZIP:			10036
+		BUSINESS PHONE:		2128521000
+
+	MAIL ADDRESS:	
+		STREET 1:		114 WEST 47TH STREET
+		CITY:			NEW YORK
+		STATE:			NY
+		ZIP:			10036
+</SEC-HEADER>
+<DOCUMENT>
+<TYPE>10-K
+<SEQUENCE>1
+<FILENAME>0001.txt
+<TEXT>
+
+
+                     SECURITIES AND EXCHANGE COMMISSION
+                           WASHINGTON, D.C. 20549
+
+                                 FORM 10-K
+(MARK ONE)
+         [X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
+                  SECURITIES EXCHANGE ACT OF 1934
+         For the fiscal year ended October 31, 2000
+
+                                     OR
+
+         [   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
+                  SECURITIES EXCHANGE ACT OF 1934
+         For the transition period from ______ to ______
+
+                     Commission file number: 000-24856
+
+                  UST PRIVATE EQUITY INVESTORS FUND, INC.
+           (Exact Name of Registrant as Specified in Its Charter)
+
+           MARYLAND                                    13-3786385
+(State or other jurisdiction of           (I.R.S. Employer Identification No.)
+incorporation or organization)
+
+                            114 WEST 47TH STREET
+                       NEW YORK, NEW YORK 10036-1532
+                  (Address of Principal Executive Offices)
+
+     Registrant's telephone number, including area code: (212) 852-1000
+
+      Securities registered pursuant to Section 12(b) of the Act: NONE
+
+        Securities registered pursuant to Section 12(g) of the Act:
+                   COMMON STOCK $0.01 PAR VALUE PER SHARE
+                              (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 [  ]
+
+Indicate by check mark if disclosure of delinquent filers pursuant to Item
+405 of Regulation S-K is not contained herein, and will not be contained,
+to the best of registrant's knowledge, in definitive proxy or information
+statements incorporated by reference in Part III of this Form 10-K or any
+amendment to this Form 10-K. [X]
+
+The registrant's common stock is not listed on any exchange nor does it
+trade on any established securities market or other public market.
+
+As of December 31, 2000 there were 40,463 shares outstanding of the
+registrant's common stock.
+
+                    DOCUMENTS INCORPORATED BY REFERENCE
+
+Portions of the definitive Proxy Statement for the Annual Meeting of
+Shareholders to be held on March 16, 2001 are incorporated by reference
+herein, including into Part III (Items 10, 11, 12, and 13) to this
+Form 10-K.
+
+
+
+
+                             TABLE OF CONTENTS
+
+                                                                     Form 10-K
+Item No.                                                            Report Page
+- --------                                                            -----------
+                                   PART I
+
+     1.        Business                                                     1
+     2.        Properties                                                   4
+     3.        Legal Proceedings                                            4
+     4.        Submission of Matters to a Vote of Security Holders          4
+
+                                  PART II
+
+     5.        Market for Registrant's Common Equity and Related
+               Stockholder Matters                                          4
+     6.        Selected Financial Data                                      5
+     7.        Management's Discussion and Analysis of Financial
+               Condition and Results of Operations                          5
+     7A.       Quantitative and Qualitative Disclosures About
+               Market Risk                                                  6
+     8.        Financial Statements and Supplementary Data                  7
+     9.        Changes in and Disagreements with Accountants on
+               Accounting and Financial Disclosure                         18
+
+                                  PART III
+
+     10.       Directors and Executive Officers of the Registrant          18
+     11.       Executive Compensation                                      18
+     12.       Security Ownership of Certain Beneficial Owners and
+               Management                                                  18
+     13.       Certain Relationships and Related Transactions              19
+
+                                  PART IV
+
+     14.       Exhibits, Financial Statement Schedules, and Reports
+               on Form 8-K                                                 20
+
+
+
+
+- ------------------------------------------------------------------------------
+                   FACTORS THAT MAY AFFECT FUTURE RESULTS
+
+         The Company's prospects are subject to certain uncertainties and
+risks. This Annual Report on Form 10-K contains certain forward-looking
+statements within the meaning of the federal securities laws that also
+involve substantial uncertainties and risks. The Company's future results
+may differ materially from its historical results and actual results could
+differ materially from those projected in the forward-looking statements as
+a result of certain risk factors. A description of such risk factors may be
+found in the Company's definitive Proxy Statement for the Annual Meeting of
+Shareholders to be held on March 16, 2001, which will be filed with the
+Securities and Exchange Commission not later than 120 days after October
+31, 2000. Readers should pay particular attention to the considerations
+described in the sections of this report entitled "Business" and
+"Management's Discussion and Analysis of Financial Condition and the
+Results of Operations." Readers should also carefully review the risk
+factors described in the other documents the Company files, or has filed,
+from time to time with the Securities and Exchange Commission.
+- -------------------------------------------------------------------------------
+
+
+
+                                   PART I
+
+
+ITEM 1.       BUSINESS
+
+OVERVIEW
+
+         UST Private Equity Investors Fund, Inc. (the "Company" or the
+"Fund") is a Maryland corporation organized on September 16, 1994. The
+Company is a non-diversified, closed-end management investment company
+operating as a business development company under the Investment Company
+Act of 1940, as amended, and, in connection with its initial offering of
+shares, registered said offering of shares under the Securities Act of
+1933, as amended. The Company's investment objective is to achieve
+long-term capital appreciation by investing in private later-stage venture
+capital and private middle-market companies and in certain venture capital,
+buyout and private equity funds that the Managing Investment Adviser
+(defined herein) believes offer significant long-term capital appreciation.
+
+           United States Trust Company of New York and U.S. Trust Company
+(together, the "Managing Investment Adviser" or "U.S. Trust") provide
+investment management services to the Company pursuant to a management
+agreement dated July 18, 2000 (the "Management Agreement"). The Managing
+Investment Adviser is a subsidiary of U.S. Trust Corporation. On May 31,
+2000, U.S. Trust Corporation became an indirect wholly owned subsidiary of
+The Charles Schwab Corporation. All officers of the Company are employees
+and/or officers of the Managing Investment Adviser. The Managing Investment
+Adviser is responsible for performing the management and administrative
+services necessary for the operation of the Company.
+
+           Pursuant to a Registration Statement on Form N-2 (File No.
+33-84290) which was declared effective on December 16, 1994, the Company
+publicly offered up to 50,000 shares of common stock at $1,000 per share.
+The Company held its initial and final closings on each of July 31, 1995
+and October 31, 1995 representing over $28.0 million and $12.4 million,
+respectively. The Company sold a total of 40,463 shares in the public
+offering for gross proceeds totaling $40,463,000 (after taking into account
+the one share purchased for $1,000 as of September 19, 1994 by David I.
+Fann, the Company's President and Chief Executive Officer). Shares of the
+Company were made available through U.S. Trust Company of California, N.A.
+(the "Selling Agent") to clients of U.S. Trust and its affiliates who met
+the Company's investor suitability standards.
+
+           In connection with the public offering of shares, the Managing
+Investment Adviser paid to the Selling Agent a commission totaling $10,000.
+The Company incurred offering and organizational costs associated with the
+public offering totaling $374,891. Net proceeds to the Company from the
+public offering, after offering and organizational costs, totaled
+$40,117,119.
+
+           The Company's Articles of Incorporation provide that the
+duration of the Company will be ten years from the final closing of the
+sale of the shares, subject to the rights of the Managing Investment
+Adviser and the investors to extend the term of the Company.
+
+
+                                    -1-
+
+
+PORTFOLIO INVESTMENTS
+
+     Now in its fifth year of existence, the Company is fully committed,
+having invested all of the initial capital raised, and is currently in its
+"harvest" mode. Through December 2000, the Company anticipates having
+distributed to investors approximately 78% of the investors' original
+investment. The Company intends to continue making distributions as they
+are generated on a regular basis.
+
+DIRECT INVESTMENTS
+
+INVESTMENT EXITS
+
+o     CORSAIR COMMUNICATIONS, INC. (NASDAQ: CAIR), Palo Alto, CA, is a
+      wireless communication infrastructure company providing prepaid
+      cellular handset and fraud detection equipment and software. Corsair
+      completed its initial public offering in July 1997. The Company has
+      sold all of its shares in Corsair. The Company realized a return of
+      1.55x on its $3.3 million investment.
+
+o     RENTAL SERVICES CORPORATION (NYSE: RSV), Scottsdale, AZ, is a
+      consolidator of heavy equipment rental businesses. The Company
+      invested $1 million in January 1996. In September 1996, Rental
+      Services Corp. completed its initial public offering. The Company
+      sold its position in that company for over $3 million, 3.1x the cost
+      to the Company.
+
+o     COMMSITE INTERNATIONAL, INC., Vienna, VA, is a provider of wireless
+      towers and construction services. On May 13, 1999, American Tower
+      Corporation (NYSE: AMT) acquired CommSite. The Company realized its
+      investment cost of $2.7 million from this transaction.
+
+o     SIGNIUS CORPORATION (formerly known as ProCommunications, Corp.),
+      Somerset, NJ, provides telemessaging services for small and medium
+      sized businesses. In March 2000, Signius was sold for a nominal
+      amount.
+
+INVESTMENTS HELD -- PUBLIC
+
+o     QUICKLOGIC CORP. (NASDAQ: QUIK), Sunnyvale, CA, designs, manufactures
+      and markets high-capacity programmable logic semiconductors, known as
+      field programmable gate arrays, along with comprehensive design
+      software. This company's products shorten the design cycle for
+      electronic systems, accelerating time-to-market. QuickLogic completed
+      its initial public offering in October 1999. As of October 31, 2000,
+      the Company sold 345,865 shares of QuickLogic for $7.8 million and
+      held 85,170 shares, which were trading at approximately $8 7/8 per
+      share.
+
+o     ACCRUE SOFTWARE, INC. (NASDAQ: ACRU), NeoVista Software, Inc.,
+      Cupertino, CA, develops data mining software applications. Accrue
+      Software acquired NeoVista Software for $140 million of Accrue stock.
+      Accrue is a provider of customer relationship management software. As
+      of October 31, 2000, the Company had sold 25,000 shares of Accrue for
+      $967,499 and still held 50,197 shares, which were trading at
+      approximately $4 5/8 per share. The Company had invested $894,132 in
+      NeoVista.
+
+INVESTMENTS HELD -- PRIVATE
+
+o     BEST FRIENDS PET CARE, INC., Norwalk, CT, is the largest operator of
+      pet kennels in the United States. Best Friends's facilities offer a
+      wide range of pet services, including boarding, grooming and
+      training. On October 31, 2000 the Company wrote-down its investment
+      in Best Friends by 50%.
+
+o     LOGICVISION, INC., San Jose, CA, is a developer of built-in self
+      testing technologies used in semiconductor design, testing and
+      manufacture. As semiconductors become more complex (i.e. large
+      systems reduced to customized chips), the need to adopt new testing
+      technology becomes critical. LogicVision's customers include Sun
+      Microsystems, Cisco Systems, NCR Corp., Hitachi and Hughes. On August
+      11, 2000, LogicVision filed a registration statement with the
+      Securities and Exchange Commission relating to a proposed initial
+      public offering of its common stock. Chase H&Q will act as the lead
+      underwriter of the offering. Other managing underwriters of the
+      offering include Robertson Stephens and SG Cowen.
+
+
+                                    -2-
+
+
+INVESTMENTS WRITTEN-OFF
+
+o     ABTOX, INC., Mundelein, IL, manufactured gas plasma sterilizers.
+      AbTox filed for bankruptcy due to operating problems arising from
+      regulatory issues related to one of its products. The Company 's
+      investment of $2.8 million has been written down to zero. The
+      Company, alongside several other institutional investors, filed a
+      complaint in New York State Supreme Court against the investment
+      banks involved in the private placement, in or around March 1999,
+      alleging fraud and deceit, fraudulent inducement and negligent
+      misrepresentation. On August 10, 1999, the court dismissed the
+      complaint. On August 31, 2000, the Company, along with other
+      institutional investors, filed a notice to appeal the court's order.
+      More recently, the Company and several other investors have been
+      named in an advisory proceeding brought by the company's bankruptcy
+      trustee seeking the return of monies paid to the Company pursuant to
+      certain senior notes in the principal amount of $301,500 issued by
+      the Company. While the Company has written off this investment, the
+      Company intends to vigorously defend these claims.
+
+o     CARDIOPULMONARY CORP., Milford, CT, is a manufacturer of a smart
+      ventilator used in the acute and sub-acute hospital market that
+      adapts to patient's changing breathing patterns. The Company's
+      position has been written off pursuant to a recapitalization of the
+      company.
+
+o     P2 HOLDINGS CORP. (formerly known as Plynetic Express), San Leandro,
+      CA, was a provider of rapid prototyping and rapid tooling services.
+      P2 Holding filed for bankruptcy in 1998. The Company has written off
+      its $2.8 million investment in P2 Holding.
+
+o     PARTY STORES HOLDINGS, INC., Melville, NY, operated the Party
+      Experience, Paperama, and Paper Cutter retail stores and filed for
+      bankruptcy in 1998. The Company has written off its $2.1 million
+      investment in Party Stores.
+
+INVESTMENTS IN THIRD-PARTY INVESTMENT FUNDS
+
+      The Company believes that each of its fund investments has largely
+completed its portfolio construction and is now in harvest mode. The
+Company continues to receive meaningful distributions from each of these
+fund investments.
+
+o     ALLEGRA CAPITAL PARTNERS III, LP ("Allegra") is a later-stage fund
+      based in New York City. Allegra invests primarily in companies in the
+      telecommunications, software and service industries with
+      "Internet-driven" strategies. The Company has received distributions
+      of Global Crossing common stock from Allegra.
+
+o     BRENTWOOD ASSOCIATES BUYOUT FUND II, LP ("Brentwood") is a buyout and
+      consolidation fund based in Westwood, CA. Brentwood's strategy is to
+      identify industries with consolidation characteristics, develop a
+      strategy for implementation and recruit management to execute that
+      strategy. Brentwood recently sold its position in Bell Sports,
+      leading to two cash distributions to the Company.
+
+o     BRUCKMANN, ROSSER, SHERRILL & CO., LP ("BRS") is a leveraged buyout
+      fund based in New York City. The Company recently received
+      distributions of California Pizza Kitchen common stock, which went
+      public in 2000, from BRS.
+
+o     MORGENTHALER VENTURE PARTNERS IV, LP ("Morgenthaler") is primarily an
+      early stage venture capital fund, investing largely in information
+      technology and healthcare companies, but also investing in buyouts of
+      basic businesses. The Company has received stock distributions of
+      Inktomi, Nortel Networks, CheckFree Holdings, and Guidant, as well as
+      cash distributions from Morgenthaler.
+
+
+                                    -3-
+
+
+o     SEVIN ROSEN FUND V, LP ("Sevin Rosen") invests in early-stage
+      technology companies, focusing specifically on companies in
+      communications and eBusiness infrastructure and solutions, as well as
+      companies with Internet-enabled business models. The Company has
+      received stock distributions of Ciena and Cisco Systems from Sevin
+      Rosen.
+
+o     VANGUARD V, LP ("Vanguard") is an early-stage fund investing in
+      information technology and healthcare. The Company has received from
+      Vanguard stock distributions of Cisco Systems and Cobalt Networks as
+      well as a cash distribution related to Digital Island.
+
+COMPETITION
+
+         The Company encounters competition from other entities and
+individuals having similar investment objectives. Primary competition for
+desirable investments comes from investment partnerships, venture capital
+affiliates of large industrial and financial companies, investment
+companies and wealthy individuals. Some of the competing entities and
+individuals have investment managers or advisers with greater experience,
+resources and managerial capabilities than the Company and may therefore be
+in a stronger position than the company to obtain access to attractive
+investments. To the extent that the Company can compete for such
+investments, it may not be able to do so on terms as favorable as those
+obtained by larger, more established investors.
+
+EMPLOYEES
+
+         At October 31, 2000, the Company had no full-time employees. All
+personnel of the Company are employed by and compensated by the Managing
+Investment Adviser pursuant to the Management Agreement.
+
+    ITEM 2.       PROPERTIES
+
+             The Company does not own or lease physical properties.
+
+    ITEM 3.       LEGAL PROCEEDINGS
+
+             The information regarding AbTox, Inc., disclosed in Item 1 of
+    this Form 10-K, is incorporated by reference herein.
+
+    ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
+
+             None.
+
+
+
+                                  PART II
+
+    ITEM 5.       MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
+                  MATTERS
+
+             The Company has 100,000 shares authorized. As of December 31,
+    2000, 40,463 shares were issued and outstanding. There is no
+    established securities market or other public market for the Company's
+    shares.
+
+
+                                    -4-
+
+
+    DIVIDENDS
+
+             Fiscal Year Ended October 31, 2000. On May 2, 2000, the
+    Company paid a dividend of $180.69 per share of long-term capital gain.
+    On May 3, 2000, the Company paid a dividend of $219.31 per share of
+    return of capital. On October 31, 2000, the Company paid a dividend of
+    $113.71 per share of long-term capital gain.
+
+             Fiscal Year Ended October 31, 1999. On December 23, 1998, the
+    Company paid a dividend of $9.08 per share of short-term capital gain.
+
+             For additional information concerning the payment of
+    dividends, see "Significant Accounting Policies" in the notes to the
+    financial statements of the Company included in Item 8 hereof.
+
+    ITEM 6.       SELECTED FINANCIAL DATA
+
+             The information under Item 8 is incorporated by reference
+    herein.
+
+    ITEM 7.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
+                  CONDITION AND RESULTS OF OPERATIONS
+
+    LIQUIDITY AND CAPITAL RESOURCES
+
+             At October 31, 2000, the Company held $0 in cash and
+    $33,028,497 in investments as compared to $4,993 in cash and
+    $47,204,696 in investments at October 31, 1999. At October 31, 2000,
+    investments included $7,000,000 in U.S. Government and agency
+    obligations, $20,404,666 in private investment funds, $3,418,221 in
+    private companies, $981,089 in public companies and $1,225,771 in
+    investment companies. As of October 31, 2000, the Company has committed
+    $12,000,000 to private investment funds and has no remaining
+    outstanding commitments.
+
+    RESULTS OF OPERATIONS
+
+    Investment Income and Expenses
+
+             For the year ended October 31, 2000, the Company had interest
+    income of $510,857, and net operating expenses of $560,821, resulting
+    in net investment loss of ($49,964) as compared to interest income of
+    $364,937, and net operating expense of $601,747, resulting in
+    investment loss of ($236,810) for the fiscal year ended October 31,
+    1999 and interest income of $569,706 and net operating expense of
+    $730,161, resulting in investment loss of ($160,455) for the fiscal
+    year ended October 31, 1998. The increase in the Company's net
+    investment income is primarily attributable to the realization of
+    proceeds from the sale of public securities and the resulting interest
+    earned on these proceeds. The decrease in net operating expenses is
+    primarily attributable to the decrease in Managing Investment Advisory
+    Fees.
+
+             The Managing Investment Adviser provides investment management
+    and administrative services required for the operation of the Company.
+    In consideration of the services rendered by the Managing Investment
+    Adviser, the Company pays a management fee based upon a percentage of
+    the net assets of the Company invested or committed to be invested in
+    certain types of investments and an incentive fee based in part on a
+    percentage of realized capital gains of the Company. Such fee is
+    determined and payable quarterly (see "Investment Advisory Fee,
+    Administration Fee, and Related Party Transactions" in the notes to the
+    financial statements of the Company included in item 8 hereof). For the
+    fiscal years ended October 31, 2000, 1999 and 1998, the Managing
+    Investment Adviser earned $448,241, $468,230 and $549,137 in management
+    fees, respectively. For the same periods, the Managing Investment
+    Adviser reimbursed other operating expenses of the Company in the
+    amount of $135,394, $146,907 and $76,165 as a result of expenses
+    incurred in excess of those permitted pursuant to the Company's
+    Prospectus. The decrease in the fees earned by the Managing Investment
+    Adviser over time can be attributed primarily to the distribution of
+    capital to shareholders.
+
+
+                                    -5-
+
+
+    Net Assets
+
+             The Company's net asset value per common share was $777.72 at
+    October 31, 2000 down $218.13 per share from the net asset value per
+    common share of $995.85 at October 31, 1999. This decrease was the net
+    result of appreciation of a number of private companies and private
+    funds, offset by the distribution of $513.71 per common share and the
+    writing down of Cardiopulmonary Corp. and Best Friends. Contributing to
+    the appreciation was the acquisition of NeoVista by Accrue Software as
+    well as sales of Corsair Communications (NASDAQ: CAIR) and Quicklogic
+    (NASDAQ: QUIK). In addition, private fund values broadly appreciated
+    and several funds continued to make distributions of cash and stock to
+    the Company.
+
+             For the year ended October 31, 2000, the Company had a net
+    increase in net assets resulting from operations of $11,959,703
+    ($295.58 per share), comprised of net investment loss totaling
+    ($49,964) (($1.23) per share), a net change in realized and unrealized
+    gain on investments of $13,344,075 ($329.79 per share) and a net change
+    in allowance for the management incentive fee of ($1,334,408) (($32.98)
+    per share).
+
+             For the year ended October 31, 2000, the Company's net assets
+    were $31,468,832, a decrease of ($8,826,437) from net assets of
+    $40,295,269 at October 31, 1999. This decrease was the result of an
+    $11,959,703 net increase in net assets resulting from operations and
+    offset by distributions to shareholders during the period totaling
+    $20,786,140.
+
+    REALIZED AND UNREALIZED GAINS AND LOSSES FROM PORTFOLIO INVESTMENTS
+
+             For the fiscal year ended October 31, 2000, the Company had a
+    $13,304,075 net realized and unrealized gain from investments,
+    comprised of a $11,935,543 net realized gain on investments and a
+    $1,408,532 net change in unrealized appreciation of investments as
+    compared to a $3,220,212 net realized and unrealized gain from
+    investments, comprised of a ($2,449,598) net realized loss on
+    investments and a $5,669,810 net increase in unrealized appreciation of
+    investments for the fiscal year ended October 31, 1999 and a
+    ($7,350,233) net realized and unrealized loss from investments,
+    comprised of a $356,562 net realized gain on investments and a
+    ($7,706,795) net change in unrealized depreciation of investments for
+    the fiscal year ended October 31, 1998. The net realized gain on
+    investments for the fiscal year ended October 31, 2000 is primarily the
+    result of sales of Quicklogic and Accrue common stock as well as the
+    receipt and sale of several stock distributions from private fund
+    investments.
+
+    ITEM 7A.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
+
+             The following discussion includes forward-looking statements.
+    Actual results could differ materially from those projected in the
+    forward-looking statements.
+
+
+    EQUITY PRICE RISK
+
+             A majority of the Company's investment portfolio consists of
+    equity securities in private companies and private investment funds
+    which are not publicly traded. These investments are recorded at fair
+    value as determined by the Managing Investment Adviser in accordance
+    with valuation guidelines adopted by the Board of Directors. This
+    method of valuation does not result in increases or decreases in the
+    fair value of these equity securities in response to changes in market
+    prices. Thus, these equity securities are not subject to equity price
+    risk. Nevertheless, the Company is exposed to equity price risk through
+    its investments in the equity securities of two public companies. At
+    October 31, 2000, these publicly traded equity securities were valued
+    at $981,089. Thus, there is exposure to equity price risk, which is
+    estimated as the potential loss in fair value due to a hypothetical 10%
+    decrease in quoted market prices, and would result in a decrease of
+    approximately $98,108 in the value of these securities.
+
+
+                                    -6-
+
+
+    ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
+
+    Independent Auditors' Report
+
+    Portfolio of Investments at October 31, 2000.
+
+    Statement of Assets and Liabilities as of October 31, 2000 and October
+    31, 1999
+
+    Statement of Operations for the years ended October 31, 2000, October
+    31, 1999 and October 31, 1998.
+
+    Statement of Changes in Net Assets for years ended October 31, 2000,
+    October 31, 1999 and October 31, 1998.
+
+    Statement of Cash Flows for the years ended October 31, 2000, October
+    31, 1999 and October 31, 1998.
+
+    Financial Highlights -- Selected Per Share Data and Ratios for the
+    years ended October 31, 2000, October 31, 1999, October 31, 1998,
+    October 31, 1997 and October 31, 1996.
+
+    Notes to Financial Statements
+
+    Note - All other schedules are omitted because of the absence of
+    conditions under which they are required or because the required
+    information is included in the financial statements or the notes
+    thereto.
+
+
+                                    -7-
+
+
+             REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
+
+    Shareholders and Board of Directors
+    UST Private Equity Investors Fund, Inc.
+
+    We have audited the accompanying statement of assets and liabilities of
+    UST Private Equity Investors Fund, Inc. as of October 31, 2000 and
+    1999, including the statement of portfolio of investments at October
+    31, 2000, the related statements of operations, statements of changes
+    in net assets and statements of cash flows for each of the three years
+    ended October 31, 2000, 1999, and 1998, and the financial highlights
+    for each of the indicated periods. These financial statements and
+    financial highlights are the responsibility of the Company'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 auditing standards generally
+    accepted in the 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. An audit includes examining, on a test basis, evidence
+    supporting the amounts and disclosures in the financial statements. Our
+    procedures included confirmation of securities owned as of October 31,
+    2000, by correspondence with the custodian and others. An audit also
+    includes assessing the accounting principles used and significant
+    estimates made by management, as well as evaluating the overall
+    financial statement presentation. 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 UST Private Equity Investors Fund, Inc. at
+    October 31, 2000 and 1999, the results of its operations and its cash
+    flows and the changes in its net assets for the years ended October 31,
+    2000, 1999, and 1998, and the financial highlights for each of the
+    indicated periods in conformity with accounting principles generally
+    accepted in the United States.
+
+
+
+                                      ERNST & YOUNG LLP
+
+    New York, New York
+    December 15, 2000
+
+
+                                    -8-
+
+
+<TABLE>
+<CAPTION>
+
+
+    UST PRIVATE EQUITY INVESTORS FUND, INC.
+    PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000
+
+
+          PRINCIPAL                                            ACQUISITION                        COUPON           VALUE
+       AMOUNT/SHARES                                              DATE##                        RATE/YIELD         (NOTE 1)
+       -------------                                           -----------                      ----------        ---------
+<S>                                                            <C>                                 <C>         <C>
+
+U.S. GOVERNMENT AGENCY OBLIGATIONS-- 22.24%
+$7,000,000        Fannie Mae, 11/02/00 (Cost $6,998,750)                                              6.43%*     $ 6,998,750
+                                                                                                                ------------
+PRIVATE INVESTMENT FUNDS #, @ -- 64.84%
+                  Allegra Capital Partners III, LP                                                                 3,758,408
+                  Brentwood Associates Buyout Fund II, LP                                                          1,429,668
+                  Bruckman, Rosser, Sherrill & Co., LP                                                             2,258,833
+                  Morgenthaler Venture Partners IV, LP                                                             3,441,090
+                  Sevin Rosen Fund V, LP                                                                           4,979,541
+                  Vanguard V, LP                                                                                   4,537,126
+                                                                                                                ------------
+
+PRIVATE INVESTMENT FUNDS (Cost $9,031,687)                                                                        20,404,666
+                                                                                                                ------------
+
+PRIVATE COMPANIES #, @ -- 10.86%
+   COMMON AND PREFERRED STOCKS -- 10.86%
+
+         MEDICAL DEVICES -- 0.00%
+    1,590,909     AbTox, Inc., Series F                                03/97                                              --
+      515,464     +Cardiopulmonary Corp., Series D                     11/96                                              --
+       35,294     +Cardiopulmonary Corp., Series F                      7/98                                              --
+                                                                                                                ------------
+                                                                                                                          --
+                                                                                                                ------------
+
+         SEMICONDUCTORS -- 5.26%
+     294,000      LogicVision, Inc., Series F                          05/97                                       1,355,722
+      70,588      LogicVision, Inc., Series I                          01/00                                         299,999
+                                                                                                                ------------
+
+                                                                                                                   1,655,721
+                                                                                                                ------------
+    SPECIALTY RETAIL -- 5.60%
+   2,608,696      +Best Friends Pet Care, Inc., Series F          12/96-3/97                                       1,500,000
+     583,333      +Best Friends Pet Care, Inc., Series G               03/98                                         175,000
+     583,333      +Best Friends Pet Care, Inc., Series H               10/99                                          87,500
+                                                                                                                ------------
+                                                                                                                   1,762,500
+                                                                                                                ------------
+  PROMISSORY NOTE -- 0.00%
+    MEDICAL DEVICES--0.00%
+   $301,500    Abtox, Inc.                                              3/98                 12.00%                       --
+                                                                                                                ------------
+
+               TOTAL PRIVATE COMPANIES (Cost $10,024,499)                                                          3,418,221
+                                                                                                                ------------
+
+PUBLIC COMPANIES,  @ -- 3.12%
+  COMMON STOCK -- 3.12%
+    COMPUTER SOFTWARE -- 0.72%
+   42,677      Accrue Software, Inc.                                                                                 197,381
+    7,520      #Accrue Software, Inc., (Lockup Shares)                08/98                                           27,824
+                                                                                                                ------------
+                                                                                                                     225,205
+                                                                                                                ------------
+    SEMICONDUCTORS -- 2.40%
+   85,170      QuickLogic Corp.                                       11/96                                          755,884
+                                                                                                                ------------
+               TOTAL PUBLIC COMPANIES (Cost $1,189,651)                                                              981,089
+                                                                                                                ------------
+</TABLE>
+
+                                    -9-
+
+<TABLE>
+<CAPTION>
+
+UST PRIVATE EQUITY INVESTORS FUND, INC.
+PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000
+
+SHARES                                                                                                                VALUE
+- ------                                                                                                                -----
+    INVESTMENT COMPANIES -- 3.90%
+<S>                                                                                  <C>                       <C>
+   647,032     Dreyfus Treasury Cash Management Fund                                                                647,032
+   578,739     Fidelity Cash Portfolio, U.S. Treasury II                                                            578,739
+                                                                                                                ------------
+
+                TOTAL INVESTMENT COMPANIES (Cost $1,225,771)                                                      1,225,771
+                                                                                                                ------------
+
+TOTAL INVESTMENTS (Cost $28,470,358**)                                                   104.96%                 33,028,497
+OTHER ASSETS & LIABILITIES (NET)                                                          (4.96)                 (1,559,665)
+                                                                                          ------                ------------
+NET ASSETS                                                                               100.00%                 31,468,832
+                                                                                         =======                ============
+</TABLE>
+
+- --------------------------
+ *  Discount Rate.
+** Aggregate cost for Federal tax and book purposes.
+ +  At October 31, 2000, the Company owned 5% or more of such company's
+    outstanding shares thereby making such company an affiliated company
+    as defined by the Investment Company Act of 1940. Total market value
+    of affiliated company securities owned at October 31, 2000 was
+    $1,762,500.
+ #  Restricted as to public resale. Acquired between November 1, 1996 and
+    January 31, 2000. Total cost of restricted securities at October 31,
+    2000 aggregated $19,145,603. Total market value of restricted
+    securities owned at October 31, 2000 was $23,850,711 or 75.8% of net
+    assets.
+##  Required disclosure for restricted securities only.
+ @  Non-Income Producing Security.
+
+
+                     See Notes to Financial Statements
+
+
+                                   -10-
+
+
+<TABLE>
+<CAPTION>
+
+UST PRIVATE EQUITY INVESTORS FUND, INC.
+STATEMENT OF ASSETS AND LIABILITIES
+
+                                                                             OCTOBER 31,
+
+                                                                         2000            1999
+                                                                         -----           ----
+     ASSETS:
+       Investments, at value (Cost $28,470,358 and $44,055,089,
+<S>                                                                 <C>              <C>
+            respectively) (Note 1).................................    $ 33,028,497   $ 47,204,696
+       Receivable for investments sold.............................         225,071        436,770
+       Interest receivable.........................................           5,243        110,457
+       Prepaid expenses............................................           4,716          8,522
+       Cash........................................................              --          4,993
+                                                                       ------------    -----------
+         TOTAL ASSETS..............................................      33,263,527     47,765,438
+     LIABILITIES:
+       Incentive fee payable (Note 2)..............................       1,106,346             --
+       Deferred incentive fee payable (Note 2).....................         455,814        227,752
+       Management fees payable (Note 2)............................          64,155        128,136
+       Directors' fees payable (Note 2)............................          66,689         43,501
+       Administration fees payable (Note 2)........................          14,567         14,567
+           Note Payable                                                          --      7,000,000
+       Accrued expenses and other payables.........................          87,124         56,213
+                                                                       ------------    -----------
+                                                                          1,794,695      7,470,169
+                                                                       ------------    -----------
+     NET ASSETS....................................................    $ 31,468,832   $ 40,295,269
+                                                                       ============   ============
+
+     NET ASSETS CONSIST OF:
+       Undistributed net investment income.........................    $    696,749   $    565,764
+       Accumulated net realized gain (loss) on investments.........        (704,632)    (2,577,254)
+       Net unrealized appreciation of investments..................       4,558,139      3,149,607
+       Allowance for management incentive fee......................      (1,562,160)      (227,752)
+       Par value...................................................             405            405
+       Paid-in capital in excess of par value......................      28,480,331     39,384,499
+                                                                       ------------    -----------
+     TOTAL NET ASSETS..............................................    $ 31,468,832   $ 40,295,269
+                                                                       ============   ============
+     Shares of Common Stock Outstanding ($0.01 par value, 100,000
+       authorized).................................................          40,463         40,463
+     NET ASSET VALUE PER SHARE.....................................    $     777.72   $     995.85
+                                                                       ============   ============
+</TABLE>
+
+
+
+                     See Notes to Financial Statements
+
+
+                                   -11-
+
+
+<TABLE>
+<CAPTION>
+
+UST PRIVATE EQUITY INVESTORS FUND, INC.
+STATEMENT OF OPERATIONS
+
+                                                                                   YEAR ENDED OCTOBER 31,
+
+                                                                           2000             1999             1998
+                                                                        ----------       ---------         ---------
+
+     INVESTMENT INCOME:
+<S>                                                                     <C>              <C>               <C>
+       Interest income...............................................   $  510,857       $ 364,937         $ 569,706
+                                                                        ----------       ---------         ---------
+     EXPENSES:
+       Managing investment advisory fees (Note 2)....................      448,241         468,230           549,137
+       Directors' fees and expenses (Note 2).........................       66,689          43,501            30,000
+       Administration fees (Note 2)..................................       58,000          58,000            58,000
+       Interest Expense on Loans (Note 5) ...........................           --          14,306            37,227
+       Legal fees....................................................       57,800         100,000            60,000
+       Audit fees....................................................       33,199          25,999            26,000
+       Amortization of organization expense (Note 4).................           --              --            16,490
+       Miscellaneous expenses........................................       32,286          38,618            29,472
+                                                                        ----------       ---------         ---------
+         TOTAL EXPENSES..............................................      696,215         748,654           806,326
+       Expenses reimbursed by Managing Investment Adviser (Note 2)...     (135,394)       (146,907)          (76,165)
+                                                                        ----------       ---------         ---------
+         NET EXPENSES................................................      560,821         601,747           730,161
+                                                                        ----------       ---------         ---------
+     NET INVESTMENT LOSS.............................................      (49,964)       (236,810)         (160,455)
+                                                                        ----------       ---------         ---------
+     NET REALIZED AND UNREALIZED GAIN: (Note 1)
+       Net realized gain (loss) on investments.......................   11,935,543      (2,449,598)          356,562
+       Net change in unrealized appreciation/(depreciation) of           1,408,532       5,669,810        (7,706,795)
+                                                                        ----------       ---------         ---------
+       Investments...................................................
+     NET REALIZED AND UNREALIZED GAIN/(LOSS).........................   13,344,075       3,220,212        (7,350,233)
+                                                                        ----------       ---------         ---------
+     Net change in allowance for management incentive fee............   (1,334,408)       (227,752)          122,095
+                                                                        ----------       ---------         ---------
+     NET INCREASE/(DECREASE) IN NET ASSETS
+       RESULTING FROM OPERATIONS..................................... $ 11,959,703    $ 2,755,650      $ (7,388,593)
+                                                                      =============   =============    =============
+</TABLE>
+
+
+
+                     See Notes to Financial Statements
+
+
+                                   -12-
+
+
+<TABLE>
+<CAPTION>
+
+UST PRIVATE EQUITY INVESTORS FUND, INC.
+STATEMENT OF CHANGES IN NET ASSETS
+
+                                                                                        YEAR ENDED OCTOBER 31,
+
+                                                                               2000            1999              1998
+                                                                            ----------       ---------         ---------
+    OPERATIONS:
+<S>                                                                       <C>              <C>               <C>
+         Net investment income (loss).................................... $   (49,964)     $ (236,810)       $ (160,455)
+         Net realized gain (loss) on investments.........................  11,935,543      (2,449,598)          356,562
+         Net change in unrealized appreciation (depreciation) of
+             Investments.................................................   1,408,532       5,669,810        (7,706,795)
+         Net change in allowance for management incentive fee............  (1,334,408)       (227,752)          122,095
+                                                                          ------------     -----------       -----------
+              Net increase (decrease) in net assets resulting from
+    operations...........................................................  11,959,703       2,755,650        (7,388,593)
+
+    DISTRIBUTIONS TO SHAREHOLDERS FROM:
+         Net investment income...........................................          --              --                --
+         Net realized gain............................................... (11,207,656)       (367,573)       (1,883,686)
+         In excess of net realized gain..................................    (704,632)             --                --
+         Paid-in capital.................................................  (8,873,852)             --                --
+                                                                          ------------     -----------       -----------
+              Total Distributions........................................ (20,786,140)       (367,573)       (1,883,686)
+                                                                          ------------     -----------       -----------
+
+    NET INCREASE (DECREASE) IN NET ASSETS................................  (8,826,437)      2,388,077        (9,272,279)
+
+    NET ASSETS:
+         Beginning of year...............................................  40,295,269       37,907,192       47,179,471
+                                                                          ------------     -----------       -----------
+         End of year (including undistributed net investment Income of
+             $696,749,  $565,764 and $417,716,respectively).............. $31,468,832     $ 40,295,269     $ 37,907,192
+                                                                          ============    ============     =============
+</TABLE>
+
+                     See Notes to Financial Statements
+
+
+                                   -13-
+
+
+<TABLE>
+<CAPTION>
+
+UST PRIVATE EQUITY INVESTORS FUND, INC.
+STATEMENT OF CASH FLOWS
+
+
+                                                                                        YEAR ENDED OCTOBER 31,
+
+                                                                               2000            1999            1998
+                                                                               ----            ----            ----
+      CASH FLOWS FROM INVESTING
+        AND OPERATING ACTIVITIES:
+<S>                                                                      <C>             <C>             <C>
+        Proceeds from Sales of Investments..........................     $ 23,050,959    $  3,653,921    $  4,641,123
+        Purchases of Investments....................................       (1,699,403)     (2,931,879)     (7,074,067)
+        Net Increase (Decrease) in Short-Term Investments...........        6,380,398         316,094      (3,012,027)
+        Investment Income...........................................          616,072         283,968         747,943
+        Interest Paid...............................................           (5,315)        (14,912)        (33,241)
+        Operating Expenses Paid.....................................         (565,626)       (538,166)       (725,821)
+                                                                         ------------    ------------    -------------
+
+        Net Cash Provided (Used) for Investing and Operating
+          Activities................................................       27,777,085         769,026      (5,456,090)
+                                                                         ------------    ------------    -------------
+                                                                                                           (1,000,000)
+      CASH FLOWS FROM FINANCING ACTIVITIES:
+        Distributions Paid..........................................      (20,786,140)       (367,573)     (1,883,686)
+        Cash Receipts from Borrowings...............................               --              --       8,000,000
+        Cash Paid on Borrowings.....................................       (7,000,000)     (1,000,000)             --
+        Other.......................................................            4,062              --              --
+                                                                         ------------    ------------    -------------
+        Net Cash Used by Financing Activities.......................      (27,782,078)     (1,367,573)      6,116,314
+                                                                         ------------    ------------    -------------
+        Net Increase/(Decrease) in Cash.............................           (4,993)       (598,547)        660,224
+      CASH AT BEGINNING OF YEAR.....................................            4,993         603,540         (56,684)
+                                                                         ------------    ------------    -------------
+      CASH AT END OF YEAR...........................................     $         --    $      4,993    $    603,540
+                                                                         ------------    ------------    -------------
+      RECONCILIATION OF NET INVESTMENT LOSS TO NET CASH PROVIDED
+        (USED) FOR INVESTING AND OPERATING ACTIVITIES:
+        Net Investment Loss.........................................     $    (49,964)   $   (236,810)   $   (160,455)
+        Proceeds from Sales of Investments..........................       23,050,959       3,653,921       4,641,123
+        Purchases of Investments....................................       (1,699,403)     (2,931,879)     (7,074,067)
+        Net (Increase) Decrease in Short-Term Investments...........        6,380,398         316,094      (3,012,027)
+        Net (Increase) Decrease  in Receivables Related to
+          Operations................................................          109,038         (70,063)        195,833
+        Net Decrease in Payables Related to Operations..............         (336,321)        (45,800)       (204,297)
+        Amortization of Organization Costs..........................               --              --          16,490
+        Accretion/Amortization of Discounts and Premiums............          322,378          83,563         141,310
+                                                                         ------------    ------------    -------------
+        Net Cash Provided (Used) for Investing and Operating
+          Activities................................................     $ 27,777,085    $    769,026    $ (5,456,090)
+                                                                         ============    ============    =============
+</TABLE>
+
+
+                     See Notes to Financial Statements
+
+
+                                   -14-
+
+
+<TABLE>
+<CAPTION>
+
+UST PRIVATE EQUITY INVESTORS FUND, INC.
+
+FINANCIAL HIGHLIGHTS--SELECTED PER SHARE DATA AND RATIOS
+
+    FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
+
+                                                                           YEAR ENDED OCTOBER 31,
+
+                                                              2000     1999        1998         1997         1996
+                                                              ----     ----        ----         ----         ----
+<S>                                                        <C>       <C>        <C>          <C>           <C>
+   NET ASSET VALUE, BEGINNING OF PERIOD.............       $ 995.85  $ 936.84   $ 1,165.99   $ 1,055.77    $ 992.32
+                                                          ---------- ---------- ----------   ----------   ----------
+   INCOME FROM INVESTMENT OPERATIONS
+     Net Investment Income (Loss)...................          (1.23)    (5.85)       (3.97)        5.35       40.33
+     Net Realized and Unrealized Gain (Loss) on
+       Investments..................................         329.79     79.57      (181.64)      144.20       32.84
+     Net Change in Allowance for Management
+       Incentive fee................................         (32.98)    (5.63)        3.01        (2.91)      (0.10)
+                                                          ---------- ---------- ----------   ----------   ----------
+       Total from Investment Operations.............         295.58     68.09      (182.60)      146.64       73.07
+                                                          ---------- ---------- ----------   ----------   ----------
+   DISTRIBUTIONS
+     Net Investment Income..........................             --        --           --       (35.34)      (9.62)
+     Net Realized Gain..............................        (276.99)    (9.08)      (46.55)       (1.08)         --
+     In Excess of Net Realized Gain.................         (17.41)       --           --           --          --
+     Paid-in Capital................................        (219.31)       --           --           --          --
+                                                          ---------- ---------- ----------   ----------   ----------
+          Total Distributions.......................        (513.71)    (9.08)      (46.55)      (36.42)       (9.62)
+                                                          ---------- ---------- ----------   ----------   ----------
+   NET ASSET VALUE, END OF PERIOD...................       $ 777.72  $ 995.85     $ 936.84   $ 1,165.99    $1,055.77
+                                                          ========== ========== ==========   ==========    =========
+
+   TOTAL NET ASSET VALUE RETURN+....................          35.41%     7.33%      (16.22)%      14.37%        7.41%
+                                                          ---------- ---------- ----------   ----------   ----------
+   RATIOS AND SUPPLEMENTAL DATA
+     Net Assets, End of Period (Thousands)..........       $ 31,469  $ 40,295     $ 37,907     $ 47,179     $ 42,720
+     Ratio of Net Operating Expenses to Average
+       Net Assets ..................................           1.54%     1.62%        1.77%        1.65%        1.00%
+     Ratio of Gross Operating Expenses to Average
+       Net Assets++.................................           1.92%     2.01%        1.95%        2.02%        1.56%
+     Ratio of Net Investment Income (Loss) to
+       Average Net Assets...........................          (0.14)%   (0.64)%      (0.39)%       0.48%        3.96%
+     Interest Expense Ratio.........................           0.01%     0.04%        0.09%         N/A          N/A
+     Portfolio Turnover Rate........................              5%       10%          11%         44%          10%
+
+
++   Total investment return based on per share net asset value reflects the
+    effects of changes in net asset value based on the performance of the
+    during the period, and assumes dividends and distributions, if any,
+    were reinvested. The Company's shares are not publicly traded, therefore
+    market value total investment return is not calculated.
+
+++ Expense ratio before waiver of fees and reimbursement of expenses by
+   Managing Investment Adviser.
+
+</TABLE>
+
+
+                                   -15-
+
+
+                       NOTES TO FINANCIAL STATEMENTS
+
+1.   SIGNIFICANT ACCOUNTING POLICIES
+
+     UST Private Equity Investors Fund, Inc. (defined herein these notes as
+the "Fund") was incorporated under the laws of the State of Maryland on
+September 16, 1994, and is a non-diversified, closed-end management
+investment company that has elected to be treated as a business development
+company under the Investment Company Act of 1940, as amended.
+
+     The following is a summary of the Fund's significant accounting
+policies. Such policies are in conformity with generally accepted
+accounting principles for investment companies and are consistently
+followed in the preparation of the financial statements. Generally accepted
+accounting principles require management to make estimates and assumptions
+that affect the reported amounts and disclosures in the financial
+statements. Actual results could differ from these estimates.
+
+     (a)  PORTFOLIO VALUATION:
+
+          The Fund values portfolio securities quarterly and at other such
+     times, as in the Board of Directors' view, as circumstances warrant.
+     Investments in securities that are traded on a recognized stock
+     exchange or on the national securities market are valued at the last
+     sale price for such securities on the valuation date. Short-term debt
+     instruments with remaining maturities of 60 days or less are valued at
+     amortized cost, which approximates market value. Direct equity
+     investments that are the same class as a class of stock that is
+     registered and publicly traded, but are subject to regulatory holding
+     periods or other restrictions, are valued based upon the last sales
+     price of the unrestricted stock on the securities exchange on which
+     such securities are primarily traded, less a liquidity discount
+     determined by the Investment Adviser. Direct equity investments for
+     which market quotations are not readily available are carried at fair
+     value as determined in good faith by the Investment Adviser after
+     considering certain pertinent factors, including the cost of the
+     investment, developments since the acquisition of the investment,
+     comparisons to similar publicly traded investments, subsequent
+     purchases of the same investment by other investors, the current
+     financial position and operating results of the issuer and such other
+     factors as may be deemed relevant. Investments in limited partnerships
+     are carried at fair value as determined by the Investment Adviser. In
+     establishing the fair value of investments in other partnerships, the
+     Investment Adviser takes into consideration information received from
+     those partnerships, including their financial statements and the fair
+     value established by the general partner of the investee partnership.
+
+          At October 31, 2000, market quotations were not readily available
+     for securities valued at $23,822,887. Such securities were valued by
+     the Investment Adviser, under the supervision of the Board of
+     Directors. Because of the inherent uncertainty of valuation, the
+     estimated values may differ significantly from the values that would
+     have been used had a ready market for the securities existed, and the
+     differences could be material.
+
+     (b)  SECURITY TRANSACTIONS AND INVESTMENT INCOME:
+
+          Security transactions are recorded on a trade date basis.
+     Realized gains and losses on investments sold are recorded on the
+     basis of identified cost. Interest income, adjusted for amortization
+     of premiums and discounts on investments, is earned from settlement
+     date and is recorded on the accrual basis. Dividend income is recorded
+     on the ex-dividend date.
+
+     (c)  REPURCHASE AGREEMENTS:
+
+          The Fund enters into agreements to purchase securities and to
+     resell them at a future date. It is the Fund's policy to take custody
+     of securities purchased and to ensure that the market value of the
+     collateral including accrued interest is sufficient to protect the
+     Fund from losses incurred in the event the counterparty does not
+     repurchase the securities. If the seller defaults and the value of the
+     collateral declines or if bankruptcy proceedings are commenced with
+
+
+                                   -16-
+
+
+     respect to the seller of the security, realization of the collateral
+     by the Fund may be delayed or limited.
+
+     (d)  FEDERAL INCOME TAXES:
+
+          It is the policy of the Fund to continue to qualify as a
+     "regulated investment company" under Subchapter M of the Internal
+     Revenue Code and distribute substantially all of its taxable income to
+     its shareholders. Therefore, no federal income or excise tax provision
+     is required.
+
+          Dividends from net investment income are declared and paid at
+     least annually. Any net realized capital gains, unless offset by any
+     available capital loss carryforward, are distributed to shareholders
+     at least annually. Dividends and distributions are determined in
+     accordance with Federal income tax regulations which may differ from
+     generally accepted accounting principles. These "book/tax" differences
+     are either considered temporary or permanent. To the extent these
+     differences are permanent, such amounts are reclassified within the
+     capital accounts based on their federal tax basis treatment; temporary
+     differences do not require reclassification. During the current year,
+     permanent differences, primarily due to net operating losses, resulted
+     in increases in undistributed net investment income and accumulated
+     net realized gain on investments and a corresponding decrease in
+     paid-in capital. The reclassification had no effect on net assets.
+
+          At October 31, 2000, the tax basis of the Fund's investments for
+     Federal income tax purposes amounted to $28,470,358. The net
+     unrealized appreciation amounted to $4,558,139, which is comprised of
+     gross unrealized appreciation of $11,642,303 and aggregate gross
+     unrealized depreciation of $7,084,164.
+
+2.   INVESTMENT ADVISORY FEE, ADMINISTRATION FEE, AND RELATED PARTY TRANSACTIONS
+
+     Pursuant to an Investment Management Agreement ("Agreement"), United
+States Trust Company of New York ("U.S. Trust") serves as the Managing
+Investment Adviser to the Fund. Under the Agreement, for the services
+provided, U.S. Trust is entitled to receive a fee, at the annual rate of
+1.50% of the net assets of the Fund, determined as of the end of each
+fiscal quarter, that are invested or committed to be invested in Portfolio
+Companies or Private Funds and equal to an annual rate of 0.50% of the net
+assets of the Fund, determined as of the end of each fiscal quarter, that
+are invested in short-term investments and are not committed to Portfolio
+Companies or Private Funds.
+
+     In addition to the management fee, the Fund has agreed to pay U.S.
+Trust an incentive fee in an amount equal to 10% of the cumulative realized
+capital gains (net of realized capital losses and unrealized net capital
+depreciation), less the aggregate amount of incentive fee payments in prior
+years. If the amount of the incentive fee in any year is a negative number,
+or cumulative net realized gains less net unrealized capital depreciation
+at the end of any year is less than such amount calculated at the end of
+the previous year, U.S. Trust will be required to repay the Fund all or a
+portion of the incentive fee previously paid.
+
+     U.S. Trust is a state-chartered bank and trust company and a member
+bank of the Federal Reserve System and is a wholly-owned subsidiary of U.S.
+Trust Corporation, a registered bank holding company. U.S. Trust
+Corporation is a wholly-owned subsidiary of The Charles Schwab Corporation.
+
+     Chase Global Funds Services Company, a corporate affiliate of The
+Chase Manhattan Bank, (the "Administrator") provides administrative
+services to the Fund. For the services provided to the Fund, the
+Administrator is entitled to an annual fee of $58,000, which is paid
+quarterly.
+
+     U.S. Trust has voluntarily agreed to waive or reimburse other
+operating expenses of the Fund, exclusive of management fees, to the extent
+they exceed 0.42% of the Fund's net assets, and U.S. Trust will waive or
+reimburse, exclusive of management fees, all such expenses with respect to
+that portion of the Fund's net assets, determined as of the end of each
+fiscal quarter, that is invested in short-term investments.
+
+
+                                   -17-
+
+
+     Each Director of the Fund receives an annual fee of $9,000, plus a
+meeting fee of $1,500 for each meeting attended, and is reimbursed for
+expenses incurred for attending meetings. No person who is an officer,
+director or employee of U.S. Trust, or of any parent or subsidiary thereof,
+who serves as an officer, director or employee of the Fund receives any
+compensation from the Fund.
+
+3.   PURCHASES AND SALES OF SECURITIES
+
+     Excluding short-term investments, the Fund's purchases and sales of
+securities for the years ended October 31, 2000, October 31, 1999 and
+October 31, 1998 aggregated:
+
+         Year Ended
+         October 31,                  Purchases ($)                  Sales ($)
+         -----------                  -------------                  ---------
+
+            2000                        1,699,403                   21,312,360
+            1999                        2,931,879                    4,090,691
+            1998                        7,074,067                    3,870,893
+
+
+4.   TRANSACTIONS WITH AFFILIATED COMPANIES
+
+     An affiliated company is a company in which the fund has ownership of
+at least 5% of the voting securities. The Fund did not receive dividend or
+interest income from affiliated companies during the period. There were no
+transactions with companies which are or were affiliates during the period.
+
+ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
+              AND FINANCIAL DISCLOSURE
+
+         None.
+
+
+                                  PART III
+
+
+ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
+
+         The information set forth under the headings "Election of
+Directors," "Section 16(a) Beneficial Ownership Reporting Compliance" and
+"Additional Information -- Officers" appearing in the Company's definitive
+Proxy Statement for the 2001 Annual Meeting of Stockholders to be held on
+March 16, 2001, which will be filed with the Securities and Exchange
+Commission not later than 120 days after October 31, 2000, is incorporated
+herein by reference.
+
+ITEM 11.      EXECUTIVE COMPENSATION
+
+         The information set forth under the caption "Election of
+Directors" in the Company's definitive Proxy Statement for the 2001 Annual
+Meeting of Stockholders to be held on March 16, 2001, which will be filed
+with the Securities and Exchange Commission not later than 120 days after
+October 31, 2000, is incorporated herein by reference.
+
+ITEM 12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
+
+         The information set forth under the caption "Security Ownership of
+Certain Beneficial Owners and Management" appearing in the Company's
+definitive Proxy Statement for the 2001 Annual Meeting of Stockholders to
+be held on March 16, 2000, which will be filed with the Securities and
+Exchange Commission not later than 120 days after October 31, 2000, is
+incorporated herein by reference.
+
+
+                                   -18-
+
+
+ITEM 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
+
+         None.
+
+
+                                   -19-
+
+
+                                  PART IV
+
+ITEM 14.      EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
+
+
+(a)      1.   FINANCIAL STATEMENTS
+
+              The financial statements listed in Item 8, "Financial
+              Statements and Supplementary Data," beginning on page 7
+              are filed as part of this report.
+
+         2.   FINANCIAL STATEMENT SCHEDULES
+
+              The financial statement schedules listed in Item 8,
+              "Financial Statements and Supplementary Data," beginning
+              on page 7 are filed as part of this report.
+
+         3.   EXHIBITS
+
+         Exhibit
+          Number           Description
+         -------           -----------
+          (3)(i)           Articles of Incorporation of the Company 1
+
+          (3)(ii)          By-Laws of the Company 1
+
+          (10)(a)          Managment Agreement 2
+
+          (10)(b)          Transfer Agency and Custody Agreement 3
+
+          (23)             Consent of Independent Auditors
+
+
+(b)      REPORTS ON FORM 8-K
+
+         None.
+
+
+
+- --------
+
+1        Incorporated by reference to UST Private Equity Investors Fund,
+         Inc.'s Registration Statement on Form N-2 (File No. 033-84290),
+         filed with the Securities and Exchange Commission on September 22,
+         1994.
+
+
+2        Incorporated by reference to UST Private Equity Investors Fund,
+         Inc.'s Definitive Proxy Statement for the 2000 Annual Meeting of
+         Stockholders, filed with the Securities and Echange Commission on
+         May 25, 2000.
+
+
+3        Incorporated by reference to UST Private Equity Investors Fund,
+         Inc.'s Registration Statement on Form N-2/A (File No. 033-84290)
+         filed with the Securities and Exchange Commission on November 1,
+         1994.
+
+
+                                   -20-
+
+
+                                 SIGNATURES
+
+Pursuant to the requirements of Section 13 or 15(d) of the e Act of 1934,
+the registrant has duly caused this report to be signed on its behalf by
+the undersigned, thereunto duly authorized.
+
+                                     UST PPRIVATE EQUITY INVESTORS FUND,INC
+
+
+Date:  January 29, 2001              By:  /S/DAVID I. FANN
+      --------------------------     ---------------------------------------
+                                     David I. Fann, Chief Executive Officer
+                                     and President
+                                     (principal executive 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 and on the dates indicated:
+
+<TABLE>
+<CAPTION>
+
+     Signature                                      Title                                        Date
+     ---------                                      -----                                        ----
+
+<S>                                  <C>                                                  <C>
+/S/DAVID I. FANN
+- --------------------------------      Chief Executive Officer and President (principal      January 29, 2001
+David I. Fann                         executive officer)
+
+
+/S/BRIAN F. SCHMIDT
+- --------------------------------      Chief Financial Officer                               January 29, 2001
+Brian F. Schmidt                      (principal financial and accounting officer)
+
+
+/S/JOHN C. HOVER II
+- --------------------------------      Chairman of the Board and Director                    January 29, 2001
+John C. Hover II
+
+
+/S/GENE M. BERNSTEIN
+- --------------------------------      Director                                              January 29, 2001
+Gene M. Bernstein
+
+
+/S/STEPHEN V. MURPHY
+- --------------------------------      Director                                              January 29, 2001
+Stephen V. Murphy
+
+
+/S/VICTOR F. IMBIMBO, JR.
+- --------------------------------      Director                                              January 29, 2001
+Victor F. Imbimbo, Jr
+
+</TABLE>
+
+
+                                   -21-
+
+</TEXT>
+</DOCUMENT>
+<DOCUMENT>
+<TYPE>EX-23
+<SEQUENCE>2
+<FILENAME>0002.txt
+<DESCRIPTION>EXHIBIT 23 - CONSENT
+<TEXT>
+
+
+                                                                   EXHIBIT 23
+
+
+
+
+                      CONSENT OF INDEPENDENT AUDITORS
+
+                  We consent to the use of our report dated December 15,
+2000, included in this Annual Report (Form 10-K), for the fiscal year ended
+October 31, 2000, of UST Private Equity Investors Fund, Inc.
+
+                                                              ERNST & YOUNG LLP
+
+
+New York, New York
+
+January 26, 2001
+
+
+                                   -22-
+</TEXT>
+</DOCUMENT>
+</SEC-DOCUMENT>
+-----END PRIVACY-ENHANCED MESSAGE-----