===============================================================================

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

                               ------------
                                 FORM 10-Q
                               ------------

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

                For the quarterly period ended September 30, 2005

                                     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: 000-51289

                 GOLDMAN SACHS HEDGE FUND PARTNERS II, LLC
           (Exact name of registrant as specified in its charter)

                DELAWARE                              02-0699398
      (State or other jurisdiction       (I.R.S. Employer Identification No.)
            of incorporation)

            701 MOUNT LUCAS ROAD
           PRINCETON, NEW JERSEY                        08540

(Address of principal executive offices)              (Zip Code)

      Registrant's telephone number, including area code: 609-497-5500

                               ------------

     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 whether the registrant is an accelerated  filer
(as defined in Rule 12b-2 of the Exchange Act). Yes [ ]      No [X]




<PAGE>



                 GOLDMAN SACHS HEDGE FUND PARTNERS II, LLC
                       QUARTERLY REPORT ON FORM 10-Q

                                   INDEX
                       PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

  Schedule of Investments as of September 30, 2005 and
  December 31, 2004.......................................................3

  Balance Sheet as of September 30, 2005 and December 31, 2004............4

  Statement of Operations for the three and nine months ended
  September 30, 2005 and 2004.............................................5

  Statement of Changes in Members' Equity for the nine months ended
  September 30, 2005 and for the year ended December 31, 2004.............6

  Statement of Cash Flows for the nine months ended September 30, 2005
  and September 30, 2004..................................................7

  Notes to Unaudited Financial Statements.................................8


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS.......................................24

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK......42

ITEM 4.  CONTROLS AND PROCEDURES.........................................45


                        PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS...............................................45

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.....45

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.................................46

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.............46

ITEM 5.  OTHER INFORMATION...............................................46

ITEM 6.  EXHIBITS........................................................49

SIGNATURES...............................................................50

INDEX TO EXHIBITS........................................................51

<PAGE>


ITEM 1. FINANCIAL STATEMENTS

<TABLE>
                 GOLDMAN SACHS HEDGE FUND PARTNERS II, LLC

                          SCHEDULE OF INVESTMENTS

                  SEPTEMBER 30, 2005 AND DECEMBER 31, 2004

<CAPTION>
                                   (Unaudited)                             (Audited)
                                      2005                                   2004
                      ------------------------------------  --------------------------
                                                                            % of
                                      % of                     % of       adjusted
                         Fair       members'       Fair       members'    members'
     Investee            value      equity(1)      value      equity(1)   equity(2)
------------------  -------------- ----------- -------------- ----------- ------------
<S>                   <C>             <C>         <C>            <C>        <C>
  Goldman Sachs
    Global Equity
    Long/Short, LLC   $251,756,265    25.81%     $208,922,802    18.15%      16.91%

  Goldman Sachs
    Global Event
    Driven, LLC        262,452,538    26.91%      287,940,001    25.02%      23.31%

  Goldman Sachs
    Global Relative
    Value II, LLC      273,815,539    28.08%      459,867,687    39.96%      37.23%

  Goldman Sachs
    Global Tactical
    Trading II, LLC    185,777,524    19.05%      279,479,970    24.29%      22.63%
                    --------------  --------   --------------  --------    --------

Total investments
(cost $889,831,562
and $1,162,143,254,
   respectively)     $ 973,801,866    99.85%   $1,236,210,460   107.42%     100.08%
                     =============  ========   ==============  ========    ========
<FN>

(1)  Members' equity,  used in the calculation of the investments as a % of
     members' equity, is reduced for member redemptions that are paid after
     the balance sheet date.

(2)  Adjusted  members' equity,  used in the calculation of the investments
     as a  percentage  of adjusted  members'  equity,  represents  members'
     equity excluding Redemptions payable in the amount of $84,411,871 that
     was payable at December 31, 2004.

</FN>


The Goldman Sachs Hedge Fund Partners II, LLC  proportionate  share of each
individual  investment owned by any individual  Investee does not exceed 5%
of members' equity.  Where an underlying  investment of an Investee is held
by more than one Investee,  such investments are aggregated for the purpose
of ensuring that any individual  investment  does not exceed 5% of members'
equity.



                          See accompanying notes.
</TABLE>


<PAGE>

<TABLE>

                 GOLDMAN SACHS HEDGE FUND PARTNERS II, LLC

                               BALANCE SHEET

                  SEPTEMBER 30, 2005 AND DECEMBER 31, 2004

                                   ASSETS
                                   ------

<CAPTION>
                                                         (Unaudited)          (Audited)
                                                             2005               2004
                                                      -----------------  -----------------
<S>                                                   <C>                <C>
Assets:
     Cash and cash equivalents                        $      3,710,445   $      2,909,015
     Investments (cost $889,831,562
         and $1,162,143,254, respectively)                 973,801,866      1,236,210,460
                                                      -----------------  -----------------
        Total assets                                  $    977,512,311   $  1,239,119,475
                                                      =================  =================

<CAPTION>
                      LIABILITIES AND MEMBERS' EQUITY
                      -------------------------------

Liabilities:
<S>                                                   <C>                <C>
     Redemptions payable                              $              -   $     84,411,871
     Due to managing member                                  2,021,163          3,799,261
     Due to bank                                                59,860                  -
     Accounts payable and accrued liabilities                  205,632             86,719
                                                      -----------------  -----------------
        Total liabilities                                    2,286,655         88,297,851

Members' equity (units outstanding 8,668,003.01 and
10,922,127.85, respectively)                               975,225,656      1,150,821,624
                                                      -----------------  -----------------

        Total liabilities and members' equity         $    977,512,311   $  1,239,119,475
                                                      =================  =================

Analysis of members' equity:
     Net capital contributions, accumulated net
     investment income/(loss) and realized
     profit/(loss)                                    $    891,255,352   $  1,076,754,418
     Accumulated net unrealized profit/(loss)         $     83,970,304   $     74,067,206
                                                      =================  =================


                          See accompanying notes.
</TABLE>


<PAGE>

<TABLE>

                 GOLDMAN SACHS HEDGE FUND PARTNERS II, LLC

                          STATEMENT OF OPERATIONS

                                (UNAUDITED)

      FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004

<CAPTION>
                                                Three Months Ended                Nine Months Ended
                                                   September 30,                     September 30,
                                           -----------------------------  -----------------------------
                                                2005           2004            2005            2004
                                           -------------  --------------  --------------  -------------
<S>                                          <C>            <C>             <C>               <C>
Income from trading:
   Equity in earnings of investees:
      Realized profit/(loss)               $ 15,731,554   $   1,151,845    $ 24,688,308     $ 1,151,845
      Change in unrealized profit/(loss)     21,684,705      (6,097,474)      9,903,098      (3,249,079)
                                           -------------  --------------  --------------  -------------
        Net trading profit/(loss)            37,416,259      (4,945,629)     34,591,406      (2,097,234)

Interest income                                  56,361         113,639          92,213         323,133

Expenses:
      Management fee                          3,016,423       3,659,910      10,301,585       9,653,202
      Professional fees                         332,647          40,350         432,169         430,364
      Interest expense                           59,860         126,508          64,186         377,217
      Miscellaneous expenses                          -             263           1,508           2,792
                                           -------------  --------------  --------------  -------------
      Total expenses                          3,408,930       3,827,031      10,799,448      10,463,575
                                           -------------  --------------  --------------  -------------
          Net investment income/(loss)       (3,352,569)     (3,713,392)    (10,707,235)    (10,140,442)
                                           -------------  --------------  --------------  -------------
Net income/(loss)                            34,063,690      (8,659,021)     23,884,171     (12,237,676)

Less:  Incentive allocation to the
managing member                               1,295,272        (203,826)      1,296,816          87,282
                                           -------------  --------------  --------------  -------------

Net income/(loss) available for
pro-rata allocation to members              $32,768,418     $(8,455,195)  $  22,587,355   $ (12,324,958)
                                           =============  ==============  ==============  =============



                                  See accompanying notes.

</TABLE>


<PAGE>

<TABLE>

                 GOLDMAN SACHS HEDGE FUND PARTNERS II, LLC

                  STATEMENT OF CHANGES IN MEMBERS' EQUITY

             FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 (UNAUDITED)
               AND THE YEAR ENDED DECEMBER 31, 2004 (AUDITED)

<CAPTION>

                                    Managing                                          Total
                                    member's         Members'         Members'       members'
                                     equity           units           equity          equity
                                 --------------  ---------------  --------------  -------------

<S>                                    <C>          <C>             <C>            <C>
Balance at December 31, 2003        $   857,458     4,376,069.56   $ 453,898,612  $ 454,756,070

Subscriptions                                 -     7,347,158.49     739,207,253    739,207,253
Redemptions                          (2,963,840)     (748,891.43)    (82,305,489)   (85,269,329)
Share class conversion                        -       (52,208.77)              -              -
Allocations of net income/(loss):
 Incentive allocation                 2,106,382                -               -      2,106,382
 Pro-rata allocation                          -                -      40,021,248     40,021,248
                                 --------------  ---------------  --------------  -------------

Balance at December 31, 2004                  -    10,922,127.85   1,150,821,624  1,150,821,624

Subscriptions                                 -       338,363.33      33,836,333     33,836,333
Redemptions                                   -    (2,141,601.24)   (233,316,472)  (233,316,472)
Share class conversion                        -      (450,886.93)              -              -
Allocations of net income/(loss):
 Incentive allocation                 1,296,816                -               -      1,296,816
 Pro-rata allocation                          -                -      22,587,355     22,587,355
                                 --------------  ---------------  --------------  -------------

Balance at September 30, 2005       $ 1,296,816     8,668,003.01   $ 973,928,840  $ 975,225,656
                                 ==============  ===============  ==============  =============


                          See accompanying notes.
</TABLE>

<PAGE>

<TABLE>

                 GOLDMAN SACHS HEDGE FUND PARTNERS II, LLC

                          STATEMENT OF CASH FLOWS

                                (UNAUDITED)

           FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004

<CAPTION>
                                                                  2005             2004
                                                             -------------    -------------
<S>                                                          <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net income/(loss)                                       $ 23,884,171     $(12,237,676)

ADJUSTMENTS TO RECONCILE NET INCOME/(LOSS) TO NET
  CASH FROM OPERATING ACTIVITIES:
     Purchases of investments                                 (45,000,000)    (745,830,492)
     Proceeds from sales of investments                       342,000,000       27,000,000
     Realized (profit)/loss from sales of
     investments                                              (24,688,308)      (1,151,845)
     Change in unrealized (profit)/loss                        (9,903,098)       3,249,079

(INCREASE)/DECREASE IN OPERATING ASSETS:

     Other assets                                                       -          511,950

INCREASE/(DECREASE) IN OPERATING LIABILITIES:

     Redemption payable                                       (84,411,871)               -
     Due to managing member                                    (1,778,098)       1,354,015
     Accounts payable and accrued liabilities                     118,913         (859,274)
                                                             -------------    -------------

Net cash from operating activities                            200,221,709     (727,964,243)
                                                             -------------    -------------
CASH FLOWS FROM FINANCING ACTIVITIES

     Subscriptions                                             33,836,333      732,267,164
     Redemptions                                             (233,316,472)        (857,458)
     Increase/(decrease) in Due to bank                            59,860       (5,526,187)
                                                             -------------    -------------
Net cash from financing activities                           (199,420,279)     725,883,519

    Net change in cash and cash equivalents                       801,430       (2,080,724)

Cash and cash equivalents at beginning of period                2,909,015       16,000,000
                                                             -------------    -------------
Cash and cash equivalents at end of period                   $  3,710,445     $ 13,919,276
                                                             =============    =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid by the Company during the period for
interest                                                     $      4,326     $    377,217
                                                             =============    =============




                          See accompanying notes.
</TABLE>

<PAGE>


                 GOLDMAN SACHS HEDGE FUND PARTNERS II, LLC

                       NOTES TO FINANCIAL STATEMENTS

                                (UNAUDITED)

                               SEPTEMBER 30, 2005


NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
----------------------------------------

Organization and basis of financial statements
----------------------------------------------

Goldman Sachs Hedge Fund Partners II, LLC (the  "Company") was organized as
a limited liability company,  pursuant to the laws of the State of Delaware
and commenced  operations  on August 1, 2003 for the  principal  purpose of
investing in the equity  long/short,  event  driven,  relative  value,  and
tactical trading hedge fund sectors through  investments in each of Goldman
Sachs Global Equity  Long/Short,  LLC ("GELS"),  Goldman Sachs Global Event
Driven, LLC ("GED"), Goldman Sachs Global Relative Value II, LLC ("GRV II")
and Goldman Sachs Global Tactical Trading II, LLC ("GTT II") (collectively,
the "Investees").  Each of these Investees invests directly through trading
advisors, or indirectly through investment vehicles managed by such trading
advisors  (together,  the "Advisors").  Goldman Sachs Hedge Fund Strategies
LLC ("GS HFS"), a wholly-owned subsidiary of The Goldman Sachs Group, Inc.,
is the managing  member,  administrator  and commodity pool operator of the
Company.

The financial  statements  are prepared in accordance  with U.S.  generally
accepted accounting principles ("GAAP"),  which require the managing member
to make estimates and assumptions  that affect the amounts  reported in the
financial statements and accompanying notes. Actual results may differ from
those  estimates.  The financial  statements are expressed in United States
dollars.

The Company is an investment  company for financial  reporting purposes and
accordingly  carries its assets and  liabilities  at fair value.  Net asset
value per unit is  determined  by dividing the net assets  attributable  to
each series by that series' respective number of units outstanding.

Consolidation
-------------

During the nine months ended September 30, 2005 and the year ended December
31, 2004, the Company's ownership  percentage of certain Investees exceeded
50%. This ownership  percentage will fluctuate as a result of the Company's
investment  strategy  and investor  subscriptions  and  redemptions  at the
Company and Investee level. The Company does not consolidate the results of
the Investees in its financial statements as the Company does not invest in
such Investees for purposes of exercising  control;  ownership in excess of
50% may be temporary;  and the  consolidation  of these  balances would not
enhance the usefulness or  understandability  of information to the member.
The Company  may, but normally  does not intend to,  exercise  control over
majority owned Investees.


<PAGE>

                 GOLDMAN SACHS HEDGE FUND PARTNERS II, LLC

                       NOTES TO FINANCIAL STATEMENTS

                                (UNAUDITED)

                             SEPTEMBER 30, 2005


NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
----------------------------------------------------

Consolidation (continued)
-------------------------

The following table summarizes the Company's  ownership in the Investees at
September 30, 2005 and December 31, 2004:


                                    September 30, 2005
              -----------------------------------------------------------
                                        Company            % owned by
                Investee equity        investment          the Company
              ------------------- -------------------- -------------------

GELS             $ 963,068,800          $   251,756,265       26.14%
GED                998,556,402              262,452,538       26.28%
GRV II             564,874,292              273,815,539       48.47%
GTT II             306,142,949              185,777,524       60.68%
                                        ---------------
                                        $   973,801,866
   Total                                ===============


                                   December 31, 2004
               -----------------------------------------------------------
                                        Company            % owned by
                Investee equity        investment          the Company
              ------------------- -------------------- -------------------


GELS            $  694,878,944          $   208,922,802       30.07%
GED                860,469,969              287,940,001       33.46%
GRV II             848,659,079              459,867,687       54.19%
GTT II             480,013,357              279,479,970       58.22%
                                        ---------------
   Total                                $ 1,236,210,460
                                        ===============

In addition,  in December 2003, the Financial  Accounting  Standards  Board
("FASB")  issued  interpretation  No.  46(R),  "Consolidation  of  Variable
Interest   Entities"  ("FIN  46(R)"),   which  provides  new  criteria  for
determining  whether  consolidation  accounting  is  required.   Registered
investment  companies  have been exempted from the  provisions of FIN 46(R)
and FIN 46(R) has been  deferred for  non-registered  investment  companies
pending the release of a FASB Scope of Investment Companies project ("Scope
Project").  The Scope Project is designed to determine  which entities will
qualify as investment  companies,  and therefore present their investees at
fair value. Those entities so qualifying will not need to determine whether
their investees  should be  consolidated  pursuant to the provisions of FIN
46(R).  FIN 46(R) would have no impact on the  Company's  net assets or net
increase in net assets resulting from operations.


<PAGE>


                 GOLDMAN SACHS HEDGE FUND PARTNERS II, LLC

                       NOTES TO FINANCIAL STATEMENTS

                                (UNAUDITED)

                             SEPTEMBER 30, 2005


NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
----------------------------------------------------

Equity in earnings of investees
-------------------------------

Equity in earnings of  investees  includes the change in fair value of each
Investee.  Fair values are determined utilizing net asset value information
supplied by each individual Investee which includes realized and unrealized
gains/losses on investments as well as the Advisor's management,  incentive
and  administration  fees  and  all  other  income/expenses.  See  Note 2 -
Investments for further information.

Cash and cash equivalents
-------------------------

The Company considers all highly liquid investments with a maturity of less
than 90 days at the time of  purchase  and not held for  resale  to be cash
equivalents.  Cash  equivalents are carried at cost plus accrued  interest,
which approximates market value.

Allocation of net income/(loss)
-------------------------------

Net  income/(loss)  is  allocated  monthly to the  capital  account of each
member in the ratio that the balance of each such member's  capital account
bears to the total balance of all members' capital  accounts.  The managing
member  receives an incentive  allocation  equal to five percent of any new
appreciation  in the net  asset  value  of each  series,  as  defined.  Any
depreciation  in the net asset value of a series must be recouped  prior to
the managing member receiving an incentive allocation.

Subscriptions and redemptions
-----------------------------

Subscriptions  to the  Company  can be  made  as of the  first  day of each
calendar  quarter  or at  the  sole  discretion  of  the  managing  member.
Redemptions from the Company can be made semi-annually after a twelve-month
holding period or at such other times as determined in the sole  discretion
of the managing member,  as provided for in the Company's limited liability
company agreement.

Income taxes
------------

The Company is taxed as a partnership for U.S. federal income tax purposes.
The members  include  their  distributive  share of the  Company's  taxable
income or loss on their  respective  income tax  returns.  Accordingly,  no
income  tax  liability  or  expense  has  been  recorded  in the  financial
statements of the Company.


<PAGE>

                 GOLDMAN SACHS HEDGE FUND PARTNERS II, LLC

                       NOTES TO FINANCIAL STATEMENTS

                                (UNAUDITED)

                             SEPTEMBER 30, 2005


NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
----------------------------------------------------

Indemnifications
----------------

The Company enters into contracts that contain a variety of indemnification
arrangements. The indemnification arrangements the Company has entered into
with service providers include  provisions for the Company to indemnify and
hold  harmless  such  service  providers  for  certain  liabilities.  These
indemnification   arrangements  typically  cover  liabilities  incurred  by
service  providers  in  connection  with the  services  provided  under the
contractual arrangements with the Company and are generally entered into as
part of a negotiated contractual  arrangement stipulating the furnishing of
the  delineated  services.  However,  under the  terms of such  contractual
arrangements,  the  Company  will  not be  required  to  indemnify  service
providers in certain situations to the extent that the liabilities incurred
by the  service  providers  were  caused by the gross  negligence,  willful
misconduct,  bad faith, reckless disregard of duties, or similar conduct on
the part of the service  provider.  The Company's  maximum  exposure  under
these  arrangements is unknown.  It is not possible to estimate the maximum
potential  exposure  under these  agreements,  because the  indemnification
arrangements  relate to unforeseeable  liabilities  suffered as a result of
the conduct of the Company or other parties  which is presently  unknown or
unforeseeable.  However,  the  Company  has not had prior  claims or losses
pursuant  to these  indemnification  arrangements  and  expects the risk of
material loss therefrom to be remote.

NOTE 2 - INVESTMENTS
--------------------

The  Investees  seek  capital  appreciation  over time by  investing in the
equity long/short,  event driven, relative value and tactical trading hedge
fund sectors.  The Company's  investments in Investees are subject to terms
and conditions of the respective operating agreements.  The investments are
carried at fair value as determined by the Company's  attributable share of
the net assets of the  respective  Investees.  Fair  values are  determined
utilizing net asset value information  supplied by each individual Investee
net of each  Investee's  management  and  incentive  fees.  These  fees are
included in Equity in earnings of investees on the Statement of Operations.
The  underlying  investments  of each  Investee are  accounted  for at fair
value.  For  investments  of the  underlying  Advisor  funds,  market value
normally is based on quoted market prices or broker-dealer price quotations
provided to the Advisor  fund.  In the absence of quoted  market  prices or
broker-dealer  price  quotations,  underlying  Advisor fund investments are
valued at fair value as determined  by the Advisor or their  administrator.
Because of the inherent uncertainty of valuation, estimated fair values may
differ, at times  significantly,  from the values that would have been used
had a ready  market  existed.  GS HFS is the  managing  member for the four
Investees.  GS HFS  does not  charge  the  Company  any  management  fee or
incentive allocation at the Investee level.


<PAGE>



                 GOLDMAN SACHS HEDGE FUND PARTNERS II, LLC

                       NOTES TO FINANCIAL STATEMENTS

                                (UNAUDITED)

                             SEPTEMBER 30, 2005


NOTE 2 - INVESTMENTS (CONTINUED)
--------------------------------

The managing member  generally has limited  access,  if at all, to specific
information  regarding  the Advisors'  portfolios  and relies on valuations
provided  by  the  Advisors.  Generally,  the  valuations  provided  by the
Advisors  are only  audited  on an  annual  basis  and are not  subject  to
independent  third  party   verification.   Typically,   audited  financial
statements  are not received  before  issuance of the  Company's  financial
statements.  GS HFS, in its capacity as managing member of the Company, may
perform additional  procedures  including Advisor due diligence reviews and
analytical  procedures  with  respect  to the  valuations  provided  by the
Advisors and to ensure  conformity  with GAAP.  Valuations  provided by the
Advisors may differ from the audited values received subsequent to the date
of the Company's net asset value determination.  In such cases, the Company
will evaluate the materiality of any such differences.

The  following  table  summarizes  the  Company's  Equity  in  earnings  of
investees for the three and nine months ended September 30, 2005 and 2004:


<TABLE>
<CAPTION>
                                  Three months ended September 30,   Nine months ended September 30,
---------------    ----------    --------------------------------   --------------------------------
   Investee        Liquidity         2005              2004             2005            2004
---------------    ----------    --------------    --------------   -------------   ------------
<S>                   <C>           <C>             <C>               <C>            <C>
GELS                 (1)         $ 14,480,627     $  1,383,949     $  19,033,463    $   960,786
GED                  (2)            8,607,173        4,075,915        15,352,537     12,526,966
GRV II               (3)            9,550,627       (2,206,576)        2,977,852      3,454,577
GTT II               (4)            4,777,832       (8,198,917)       (2,772,446)   (19,039,563)
                                 --------------    --------------   -------------   ------------
   Total                         $ 37,416,259     $ (4,945,629)    $  34,591,406    $(2,097,234)
                                 ==============    ==============   =============   ============
<FN>
(1)  Redemptions can be made quarterly with 45 days' notice, or at the sole
     discretion of the managing member.  Prior to July 2004, a twelve-month
     holding period was in effect.
(2)  Redemptions can be made  semi-annually with 45 days' notice, or at the
     sole  discretion  of the  managing  member.  Prior  to  July  2004,  a
     twelve-month holding period was in effect.  Effective January 1, 2006,
     redemptions can be made quarterly with 91 days' notice.
(3)  Redemptions  can be made  semi-annually  with 45 days'  notice after a
     twelve-month holding period, or at the sole discretion of the managing
     member.  Effective January 1, 2006,  redemptions can be made quarterly
     with 91 days' notice.
(4)  Redemptions can be made  semi-annually with 61 days' notice, or at the
     sole  discretion of the managing  member.  Effective  January 1, 2006,
     redemptions can be made quarterly with 60 days' notice.
</FN>
</TABLE>


<PAGE>
                 GOLDMAN SACHS HEDGE FUND PARTNERS II, LLC

                       NOTES TO FINANCIAL STATEMENTS

                                (UNAUDITED)

                             SEPTEMBER 30, 2005


NOTE 2 - INVESTMENTS (CONTINUED)
--------------------------------

Goldman Sachs Global Equity Long/Short, LLC
-------------------------------------------
GELS seeks  risk-adjusted  absolute  returns with volatility lower than the
broad  equity  markets,   primarily   through  long  and  short  investment
opportunities in the global equity markets.  Strategies  generally  involve
making long and short  equity  investments,  often  based on the  Advisor's
assessment of fundamental value compared to market price, although Advisors
employ a wide range of styles.

Goldman Sachs Global Event Driven, LLC
--------------------------------------
GED seeks  risk-adjusted  absolute  returns with volatility and correlation
lower than the broad equity  markets by allocating  assets to Advisors that
operate  primarily  in  the  global  event  driven  sector.   Event  driven
strategies seek to identify security price changes resulting from corporate
events such as restructurings,  mergers,  takeovers,  spin-offs,  and other
special  situations.  Corporate event  arbitrageurs  generally choose their
investments  based on their perceptions of the likelihood that the event or
transaction  will occur, the amount of time that the process will take, and
the perceived  ratio of return to risk.  Strategies that may be utilized in
the event driven sector include risk arbitrage/special  situations,  credit
opportunities/distressed  securities and  multi-strategy  investing.  Other
strategies may be employed as well.

Goldman Sachs Global Relative Value II, LLC
-------------------------------------------
GRV II seeks risk-adjusted absolute returns with volatility and correlation
lower than the broad equity  markets by allocating  assets to Advisors that
operate  primarily in the global  relative  value  sector.  Relative  value
strategies  seek to profit from the  mispricing  of financial  instruments,
capturing  spreads between related  securities that deviate from their fair
value or historical  norms.  Directional  and market  exposure is generally
held to a minimum or completely hedged.  Strategies that may be utilized in
the relative value sector include convertible  arbitrage,  equity arbitrage
and fixed-income arbitrage. Other strategies may be employed as well.

Goldman Sachs Global Tactical Trading II, LLC
---------------------------------------------
GTT II seeks  long-term  risk-adjusted  returns by allocating its assets to
Advisors  that employ  strategies  primarily  within the  tactical  trading
sector. Tactical trading strategies are directional trading strategies that
generally fall into one of the following two  categories:  managed  futures
strategies and global macro strategies.  Managed futures strategies involve
trading in the global  futures  and  currencies  markets,  generally  using
systematic or discretionary  approaches.  Global macro strategies generally
utilize analysis of macroeconomic,  geopolitical,  and financial conditions
to develop views on country,  regional or broader  economic themes and then
seek to  capitalize  on such views by trading in  securities,  commodities,
interest rates, currencies and various financial instruments.


<PAGE>
                 GOLDMAN SACHS HEDGE FUND PARTNERS II, LLC

                       NOTES TO FINANCIAL STATEMENTS

                                (UNAUDITED)

                             SEPTEMBER 30, 2005


NOTE 2 - INVESTMENTS (CONTINUED)
--------------------------------

Information  regarding the actual  management and incentive fees charged by
the  Advisors  for the  period  was not  available  for all  Advisors.  The
following table reflects the weighted average Advisors'  management fee and
incentive  fee rates at the Investee  level at September 30, 2005 and 2004.
The  weighted  average is based on the  period  end  market  values of each
Advisor's investment in proportion to the Investee's total investments. The
fee rates used in the  weighted  average  calculation  are the actual rates
charged by each Advisor.

                       September 30, 2005             September 30, 2004
                   ----------------------------   ---------------------------
                      Management       Incentive     Management      Incentive
     Investee            fees             fee           fees            fee
----------------   --------------    ----------   --------------   ----------
     GELS              1.46%           19.96%          1.44%         19.82%
      GED              1.46%           19.92%          1.41%         19.94%
    GRV II             1.57%           20.40%          1.56%         20.00%
    GTT II             2.05%           20.63%          2.05%         20.36%

The Advisors'  management  and incentive  fees are not paid to the managing
member.

The following table summarizes the cost of the Company's investments in the
Investees at September 30, 2005 and December 31, 2004:

      Investee          September 30, 2005     December 31, 2004
---------------------   -------------------    ------------------
        GELS                $ 215,893,657       $   190,198,797
        GED                   223,174,000           255,638,110
       GRV II                 262,488,385           440,626,735
       GTT II                 188,275,520           275,679,612
                        ------------------     ------------------
   Total                    $ 889,831,562       $ 1,162,143,254
                        ==================     ==================

NOTE 3 - FEES
-------------

The  Company  pays a  monthly  management  fee to GS HFS equal to 1.25% per
annum of the net assets of the Company as of each month-end, as defined.

Effective January 1, 2005, a monthly  administration  fee is charged by SEI
Global  Services,  Inc. ("SEI") in the range of 0.07% to 0.10% per annum of
the net assets at the Investee  level,  but such rate may be exceeded under
certain  circumstances,  subject to a maximum of approximately 0.20%. Prior
to January 1, 2005, the Company paid a monthly administration fee to GS HFS
equal to 0.20%  per  annum of the net  assets at the  Investee  level.  The
administration  fee is charged at the  Investee  level and is  included  in
Equity in earnings of investees on the  Statement  of  Operations.  For the
three months ended  September  30, 2005 and 2004,  the  administration  fee
charged at the Investee level totaled $146,132 and $440,996,  respectively.
For the nine months ended  September 30, 2005 and 2004, the  administration
fee  charged  at  the  Investee  level  totaled  $517,922  and  $1,170,019,
respectively.


<PAGE>
                 GOLDMAN SACHS HEDGE FUND PARTNERS II, LLC

                       NOTES TO FINANCIAL STATEMENTS

                                (UNAUDITED)

                             SEPTEMBER 30, 2005


NOTE 3 - FEES (CONTINUED)
-------------------------

GS HFS and the Company  entered into an agreement  with SEI to serve as the
sub-administrator  of the Company effective March 1, 2004.  Pursuant to the
agreement,  GS HFS is  responsible  for paying the fees of SEI.  SEI is the
administrator for each Investee.

NOTE 4 - RISK MANAGEMENT
------------------------

In the  ordinary  course of  business,  GS HFS, in its capacity as managing
member of the  Company and the  Investees,  attempts to manage a variety of
risks,  including  market,  credit and  operational  risk.  GS HFS,  in its
capacity as managing  member of the Company and the Investees,  attempts to
identify,  measure and monitor risk through  various  mechanisms  including
risk management  strategies and credit policies.  These include  monitoring
risk guidelines and diversifying exposures across a variety of instruments,
markets and counterparties.

Market risk is the risk of  potential  significant  adverse  changes in the
value of financial instruments because of changes in market conditions such
as interest and currency  rate  movements  and  volatility  in commodity or
security prices.  GS HFS, in its capacity as managing member of the Company
and the  Investees,  monitors its  exposure to market risk through  various
analytical techniques.

The Company invests in the Investees,  and may from time to time redeem its
membership  units  of the  Investees.  The  Investees,  in  turn,  maintain
relationships  with  counterparties   that  include  the  Advisors.   These
relationships  could result in  concentrations  of credit risk. Credit risk
arises from the  potential  inability of  counterparties  to perform  their
obligations  under the terms of the  contract.  GS HFS, in its  capacity as
managing  member of the  Investees,  has formal  credit-review  policies to
monitor counterparty risk.

Operational  risk is the  potential  for loss  caused  by a  deficiency  in
information,  communication,  transaction  processing  and  settlement  and
accounting  systems.  GS HFS, in its  capacity  as  managing  member of the
Company  and the  Investees,  maintains  controls  and  procedures  for the
purpose of mitigating operational risk.

There can be no assurance  that GS HFS, in its capacity as managing  member
of the  Company  and the  Investees,  will be able to  implement  its  risk
guidelines or that its risk monitoring strategies will be successful.

NOTE 5 - DERIVATIVE CONTRACTS AND OTHER FINANCIAL INSTRUMENTS
-------------------------------------------------------------

In the normal  course of business,  the Advisors  trade  various  financial
instruments  and  may  enter  into  various   investment   activities  with
off-balance  sheet risk.  These include,  but are not limited to,  futures,
forwards,  swaps and options  written.  The  Company's  risk of loss in the
Investees  is limited to the value of its  investment  as  reported  by the
Investee.


<PAGE>

                 GOLDMAN SACHS HEDGE FUND PARTNERS II, LLC

                       NOTES TO FINANCIAL STATEMENTS

                                (UNAUDITED)

                             SEPTEMBER 30, 2005



NOTE 6 - RELATED PARTIES
------------------------

The Due to  managing  member  liability  on the  Balance  Sheet  represents
management fees due to GS HFS at September 30, 2005 and December 31, 2004.

Goldman,  Sachs & Co.,  an  affiliate  of the  managing  member,  is one of
several prime brokers for the Advisors.  Goldman,  Sachs & Co. charges fees
at prevailing market rates.

Directors and Executive Officers of the managing member own less than 1% of
the Company's equity at September 30, 2005 and December 31, 2004.

NOTE 7 - BORROWING FACILITY
---------------------------

On November 24, 2004, the Company  entered into a five year credit facility
with a major  financial  institution.  Subject to approval by the financial
institution,  the Company may request to borrow up to  $40,000,000.  At the
time of any borrowing, the aggregate amounts borrowed may not exceed 10% of
the Company's  net asset value and at all other times the aggregate  amount
borrowed may not exceed 15% of the Company's net asset value. The effective
interest  rate on borrowed  amounts is the London  Interbank  Offering Rate
("LIBOR"),  plus 0.85%.  There were no borrowings  outstanding at September
30, 2005 or December 31, 2004.

Prior to November  24,  2004,  the  Company  had  entered  into a borrowing
facility with a major financial institution. The facility was structured as
a call spread  option that had been issued by the Company to the  financial
institution. Under the terms of the facility, the Company received cash and
redeposited  the amount  with the  financial  institution  in a  collateral
account.  The  Company  had the  right to draw  funds  from the  collateral
account to use for  liquidity  purposes.  The  effective  interest  rate on
borrowed amounts represented by funds drawn from the collateral account was
LIBOR plus 0.875%. The Company also paid the equivalent of a commitment fee
of 0.25% on the undrawn funds. This facility expired in October 2004.


<PAGE>

                 GOLDMAN SACHS HEDGE FUND PARTNERS II, LLC

                       NOTES TO FINANCIAL STATEMENTS

                                (UNAUDITED)

                             SEPTEMBER 30, 2005


NOTE 8 - MEMBERS' EQUITY
------------------------

At September 30, 2005 and December 31, 2004,  the Company had Class A units
outstanding.  Each  series of Class A units is  identical  in every  regard
except  with  respect  to its  individualized  incentive  allocation  base.
Effective January 1, 2005, Class A Series 2 through Class A Series 11 units
were  converted  into  Class A Series 1 units.  Transactions  in units  for
non-managing  members for the nine months ended  September 30, 2005 and the
year ended December 31, 2004 are as follows:


<TABLE>
<CAPTION>

                        Nine months ended September 30, 2005       Year ended December 31, 2004
                      --------------------------------------   -----------------------------------
                              Units               Amount               Units             Amount
                      ----------------    ------------------   ----------------   ----------------
<S>                     <C>                 <C>                  <C>               <C>
Share Class Conversion
   Class A
      Series 1          5,993,535.32        $  658,708,137        3,170,811.64     $  332,856,904
      Series 2         (1,618,389.13)         (167,180,096)      (1,166,950.90)      (122,453,547)
      Series 3         (2,184,050.00)         (222,344,197)        (670,350.00)       (69,504,507)
      Series 4         (2,403,942.74)         (244,478,196)        (861,701.58)       (87,716,160)
      Series 5             (2,500.00)             (258,258)        (524,017.93)       (53,182,690)
      Series 6           (106,226.72)          (11,010,123)                  -                  -
      Series 7            (40,803.57)           (4,258,112)                  -                  -
      Series 8            (19,109.20)           (2,001,573)                  -                  -
      Series 9            (32,500.00)           (3,392,326)                  -                  -
      Series 10           (22,900.89)           (2,371,617)                  -                  -
      Series 11           (14,000.00)           (1,413,639)                  -                  -
                        ------------        --------------       -------------     --------------
Total                    (450,886.93)       $            -          (52,208.77)    $            -
                        =============       ==============       =============     ==============

Subscriptions
   Class A
      Series 1                     -        $            -          902,736.24     $   94,765,029
      Series 2                     -                     -        1,618,389.13        161,838,913
      Series 3                     -                     -        2,184,050.00        218,405,000
      Series 4                     -                     -        2,403,942.74        240,394,274
      Series 5                     -                     -            2,500.00            250,000
      Series 6                     -                     -          106,226.72         10,622,672
      Series 7                     -                     -           40,803.57          4,080,356
      Series 8                     -                     -           19,109.20          1,910,920
      Series 9                     -                     -           32,500.00          3,250,000
      Series 10                    -                     -           22,900.89          2,290,089
      Series 11                    -                     -           14,000.00          1,400,000
      Series 12            71,977.84             7,197,784                   -                  -
      Series 13           111,885.49            11,188,549                   -                  -
      Series 14             9,000.00               900,000                   -                  -
      Series 15           110,500.00            11,050,000                   -                  -
      Series 16            10,000.00             1,000,000                   -                  -
      Series 17            19,000.00             1,900,000                   -                  -
      Series 18             6,000.00               600,000                   -                  -
                        ------------        --------------        -------------    --------------
Total                     338,363.33        $   33,836,333        7,347,158.49     $  739,207,253
                        =============       ==============       ==============    ==============
</TABLE>


<PAGE>

<TABLE>

                 GOLDMAN SACHS HEDGE FUND PARTNERS II, LLC

                       NOTES TO FINANCIAL STATEMENTS

                                (UNAUDITED)

                             SEPTEMBER 30, 2005



NOTE 8 - MEMBERS' EQUITY (CONTINUED)
------------------------------------
<CAPTION>
                        Nine months ended September 30, 2005       Year ended December 31, 2004
                        -------------------------------------    --------------------------------
                              Units               Amount               Units             Amount
                        ----------------    -----------------    ----------------  --------------
<S>                      <C>                  <C>                  <C>             <C>
Redemptions
   Class A
       Series 1          2,141,601.24        $ 233,316,472          748,891.43       $ 82,305,489
                        ----------------    ------------------   ----------------   -------------
      Total              2,141,601.24        $ 233,316,472          748,891.43       $ 82,305,489
                        ================    ==================   ================   =============

At September 30, 2005 and December 31, 2004, members' equity consists of
the following:
<CAPTION>

                                    September 30, 2005                    December 31, 2004
                            -----------------------------------    ---------------------------------
                                Units               Net                Units              Net
                             outstanding        asset value         outstanding       asset value
                            --------------    -----------------    --------------    ---------------
<S>                         <C>               <C>                   <C>              <C>
Non-managing members
      Class A
         Series 1            8,329,639.68      $   939,082,013      4,477,705.60     $  492,113,487
         Series 2                       -                    -      1,618,389.13        167,180,096
         Series 3                       -                    -      2,184,050.00        222,344,197
         Series 4                       -                    -      2,403,942.74        244,478,196
         Series 5                       -                    -          2,500.00            258,258
         Series 6                       -                    -        106,226.72         11,010,123
         Series 7                       -                    -         40,803.57          4,258,112
         Series 8                       -                    -         19,109.20          2,001,573
         Series 9                       -                    -         32,500.00          3,392,326
         Series 10                      -                    -         22,900.89          2,371,617
         Series 11                      -                    -         14,000.00          1,413,639
         Series 12              71,977.84            7,383,567                 -                  -
         Series 13             111,885.49           11,551,915                 -                  -
         Series 14               9,000.00              919,501                 -                  -
         Series 15             110,500.00           11,341,261                 -                  -
         Series 16              10,000.00            1,044,289                 -                  -
         Series 17              19,000.00            1,985,657                 -                  -
         Series 18               6,000.00              620,637                 -                  -
                            --------------    -----------------    --------------    ---------------
           Subtotal          8,668,003.01      $   973,928,840     10,922,127.85     $1,150,821,624
                            ==============                         ==============

   Managing member                                   1,296,816                                   -
                                              -----------------                      ---------------
   Total members' equity                       $   975,225,656                       $1,150,821,624
                                              =================                      ===============

</TABLE>

<PAGE>


                 GOLDMAN SACHS HEDGE FUND PARTNERS II, LLC

                       NOTES TO FINANCIAL STATEMENTS

                                (UNAUDITED)

                             SEPTEMBER 30, 2005

NOTE 9 - FINANCIAL HIGHLIGHTS
-----------------------------

Financial highlights for the Company for the three months ended
September 30, 2005 are as follows:


<TABLE>
<CAPTION>

                                                   Class A     Class A     Class A     Class A
                                                   Series 1   Series 12   Series 13   Series 14
                                                  ---------  ----------   ----------  ----------
<S>                                                <C>          <C>        <C>          <C>
 Per unit operating performance:
      Net asset value, beginning of period        $ 108.94   $   99.12     $ 99.80    $  98.70
 Income from operations:
      Net trading profit/(loss)                       4.33        3.94        3.96        3.93
      Net investment income/(loss)                   (0.53)      (0.48)      (0.51)      (0.46)
                                                  ---------  ---------     ---------  ----------
         Total income/(loss) from operations          3.80        3.46        3.45        3.47
                                                  ---------  ---------     ---------  ----------

Net asset value, end of period                    $ 112.74   $  102.58    $ 103.25    $ 102.17
                                                  =========  =========     =========  ==========

Ratios to average net assets (annualized):
      Expenses                                       1.30%       1.30%       1.30%       1.30%
      Incentive allocation                           0.13%       0.13%       0.17%       0.11%
                                                  ---------  ---------     ---------  ----------
         Total expenses and incentive
         allocation                                  1.43%       1.43%       1.47%       1.41%
                                                  =========  =========     =========  ==========

         Net investment income/(loss)               (1.41%)     (1.41%)     (1.45%)     (1.39%)
                                                  =========  =========     =========  ==========
Total return (prior to incentive allocation)         3.63%       3.63%       3.63%       3.63%
Incentive allocation                                (0.15%)     (0.15%)     (0.18%)     (0.13%)
                                                  ---------  ---------     ---------  ----------
         Total return                                3.48%       3.48%       3.45%       3.50%
                                                  =========  =========     =========  ==========
<CAPTION>

                                                   Class A     Class A     Class A     Class A
                                                  Series 15  Series 16   Series 17   Series 18
                                                  ---------  ----------   ----------  ----------
<S>                                                <C>          <C>        <C>          <C>
Per unit operating performance:
      Net asset value, beginning of period        $  99.18   $  100.95    $ 101.03    $ 100.00
Income from operations:
      Net trading profit/(loss)                       3.94        4.02        4.02        3.97
      Net investment income/(loss)                   (0.48)      (0.54)      (0.54)      (0.53)
                                                  ---------  ----------   ----------  ----------
         Total income/(loss) from operations          3.46        3.48        3.48        3.44
                                                  ---------  ----------   ----------  ----------

 Net asset value, end of period                   $ 102.64   $ 104.43     $ 104.51    $ 103.44
                                                  =========  =========     =========  ==========

Ratios to average net assets (annualized):
      Expenses                                       1.30%       1.31%       1.31%       1.31%
      Incentive allocation                           0.14%       0.18%       0.18%       0.18%
                                                  ---------  ----------   ----------  ----------
         Total expenses and incentive
         allocation                                  1.44%       1.49%       1.49%       1.49%
                                                  =========  =========     =========  ==========

         Net investment income/(loss)               (1.42%)     (1.46%)     (1.46%)     (1.46%)
                                                  =========  =========     =========  ==========

Total return (prior to incentive allocation)         3.63%       3.62%       3.62%       3.62%
Incentive allocation                                (0.15%)     (0.18%)     (0.18%)     (0.18%)
                                                  ---------  ----------   ----------  ----------
         Total return                                3.48%       3.44%       3.44%       3.44%
                                                  =========  =========     =========  ==========
</TABLE>


<PAGE>

                 GOLDMAN SACHS HEDGE FUND PARTNERS II, LLC

                       NOTES TO FINANCIAL STATEMENTS

                                (UNAUDITED)

                             SEPTEMBER 30, 2005


NOTE 9 - FINANCIAL HIGHLIGHTS (CONTINUED)
-----------------------------------------

Financial highlights for the Company for the three months ended
September 30, 2004 are as follows:

<TABLE>
<CAPTION>

                                                   Class A     Class A     Class A     Class A
                                                   Series 1   Series 2    Series 3    Series 4
                                                  ---------  ----------   ----------  ----------
<S>                                                <C>          <C>        <C>          <C>
 Per unit operating performance:
      Net asset value, beginning of period        $ 106.03    $  99.65     $ 98.13    $  98.02
 Income from operations:
      Net trading profit/(loss)                      (0.45)      (0.44)      (0.42)      (0.42)
      Net investment income/(loss)                   (0.29)      (0.30)      (0.30)      (0.30)
                                                  ---------  ----------   ----------  ----------
         Total income/(loss) from operations         (0.74)      (0.74)      (0.72)      (0.72)
                                                  ---------  ----------   ----------  ----------
 Net asset value, end of period                   $ 105.29    $  98.91     $ 97.41    $  97.30
                                                  =========  =========     =========  ==========

 Ratios to average net assets (annualized):
      Expenses                                       1.30%       1.30%       1.30%       1.30%
      Incentive allocation                          (0.04%)      0.00%       0.00%       0.00%
                                                  ---------  ----------   ----------  ----------
         Total expenses and incentive
         allocation                                  1.26%       1.30%       1.30%       1.30%
                                                  =========  =========     =========  ==========

         Net investment income/(loss)               (1.22%)     (1.26%)     (1.26%)     (1.26%)
                                                  =========  =========     =========  ==========
 Total return (prior to incentive
 allocation)                                        (0.74%)     (0.74%)     (0.74%)     (0.74%)
 Incentive allocation                                 0.04%     (0.00%)     (0.00%)     (0.00%)
                                                  ---------  ----------   ----------  ----------
         Total return                               (0.70%)     (0.74%)     (0.74%)     (0.74%)
                                                  =========  =========     =========  ==========

<CAPTION>

                                                   Class A     Class A     Class A     Class A
                                                  Series 5    Series 6    Series 7    Series 8
                                                  ---------  ----------   ----------  ----------
<S>                                                <C>          <C>        <C>          <C>
Per unit operating performance:
      Net asset value, beginning of period        $  99.65   $  100.00     $100.00    $ 100.00
 Income from operations:
      Net trading profit/(loss)                      (0.43)      (0.43)       0.20        0.47
      Net investment income/(loss)                   (0.30)      (0.31)      (0.22)      (0.12)
                                                  ---------  ----------   ----------  ----------
         Total income/(loss) from operations         (0.73)      (0.74)      (0.02)       0.35
                                                  ---------  ----------   ----------  ----------
 Net asset value, end of period                   $  98.92    $  99.26     $ 99.98    $ 100.35
                                                  =========  =========     =========  ==========

 Ratios to average net assets (annualized):
      Expenses                                       1.30%       1.30%       1.30%       1.30%
      Incentive allocation                           0.00%       0.00%       0.00%       0.02%
                                                  ---------  ----------   ----------  ----------
         Total expenses and incentive
         allocation                                  1.30%       1.30%       1.30%       1.32%
                                                  =========  =========     =========  ==========

         Net investment income/(loss)               (1.26%)     (1.26%)     (1.26%)     (1.27%)
                                                  =========  =========     =========  ==========
 Total return (prior to incentive
 allocation)                                        (0.74%)     (0.74%)     (0.02%)      0.37%
 Incentive allocation                               (0.00%)     (0.00%)     (0.00%)     (0.02%)
                                                  ---------  ----------   ----------  ----------
         Total return                               (0.74%)     (0.74%)     (0.02%)      0.35%
                                                  =========  =========     =========  ==========
</TABLE>


<PAGE>

                 GOLDMAN SACHS HEDGE FUND PARTNERS II, LLC

                       NOTES TO FINANCIAL STATEMENTS

                                (UNAUDITED)

                             SEPTEMBER 30, 2005


NOTE 9 - FINANCIAL HIGHLIGHTS (CONTINUED)
-----------------------------------------

Financial highlights for the Company for the nine months ended
September 30, 2005 are as follows:

<TABLE>
<CAPTION>

                                                   Class A     Class A     Class A     Class A
                                                   Series 1   Series 12   Series 13   Series 14
                                                  ---------  ----------   ----------  ----------
<S>                                                <C>          <C>        <C>          <C>
 Per unit operating performance:
      Net asset value, beginning of period        $ 109.90   $  100.00     $100.00    $ 100.00
 Income from operations:
      Net trading profit/(loss)                       4.06        3.69        4.29        3.04
      Net investment income/(loss)                   (1.22)      (1.11)      (1.04)      (0.87)
                                                  ---------  ----------   ----------  ----------
         Total income/(loss) from operations          2.84        2.58        3.25        2.17
                                                  ---------  ----------   ----------  ----------
 Net asset value, end of period                   $ 112.74   $  102.58     $103.25    $ 102.17
                                                  =========  =========     =========  ==========

 Ratios to average net assets (annualized):
      Expenses                                       1.30%       1.30%       1.30%       1.30%
      Incentive allocation                           0.12%       0.14%       0.17%       0.11%
                                                  ---------  ----------   ----------  ----------
         Total expenses and incentive
         allocation                                  1.42%       1.44%       1.47%       1.41%
                                                  =========  =========     =========  ==========

         Net investment income/(loss)               (1.40%)     (1.43%)     (1.46%)     (1.40%)
                                                  =========  =========     =========  ==========
 Total return (prior to incentive
 allocation)                                         2.70%       2.72%       3.42%       2.28%
 Incentive allocation                               (0.12%)     (0.14%)     (0.17%)     (0.11%)
                                                  ---------  ----------   ----------  ----------
         Total return                                2.58%       2.58%       3.25%       2.17%
                                                  =========  =========     =========  ==========

<CAPTION>

                                                   Class A     Class A     Class A     Class A
                                                 Series 15   Series 16   Series 17   Series 18
                                                  ---------  ----------   ----------  ----------
<S>                                                <C>          <C>        <C>          <C>
Per unit operating performance:
      Net asset value, beginning of period        $ 100.00   $  100.00    $ 100.00    $ 100.00
 Income from operations:
      Net trading profit/(loss)                       3.44        5.24        5.22        3.97
      Net investment income/(loss)                   (0.80)      (0.81)      (0.71)      (0.53)
                                                  ---------  ----------   ----------  ----------
         Total income/(loss) from operations          2.64        4.43        4.51        3.44
                                                  ---------  ----------   ----------  ----------
 Net asset value, end of period                   $ 102.64   $  104.43    $ 104.51    $ 103.44
                                                  =========  =========     =========  ==========

 Ratios to average net assets (annualized):
      Expenses                                       1.30%       1.30%       1.31%       1.31%
      Incentive allocation                           0.14%       0.23%       0.23%       0.18%
                                                  ---------  ----------   ----------  ----------
         Total expenses and incentive
         allocation                                  1.44%       1.53%       1.54%       1.49%
                                                  =========  =========     =========  ==========

         Net investment income/(loss)               (1.43%)     (1.52%)     (1.52%)     (1.46%)
                                                  =========  =========     =========  ==========
 Total return (prior to incentive
 allocation)                                         2.78%       4.66%       4.75%       3.62%
 Incentive allocation                               (0.14%)     (0.23%)     (0.24%)     (0.18%)
                                                  ---------  ----------   ----------  ----------
         Total return                                2.64%       4.43%       4.51%       3.44%
                                                  =========  =========     =========  ==========
</TABLE>

                 GOLDMAN SACHS HEDGE FUND PARTNERS II, LLC

                       NOTES TO FINANCIAL STATEMENTS

                                (UNAUDITED)

                             SEPTEMBER 30, 2005


NOTE 9 - FINANCIAL HIGHLIGHTS (CONTINUED)
-----------------------------------------

Financial highlights for the Company for the nine months ended September
30, 2004 are as follows:

<TABLE>
<CAPTION>

                                                   Class A     Class A     Class A     Class A
                                                  Series 1    Series 2    Series 3    Series 4
                                                  ---------  ----------   ----------  ----------
<S>                                                <C>          <C>        <C>          <C>
 Per unit operating performance:
      Net asset value, beginning of period        $ 104.98   $  100.00     $100.00    $ 100.00
 Income from operations:
      Net trading profit/(loss)                       1.37       (0.24)      (1.85)      (2.08)
      Net investment income/(loss)                   (1.06)      (0.85)      (0.74)      (0.62)
                                                  ---------  ----------   ----------  ----------
         Total income/(loss) from operations          0.31       (1.09)      (2.59)      (2.70)
                                                  ---------  ----------   ----------  ----------
 Net asset value, end of period                   $ 105.29   $   98.91     $ 97.41    $  97.30
                                                  =========  =========     =========  ==========

 Ratios to average net assets (annualized):
      Expenses                                       1.35%       1.34%       1.34%       1.31%
      Incentive allocation                           0.02%       0.00%       0.00%       0.00%
                                                  ---------  ----------   ----------  ----------
         Total expenses and incentive
         allocation                                  1.37%       1.34%       1.34%       1.31%
                                                  =========  =========     =========  ==========

         Net investment income/(loss)               (1.33%)     (1.29%)     (1.29%)     (1.28%)
                                                  =========  =========     =========  ==========
 Total return (prior to incentive
 allocation)                                         0.31%      (1.09%)     (2.59%)     (2.70%)
 Incentive allocation                               (0.01%)     (0.00%)     (0.00%)     (0.00%)
                                                  ---------  ----------   ----------  ----------
         Total return                                0.30%      (1.09%)      (2.59%)     (2.70%)
                                                  =========  =========     =========  ==========

<CAPTION>

                                                   Class A     Class A     Class A     Class A
                                                  Series 5    Series 6    Series 7    Series 8
                                                  ---------  ----------   ----------  ----------
<S>                                                <C>          <C>        <C>          <C>
Per unit operating performance:
      Net asset value, beginning of period        $ 100.00   $  100.00    $ 100.00    $ 100.00
 Income from operations:
      Net trading profit/(loss)                      (0.67)      (0.43)       0.20        0.47
      Net investment income/(loss)                   (0.41)      (0.31)      (0.22)      (0.12)
                                                  ---------  ----------   ----------  ----------
         Total income/(loss) from operations         (1.08)      (0.74)      (0.02)       0.35
                                                  ---------  ----------   ----------  ----------
 Net asset value, end of period                   $  98.92   $   99.26    $  99.98    $ 100.35
                                                  =========  =========     =========  ==========

 Ratios to average net assets (annualized):
      Expenses                                       1.30%       1.30%       1.30%       1.30%
      Incentive allocation                           0.00%       0.00%       0.00%       0.02%
                                                  ---------  ----------   ----------  ----------
         Total expenses and incentive
         allocation                                  1.30%       1.30%       1.30%       1.32%
                                                  =========  =========     =========  ==========

         Net investment income/(loss)               (1.27%)     (1.26%)     (1.26%)     (1.27%)
                                                  =========  =========     =========  ==========
 Total return (prior to incentive
 allocation)                                        (1.08%)     (0.74%)     (0.02%)      0.37%
 Incentive allocation                               (0.00%)     (0.00%)     (0.00%)     (0.02%)
                                                  ---------  ----------   ----------  ----------
         Total return                               (1.08%)     (0.74%)     (0.02%)      0.35%
                                                  =========  =========     =========  ==========
</TABLE>

<PAGE>
                 GOLDMAN SACHS HEDGE FUND PARTNERS II, LLC

                       NOTES TO FINANCIAL STATEMENTS

                                (UNAUDITED)

                               SEPTEMBER 30, 2005



NOTE 9 - FINANCIAL HIGHLIGHTS (CONTINUED)
-----------------------------------------

Total return is calculated for each series taken as a whole.  The ratios to
average  net assets and the total  return for each member may vary based on
the  timing  of  capital  transactions.  The  ratio  of  expenses  and  net
investment  income/(loss)  to average net assets is  calculated by dividing
total expenses and net investment income/(loss), respectively, by the month
end average net assets for the period.  The  components of total return are
calculated  by dividing the change in the per unit value of each  component
for the  period by the net asset  value  per unit at the  beginning  of the
period.  The ratios to average net assets  calculated  above do not include
the Company's  proportionate share of net investment income and expenses of
the Investees.


<PAGE>


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

     The  following  discussion  should  be read in  conjunction  with  the
financial  statements  of Goldman  Sachs Hedge Fund  Partners  II, LLC (the
"Company") and the related notes thereto.

OVERVIEW

     The  Company is a Delaware  limited  liability  company  organized  in
August 2003 to operate as an investment  fund.  It commenced  operations on
August 1, 2003. Goldman Sachs Hedge Fund Strategies LLC, a Delaware limited
liability  company,  serves as the Company's managing member (the "Managing
Member").

     As of September 30, 2005, the Company had total assets of $977,512,311
compared  with total  assets of  $1,239,119,475  as of December  31,  2004.
Liabilities  of the Company  totaled  $2,286,655  as of September  30, 2005
compared with  $88,297,851 as of December 31, 2004.  Member's equity of the
Company  was   $975,225,656   as  of  September   30,  2005  compared  with
$1,150,821,624 as of December 31, 2004.

     The Company's  investment  objective is to target attractive long-term
risk-adjusted   returns  across  a  variety  of  market  environments  with
volatility  and  correlation  that are lower than those of the broad equity
markets.   To  achieve  this  objective,   the  Company  allocates  all  or
substantially  all of its assets among privately  placed  investment  funds
(the  "Investment  Funds")  managed by the Managing  Member,  each of which
allocates  its assets to, or invests in entities  managed  by,  independent
investment  managers  (collectively,  the  "Advisors")  that employ a broad
range of investment  strategies  primarily within one of the following four
hedge fund sectors:  the equity long/short sector, the event driven sector,
the relative  value sector,  and the tactical  trading  sector.  Currently,
substantially  all of the Company's  assets are invested in four Investment
Funds: Goldman Sachs Global Equity Long/Short,  LLC ("GELS"), Goldman Sachs
Global Event Driven,  LLC ("GED"),  Goldman Sachs Global Relative Value II,
LLC ("GRV II ") and Goldman  Sachs  Global  Tactical  Trading II, LLC ("GTT
II").

     Performance  of the Company in any period will be  dependent  upon the
performance  by  the  four  Investment  Funds  and  the  percentage  of the
Company's  assets in each of the  Investment  Funds  during the period.  In
addition,  performance  is determined by the  allocation by the  Investment
Funds of their assets with the various Advisors and the performance of each
of those Advisors.

     The Company's  results  depend on the ability of the Managing  Member,
including  in its  capacity  as managing  member of each of the  Investment
Funds,  to  recognize  and  capitalize  on  trends  and  other  profit  and
investment  opportunities  within the four investment sectors.  Unlike many
operating businesses,  general economic or seasonal conditions may not have
any  direct  effect  on the  profit  potential  of the  Company  due to the
speculative  nature of the  Company's  investments  and since the Company's
investments in the Investment  Funds are managed to seek to eliminate or at
least  significantly  reduce  the impact of general  economic  or  seasonal
conditions.  In addition, the Company's past performance is not necessarily
indicative of future  results.  Each  Investment  Fund allocates  assets to
Advisors  that  invest in  various  markets  at  different  times and prior
activity  in a  particular  market  does not mean that such  market will be
invested in by the Advisors or will be profitable in the future.


<PAGE>


RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30,
2005 AND 2004

     The following  presents a summary of the  operations for the three and
nine  months  ended  September  30,  2005 and for the three and nine months
ended  September  30, 2004,  and a general  discussion  of each  Investment
Fund's performance during those periods.

PERFORMANCE FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005

     The  Company's net trading  profit/loss  for the three and nine months
ended  September 30, 2005 was $37,416,259  and  $34,591,406,  respectively,
compared  to the  three  and  nine  months  ended  September  30,  2004  of
$(4,945,629) and $(2,097,234), respectively.

     For the three and nine months ended  September 30, 2005, the Company's
Class A Series 1 Units returned 3.48% and 2.58%, respectively,  net of fees
and incentive allocation.

OVERVIEW

     The Company is designed to be broadly exposed to the hedge fund market
by  allocating  its assets to the  Investment  Funds in the four hedge fund
sectors:  tactical  trading,  equity  long/short,  relative value and event
driven.  Quantitative  analysis is  combined  with  judgment  to  determine
strategic allocations that will offer broad exposure to hedge fund returns.
Strategic  return,  risk and correlation  estimates inform the quantitative
analysis,  which  balances  returns and  contribution  to  portfolio  risk.
Judgment is applied to both  estimates and weights in an attempt to achieve
a  diversified  exposure  to hedge funds while  targeting  attractive  risk
adjusted returns.  All sectors posted positive returns for the three months
ended  September 30, 2005,  and all sectors  except  tactical  trading were
positive for the nine months ended  September 30, 2005,  with the strongest
performance  delivered by the equity long/short sector.  Decreased investor
confidence,  rising interest rates, and continued strength in European and,
especially,  Asian equity  markets during the first nine months of 2005, as
well as the effects of Hurricane Katrina in the third quarter of 2005, were
all significant  drivers of  performance.  The Company cannot predict which
hedge fund sector and  accordingly,  which Investment Fund will perform the
best in the future. As of September 30, 2005, the Company had the following
exposures:

<TABLE>
<CAPTION>


                                              THREE MONTHS          NINE MONTHS
                         PORTFOLIO WEIGHT        ENDED                 ENDED
                             AS A % OF      SEPTEMBER 30, 2005   SEPTEMBER 30, 2005
   INVESTMENT FUND       MEMBERS' EQUITY      NET RETURN (1)       NET RETURN (1)
--------------------- --------------------- --------------- ------------------------
<S>                            <C>              <C>               <C>
        GELS                   25.81%             6.10%                 8.11%
-----------------------------------------------------------------------------------
        GED                    26.91%             3.39%                 5.85%
-----------------------------------------------------------------------------------
       GRV II                  28.08%             3.61%                 1.82%
-----------------------------------------------------------------------------------
       GTT II                  19.05%             2.64%               (0.26)%
-----------------------------------------------------------------------------------
<FN>

(1)  These returns are based on the  performance of Class C Series 1 units.
     The  returns  include   administration  fees.  No  management  fee  or
     incentive  allocation  was  charged  by  the  managing  member  of the
     Investment  Funds with respect to the  Company's  investment in any of
     the  Investment  Funds.  Past  performance is not indicative of future
     results, which may vary.
</FN>
</TABLE>

THE INVESTMENT FUNDS

     Each of the four Investment  Funds'  performance  during the three and
nine months ended September 30, 2005 is described in the following.

GOLDMAN SACHS GLOBAL EQUITY LONG/SHORT, LLC

     As of September 30, 2005, GELS  represented  approximately  26% of the
Company's  members' equity which reflected the reweighting of the portfolio
and the subsequent  increase in the weighting of GELS during the first half
of 2005. GELS returned 6.10% and 8.11%, respectively,  for Class C Series 1
units for the three and nine months ended September 30, 2005.

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005

     Global equity markets exhibited mixed performance in the third quarter
of 2005, with U.S.  equities  finishing the quarter  slightly ahead,  while
European and especially  Japanese  equities  delivered  strong  performance
during the quarter.  U.S.  equities rallied strongly in July on better than
expected leading economic  indicators data, a slightly  improved U.S. trade
deficit situation and stronger than expected retail sales figures. Japanese
equities rallied on news that the country's  unemployment  rate had dropped
to its lowest level since 1998. Technology and biotechnology companies with
higher  volatility  than the market  rallied  even more  strongly  than the
overall  markets in July,  hurting  many of the GELS  Advisors who were net
short those sectors. U.S. markets reversed course and dropped significantly
in August due to decreased investor  confidence.  The Federal Reserve Board
(the "Fed") warned that the risk  premiums  priced into the real estate and
bond markets were abnormally low, while Moody's downgraded the debt of both
Ford and General  Motors to junk  status.  Japanese  equities  continued to
rally after a strong Tokyo consumer  confidence  report.  Hurricane Katrina
was the driving event behind the markets in September,  and the hurricane's
damage to gulf coast energy  assets sent prices for energy  commodities  up
significantly.  The rise in energy prices  helped  propel  energy  equities
higher, helping many GELS Advisors who were net long energy stocks. The Fed
continued  to raise  interest  rates  despite the impact of the  hurricane.
Higher  energy  prices,  in  conjunction  with a decline  in U.S.  consumer
confidence levels, dampened the returns of the U.S. equities markets, which
finished  September  only  slightly  higher.  A victory by  Japanese  Prime
Minister  Koizumi in Japan  helped to  maintain  the  positive  momentum of
Japanese equities through the end of the quarter.

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005

     Markets  were mixed for the first three  quarters  of 2005,  with most
U.S. indices up slightly,  while European and Asian equities have delivered
strong performance. The S&P 500 Index was down for the first quarter before
recovering  in the second  and third  quarters,  finishing  up 2.8% for the
first nine months of 2005.  Rising energy prices  dominated the news in the
first  quarter of 2005.  Crude oil  started  January  trading at $42.12 per
barrel, and finished the first quarter at $55.40 per barrel.  Though energy
prices remained stable during the second quarter of 2005, prices for energy
products  and natural gas spiked in the third  quarter,  largely due to the
effects of Hurricanes  Katrina and Rita. Natural gas prices have risen over
125% since the  beginning of the year,  with much of that rise taking place
in the third  quarter.  After a mixed January,  GELS Advisors  posted solid
returns in February,  with twelve of twenty-six Advisors up at least 3% for
the month.  The market  corrected  in March,  with  emerging  markets  down
significantly.  The first  quarter of 2005  rally in energy  and  commodity
prices hurt the overall  markets,  but helped several GELS Advisors who had
significant long exposure to energy, industrial and cyclical stocks. In the
beginning of the second quarter of 2005,  sell-offs  occurred in those same
energy,  industrial  and  cyclical  names as  commodity  prices  retreated,
hurting  performance  of a number  of GELS  Advisors.  Many  GELS  Advisors
reduced exposure to those sectors early in the second quarter of 2005. Poor
first quarter U.S. Gross  Domestic  Product  ("GDP")  numbers and inflation
fears contributed to poor performance in nearly all world equity indices in
April. In May, positively revised first quarter 2005 GDP numbers,  stronger
than expected U.S. non-farm payroll numbers, and a lower than expected U.S.
trade deficit helped to propel equities to significant gains for the month.
In June, most U.S.  indices  declined or were flat,  while overseas markets
performed  well. The Fed raised rates yet again in the U.S.,  while the U.K
Monetary  Authority kept rates unchanged.  The U.S. trade deficit was below
expectations,  and the U.S. index of leading economic indicators was weaker
than expected.  Most GELS Advisors performed well in the month of June, and
more than two thirds of GELS Advisors  delivered  positive  performance for
the second quarter of 2005. The U.S. equities markets rallied significantly
in July,  with  technology and biotech  companies  performing  particularly
well.  The market  reversed  course in August,  with most indices down as a
result of weak  consumer  confidence  numbers,  among other  economic  data
points.  In September,  the markets were driven largely by the aftereffects
of Hurricane Katrina,  which drove prices for energy and the stocks of most
energy companies  significantly  higher.  GELS Advisors were, in aggregate,
long the energy sector and  benefited  from the strong  performance  of the
sector in September.

GOLDMAN SACHS GLOBAL EVENT DRIVEN, LLC

     As of September 30, 2005,  GED  represented  approximately  27% of the
Company's  members' equity which reflected the reweighting of the portfolio
and the  subsequent  increase in the weighting of GED during the first half
of 2005. GED returned 3.39% and 5.85%,  respectively,  for Class C Series 1
units for the three and nine months ended September 30, 2005.

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005

     GED Advisors experienced a strong third quarter,  with the majority of
gains coming from exposure to European and Asian  situations,  specifically
in  merger-related  equity  transactions  and to companies with  distressed
credit. There were several themes at play during the quarter, including the
effects of Hurricane  Katrina on gasoline  prices,  the Federal Open Market
Committee's  decision to raise the Federal  Funds target rate for the tenth
time in a little over a year to 3.50%,  and continued  strength in European
and Asian stock markets,  particularly in Japan,  where the TOPIX ended the
quarter at a four-year high.

     High yield credit spreads  tightened by 31 basis points ("bps") to end
the quarter at 354 bps over  10-year  Treasury  Notes, with  the high yield
market,  represented  by the Merrill  Lynch US High Yield  Master II Index,
ending the quarter up 0.9%.  GED Advisors  continued to focus on individual
credits,  with  weakness  in the  airline and auto  sectors  continuing  to
dominate the  headlines.  In the month of August,  General Motors and Ford,
the two biggest U.S.  automakers,  were  downgraded to high yield status by
Moody's as both  companies  continued  to struggle in their North  American
automotive  operations.  The news was  greeted by the market  with  minimal
impact  since Fitch and S&P,  the two other  major  ratings  agencies,  had
already  downgraded  both  companies  in the month of May.  In the month of
September,  the CCC and lower-rated component of the index was down 1.6% as
Delta Air Lines and Northwest Airlines both filed for Chapter 11 bankruptcy
citing balance sheet weakness, labor issues, competitive pressures,  rising
jet fuel costs and debilitating pension liabilities.

     Announced  global  mergers  and  acquisitions  volumes  for the  third
quarter of 2005 totaled $584 billion, which represented a 54% increase over
the third quarter of 2004.  Competitive  merger  transactions with inherent
deal  complexities  typically  provide  attractive  opportunities  for  GED
Advisors.

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005

     In the first quarter of 2005,  GED Advisors  benefited  from the short
positions held by many  credit-focused  managers,  as well as from European
and other  non-U.S.  exposure.  In the second quarter of 2005, GED Advisors
recouped  losses  suffered  in April and May in the  credit  market  with a
strong month in June,  aided by positive  performance  from  Advisors  with
European  exposure.  In the third quarter of 2005,  GED Advisors  benefited
from the  increased  level  of  mergers  and  acquisitions  deal  activity,
including LBO transactions in North America and Europe,  as well as certain
distressed situations, particularly in the energy and power sector.

     High yield  spreads were affected late in the first quarter of 2005 by
a number of  events,  including  the  Fed's  decision  to raise  short-term
interest rates, high yield mutual fund outflows, and negative earnings from
GM, the  world's  largest  auto  maker.  The  second  quarter of 2005 saw a
continuation of the same theme:  the Fed raised rates for the ninth time in
the past  twelve  months,  and the month of April  experienced  a technical
sell-off in the high yield markets with continued mutual fund outflows.

     Key events for 2005 through the third quarter include the downgrade of
GM and Ford to junk  status  and Delta Air  Lines and  Northwest  Airlines'
decision to file for Chapter 11 bankruptcy.

     There  has  been  $1.85  trillion  of  announced  global  mergers  and
acquisition activity through the third quarter of 2005,  representing a 49%
increase,  year-over-year.  In the  third  quarter  of 2005,  GED  Advisors
profited  from the  completion  of the  Sprint  and  Nextel  Communications
merger.

     In the area of strategic alternatives/restructuring, GED Advisors were
active in the media sector.  Companies with exposure to asbestos litigation
rallied  early in the  second  quarter of 2005 on the back of news that the
Senate  Judiciary  Committee  may  be  close  to  agreement  on a  proposed
industry-financed asbestos trust fund.

GOLDMAN SACHS GLOBAL RELATIVE VALUE II, LLC

     As of September 30, 2005, GRV II represented  approximately 28% of the
Company's  members' equity which reflected the reweighting of the portfolio
and the  subsequent  decrease in the  weighting  of GRV II during the first
nine months of 2005.  GRV II returned  3.61% and 1.82%,  respectively,  for
Class C Series 1 units for the three and nine months  ended  September  30,
2005.

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005

     Convertible bond arbitrage  strategies  generated  positive returns in
the third  quarter of 2005.  GRV II does not have  exposure to this type of
strategy   through    single-strategy    advisors,   but   rather   through
multi-strategy  advisors.  GRV II Advisors  experienced  a recovery in this
strategy  primarily  as a result  of an  increase  in  implied  volatility,
particularly  in Asia.  In  addition,  the  technical  selling and negative
sentiment  experienced  in the first half of 2005 was less prevalent in the
third quarter.  As a result, most GRV II Advisors trading convertible bonds
experienced positive performance from this strategy.

     Overall, GRV II Advisors experienced a strong third quarter, despite a
difficult equity market  environment where the variation between individual
stocks'  returns  remained low by  historical  standards,  providing  fewer
opportunities for profits from net positive vs. net negative positions. The
profits were due to strong  factor  performance,  such as value factors and
momentum factors,  which,  when aggregated across many stocks,  resulted in
strong returns.

     GRV  II  Advisors   implementing   fixed  income  trading   strategies
experienced  mixed  performance  in  the  third  quarter  of  2005.  GRV II
Advisors'  returns  differed based on their  investment  approaches.  Fixed
Income trading in government/agency  markets was modestly positive,  driven
by positions in Japan and Europe, but underperformed most other strategies.
Lower trading volumes  detracted from performance in the latter half of the
quarter.

     GRV  II  Advisors   implementing   credit  relative  value  strategies
delivered  good results for the third quarter in 2005.  GRV II Advisors who
focused on fundamental  credit picking  continued their solid  performance.
GRV II  Advisors  who have more of a  quantitative  investment  process and
trading approach  experienced some improvement in the third quarter but low
volumes  kept  returns  relatively  low.  Managers  exposed to  correlation
trading suffered a bit toward the end of the quarter.

     GRV II  Advisors  implementing  strategies  based on  emerging  market
relative value posted solid gains in the third quarter,  mainly  attributed
to intra-country  trading,  fundamental sovereign debt selection and strong
market technicals.

     GRV II Advisors  implementing a multi-strategy  approach experienced a
positive  third quarter of 2005.  Although the majority of profits  derived
from the  aforementioned  strategies,  GRV II Advisors also  benefited from
their allocation to niche strategies such as energy volatility  trading and
credit special situations.

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005

     Convertible bond arbitrage  strategies  generated  negative returns in
the first nine months of 2005.  Realized  equity  volatility  remained  low
throughout the first nine months of the year, implied volatilities declined
and the new issue market was weak.  For much of the period,  there was also
pressure on convertible  bond valuations as a result of hedge fund investor
redemptions. The Chicago Board Options Exchange Volatility Index ("VIX") (a
measure of short term implied  volatility)  traded  between 10.2% and 17.7%
for the  period.  As a  result,  for the first  nine  months of 2005 GRV II
Advisors   trading   convertible  bond  strategies   experienced   negative
performance from this strategy.

     Overall, GRV II Advisors implementing equity market neutral strategies
experienced a strong first nine months in 2005. Strong performance by value
and momentum factors  overcame a difficult  equity market  characterized by
low dispersion between single stock prices.

     GRV  II  Advisors   implementing   fixed  income  trading   strategies
collectively  were  slightly  positive  in the first  nine  months of 2005,
although there was significant  dispersion between managers' returns.  Most
of the  dispersion  was a result of the  managers'  security  selection and
trading  approach.  Managers focusing on yield curve relative value trading
experienced  mixed results,  while managers focusing more on long and short
positions between countries outperformed.

     GRV  II  Advisors   implementing   credit  relative  value  strategies
delivered  mixed results for the first nine months of 2005. GRV II Advisors
focusing more on fundamental  credit picking were able to generate positive
absolute  returns,  while credit relative value GRV II Advisors with a more
quantitative  investment and trading approach  (especially those exposed to
correlation  trades)  suffered  losses as the price  movement  predicted by
their models deviated from real market price movements.

     GRV II  Advisors  implementing  strategies  based on  emerging  market
relative  value  posted  strong  results in the first nine  months of 2005.
Profits were  primarily a result of strong market  technicals  coupled with
successful intra-country trading and fundamental sovereign debt selection.

     GRV II Advisors  implementing a  multi-strategy  approach  experienced
overall  positive results for the nine months ended September 30, 2005. The
differences  in  performance  between  multi-strategy  GRV II Advisors were
primarily  due to the  different  allocation  each  GRV II  Advisor  had to
convertible  bond  trading,  correlation  trading,  and  equity  volatility
trading  strategies.   The  more  a  GRV  II  Advisor  allocated  to  these
strategies,  the greater the  likelihood  of negative  performance.  GRV II
Advisors  who  allocated in favor of  fundamental  credit,  equity  trading
strategies  and  niche  strategies,  such  as  energy  volatility  trading,
produced overall positive results.

GOLDMAN SACHS GLOBAL TACTICAL TRADING II, LLC

     As of September 30, 2005, GTT II represented  approximately 19% of the
Company's  members' equity which reflected the reweighting of the portfolio
and the  subsequent  decrease in the  weighting  of GTT II during the first
nine months of 2005. GTT II returned 2.64% and (0.26)%,  respectively,  for
Class C Series 1 units for the three and nine months  ended  September  30,
2005.

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005

     The third  quarter of 2005  proved to be strong for GTT II Advisors as
GTT II Advisors were profitable in each of the three months. Equity trading
was the largest  contributor to performance  for the third quarter  through
long positioning in major global equity indices. The equity markets rallied
strongly during the quarter, reflecting a positive global economic outlook.
GTT II Advisors were  particularly  successful  with long  positions in the
Nikkei,  as the index  rose to a  four-year  high on strong  conviction  in
Japan's  continuing  progress  toward  economic  recovery,  a theme further
emphasized by Koizumi's election victory.

     Fixed Income trading was the largest  contributor to losses for GTT II
Advisors in the third quarter of 2005. U.S. Treasuries finished the quarter
lower, as investors  discounted  continued  interest rate tightening by the
Fed and the possible  economic  slowdown  caused by Hurricanes  Katrina and
Rita. Japanese government bonds also ended the third quarter  significantly
lower, on positive  economic outlook and a favorable  election result.  Net
long positions across European and Asian fixed income instruments generated
losses for GTT II Advisors, while short positions in 10-year Treasury Notes
were profitable.

     Commodities trading generated  substantial profits for GTT II Advisors
in the third quarter of 2005. Energy prices reached  historical highs after
Hurricane  Katrina disrupted 95% of oil production along the Gulf of Mexico
in August.  Prices then retreated moderately at the beginning of September,
until Hurricane Rita led to another spike  mid-month.  GTT II Advisors were
broadly  long  energy  instruments,   making  energy  the  most  profitable
commodity sector for the quarter. Precious and base metal trading were also
profitable for GTT II Advisors  during the quarter.  Gold reached a 17-year
high,  as  record  high  energy  prices  boosted  demand  for  gold  as  an
inflation-hedging  instrument.  Copper  also  traded  at  record  highs  in
response to increasing global demand led by China.  Grain trading was mixed
as net short positions in soybeans  finished the quarter  profitable  while
short  wheat  positions  were hurt by a sharp price spike at the end of the
quarter  following a government  report  showing that  production  may fall
substantially due to disease in the spring crop.

     Foreign exchange trading  contributed to losses for GTT II Advisors in
the  third  quarter  of 2005.  Following  dollar  depreciation  in July and
August,  the  currency  rallied  in  September,  as it became  increasingly
evident that yield  differentials  favored the U.S.  over Europe and Japan.
GTT  II  Advisors  were  moderately  profitable  through  net  long  dollar
positioning  against a basket of major  currencies.  However,  profits were
offset  by  losses   generated   from  long  dollar   positioning   against
commodity-related  currencies such as the Australian dollar as the currency
appreciated in response to growing commodity demand.

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005

     The first three quarters of 2005 experienced  mixed results across the
four  major  asset  classes.   Fixed  income   generated  the  majority  of
year-to-date  gains,  with  profits  coming  primarily  from long  European
exposure during the first half of the year. European bonds rallied strongly
on sluggish economic growth and an unstable political environment. However,
these long positions were the biggest  detractors in the third quarter,  as
global  fixed  income  markets  sold off  broadly on  concerns  over global
inflation which led to interest rate tightening by the central banks. Bonds
in the U.S. traded in a tight range  throughout the first three quarters of
the year on  conflicting  economic  releases,  resulting in a  particularly
difficult  trading  environment  for  GTT  II  Advisors.  GTT  II  Advisors
extracted  substantial profits from short U.S. fixed income exposure during
the bond sell-off in the second  quarter and ended the first nine months of
2005 profitable, despite the losses incurred in the third quarter after the
trend reversed.

     Foreign  exchange  generated the largest losses for GTT II Advisors in
the first  nine  months  of the year,  as  markets  have been  increasingly
difficult in the face of conflicting fundamentals, with U.S. trade deficits
suggesting  Dollar weakness,  as U.S. growth and interest rates relative to
Europe and Japan favoring Dollar strength. Despite the conflicting signals,
the Dollar has been on a strong rally against major  currencies  throughout
the year as of September  30, 2005.  As the second  quarter of 2005 brought
more focus on the  interest  rate and  growth  differentials,  pushing  the
Dollar steeply higher GTT II Advisors  posted notable  returns through long
Dollar  exposure.  However,  profits  generated in the second  quarter were
unable to fully offset losses  incurred during the first and third quarters
of the year.

     Equity  trading has been  profitable  for GTT II Advisors in the first
three quarters of 2005.  Following  mixed  performance in the first half of
the year in reaction to mixed  company-specific  and economic news,  higher
oil prices and continued  interest rate tightening,  global indices rallied
strongly in the third quarter on broadly positive global economic  outlook.
Both the Nikkei and DAX ended the third quarter at multi-year highs. GTT II
Advisors  have  generally  held long  positions  in equity  indices for the
majority of the year, with the most risk allocated to Europe and Asia.

     Commodity  trading remains  negative year to date for GTT II Advisors,
as profits generated in the third quarter have only partially offset losses
incurred in the first half of the year.  Energy  trading  was  consistently
profitable  during the period as GTT II Advisors  benefited from the strong
energy  rallies  following   Hurricanes   Katrina  and  Rita.  The  largest
commodities  losses were suffered in metals  trading (both  industrial  and
precious).  The profits from the third  quarter  through  long  exposure to
increasing  global  demand were unable to recoup  losses  generated  in the
first quarter in a directionless market environment.  The range-bound grain
market also contributed to a difficult trading environment during the first
nine months of 2005 and contributed to losses by GTT II Advisors.

PERFORMANCE FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004

     The Company's  net trading  profit for the three and nine months ended
September 30, 2004 was $(4,945,629) and $(2,097,234), respectively.

     For the three and nine months ended  September 30, 2004, the Company's
Class A Series 1 Units  returned  (0.70)% and 0.30%,  respectively,  net of
fees and incentive allocation.

OVERVIEW

     The Company is designed to be broadly exposed to the hedge fund market
by  allocating  its assets to the  Investment  Funds in the four hedge fund
sectors:  equity  long/short,  event  driven,  relative  value and tactical
trading. As of September 30, 2004, the Company had the following exposures:


<TABLE>
<CAPTION>


                                              THREE MONTHS          NINE MONTHS
                         PORTFOLIO WEIGHT        ENDED                 ENDED
                             AS A % OF      SEPTEMBER 30, 2004   SEPTEMBER 30, 2004
   INVESTMENT FUND       MEMBERS' EQUITY      NET RETURN (1)       NET RETURN (1)
<S>                      <C>                    <C>               <C>
--------------------------------------------------------------------------------------------
            GELS              16.55%              0.71%                2.10%
--------------------------------------------------------------------------------------------
            GED               23.12%              1.52%                6.71%
--------------------------------------------------------------------------------------------
           GRV II             38.09%             (0.49)%               1.85%
--------------------------------------------------------------------------------------------
           GTT II             22.16%             (3.06)%              (4.83)%
--------------------------------------------------------------------------------------------
<FN>
(1)  These returns are based on the  performance of Class C Series 1 units.
     The  returns  include   administration  fees.  No  management  fee  or
     incentive  allocation  was  charged  by  the  managing  member  of the
     Investment  Funds with respect to the  Company's  investment in any of
     the  Investment  Funds.  Past  performance is not indicative of future
     results, which may vary.
</FN>
</TABLE>

THE INVESTMENT FUNDS

     Each of the four Investment  Funds'  performance  during the three and
nine months ended September 30, 2004 is described in the following.

GOLDMAN SACHS GLOBAL EQUITY LONG/SHORT, LLC

     As of September 30, 2004, GELS  represented  approximately  17% of the
Company's members' equity which was generally consistent with the strategic
weight of 20% set by the Managing  Member for GELS as of July 1, 2004.  For
further description of the adjustment to the weights implemented as of July
1, 2004, see "Item 3. Quantitative and Qualitative  Disclosure about Market
Risk--Risk  Management." GELS returned 0.71% and 2.10%,  respectively,  for
Class C Series 1 units for the three and nine months  ended  September  30,
2004.

THREE MONTHS ENDED SEPTEMBER 30, 2004

     Global equity markets experienced  significant  volatility  throughout
the  third  quarter  of 2004.  The  first  half of the  third  quarter  was
negative,  marked by  surging  oil  prices,  slowing  economic  growth  and
consumer spending, an uncertain  geopolitical  landscape,  and the economic
impact of hurricanes that hit Florida and the Gulf. However, despite record
high crude oil prices, global equity markets gained strength from near-term
lows and  reversed  late in the quarter.  GELS  Advisors  with  significant
exposures in  healthcare  and  technology  sectors had a difficult  July as
those  sectors  sold  off  on  weak  earnings  results  and   deteriorating
sentiment.  In  September,  positive  company-specific  news  and  earnings
reports  rallied  performance.  Nearly all GELS  Advisors  posted gains for
September.  Particularly  strong were  Advisors  with  exposures in Europe,
emerging markets, energy, and basic materials.

NINE MONTHS ENDED SEPTEMBER 30, 2004

     Global equity markets experienced  significant  volatility  throughout
the first three  quarters of 2004. The first quarter saw  geopolitical  and
macroeconomic uncertainty,  with terrorist bombings in Spain, the discovery
of a bomb plot in London, the impeachment of South Korea's  president,  and
an attempted  assassination and disputed election in Taiwan. This, combined
with a weak United  States jobs report for February and  increasing  energy
prices,  raised concerns about the breadth of the U.S.  economic  expansion
and its potential impact on consumer confidence and spending. In the second
quarter,  positive  employment  and job reports,  coupled with  encouraging
indicators  from the  Federal  Open Market  Committee  alluding to economic
strength and trends towards low inflation, helped to stabilize the markets.
A series of  strong  earnings  reports,  a  pull-back  in oil  prices,  the
indication that interest rate adjustments  would be made at a moderate pace
going forward,  and the  unexpected  early transfer of sovereignty in Iraq,
built  confidence  in the  markets in June.  In the third  quarter of 2004,
disappointing  earnings  reports,  hurricanes in Florida and the Gulf,  the
high current account  deficit,  and interest rate hikes led to a decline in
the  markets.  Within  developed  markets,  Japan  was the  most  volatile,
experiencing a sharp pull-back in April and May, followed by a strong rally
in June, and a subsequent decline in the third quarter.

GOLDMAN SACHS GLOBAL EVENT DRIVEN, LLC

     As of September 30, 2004,  GED  represented  approximately  23% of the
Company's members' equity which was generally consistent with the strategic
weight of 24% set by the  Managing  Member for GED as of July 1, 2004.  For
further description of the adjustment to the weights implemented as of July
1, 2004, see "Item 3. Quantitative and Qualitative  Disclosure about Market
Risk--Risk  Management."  GED returned 1.52% and 6.71%,  respectively,  for
Class C Series 1 units for the three and nine months  ended  September  30,
2004.

THREE MONTHS ENDED SEPTEMBER 30, 2004

     The  third  quarter  of 2004 was  marked  by  strength  in the  credit
markets,  mixed performance by the equity markets,  two interest rate hikes
of 25 basis points each by the Fed (raising the  overnight  lending rate to
1.75%), and a reduction in implied equity volatility,  with the VIX trading
down to 13.3 from 14.3.  For the  quarter,  the MSCI World  Index  returned
(1.00)%,  the S&P 500 Index  returned  (1.87)%,  the Lehman  Aggregate Bond
Index returned  3.20%,  and the Merrill Lynch US High Yield Master II Index
returned 4.63%. The U.S. Treasury market was volatile,  as yields fell from
4.58% at the  beginning  of the quarter to end the quarter at 4.12%.  While
the high yield market was positive in each of the  quarter's  three months,
the equity  markets  experienced  their worst month of  performance to date
this year during July,  recovering  partially in the two subsequent months.
GED  Advisors  performed  well  in  an  environment  where  catalysts  like
bankruptcy  filings and  restructuring  announcements,  the  aforementioned
strength  in the high  yield  market,  and the  tightening  of  spreads  in
specific  merger  and  acquisition  deals  enabled  different  areas of the
portfolio to contribute positively.

     High yield credit  spreads  tightened by 20 basis  points,  ending the
quarter at 384 basis points over U.S.  Treasury  bonds,  and $30 billion of
new high yield paper was  issued,  bringing  year-to-date  issuance to $110
billion.  GED's high yield- and  credit-focused  Advisors were rewarded for
strong credit selection,  and several Advisors  continued to increase their
short  exposure in order to maintain a more balanced book of long and short
positions.  This is a continuation  of a trend that started  several months
ago. This short  exposure has hurt some GED Advisors,  but they continue to
position their books judiciously given that credit spreads, in general, are
at their  tightest  levels in years.  Specifically,  opportunities  for GED
Advisors may arise in certain  secured  credits  within the airline  sector
where  spreads  have  broadly  widened to over 1,700 basis points over U.S.
Treasuries spurred by negative announcements from several major airlines.

     Global  merger and  acquisition  volume for the quarter  totaled  $420
billion,  a 36% increase  over third  quarter  activity in 2003.  The third
quarter of 2004 saw resurgence in the merger arbitrage space.

NINE MONTHS ENDED SEPTEMBER 30, 2004

     The first three quarters of 2004 were marked by rising interest rates,
concerns  over  the  situation  in Iraq,  the  upcoming  U.S.  presidential
election,  and low implied equity volatility.  Since the beginning of 2004,
the VIX has traded in a range between 13 and 18, high yield credit  spreads
have  tightened  from 418  basis  points  to 384  basis  points  over  U.S.
Treasuries,  and the  Merrill  Lynch US High  Yield  Master  II  Index  has
returned 6.05%.

     The  first  quarter  of 2004  saw  high  yield  credit  spreads  widen
slightly,  while the second and third  quarters  saw a  tightening  of high
yield credit spreads.  High yield new issuance for the first nine months of
the year was robust at approximately  $110 billion  (compared to the record
$140 billion of high yield debt that was issued in 2003). Many GED Advisors
performed well by focusing on arbitrage and shorting  opportunities  in the
credit markets.

     On the merger and  acquisition  front,  global merger and  acquisition
volume,  at over $1.3 trillion for the first three quarters,  has surpassed
last year's  total deal  volume.  The first  quarter of the year  witnessed
three key large deals. The second quarter saw some of the momentum from the
first quarter slow, with no very large deals  announced.  In addition,  the
termination  of a large deal in the defense  sector  negatively  impacted a
number  of GED  Advisors  in their  risk  arbitrage  portfolios.  The third
quarter of 2004 saw a tightening of spreads in several large deals enabling
GED Advisors to generate profits.

GOLDMAN SACHS GLOBAL RELATIVE VALUE II, LLC

     As of September 30, 2004, GRV II represented  approximately 38% of the
Company's members' equity which was generally consistent with the strategic
weight of 33% set by the Managing Member for GRV II as of July 1, 2004. For
further description of the adjustment to the weights implemented as of July
1, 2004, see "Item 3. Quantitative and Qualitative  Disclosure about Market
Risk--Risk  Management." GRV II returned  (0.49)% and 1.85%,  respectively,
for Class C Series 1 units for the three and nine  months  ended  September
30, 2004.

THREE MONTHS ENDED SEPTEMBER 30, 2004

     The third  quarter of 2004 was a  challenging  period for  convertible
arbitrage  Advisors,  although  GRV  II  ended  the  period  with  positive
performance.  Concerns  surrounding the economy, as well as the significant
rise in oil  prices,  led major  equity  and  credit  markets to trade in a
narrow range,  with low volatility,  resulting in a diminished  opportunity
set.

     Fixed income arbitrage  Advisors delivered modest performance but were
hurt in some  cases by short  positions  in U.S.  10-year  Treasury  bonds,
reflecting  their view of rising  interest  rates.  Hedges  implemented  to
create a relative value trade from this view, using  international  markets
and other points in the U.S.  Treasury  yield curve,  proved  inadequate as
traditional  relationships broke down over the period, and the 10-year U.S.
Treasury bond experienced a strong move.

     In corporate bond markets,  Advisors' results were stronger, as credit
trading Advisors' company selection was rewarded on both the long and short
sides.   The  arbitrage   between  credit  indices  and  their   underlying
constituents   remained  a  positive  contributor  to  returns.   Advisors'
model-driven trades underperformed fundamentally driven strategies, and GRV
II benefited from its diversification across approaches.

     Equity  market  neutral  Advisors  performed  well,   particularly  in
September,  as fundamental  quality and valuation  metrics were rewarded by
the market and benefited quantitative portfolios.  International strategies
delivered stronger  performance than U.S.  strategies,  particularly in the
case of smaller-capitalization stocks.

     Convertible bond arbitrage  strategies faced difficult conditions over
the third quarter as equity volatility decreased,  hitting multi-year lows,
and new issuance levels continued to disappoint.

NINE MONTHS ENDED SEPTEMBER 30, 2004

     The first three quarters of 2004 presented a difficult environment for
GRV II Advisors.  Markets experienced  volatile price movements in reaction
to any  indicator  which might sway the  general  consensus  regarding  the
health  of  the  global   economic   recovery,   but  finished  the  period
range-bound, making it difficult for GRV II Advisors to generate profits.

     Fixed income arbitrage Advisors' performance was fair, as expectations
of growth and inflation traded in wide swings throughout the period.  These
large swings  resulted in a  challenging  trading  environment,  especially
hurting those Advisors  caught on the wrong side of a significant  move. At
the  same  time,  expected  future  volatility  declined,   which  normally
translates  into reduced  opportunities  for many  relative  value-oriented
Advisors.  Many  Advisors saw their  portfolio  leverage  decline,  as they
exercised   patience   and   waited   for  rare  but   profitable   trading
opportunities.

     Credit Advisors posted strong results throughout the period, as credit
spreads remained strong. The increased liquidity in credit indices, as well
as the formation of several new indices and  standardized  index  tranches,
led to many  profitable  trades for  Advisors  who focus on trading  credit
indices versus their underlying constituents.

     Convertible  bond  arbitrage  trading  strategies  faced  a  difficult
environment throughout most of the period, as the market's two main drivers
of return,  volatility and new supply,  were static.  Equity volatility was
depressed  compared to historical levels, as the VIX fell to a low of 13.3.
At the same time, the supply of new convertible issues was small,  limiting
opportunities for Advisors to deploy capital in attractively  priced bonds.
As a result, many Advisors shifted allocations to Asia, especially Japan in
pursuit of more volatile markets and more active new security issuance.

     Equity  market  neutral  Advisors  gradually  shifted  assets over the
period  toward  international  strategies,  in order to take  advantage  of
opportunities  afforded  by  those  less  efficient  markets.  Statistical,
price-based, mean-reversion strategies continued to falter in the U.S.

GOLDMAN SACHS GLOBAL TACTICAL TRADING II, LLC

     As of September 30, 2004, GTT II represented  approximately 22% of the
Company's members' equity which was generally consistent with the strategic
weight of 23% set by the Managing Member for GTT II as of July 1, 2004. For
further description of the adjustment to the weights implemented as of July
1, 2004, see "Item 3. Quantitative and Qualitative  Disclosure about Market
Risk--Risk Management." GTT II returned (3.06)% and (4.83)%,  respectively,
for Class C Series 1 units for the three and nine  months  ended  September
30, 2004.

THREE MONTHS ENDED SEPTEMBER 30, 2004

     The third quarter of 2004 saw mixed performance  across all four asset
classes (fixed income, commodity trading,  currencies and equities).  Fixed
income and commodity  trading,  which contributed the largest losses in the
second  quarter,  were the most  profitable in the third  quarter.  For the
period, losses were incurred in currencies and equities.

     Foreign  exchange  trading   continued  to  experience  a  challenging
environment throughout the third quarter.  Despite the growing consensus of
a  weaker  U.S.  economy  and a record  current  account  deficit,  markets
remained  directionless,  leading to losses in short U.S. dollar positions.
Equity markets experienced  several sharp reversals  throughout the quarter
as the market  digested  rising oil prices and signs of a potential  global
economic slowdown.

     A series of  weaker-than-expected  economic data releases,  higher oil
prices,  and the Fed's  assurance  that  fears of  inflation  were  largely
unfounded  combined to drive bond yields lower over the course of the third
quarter.  Advisors  were able to profit from long fixed  income  positions,
particularly in Europe.  Advisors also benefited from trends that developed
in several commodity  markets.  Crude oil rallied throughout the quarter as
concerns   regarding  the   already-strained   supply  were  aggravated  by
hurricane-related  damage in the Gulf of Mexico and instability in Nigeria.
Grain  markets,  on the other  hand,  experienced  sharp  declines  as crop
estimates came in above expectations.

NINE MONTHS ENDED SEPTEMBER 30, 2004

     Year-to-date,  commodities have proven to be the most profitable asset
class for GTT II. In the first quarter of 2004, commodities continued their
bullish trend, contributing the majority of GTT II profits for the quarter.
Within commodities, the agricultural markets, specifically the soy complex,
proved to be the largest driver of returns.  Advisors also held  profitable
positions  in  base  and  precious  metals.  In the  second  quarter,  long
positions  in the  energy  sector  proved  to be the  most  profitable,  as
Advisors  were able to  capitalize  on record  high oil  prices,  driven by
tightening  supply and  concerns in the Middle  East.  However,  non-energy
commodity markets,  specifically agriculturals and metals, fell sharply due
to the  strengthening  of the U.S.  dollar and concerns  regarding  slowing
demand from China, resulting in losses for the quarter.  Advisors continued
to profit from long  energy  positions  in the third  quarter and also made
strong gains in metals,  which rallied on expectations of increased Chinese
demand.

     Results in fixed  income  were mixed for the first  three  quarters of
2004.  Long bond  positions  in the U.S.  and Europe  survived  significant
volatility  resulting  from the Fed's  indication  in January that it would
likely raise interest rates in the near future, and remained  profitable in
the first quarter. The second quarter proved to be challenging, as well, as
reports  of  a  strong  economic  recovery  and  rising  inflation  led  to
expectations  of  accelerated  rate hikes by the Fed and to a  sell-off  in
fixed income markets.  Fixed income  positions  finished the second quarter
with net losses.  In the third  quarter,  a series of  weaker-than-expected
economic data  releases,  higher oil prices,  and the Fed's  assurance that
fears of  inflation  were largely  unfounded  combined to drive bond yields
lower.  Advisors  were able to profit  with long  fixed  income  positions,
particularly  in  Europe.  Year-to-date,  fixed  income  trading  has  been
profitable.

     The largest  losses for the first three quarters of 2004 were incurred
in  currencies  and global  equity  indices.  Throughout  the year to date,
currency  trading  has  proven to be  challenging,  as the U.S.  dollar has
remained  range-bound  and  directionless.  As a  result  of the  difficult
environment,  foreign exchange has incurred the largest losses to date this
year.  The equity  market  rally of the second  half of 2003  continued  in
January and  February,  helping  long equity index  positions  early in the
year. However,  anticipation of a higher rate environment following reports
of a strengthening  economy and rising inflation in the second quarter hurt
long equity,  bringing  performance for the period into negative territory.
The equity  markets saw several  reversals  throughout  the third  quarter,
resulting in additional losses for the period.

COMPARISON OF SELECTED FINANCIAL INFORMATION FOR THE THREE AND NINE MONTHS
ENDED SEPTEMBER 30, 2005 AND 2004

INTEREST INCOME

     Interest income for the three and nine months ended September 30, 2005
was  $56,361  and  $92,213,  respectively,  compared  to the three and nine
months ended September 30, 2004 of $113,639 and $323,133, respectively. The
Company's  interest  income  fluctuates with the level of cash available to
invest. The decrease in interest income for the three and nine months ended
September 30, 2005 as compared to the three and nine months ended September
30, 2004 primarily  relates to the structure of the current credit facility
which, unlike the Company's previous credit facility,  does not require the
Company  to  redeposit  cash  received  from  the  credit  facility  into a
collateral account, but instead allows the Company to borrow as requested.

EXPENSES

     The Management  Fee for the three and nine months ended  September 30,
2005 was $3,016,423 and  $10,301,585,  respectively,  compared to the three
and nine months ended  September  30, 2004 of  $3,659,910  and  $9,653,202,
respectively.  Because the  Management Fee is calculated as a percentage of
the Company's members' equity as of each month end (equal to one-twelfth of
1.25% of the net  assets  of the  Company  as of the end of the  applicable
month),  the decrease in Management  Fee expense for the three months ended
September 30, 2005 as compared to the three months ended September 30, 2004
was due to a  decrease  in the  Company's  members'  equity  for the period
resulting  from net  redemptions  during the  period.  The  increase in the
Management  Fee  expense  for the nine  months  ended  September  30,  2005
compared to the nine months ended September 30, 2004 was due to an increase
in the  Company's  members'  equity  for  the  period  resulting  from  net
subscriptions and an increase in net income during the period.

     Interest  expense for the three and nine months  ended  September  30,
2005 was $59,860 and $64,186, respectively,  compared to the three and nine
months ended September 30, 2004 of $126,508 and $377,217, respectively. The
interest  expense  relates to the terms of the borrowing  facility that was
outstanding  during the three and nine month  periods  ended  September 30,
2005 and 2004. The change in interest expense for the three and nine months
ended  September  30,  2005  compared  to  September  30,  2004  was due to
decreased  levels  of  short-term  borrowing  during  the  periods.  As  of
September  30, 2005 and December 31,  2004,  the Company had no  borrowings
under its  credit  facility.  While the amount  available  under the credit
facility is $40,000,000  as discussed in "Liquidity and Capital  Resources"
below,  the Company does not anticipate  making draw downs under the credit
facility to increase  leverage as part of its  investment  strategy and the
Company's  current  risk  position is not expected to change as a result of
the increase in the amount available under the credit facility.

     Professional  fees and  miscellaneous  expenses for the three and nine
months ended  September 30, 2005 were $332,647 and $433,677,  respectively,
compared to the three and nine months ended  September  30, 2004 of $40,613
and  $433,156,   respectively.   The  increase  in  professional  fees  and
miscellaneous  expenses  for the three  months  ended  September  30,  2005
compared to the three months ended  September 30, 2004 was primarily due to
additional  services rendered by the Company's auditors and legal providers
related to the registration with the SEC.

     Other than the management fee, the professional fees and miscellaneous
expenses and the  incentive  allocation,  there are no other fees  directly
borne  by  the  Company.  In  addition,  through  its  investments  in  the
Investment   Funds,   the   Company   bears  a  pro-rata   portion  of  the
administration fee paid to the managing member for services provided to the
Investment Funds and Portfolio Companies.

INCENTIVE ALLOCATION

     The Incentive Allocation for the three and nine months ended September
30, 2005 was $1,295,272 and $1,296,816, respectively, compared to the three
and nine  months  ended  September  30,  2004 of  $(203,826)  and  $87,282,
respectively.  The change in  Incentive  Allocation  for the three and nine
months ended September 30, 2005 compared to the three and nine months ended
September 30, 2004 is due to an increase in net income from  operations for
the periods.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's  liquidity  requirements  consist of cash needed to fund
investments  in the  Investment  Funds in  accordance  with  the  Company's
investment  strategy and to fund  semi-annual  redemptions and to pay costs
and expenses. The Company periodically  re-allocates its investments in the
Investment Funds based on the performance of the Investment Funds and other
factors. The Company cannot predict the level of redemptions in the Company
for any semi-annual period until 61 days prior to the redemption date where
written notice must be given to the Managing Member.  Effective  January 1,
2006,  redemptions  will be  permitted  on a quarterly  basis rather than a
semi-annual  basis,  and written notices of redemption must be delivered to
the Company at least 91 days prior to the  applicable  valuation date which
is the day immediately  preceding the applicable  redemption  date,  rather
than the 61 day notice period previously required. The Company endeavors to
pay  redemption  proceeds  within 45 days  following the  redemption  date,
without interest. If the Company faces a liquidity problem, the redemptions
may be  limited or  postponed  under  certain  limited  circumstances.  The
Managing Member's ability to limit or postpone  redemptions in the Company,
enables the Company to control and to some extent  mitigate the impact of a
liquidity problem. However, substantial redemptions of Units in the Company
could require the Company to liquidate  certain of its  investments  in the
Investment Funds in order to raise cash to fund the redemptions which could
have a material  adverse effect on the NAV of the Units and the performance
of the Company.

     The  Company  can  fund  its  liquidity  requirements  by  liquidation
(through  redemption,  or as otherwise  permitted in the limited  liability
agreements of the  Investment  Funds) of its  investments in the Investment
Funds and from new investments from existing and new investors. Redemptions
of the  Company's  investments  in the  Investment  Funds  can be made on a
semi-annual or quarterly basis depending on the Investment Fund, subject to
certain limitations.  The Company was closed to new investors from May 2004
through  September  2005  and  only  accepted  limited  subscriptions  from
existing  investors during this period. If and when the Company re-opens to
new  investors,  the Company may close again at any time without  notice at
the sole  discretion  of the  Managing  Member.  The  acceptance  of future
subscriptions  in the Company and the continued  growth of the Company will
be determined by the Managing Member in its sole  discretion.  Although the
Managing  Member may begin to receive new  subscriptions  to the Company in
the future from additional outside investors, any liquidity requirements in
the near term may need to be funded  through  the  redemption  of  existing
investments in the Investment  Funds to the extent new  investments are not
received in sufficient amounts to cover  redemptions.  If the Company seeks
to  redeem  all or a  portion  of its  investment  positions  in any of the
Investment  Funds, the Investment Fund, to the extent it does not have cash
on  hand to fund  such  redemption,  will  need  to  liquidate  some of its
investments.  Substantial  redemptions of membership units in an Investment
Fund,  including  by the  Company,  could  require the  Investment  Fund to
liquidate certain of its investments more rapidly than otherwise  desirable
in  order  to  raise  cash to fund the  redemptions  and  achieve  a market
position  appropriately  reflecting a smaller asset base. This could have a
material  adverse effect on the value of the membership  units redeemed and
the membership units that remain  outstanding and on the performance of the
Investment Fund.  Under certain  exceptional  circumstances,  such as force
majeure, the managing member of an Investment Fund (currently, the Managing
Member) may find it necessary (a) to postpone  redemptions if it determines
that  the  liquidation  of  investments  in the  Investment  Fund  to  fund
redemptions  would adversely affect the net asset value per membership unit
of the  Investment  Fund or (b) to set up a  reserve  for  undetermined  or
contingent  liabilities  and  withhold  a  certain  portion  of  redemption
proceeds. In such circumstances,  the Investment Fund would likely postpone
any redemptions it could not fund.

     Certain  investment  positions  in which the  Investment  Funds have a
direct or  indirect  interest  are  illiquid.  The  Advisors  may invest in
restricted  or  non-publicly  traded  securities,   securities  on  foreign
exchanges  and futures.  These  positions may be illiquid  because  certain
exchanges  limit  fluctuations in certain  securities and futures  contract
prices  during a single  day by  regulations  referred  to as "daily  price
fluctuation  limits" or "daily  limits." Under such daily limits,  during a
single  trading day no trades may be  executed  at prices  beyond the daily
limits.  Once the price of a  particular  security or futures  contract has
increased or decreased by an amount equal to the daily limit,  positions in
that  security  or  contract  can  neither be taken nor  liquidated  unless
traders are willing to effect trades at or within the limit.

     The Company received  investments  from new and existing  investors of
$600,000 and  $33,836,333  during the three and nine months ended September
30, 2005,  respectively,  and of $16,613,948  and  $732,267,164  during the
three and nine months ended September 30, 2004, respectively.

     The Company paid out  redemptions  of  $233,316,472  and  $317,728,343
during the three and nine months ended  September  30, 2005,  respectively,
and $0 and $857,458  during the three and nine months ended  September  30,
2004, respectively.

     In connection with January 2006 redemptions,  the Company has received
redemption  requests in the amount of  $459,949,920.  The  Managing  Member
anticipates  funding the redemptions in January 2006 by making  redemptions
from the  Investment  Funds and through the use of any  uninvested  cash on
hand and by  utilizing  its credit  facility.  The Company does not believe
that the redemptions  that are payable in January 2006 will have a material
adverse effect on the value of the units or the performance of the Company.

     The Company and each  Investment  Fund may,  but are not  required to,
borrow  from  (including  through  direct  borrowings,  borrowings  through
derivative  instruments,  or otherwise) the GS Group or other parties, when
deemed  appropriate by its managing  member,  including to make investments
and  distributions in respect of redemptions of Units or membership  units,
to pay expenses, or for other purposes.  During the year ended December 31,
2003, the Company entered into a borrowing  facility with a major financial
institution (the "Old Facility Counterparty").  The facility was structured
as a call  spread  option  that had been  issued by the  Company to the Old
Facility  Counterparty.  Under  the  terms  of the  facility,  the  Company
received cash and redeposited the amount with the Old Facility Counterparty
in a collateral  account.  The Company had the right to draw funds from the
collateral account to use for liquidity purposes.  Under the facility,  the
Company was able to draw,  at any given time,  up to a total  amount of the
collateral  account at the time of withdrawal.  However,  in no event could
the Company  have drawn an amount  under the  facility  exceeding 5% of the
Company's net asset value.  In February  2004, the size of the facility was
reduced  to  $20,000,000  and in  October  2004 the  facility  expired.  On
November 24, 2004,  the Company  entered into a credit  facility with a new
financial  institution (the "New Facility  Counterparty") which will remain
in effect until October 2009, unless terminated  earlier in accordance with
its terms or otherwise. The Company made an initial borrowing of $1,000,000
under this facility.  Subject to approval by the New Facility Counterparty,
the Company may request to borrow up to $40,000,000  in the  aggregate.  At
the time of any borrowing, the aggregate amounts borrowed, however, may not
exceed  10% of the  Company's  net asset  value and at all other  times the
aggregate  amount  borrowed may not exceed 15% of the  Company's  net asset
value.  The  effective  interest  rate on the borrowed  amounts  equals the
London  Interbank  Offered Rate ("LIBOR")  plus 0.85% per annum  compounded
daily.  The  Company  also  pays  an  administration  and  structuring  fee
calculated as 0.10% per annum on the aggregate  amount of $40,000,000.  The
proceeds  of  the  borrowings  must  be  used  primarily  for  purposes  of
refinancing existing  indebtedness,  making further investment in a pool of
funds,  funding  liquidity  of  redemptions  of  Units in the  Company  and
managing the cash flow of the Company. There were no borrowings outstanding
at  September  30,  2005  and  December  31,  2004.  As  security  for  its
borrowings,  the Company  granted the New Facility  Counterparty a security
interest in the Company's cash accounts and any other account that contains
other  investment  property  (other  than to the extent  that it  comprises
shares of funds in the pool of funds in which the Company has  invested) of
the  Company.  The  terms  of  the  facility  include  various  restrictive
covenants,  including  restrictions on additional  indebtedness,  liens and
fundamental   changes  to  the   Company's   business.   The  New  Facility
Counterparty  may demand  payment upon the  occurrence  of certain  events,
including:  (i)  specified  declines in the  Company's  aggregate net asset
value  per  Unit,  (ii)  the  incurrence  of  indebtedness  or liens by the
Company,   (iii)  the  failure  by  the  Company  to  maintain   prescribed
diversification  of its investments,  (iv) if the investment manager (which
currently  is GS HFS)  resigns  or is removed  by the  Company,  (v) if the
administrator  (which currently is GS HFS), custodian or auditor resigns or
is removed by the Company and the  replacement  is not  approved by the New
Facility  Counterparty (which consent may not be unreasonably  withheld) or
(vi)  the   occurrence  of  events  of  default   customary  for  financing
transactions.  See Note 7 to the financial statements. Each Investment Fund
has entered into a similar facility with the New Facility Counterparty.

     As of September 30, 2005, the Company had Cash and cash equivalents on
hand of $3,710,445.  As of December 31, 2004, the Company had Cash and cash
equivalents on hand of $2,909,015.

     Investments as of September 30, 2005 were  $973,801,866 as compared to
$1,236,210,460 as of December 31, 2004. The decrease from December 31, 2004
to  September  30,  2005  was due to  significant  redemptions  made by the
Company to the Investment Funds net of subscriptions  and net income earned
during the nine months ended September 30, 2005.

     Due to  managing  member  represents  the  management  fees due to the
Managing  Member.  Due to  managing  member as of  September  30,  2005 was
$2,021,163 as compared to  $3,799,261 as of December 31, 2004.  Because the
management fee is calculated as a percentage of the Company's net assets as
of each month end, the liability  related to management fees will fluctuate
based on the month end net asset value of the Company.  The decrease in Due
to  managing  member is due to the amount and timing of the  payment of the
monthly management fee to the Managing Member.

     The Company  generally expects that its cash flow from liquidating its
investment  positions in the Investment  Funds to the extent  necessary and
from new  investments  in the Company  together with  borrowings  under the
borrowing  facility will be adequate to fund its  operations  and liquidity
requirements.

    The Company does not have any long-term  debt  obligations,  capital or
operational lease obligations, purchase obligations or other long-term debt
liabilities.  In addition,  there are no  off-balance  sheet or  contingent
liabilities at the Company level.

     The  value  of  the   Company's   directly  held  cash  and  financial
instruments is not expected to be materially affected by inflation.  At the
Investment  Fund  level,  given that GRV II 's and GED's  Advisors  seek to
profit from price  movements and can take both positive and negative  views
on the drivers of such movements,  their outlooks may include a view on the
direction of inflation,  with the outcome of their trades derived, at least
in part,  from the accuracy of such a view. No first-order  endemic effects
from inflation,  as may exist in long-only bond  portfolios,  are expected.
Further,  extended changes in inflation may be associated with strong up or
down trends in interest  rates,  creating a favorable  environment  for GTT
II's  Advisors,   and  therefore   contributing  to  the  Company's  profit
potential.  However,  unexpected changes in inflation can also give rise to
rapid reversals in interest rate markets,  creating an environment in which
such Advisors,  and the Company,  potentially may suffer losses. The impact
of changes  in  inflation  on equity  long/short  strategies  used by GELS'
Advisors is  difficult  to predict and depends upon how large the change is
in both absolute  terms and relative to  expectations.  A sharp increase in
inflation could hurt certain sectors, such as regional banks, homebuilders,
and autos, while sharp downward moves could be beneficial for equities.  If
a downward  move were too large,  however,  it could give rise to  concerns
about  deflation.  In all cases,  however,  the Company  endeavors  to take
inflation,  and its possible effects on each of the Investment  Funds, into
account when it develops its investment strategies.

RECENT ACCOUNTING PRONOUNCEMENTS

     FASB INTERPRETATION NO. 46(R)

     In  December   2003,  the  FASB  issued   Interpretation   No.  46(R),
Consolidation of Variable Interest  Entities ("FIN 46(R)"),  which provides
new criteria for determining whether consolidation  accounting is required.
Registered  investment  companies have been exempted from the provisions of
FIN 46(R) and FIN 46(R) has been  deferred  for  non-registered  investment
companies  pending  the  release  of a FASB Scope of  Investment  Companies
project ("Scope Project"). The Scope Project is designed to determine which
entities will qualify as investment companies,  and therefore present their
investments at fair value.  Those  entities so qualifying  will not need to
determine whether their investments should be consolidated  pursuant to the
provisions  of FIN 46(R).  FIN 46(R) would have no impact on the  Company's
net assets or net increase in net assets  resulting  from  operations.  The
Company  understands  that the Scope Project has been approved for issuance
by the FASB and retained these provisions.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

     The discussion and analysis of the Company's  financial  condition and
results of  operations  are based on the  Company's  financial  statements,
which have been  prepared  in  accordance  with  GAAP,  which  require  the
Managing Member to make estimates and  assumptions  that affect the amounts
reported in the financial statements and accompanying notes. Actual results
may differ from those estimates.  The financial statements are expressed in
U.S. Dollars. A summary of the Company's  accounting  policies is set forth
in Note 1 to the Company's financial  statements.  In the Managing Member's
view,  the policy that involves the most  subjective  judgment is set forth
below.

     The Company's investments in Investment Funds are subject to terms and
conditions of their respective  operating  agreements.  The investments are
carried at fair value as determined by the Company's  attributable share of
the  net  assets  of  the  respective  Investment  Fund.  Fair  values  are
determined   utilizing  net  asset  value  information   supplied  by  each
individual  Investment  Fund that are net of the Advisors'  management  and
incentive fees charged to the Investment Funds. The underlying  investments
of each Investment Fund are accounted for at fair value. For investments of
the  underlying  Advisor  Funds,  market value  normally is based on quoted
market prices or  broker-dealer  price  quotations  provided to the Advisor
Fund.  In the  absence  of  quoted  market  prices or  broker-dealer  price
quotations, underlying Advisor Fund investments are valued at fair value as
determined by the Advisors or their administrator.  Because of the inherent
uncertainty  of  valuation,  estimated  fair  values may  differ,  at times
significantly, from the values that would have been used had a ready market
existed.  In particular,  the valuations are made based on information  the
Investment  Funds receive from the Advisors.  This information is generally
not audited,  except at year-end,  and could prove to be inaccurate  due to
inadvertent  mistakes,  negligence,  recklessness or fraud by the Advisors.
Neither  the  Company  nor the  Investment  Funds  generally  will  receive
independent  valuations from third party  administrators or from any of the
Advisors  and will not in many  cases be able to  conduct  any  independent
valuations  on their own or to cause any third  parties to  undertake  such
valuations.  In  addition,  valuations  of  illiquid  securities  and other
investments  are  inherently  uncertain  and may prove to be  inaccurate in
hindsight. These risks are more fully described in the Company's Form 10 as
filed on May 2, 2005,  as amended on June 30,  2005 and July 26,  2005 (the
"Form 10").

OFF-BALANCE SHEET RISK

     There are no off-balance sheet or material  contingent  liabilities at
the Company level.

CONTRACTUAL OBLIGATIONS

     The Company does not have any long-term debt  obligations,  capital or
operational lease obligations or other long-term debt liabilities.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The  following  table  lists the  significant  market  risk  sensitive
instruments  held by the  Company,  through  the  Investment  Funds,  as of
September  30, 2005 and as of December 31,  2004,  as indicated by the Fair
Value/Value  at Risk  column,  and the net income  from  January 1, 2005 to
September  30, 2005 and from January 1, 2004 to December 31, 2004.  Because
of the speculative  nature of the  investments  that the Company engages in
through the  Investment  Funds,  the  Managing  Member  believes the entire
portfolio value of the Company is at risk. The Managing Member is unable to
track the impact of market volatility, credit and interest rate risk on the
Units as in many  cases  it does  not  receive  information  on  individual
investments made by Advisors or their aggregate holdings and so is not in a
position to track such risks on an aggregate basis.

                             NINE MONTHS ENDED
                             SEPTEMBER 30, 2005
-------------------------------------------------------------------------------
                   % OF            FAIR         NET TRADING
  INVESTMENT      MEMBERS'      VALUE/VALUE      PROFIT/LOSS
    FUND           EQUITY         AT RISK      (IN MILLIONS)        LIQUIDITY
    ----           ------         -------       ------------        ---------
    GELS            25.81%     $251,756,265         $19.0             (1)
    GED             26.91%     $262,452,538         $15.4             (2)
    GRV II          28.08%     $273,815,539         $ 3.0             (3)
    GTT II          19.05%     $185,777,524         $(2.8)            (4)

                 ----------    ------------        -------
TOTAL            99.85% (6)    $973,801,866         $34.6
                 ==========    ============        =======
===============================================================================

<TABLE>
                                 YEAR ENDED
                             DECEMBER 31, 2004
-------------------------------------------------------------------------------
<CAPTION>
                     % OF        % OF ADJUSTED                           NET TRADING
                   MEMBERS'        MEMBERS'        FAIR VALUE/VALUE        PROFIT
INVESTMENT FUND     EQUITY        EQUITY (7)           AT RISK           (IN MILLIONS)    LIQUIDITY
---------------     ------        ---------       ----------------       --------------   ---------
<S>                 <C>            <C>              <C>                    <C>                <C>
    GELS             18.15%         16.91%          $ 208,922,802            $14.6            (1)
    GED              25.02%         23.31%          $ 287,940,001            $27.8            (2)
    GRV II           39.96%         37.23%          $ 459,867,687            $14.6            (3)
    GTT II           24.29%         22.63%          $ 279,479,970            $(0.9)           (4)
                  -----------    ------------      --------------          ------
TOTAL               107.42% (5)    100.08% (5)     $1,236,210,460            $56.1
                  ===========    ============      ==============          ======

<FN>
(1)  Redemptions  can be made quarterly with 45 days' notice or at the sole
     discretion of the managing member.  Prior to July 2004, a twelve-month
     holding period was in effect.

(2)  Redemptions can be made  semi-annually with 45 days' notice, or at the
     sole  discretion  of the  managing  member.  Prior  to  July  2004,  a
     twelve-month holding period was in effect.  Effective January 1, 2006,
     redemptions can be made quarterly with 91 days' notice.

(3)  Redemptions  can be made  semi-annually  with 45 days'  notice after a
     twelve-month holding period, or at the sole discretion of the managing
     member.  Effective January 1, 2006,  redemptions can be made quarterly
     with 91 days' notice.

(4)  Redemptions can be made  semi-annually with 61 days' notice, or at the
     sole  discretion of the managing  member.  Effective  January 1, 2006,
     redemptions can be made quarterly with 60 days' notice.

(5)  The total value of the Company's  investments in the Investment  Funds
     exceeded  100%  of  members'  equity  and  adjusted  members'  equity,
     respectively,  because  members'  equity and adjusted  members' equity
     reflected certain accrued  liabilities of the Company,  including fees
     and expenses, and redemptions payable after the balance sheet date.

(6)  The total value of the Company's  investments in the Investment  Funds
     was  less  than  100%  of  members'  equity  because  members'  equity
     reflected Cash and cash equivalents greater than total liabilities.

(7)  Adjusted  members' equity,  used in the calculation of the investments
     as a  percentage  of adjusted  members'  equity,  represents  members'
     equity excluding Redemptions payable in the amount of $84,411,871 that
     is payable at December 31, 2004.
</FN>
</TABLE>


RISK MANAGEMENT

     In the ordinary course of business, the Managing Member,  including in
its capacity as managing member of the Investment Funds, attempts to manage
a variety of risks,  including  market,  credit and  operational  risk. The
Managing  Member,  including in its capacity as the managing  member of the
Investment  Funds,  attempts to identify,  measure and monitor risk through
various  mechanisms   including  risk  management   strategies  and  credit
policies.   These  include  monitoring  risk  guidelines  and  diversifying
exposures across a variety of instruments, markets and counterparties.

     Market risk is the risk of potential  significant  adverse  changes to
the value of financial  instruments because of changes in market conditions
such as interest  rates,  foreign  exchange  rates,  equity prices,  credit
spreads,  liquidity  and  volatility in commodity or security  prices.  The
Managing  Member  including  in its  capacity  as  managing  member  of the
Investment  Funds  monitors its exposure to market risk at both the Advisor
and portfolio level through various analytical  techniques.  At the Advisor
level,  market risk is monitored on a regular  basis.  Where position level
detail is  available,  the  Managing  Member  including  in its capacity as
managing  member of the  Investment  Funds  monitors its exposure to market
risk through a variety of analytical  techniques,  including  Value-at-Risk
("VaR") and scenario  analysis  (stress  testing).  VaR is  calculated by a
Monte Carlo  simulation  using a 99.9%  confidence level and a 240-day look
back period. Where position level detail is unavailable, an Investment Fund
relies on risk  reports  provided by the  Advisors as well as through  open
communication  channels  with  Advisors,  which often times  includes  site
visits and conference calls.

     The  managing  member of the  Investment  Funds  monitors  Advisors to
prevent style drift.  "Style drift" is defined as Advisors  changing  their
investment style from the Investment  Fund's  expectations.  Where position
level detail is  available,  the managing  member of the  Investment  Funds
monitors leverage against predetermined limits. Positions sizing limits are
also  monitored  to  ensure  Advisors  are  properly  diversified  and risk
normally is not  concentrated  in one or relatively few positions.  In some
cases,  the managing member of the Investment Funds also has the ability to
monitor  approved  trading  instruments to ensure  Advisors are not trading
securities  outside  their  mandate.  Where  position  level  detail is not
available,  the  managing  member of the  Investment  Funds  relies on both
written and oral Advisor  communications.  The risks involved are described
in the Company's Form 10.

     At the Company's portfolio level, the Company's portfolio construction
process is designed to ensure that all the Investment  Funds are adequately
diversified.  Each  Investment Fund is a portfolio of  approximately  20-30
underlying Advisors and the managing member of each of the Investment Funds
regularly reviews portfolio  statistics,  such as relative  contribution to
risk, to confirm that risk is not concentrated in any single Advisor.

     Quantitative   analysis  is  combined   with   judgment  to  determine
weightings that will offer broad exposure to hedge fund returns.  Strategic
return,  risk and correlation  estimates inform the quantitative  analysis,
which balances  returns and  contribution  to portfolio  risk.  Judgment is
applied  to  both  estimates  and  weights  in  an  attempt  to  achieve  a
diversified  exposure  to hedge  funds  while  delivering  attractive  risk
adjusted returns. Until June 30, 2004, the Company had allocated its assets
on a roughly equivalent  risk-weighted basis to each of the four hedge fund
sectors.  In other words,  each of the four  Investment  Funds  contributed
approximately 25% of the total risk of the Company portfolio,  although the
actual allocations that achieve the roughly equivalent risk weightings were
different for each sector.  The Managing Member utilizes a strategic sector
allocation and  periodically  re-evaluates the contribution to the risk and
return of the  Company  from  each  investment  sector  and may in its sole
discretion  adjust the Company's  assets or weights as it deems  advisable.
Through  June 30,  2004,  the  Managing  Member  had not made any  tactical
adjustments.  The adjustment to the weights  implemented as of July 1, 2004
reflected the Managing Member's updated  expectations for return,  risk and
correlations  for the  Investment  Funds as well as the  Managing  Member's
judgment.  In addition,  the weights among the  Investment  Funds no longer
reflect a strict equal risk allocation (as they had prior to July 1, 2004).
As of July 1, 2004,  the weights were set to 20% GELS, 24% GED, 33% GRV II,
and 23% GTT II. In addition,  on July 1, 2005,  the Managing  Member made a
tactical  adjustment to the weightings of the Investment  Funds. As of July
1, 2005, the weights were set to 30% GELS, 30% GED, 25% GRV II, and 15% GTT
II. This adjustment to the weights among the Investment  Funds reflects the
Managing  Member's  judgment  and  is  intended  to be  implemented  by the
Managing Member gradually  following July 1, 2005. The approximate  weights
of the  Investment  Funds were 26% GELS, 27% GED, 28% GRV II and 19% GTT II
as of September 30, 2005 as a percentage of members' equity. This portfolio
construction  process  is  designed  to  create a  diversified  hedge  fund
portfolio with attractive return and risk characteristics.

     The Company invests in the Investment Funds, and may from time to time
redeem its membership units of the Investment  Funds. The Investment Funds,
in turn,  maintain  relationships  with  counterparties  that  include  the
Advisors.  These  relationships  could result in  concentrations  of credit
risk. Credit risk arises from the potential  inability of counterparties to
perform their obligations under the terms of the contract, including in the
case of the Company's  investments in the Investment  Funds,  the potential
inability of an Investment Fund to satisfy its redemption obligations.  The
managing member of the Investment  Funds  (currently,  the Managing Member)
has formal credit-review policies to monitor counterparty risk.

     In addition  to market  risk and credit  risk,  the  Managing  Member,
including  in its  capacity as  managing  member of the  Investment  Funds,
allocates resources to mitigate  operational risk.  Operational risk is the
potential  for loss caused by a deficiency in  information,  communication,
transaction  processing,  settlement and accounting  systems.  The Managing
Member including in its capacity as managing member of the Investment Funds
maintains  controls and  procedures  for the purpose of mitigating  its own
operational  risk but it does  not have  control  over the  systems  of the
Advisors.  In addition,  the Managing  Member  including in its capacity as
managing member of the Investment Funds deploys resources to assess control
systems,  legal risk, compliance risk, operations and treasury risk, credit
risk, accounting risk and reputational risk.

     Fraud and other  business  risks cannot be  eliminated,  however,  the
Managing  Member  including  in its  capacity  as  managing  member  of the
Investment  Funds seeks to  significantly  reduce such risks. The portfolio
risk management  process includes an effort to monitor and manage risk, but
should not be  confused  with and does not imply low risk.  There can be no
assurance  that the Managing  Member  including in its capacity as managing
member  of the  Investment  Funds  will  be  able  to  implement  its  risk
guidelines or that its risk monitoring strategies will be successful.

ITEM 4.  CONTROLS AND PROCEDURES

     As of the end of the period covered by this report,  an evaluation was
carried out by the Managing Member's management,  with the participation of
its  Chief  Executive   Officer  and  Chief  Financial   Officer,   of  the
effectiveness  of the  design and  operation  of the  Company's  disclosure
controls and procedures  (as defined in Rule  13a-15(e)  under the Exchange
Act). Based on that evaluation,  the Company's Chief Executive  Officer and
Chief Financial  Officer concluded that the Company's  disclosure  controls
and  procedures  were effective as of the end of the period covered by this
report.  In  addition,  no change in the  Company's  internal  control over
financial  reporting (as defined in Rule 13a-15(f)  under the Exchange Act)
occurred  during  the most  recent  fiscal  quarter  that  have  materially
affected,  or is  reasonably  likely to  materially  affect,  the Company's
internal control over financial reporting.

                        PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     There are no material  pending legal  proceedings to which the Company
or the  Managing  Member  is a party or to which  any of their  assets  are
subject.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

     From January 1, 2005 to September  30, 2005,  aggregate  subscriptions
totaled  $33,836,333.  Details  of the sale of the  series  of Units are as
follows:

<TABLE>
<CAPTION>

                       CLASS AND                                         TOTAL
                       SERIES OF        NUMBER OF      NUMBER OF     SUBSCRIPTION
   DATE OF SALE          UNITS          UNITS SOLD     INVESTORS         AMOUNT
-----------------  -----------------  --------------  ------------  --------------
<S>                <C>                   <C>                 <C>       <C>
 January 1,  2005   Class A Series 12      71,977.84          7         $ 7,197,784
----------------------------------------------------------------------------------
 February 1, 2005   Class A Series 13     111,885.49          9         $11,188,549
----------------------------------------------------------------------------------
 March 1, 2005      Class A Series 14       9,000.00          3         $   900,000
----------------------------------------------------------------------------------
 April 1, 2005      Class A Series 15     110,500.00          4         $11,050,000
----------------------------------------------------------------------------------
 May 1, 2005        Class A Series 16      10,000.00          2         $ 1,000,000
---------------------------------------------------------------------------------
 June 1, 2005       Class A Series 17      19,000.00          3         $ 1,900,000
----------------------------------------------------------------------------------
 July 1, 2005       Class A Series 18       6,000.00          1         $   600,000
----------------------------------------------------------------------------------
      Total                               338,363.33         29         $33,836,333

</TABLE>


     The Units were sold at $100.00  per Unit.  The sale was not subject to
any underwriting  discount or commission.  The Units were privately offered
and sold to accredited  investors  pursuant to Rule 506 of Regulation D and
the sales were exempt from registration under the Securities Act of 1933.

     Pursuant to the Company's limited liability company agreement, holders
of Units may redeem their Units upon 61 days' prior  written  notice to the
Managing Member (unless such notice is waived by the Managing Member in its
sole  discretion),  on each  January 1 or July 1 occurring  on or after the
first  anniversary  of the  purchase  of such Units by the  holder  (each a
"Redemption  Date").  Effective  January 1, 2006,  holders of Units will be
able to  redeem  their  Units  upon 91 days'  prior  written  notice to the
Managing  Member on each January 1, April 1, July 1 and October 1. Units of
a particular series will be redeemed at a per Unit price based upon the NAV
of such series as of the close of business on the day immediately preceding
the  Redemption  Date  (taking  into  account  the  allocation  of any  net
appreciation  or  depreciation  in the net  assets of the  Company  for the
accounting period then ending),  after reduction for any Management Fee and
Incentive  Allocation  and other  liabilities  of the Company to the extent
accrued or otherwise  attributable to the Units being redeemed. The Company
paid  out  $233,316,472  in  redemptions  during  the  three  months  ended
September 30, 2005.

     ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     Not applicable.

     ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None

     ITEM 5. OTHER INFORMATION

     This Quarterly Report on Form 10-Q contains  certain  "forward-looking
statements"  regarding  the  operation  of the  Company  and the  Company's
investment objectives, including, among other things:

     o investment strategies and allocations of assets;

     o future performance; and

     o trends in the four hedge fund sectors.

     Forward-looking  statements  are  typically  identified  by the use of
terms  such  as  "may,"  "will,"  "should,"   "expect,"  "intend,"  "plan,"
"anticipate,"  "estimate," "believe," "continue," "predict," "potential" or
the  negative  of  such  terms  and  other  comparable  terminology.  These
statements are only predictions and are not historical facts. Actual events
or results may differ materially.

     The  forward-looking  statements  included  herein  are  based  on the
Managing Member of the Company's current expectations, plans, estimates and
beliefs that involve numerous risks and uncertainties. Assumptions relating
to the  foregoing  involve  judgments  with respect to, among other things,
future  economic,  competitive  and market  conditions and future  business
decisions,  all of which are difficult or impossible to predict  accurately
and many of which are beyond the Company's control.  Any of the assumptions
underlying  the  forward-looking   statements  contained  herein  could  be
inaccurate and, therefore, the Managing Member of the Company cannot assure
investors that the  forward-looking  statements  included in this Quarterly
Report on Form 10-Q will prove to be accurate.

     In   light  of  the   significant   uncertainties   inherent   in  the
forward-looking  statements included in this Quarterly Report on Form 10-Q,
the   inclusion   of  such   information   should  not  be  regarded  as  a
representation  by the Company or the Managing  Member that the  investment
objectives  set  forth  in  this  Quarterly  Report  on Form  10-Q  will be
achieved.  The Company cautions investors that  forward-looking  statements
are not guarantees and that the actual results could differ materially from
those expressed or implied in the forward-looking statements.

     In  addition  to  the  risks  identified  in our  Form  10,  which  is
incorporated herein by reference,  the following list indicates some of the
risks which could impact the likelihood that any forward-looking statements
will come true:

     o    There can be no assurance  that the Managing  Member's  decisions
          regarding  risk  allocations   will  be  successful;   inaccurate
          information  provided by the Advisors may have a material adverse
          effect on implementing the Company's investment objective;

     o    The Managing  Member  generally has limited access to information
          on or control over  Advisor's  portfolios  and Members assume the
          risk that Advisors may knowingly  misrepresent  information which
          could have a material negative impact on the Company;

     o    The  Company  faces  legal,  tax and  regulatory  risks which may
          materially adversely affect the Company;

     o    Units will not be listed and will not be marketable;  the Company
          is a closed-end  fund with limited  liquidity and limited  rights
          for  redemption;  substantial  redemptions  could have a material
          adverse effect on the Company;

     o    The  fee  structure  of  the  Company,   including   compensation
          arrangements  with the  Managing  Member and the  Advisors of the
          Investment  Funds, may create incentives for the Managing Member,
          the Investment Funds or the Advisors to make riskier  investments
          or to inflate returns;

     o    Past  performance  of  affiliated  funds and of Advisors  are not
          necessarily  indicative  of the results  that the Company and any
          Investment Fund may achieve or of future results;

     o    Valuation of the Investment Funds' investments will be based upon
          valuations  provided  by the  Advisors  which are  generally  not
          audited;  uncertainties  in  valuations  could  have  a  material
          adverse effect on the Company's net assets;

     o    Frequent   trading  and   turnover   typically   result  in  high
          transaction  costs and the Investment  Funds have no control over
          this turnover;

     o    An investment in the Company  involves a high degree of risk that
          the entire amount  invested may be lost;  investment  results may
          vary substantially over time;

     o    A Member's  investment  in the  Company  will be  affected by the
          investment  policies and decisions of Advisors  which are outside
          the  Company's  control;  the  Advisors  may be  unable to or may
          choose not to seek to achieve their  investment  goals;  Advisors
          may not be able to locate suitable investment opportunities;

     o    The  ability of an  Investment  Fund to hedge  successfully  will
          depend on the particular  Advisor's  ability to predict pertinent
          market movements which cannot be assured;

     o    The  prices of an  Investment  Fund's  investments  can be highly
          volatile and influenced by external  factors  outside the control
          of such Investment Fund;

     o    International  investments  may involve special risks not usually
          associated with investments in U.S. securities,  including higher
          risk of financial  irregularities and/or lack of appropriate risk
          monitoring and controls;

     o    Equity and equity related  instruments  may be subject to various
          types  of  risk,   including   market   risk,   liquidity   risk,
          counterparty credit risk, legal risk and operations risk; and

     o    The issuers of  securities  acquired by Advisors  will  sometimes
          face a high degree of business and financial risk.

     The foregoing list of factors is not exhaustive.  You should carefully
consider the foregoing  factors and the other  uncertainties  and potential
events  described in the Form 10. The Company or the Managing Member do not
undertake to update any forward-looking statement, whether written or oral,
that may be made from time to time by the Managing Member of the Company or
Company or on their behalf.

     References  to  market  or  composite  indices,  benchmarks  or  other
measures of relative market performance (each, an "index") are provided for
your  information  only.  Reference  to an index  does not  imply  that the
portfolio will achieve results similar to that index.


<PAGE>



ITEM 6. EXHIBITS

       (a) Exhibits
           --------
           Number                       Description
           ------                       -----------

           31.1     Certification  of Chief Executive  Officer  pursuant to
                    Section 302 of the Sarbanes-Oxley Act of 2002

           31.2     Certification of Chief Financial Officer pursuant to
                    Section 302 of the Sarbanes-Oxley Act of 2002

           32.1     Certification of Chief Executive Officer pursuant to
                    18 U.S.C. Section 1350, as Adopted pursuant to Section 906
                    of the Sarbanes-Oxley Act of 2002

           32.2    Certification of Chief Financial Officer pursuant to
                   18 U.S.C. Section 1350, as Adopted pursuant to Section 906
                   of the Sarbanes-Oxley Act of 2002


<PAGE>



                                 SIGNATURES

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

                                  GOLDMAN SACHS HEDGE FUND
                                  PARTNERS II, LLC
                                  (Registrant)

                                  By:  Goldman Sachs Hedge Fund Strategies LLC
                                       Managing Member


  Date:  November 14, 2005             By:  /s/ Tobin V. Levy
                                            ---------------------------
                                            Tobin V. Levy
                                            Managing Director and
                                            Chief Financial Officer




<PAGE>


                             INDEX TO EXHIBITS

           Number                        Description
           ------                        -----------

           31.1     Certification  of Chief Executive  Officer  pursuant to
                    Section 302 of the Sarbanes-Oxley Act of 2002

           31.2     Certification of Chief Financial Officer pursuant to
                    Section 302 of the Sarbanes-Oxley Act of 2002

           32.1     Certification of Chief Executive Officer pursuant to
                    18 U.S.C. Section 1350, as adopted pursuant to Section 906
                    of the Sarbanes-Oxley Act of 2002

           32.2    Certification of Chief Financial Officer pursuant to
                   18 U.S.C. Section 1350, as adopted pursuant to Section 906
                   of the Sarbanes-Oxley Act of 2002


<PAGE>