** **

**UNITED STATES**

**SECURITIES AND EXCHANGECOMMISSION**

**Washington, D.C. 20549**

 

**FORM 10-K**

** **

| **x** | **Annual Report Pursuant to  Section 13 or 15(d) of the Securities Exchange Act of 1934** |
|-------|------------------------------------------------------------------------------------------------|

** **

**For the Fiscal Year Ended:  December 31, 2008**

 

**or**

 

| **o** | **Transition Report Pursuant to  Section 13 or 15(d) of the Securities Exchange Act of 1934** |
|-------|----------------------------------------------------------------------------------------------------|

 

**Commission File Number:  000-50725**

 

**NESTOR PARTNERS**

(Exact name of registrantas specified in its charter)

 

| **New  Jersey**                  | ** ** | **22-2149317**       |
|----------------------------------|------------|----------------------|
| (State or other  jurisdiction of |       | (I.R.S. Employer     |
| incorporation or  organization)  |       | Identification  No.) |

 

**c/o****MILLBURN RIDGEFIELD CORPORATION**

**411 West Putnam Avenue**

**Greenwich,Connecticut  06830**

(Address of principalexecutive offices) (Zip code)

 

Registrant’s telephonenumber, including area code:   **(203) 625-7554**

 

Securities registeredpursuant to Section 12(b) of the Act:   **None**

 

| Securities registered  pursuant to Section 12(g) of the Act: | ** ** | **Limited Partnership Interests** | ** ** |
|------------------------------------------------------------------------|------------|-----------------------------------|------------|
|                                                                   |       | (Title of Class)                  |       |

 

Indicateby check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405of the Securities Act.  Yes o  No x

 

Indicate by check mark if the registrant is notrequired to file reports pursuant to Section 13 or Section 15(d) ofthe Act.  Yes o  No x

 

Indicateby check mark whether the registrant (1) has filed all reports required tobe filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject tosuch filing requirements for the past 90 days.  Yes x  No o

 

Indicateby check mark if disclosure of delinquent filers pursuant to Item 405 ofRegulation S-K (§229.405 of this chapter) is not contained herein, and will notbe contained, to the best of registrant’s knowledge, in definitive proxy orinformation statements incorporated by reference in Part III of this Form 10-Kor any amendment to this Form 10-K.  x

 

Indicateby check mark whether the registrant is a large accelerated filer, anaccelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large acceleratedfiler,” “accelerated filer” and “smaller reporting company” in Rule 12b-2of the Exchange Act.

 

|   | Large accelerated filer o |   | Accelerated Filer o         |
|--------|---------------------------|--------|-----------------------------|
|   | Non-accelerated filer o   |   | Smaller Reporting Company x |

 

Indicateby check mark whether the registrant is a shell company (as defined in Rule 12b-2of the Act).  Yes o  No x

 

State the aggregate market value of the voting andnon-voting common equity held by non-affiliates computed by reference to theprice at which the common equity was last sold, or the average bid and askedprice of such common equity, as of the last business day of the registrant’smost recently completed second fiscal quarter.

 

Not applicable.

Documents Incorporated byReference

 

Registrant’sFinancial Statements for the years ended December 31, 2008, 2007 and 2006with Report of Independent Registered Public Accounting Firm, the annual reportto security holders for the fiscal year ended December 31, 2008, isincorporated by reference into Part II Item 8 and Part IV hereof andfiled as an exhibit herewith.

 

 

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PART I

 

Item 1.   Business

 

(a)   General development of business

 

Nestor Partners (the “Partnership”) is a limited partnership organized December 13,1976 under the New Jersey Uniform Limited Partnership Act.  The general partner of the Partnership is MillburnRidgefield Corporation, a Delaware corporation (the “General Partner”).

 

The Partnership’s business is trading a diversified portfolio (a “DiversifiedPortfolio”) of futures, forward, swap and related option contracts oncurrencies, metals, interest rate instruments, stock indices, energy andagricultural commodities.  Approximately30%-40% of the Partnership’s trading, measured by the General Partner’sassessment of risk, currently takes place in the currency markets.  The Partnership began its trading activitiesin February 1977.  All tradingdecisions are made by the General Partner.

 

The General Partner was organized in May 1982 to managediscretionary accounts in futures and forward markets.  It is the corporate successor to a futurestrading and advisory organization which has been continuously managing assetsin the currency and futures markets using quantitative, systematic techniquessince 1971.  The General Partner has beenregistered with the Commodity Futures Trading Commission (“CFTC”) as a “commoditypool operator” since July 1, 1982 and as a “commodity trading advisor”since September 13, 1984 and is a member of National Futures Association (“NFA”).  The Millburn Corporation, an affiliate of theGeneral Partner, performs certain accounting, administrative and operatingfunctions for the Partnership and other commodity pools and investmentpartnerships managed by the General Partner.

 

As of December 31, 2008, the aggregate Net Asset Value of thePartnership was $167,319,421.  The valueat December 31, 2008 of a limited partner’s initial $1,000 investment inthe Partnership on February 1, 1977 would be $57,766.51, based on theactual rate of return a limited partner’s investment in the Partnership wouldhave recognized, net of the highest charges applicable to a limited partner,during each month in the calculation period from February 1977 to December 31,2008.

 

The Partnership’s fiscal year ends on December 31.

 

The Partnership will terminate on October 31, 2017 or upon theprior withdrawal, insolvency or dissolution of the General Partner oroccurrence of any event legally requiring termination.

 

The Partnership is not aregistered investment company or mutual fund. Accordingly, investors in the Partnership do not have the protectionsafforded by the Investment Company Act of 1940, as amended.

 

(b)   Financial information about industry segments

 

The Partnership’sbusiness constitutes only one segment, i.e., a speculative commodity pool.  The Partnership does not engage in sales ofgoods and services.  Financialinformation regarding the Partnership’s business is set forth in thePartnership’s Financial Statements included as Exhibit 13.01 to thisreport.

 

(c)   Narrative description of business

 

The Partnership engages in the speculative trading of futures, optionson futures, forward and swap contracts. The Partnership’s sole trading adviser is the General Partner.  The Partnership trades, pursuant to theGeneral Partner’s Diversified Portfolio, in the agricultural, metals, energy,interest rate and stock index futures and futures options markets and in thecurrency markets, trading primarily forward contracts in the interbankmarket.  The objective of the GeneralPartner’s trading method is to participate in all major sustained price moves inthe markets traded. The General Partner’s approach is medium-term to long-termin nature. The General Partner makes trading decisions pursuant to its tradingmethod, which includes technical trend analysis, certain non-trend-followingtechnical systems, and money management principles, which may be revised fromtime to time.

 

The General Partner is engaged in an ongoing research effort to improveits trading methods and to apply its quantitative analytic expertise to newfinancial products.

 

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Successful systematic futures trading depends on two factors: 1)development and selection of the trading systems used in each market and 2)allocation of portfolio risk among the markets available for trading.

 

Market environments change over time, and particular systems mayperform well in one environment but poorly in another.  Likewise, portfolio sectors and individualmarkets go through periods where systematic trading is very profitable andother periods where no system makes any money.

 

The goal of the General Partner’s research has been to develop andselect a mix of systems in each market and allocate risk across a wide array ofmarkets, so as to contain overall portfolio risk in the targeted range, whileallowing exposure to profitable trend opportunities.  Over the last 30 years, the General Partnerhas developed hundreds of trading systems. These trading systems generate buyor sell decisions in a particular market based on the direction of pricemovements in the market.

 

Of course, systems can be materially different — better in some periodsand worse in others.  The maindistinguishing features are time-frame over which systems work (intra-day tolong-term), the type of data fed into them (granularity [ticks toweeks/months], type [market or economic statistics], source [cash, futures oroptions markets]), and the objective of the system (profiting from trends,trading-ranges or volatility).  No singleapproach will work all the time. Therefore, the General Partner’s objective is to have several approachesoperating at all times.  Since the early1980’s, the General Partner has selected multiple systems for each market.

 

When arriving at the portfolio allocation, the General Partner seeksmaximum diversification subject to liquidity constraints.  The markets traded and allocations arereviewed monthly, although changes may occur less frequently.  The following factors are considered inconstructing a universe of markets to trade for each portfolio:  profitability, correlation of marketperformance, liquidity of markets, professional judgment, desireddiversification and transaction costs. Once the universe of markets is established, the General Partner’ssimulation and optimization techniques help determine which markets to includein the portfolio.  The current allocationto any market in the portfolio does not exceed 2.0%.

 

Risk is a function of both price level and price volatility.  In attempting to assess market volatility asa means of monitoring and evaluating risk, the General Partner uses itsvolatility overlay as a part of individual market risk management. This systemis designed to measure the risk in the portfolio’s position in each market andsignals a decrease in position size when risk increases and an increase inposition size when risk decreases. The General Partner’s volatility overlaymaintains overall portfolio risk and distribution of risk across markets withindesignated ranges.  It is applied to thesystematic strategies described above.  Asecondary benefit of the volatility overlay can be timely profit taking.  Because markets tend to become more volatileafter a profitable trend has been long underway, the volatility overlay oftensignals position reductions before trend reversals.

 

In addition to thevolatility overlay, the General Partner’s risk management focuses on moneymanagement principles applicable to the portfolio as a whole such as portfoliodiversification and control of leverage and portfolio size.  There are, however, no restrictions on theamount of leverage the General Partner may use at any time.

 

Pursuant to the Amendedand Restated Agreement of Limited Partnership (the “Limited PartnershipAgreement”), the General Partner receives in respect of limited partners whoacquire their limited partnership interests (“Interests”) through sellingagents, a flat-rate monthly brokerage fee equal to 0.458 of 1% of the month-endNet Assets (a 5.5% annual rate) attributable to such limited partners.  In respect of limited partners who acquiretheir Interests through the General Partner, the General Partner receivesbrokerage commissions at a monthly flat-rate of 0.167% of the month-end NetAssets (a 2.0% annual rate) attributable to such limited partners plus anamount equal to the brokerage commissions and fees payable to clearing andexecuting brokers attributable to such limited partners’ proportionate interestin the Partnership.  The General Partnerin turn bears all brokerage commissions and fees payable to clearing andexecuting brokers as well as all compensation payable to selling agents, ifany.  The General Partner also receives aprofit share equal to 20% of any new trading profit, determined as of the endof each calendar year.  The annual profitshare is calculated net of brokerage fees and administrative expenses.

 

The Partnership pays itsadministrative expenses, including costs incurred in connection with thecontinuing offering of the Interests, and any extraordinary expenses which itmay incur.

 

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Deutsche Bank SecuritiesInc. (“Deutsche Bank”), Merrill Lynch, Pierce, Fenner & SmithIncorporated (“Merrill Lynch”) and Newedge USA, LLC (“Newedge”) act as thefutures brokers for the Partnership.  ThePartnership executes currency forward trades with several brokers and banks,including Morgan Stanley & Co. Incorporated and Deutsche Bank AG, andclears all such trades with Morgan Stanley & Co. Incorporated andDeutsche Bank AG, serving as prime brokers. The Partnership pays “bid asked” spreads on its forward trades, as suchspreads are incorporated into the pricing of forward contracts.  The General Partner monitors the Partnership’strades to ensure that the prices it receives are competitive.

 

Each partner has acapital account, and its initial balance is the amount of his contribution tothe Partnership.  There is also a newprofit memo account which is credited with the General Partner’s profit shareon redeemed Interests and any excess of the General Partner’s profit share overthe Partnership’s taxable gains at year-end. The Net Assets of the Partnership are determined monthly, and anyincrease or decrease from the end of the preceding month is added to orsubtracted from the accounts (including the new profit memo account) of thepartners in the ratio that each account bears to all accounts.  The credits to the new profit memo accountare charged to the accounts of the limited partners.

 

At the end of each fiscal year the Partnership’s taxable capital gainor loss (including gains and losses on open positions in certain futures andforward contracts which are “marked-to-market” at the end of the Partnership’sfiscal year) and ordinary income and expense are allocated among the partnersfor tax purposes, and each partner who is a United States citizen or residentis required to include on his personal income tax return his distributive shareof such items.  Items of operating incomesuch as interest and items of operating expense such as legal, accounting andfiling fees that accrued during each month will be allocated among the personswho were partners during each month in the ratio that each partner’s capitalaccount bears to all partners’ capital accounts.

 

Net capital gain is allocated first to the General Partner up to theamount of the General Partner’s profit share for the year and then up to theamount of any balance in the new profit memo account.  Net capital gain is next allocated to eachpartner who has redeemed all or a portion of his Interests during the year tothe extent that the amount received on redemption exceeds the partner’s taxbasis (“Tax Basis”).  A partner’s TaxBasis is the amount paid for the Interests redeemed plus net taxable incomeless taxable losses previously allocated to such Interests and less amountspreviously distributed to the partner with respect to the redeemedInterests.  Remaining net capital gain isallocated among the partners whose capital accounts have increased from theirTax Basis.  The allocation to eachpartner is in the ratio that his increase bears to all partners’increases.  Net capital gain remaining isallocated to each partner in the ratio that his capital account value bears tothe total capital account value of all partners.

 

Net capital loss is allocated first to each limited partner who hasredeemed all or a portion of his Interests during the year to the extent thatthe amount the partner’s Tax Basis for the Interests redeemed exceeds theamount received on redemption.  Remainingnet taxable capital loss is allocated among the partners whose capital accountshave decreased from their Tax Basis.  Theallocation to each partner is in the ratio that his decrease bears to allpartners’ decreases.  Net capital lossremaining is allocated to each partner in the ratio that his capital accountvalue bears to the total capital account value of all partners.

 

The Partnership’s cash and U.S. Treasury instruments are used by thePartnership to engage in its trading activities and as reserves to support thattrading.  The Partnership’s assetsdeposited with the Partnership’s futures brokers as margin are maintained in “customersegregated funds accounts” or “foreign futures and foreign options securedamount accounts” and are held in cash, or U.S. Treasury instruments.  Partnership assets not deposited as marginare maintained in bank or brokerage accounts and are held primarily in bankmoney market funds or U.S. Treasury instruments.

 

The Partnership does not engage in lending (other than throughpermitted securities investments).  TheGeneral Partner does not anticipate making any distributions of Partnershipprofits, if any.

 

Regulation

 

Under the CommodityExchange Act, as amended (the “CEA”), commodity exchanges and futures tradingare subject to regulation by the CFTC. NFA, a “registered futures association” under the CEA, is the onlynon-exchange self-regulatory organization for futures industryprofessionals.  The CFTC has delegated toNFA 

 

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responsibility for theregistration of “commodity trading advisors,” “commodity pool operators,” “futurescommission merchants,” “introducing brokers” and their respective associatedpersons and “floor brokers” and “floor traders.”  The CEA requires commodity pool operators andcommodity trading advisors, such as the General Partner, and commodity brokersor futures commission merchants, such as Deutsche Bank, Merrill Lynch andNewedge to be registered and to comply with various reporting and recordkeeping requirements.  The CFTC maysuspend a commodity pool operator’s or trading advisor’s registration if itfinds that its trading practices tend to disrupt orderly market conditions orin certain other situations.  In theevent that the registration of the General Partner as a commodity pool operatoror a commodity trading advisor were terminated or suspended, the GeneralPartner would be unable to continue to manage the business of thePartnership.  Should the General Partner’sregistration be suspended, termination of the Partnership might result.

 

In addition to suchregistration requirements, the CFTC and certain commodity exchanges haveestablished limits on the maximum net long or net short position which anyperson may hold or control in particular commodities.  Most exchanges also limit the changes infutures contract prices that may occur during a single trading day.   Currency forward contracts are not subjectto regulation by any United States Government agency.

 

(i)   through(xii) - not applicable.

 

(xiii)   thePartnership has no employees.

 

(d)   Financialinformation about geographic areas

 

The Partnership does notengage in material operations in foreign countries (although it does trade fromthe United States in foreign currency forward contracts and on foreign futuresexchanges), nor is a material portion of its revenues derived from foreigncustomers.

 

Item1A.   Risk Factors

 

Not applicable.

 

Item 2.   Properties

 

The Partnership does notown or use any physical properties in the conduct of its business.  The General Partner or an affiliate performadministrative services for the Partnership from their offices.

 

Item 3.   Legal Proceedings

 

The General Partner isnot aware of any pending legal proceedings to which either the Partnership is aparty or to which any of its assets are subject.  In addition there are no pending materiallegal proceedings involving the General Partner.

 

Item 4.   Submissionof Matters to a Vote of Security Holders

 

None.

 

PART II

 

Item 5.   Market for the Registrant’s Common Equity andRelated Stockholder Matters

 

(a)   Market Information.

 

There is no tradingmarket for the Interests, and none is likely to develop.  Interests may be redeemed upon  15 business days’ written notice to theGeneral Partner at their Net Asset Value as of the last day of any month,subject to certain early redemption charges.

 

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(b)   Holders.

 

As of December 31,2008, there were 431 holders of Interests.

 

(c)   Dividends.

 

No distributions ordividends have been made on the Interests, and the General Partner has nopresent intention to make any.

 

(d)   SecuritiesAuthorized for Issuance Under Equity Compensation Plans.

 

None.

 

(e)   RecentSales of Unregistered Securities; Use of Proceeds from Registered Securities.

 

Interests are sold on a monthly basis through the General Partner andcertain broker/dealers, the selling agents, retained by the General Partner toact as its agents.  The offering price ofan Interest is equal to the amount of cash contributed to the Partnership by alimited partner.  Between October 1,2008 and December 31, 2008, the Partnership issued Interests at thebeginning of each calendar month, as set forth in the following chart, to bothnew limited partners as well as to existing limited partners making additionalinvestments.

 
| **Month**              | ** ** | **Number of**

**Interests   Sold to   Limited Partners** | ** ** | **Dollar Amount   of such   Interests Sold** | ** ** | **Number of   Interests Sold to   Special Limited   Partners** | ** ** | **Dollar  Amount of   such Interests   Sold** | ** ** |
|------------------------|------------|-----------------------------------------------------------|------------|----------------------------------------------|------------|----------------------------------------------------------------|------------|-----------------------------------------------|------------|
|                   |       |                                                      |       |                                         |       |                                                           |       |                                          |       |
| October 1,  2008  |       | 1                                                         |       | $                                            | 28,100     |                                                           | 1          |                                          | $          | 14,976 |   |
| November 1,  2008 |       | 0                                                         |       | $                                            | 0          |                                                           | 0          |                                          | $          | 0 |   |
| December 1,  2008 |       | 4                                                         |       | $                                            | 100,000    |                                                           | 0          |                                          | $          | 0 |   |
|                   |       |                                                      |       |                                         |       |                                                           |       |                                          |       |
| Total                  |       | 5                                                         |       | $                                            | 128,100    |                                                           | 1          |                                          | $          | 14,976 |   |

 

The foregoing Interests were privately offered and sold only to “accreditedinvestors” as defined in Rule 501(a) of Regulation D under theSecurities Act of 1933, as amended (the “1933 Act”), in reliance on theexemption from registration provided by Rule 506 of Regulation D under the1933 Act, and with whom the Partnership, the General Partner or a selling agentacting on behalf of the General Partner has a pre-existing substantiverelationship and with respect to whom it has been determined that Interests area suitable investment.

 

No underwriting discountsor underwriting commissions were paid in connection with such sales.

 

(f)   IssuerPurchases of Equity Securities.

 

Pursuant to the LimitedPartnership Agreement, limited partners may withdraw capital from their capitalaccounts in the Partnership as of the end of each calendar month.  The withdrawal of capital by limited partnershas no impact on the value of the capital accounts of other limited partners.

 

The following tablesummarizes limited partner withdrawals during the fourth calendar quarter of2008:

 

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| **Month**               | ** ** | **Limited Partners   Amount withdrawn** | ** ** | **Special Limited Partners   Amount withdrawn** | ** ** |
|-------------------------|------------|-----------------------------------------|------------|-------------------------------------------------|------------|
|                    |       |                                    |       |                                            |       |
| October 31,  2008  |       | $                                       | 638,658    |                                            | $          | 96,725 |   |
| November 30,  2008 |       | $                                       | 196,054    |                                            | $          | 272,843 |   |
| December 31,  2008 |       | $                                       | 6,328,867  |                                            | $          | 8,020,000 |   |
|                    |       |                                    |       |                                            |       |
| Total                   |       | $                                       | 7,163,579  |                                            | $          | 8,389,568 |   |

 

Item6.   Selected Financial Data

 

Notapplicable.

 

Item 7.   Management’s Discussion and Analysis of FinancialCondition and Results of Operations

 

                Liquidity

 

The Partnership’s assetsare generally held as cash or cash equivalents which are used to margin thePartnership’s futures and forward currency positions and withdrawn, asnecessary, to pay redemptions and expenses. Other than potential market-imposed limitations on liquidity, due, forexample, to limited open interest in certain futures markets or to daily pricefluctuation limits, which are inherent in the Partnership’s futures and forwardtrading, the Partnership’s assets are highly liquid and are expected to remainso.  During its operations through December 31,2008, the Partnership experienced no meaningful periods of illiquidity in anyof the numerous markets traded by the General Partner.

 

Capital Resources

 

Interests may be offeredfor sale as of the beginning, and may be redeemed as of the end, of each month.

 

The amount of capital raisedfor the Partnership should not have a significant impact on its operations, asthe Partnership has no significant capital expenditure or working capitalrequirements other than for monies to pay trading losses, brokerage commissionsand charges.  Within broad ranges ofcapitalization, the General Partner’s trading positions should increase ordecrease in approximate proportion to the size of the Partnership.

 

The Partnership raisesadditional capital only through the sale of Interests and capital is increasedthrough trading profits (if any).  ThePartnership does not engage in borrowing.

 

The Partnership tradesfutures, options and forward contracts, and may trade swap contracts, oninterest rate instruments, agricultural commodities, currencies, metals, energyand stock indices.  Risk arises fromchanges in the value of these contracts (market risk) and the potentialinability of counterparties or brokers to perform under the terms of theircontracts (credit risk).  Market risk isgenerally to be measured by the face amount of the futures positions acquiredand the volatility of the markets traded. The credit risk from counterparty non-performance associated with theseinstruments is the net unrealized gain, if any, on these positions plus thevalue of the margin or collateral held by the counterparty.  The risks associated with exchange-tradedcontracts are generally perceived to be less than those associated withover-the-counter transactions, because exchanges typically (but notuniversally) provide clearinghouse arrangements in which the collective credit(in some cases limited in amount, in some cases not) of the members of theexchange is pledged to support the financial integrity of the exchange.  In over-the-counter transactions, on theother hand, traders must rely solely on the credit of their respectiveindividual counterparties.  Margins whichmay be subject to loss in the event of a default, are generally required inexchange trading, and counterparties may require margin or collateral in theover-the-counter markets.

 

The General Partner hasprocedures in place to control market risk, although there can be no assurancethat they will, in fact, succeed in doing so. These procedures primarily focus on (1) real time monitoring ofopen positions; (2) diversifying positions among various markets; (3) limitingthe assets committed as margin, generally within a range of 10% to 35% of anaccount’s Net Assets at exchange minimum margins, (including imputed 

 

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margins on forwardpositions) although the amount committed to margin at any time may besubstantially higher; (4) prohibiting pyramiding (that is, usingunrealized profits in a particular market as margin for additional positions inthe same market); and (5) changing the equity utilized for trading by anaccount solely on a controlled periodic basis rather than as an automaticconsequence of an increase in equity resulting from trading profits.  The Partnership controls credit risk bydealing exclusively with large, well capitalized financial institutions asbrokers and counterparties.  Although, asevidenced by recent market events, there can be no assurances that such large,well capitalized financial institutions will not fail.

 

The financial instrumentstraded by the Partnership contain varying degrees of off-balance sheet riskwhereby changes in the market values of the futures and forward contractsunderlying the financial instruments or the Partnership’s satisfaction of theobligations may exceed the amount recognized in the statement of financialcondition of the Partnership.

 

Due to the nature of thePartnership’s business, substantially all its assets are represented by cashand United States government obligations, while the Partnership maintains itsmarket exposure through open futures and forward contract positions.

 

The Partnership’s futurescontracts are settled by offset and are cleared by the exchange clearinghousefunction.  Open futures positions aremarked to market each trading day and the Partnership’s trading accounts aredebited or credited accordingly.  Optionson futures contracts are settled either by offset or by exercise.  If an option on a future is exercised, thePartnership is assigned a position in the underlying future which is thensettled by offset.  The Partnership’sspot and forward currency transactions conducted in the interbank market aresettled by netting offsetting positions or payment obligations and by cashpayments.

 

The value of thePartnership’s cash and financial instruments is not materially affected byinflation.  Changes in interest rates,which are often associated with inflation, could cause the value of certain ofthe Partnership’s debt securities to decline, but only to a limitedextent.  More important, changes ininterest rates could cause periods of strong up or down market price trends,during which the Partnership’s profit potential generally increases.  However, inflation can also give rise tomarkets which have numerous short price trends followed by rapid reversals,markets in which the Partnership is likely to suffer losses.

 

Critical Accounting Estimates

 

The Partnership records its transactions in futures and forwardcurrency contracts, including related income and expenses, on a trade datebasis.  Open futures contracts traded onan exchange are valued at market, which is based on the closing settlementprice on the exchange where the futures contract is traded by the Partnershipon the day with respect to which Net Assets are being determined.  Open forward currency contracts are recordedat fair value, based on pricing models that consider the current market prices (“Spot Prices”) plus the timevalue of money (“Forward Points”) and contractual prices of the underlyingfinancial instruments.  The Spot Pricesand Forward Points for open forward currency contracts are generally based onthe 3:00 P.M. New York time prices provided by widely used quotationservice providers on the day with respect to which Net Assets are beingdetermined.  The Forward Points from thequotation service providers are generally in periods of one month, two months,three months and six months forward while the contractual forward deliverydates for the foreign currency contracts traded by the Partnership may be in betweenthese periods.

 

The General Partner’s policy is to calculate the Forward Points foreach contract being valued by determining the number of days from the date theforward currency contract is being valued to its maturity date and then usingstraight-line interpolation to calculate the valuation of Forward Points forthe applicable forward currency contract. The General Partner will also compare the calculated price to theforward currency prices provided by dealers to determine whether the calculatedprice is fair and reasonable.

 

The preparation of financial statements in conformity with accountingprinciples generally accepted in the United States of America (“GAAP”) requiresmanagement to make estimates and assumptions, such as accrual of expenses, thataffect the amounts and disclosures reported in the financial statements.  Based on the nature of the business andoperations of the Partnership, the General Partner believes that the estimatesutilized in preparing the Partnership’s financial statements are appropriateand reasonable, however actual results could differ from these 

 

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estimates.  The estimates used do not provide a range ofpossible results that would require the exercise of subjective judgment.  The General Partner further believes that,based on the nature of the business and operations of the Partnership, no otherreasonable assumptions relating to the application of the Partnership’scritical accounting estimates other than those currently used would likelyresult in materially different amounts from those reported.

 

Results of Operations

 

The Partnership’s successdepends on the General Partner’s ability to recognize and capitalize on trendsand other profit opportunities in different sectors of the world economy.  The General Partner’s trading methods areconfidential, so that substantially the only information that can be furnishedregarding the Partnership’s results of operations is its performancerecord.  Unlike most operating businesses,general economic or seasonal conditions have no direct effect on the profitpotential of the Partnership, while, at the same time, its past performance isnot necessarily indicative of future results. Because of the speculative nature of its trading, operational oreconomic trends have little relevance to the Partnership’s results.  The General Partner believes, however, thatthere are certain market conditions — for example, markets with strong pricetrends — in which the Partnership has a better opportunity of being profitablethan in others.

 

*2008*

 

During 2008, thePartnership achieved a net realized and unrealized gain of $42,272,187 from itstrading operations (including foreign exchange transactions andtranslations).  Brokerage commissions of$3,779,342, administrative expenses of $420,720 and custody fees of $29,717were paid or accrued.  The Partnershippaid a profit share to the General Partner of $5,129,390.  Interest income of $4,703,091 offset thePartnership’s expenses resulting in a net gain of $37,616,109.  An analysis of the trading gain (loss) bysector is as follows:

 

| **Sector**     | ** ** | **% Gain** | ** ** |
|----------------|------------|------------|------------|
| ** **     | ** ** | ** ** | ** ** |
| Currencies     |       | 4.36       | %          |
| Energies       |       | 6.40       | %          |
| Grains         |       | 2.63       | %          |
| Interest Rates |       | 3.41       | %          |
| Livestock      |       | 0.94       | %          |
| Metals         |       | 2.92       | %          |
| Softs          |       | 0.62       | %          |
| Stock Indices  |       | 6.45       | %          |
|           |       |       |       |
| Total          |       | 27.73      | %          |

 

The Partnershipregistered a strong gain during 2008. All major sectors—stock indices, currencies, interest rates, energy,metals and agricultural commodities—contributed profits.

 

The ongoing financial andeconomic turmoil triggered by the U.S. housing and mortgage crises andsubsequent credit crunch exploded with international ramifications throughoutthe year.  Central banks in the developedcountries made more money available against a broader range of collateral to awider group of financial firms than ever before.  In the U.S., increasing evidence of problemsfor the real economy deriving from the financial market freeze-up prompted theFederal Reserve to announce dramatic cuts in the federal funds and discountrates, and to initiate a series of liquidity enhancing programs.  Extraordinary events during the yearincluded  the U.S. Government’s seizuresof  Fannie Mae and Freddie Mac andbailout and substantial takeover of AIG Insurance, the bankruptcy of LehmanBrothers, “breaking the buck” by a major institutional money market fund, therescues and sales of Bear Stearns, Washington Mutual, Wachovia and MerrillLynch in the U.S. and several major financial institutions in Europe, theprovision of preferred equity by the Treasury to troubled U.S. financialinstitutions and the Treasury’s U.S. auto industry bailout.

 

 

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In this environment,worldwide inflation and growth dynamics changed markedly during the year.  Concerns about stagflation with the worstgrowth slowdown in the U.S. characterized the first half of 2008, but werereplaced during the second half by worries about global deflation, recessionand perhaps even depression as the world’s financial system seized up and nearlyground to a halt.  In response to margincalls, the loss of credit facilities, and to avoid insolvency, marketparticipants unwound risky trades, reduced leverage massively, and soughtliquidity and safety.  Against thisbackground, price trends in some sectors—equities and interest rates— thoughvolatile, were sustained for much of the year. In other sectors—currencies and commodities—trends reversed abruptly.

 

Short stock index futurespositions throughout most of Europe, the U.S., Japan and non-Japan Asiaproduced gains, particularly during the second half of 2008.

 

Long positions in U.S.,Australian and Canadian long term and short term interest rate futures wereprofitable, while trading of European futures was somewhat unprofitable.

 

Foreign exchange rateswere volatile.  Early in the year theU.S. dollar was under persistent pressure and short dollar trades wereprofitable.  Over the summer, as theflight to safety commenced, these short trades lost money and dollar positionswere reversed to long trades.  These longdollar positions produced gains over the last several months of 2008.  During the first half of the year, carrytrades—being long high interest rate currencies—were profitable.  Later, however, as risky trades were unwound,these carry trades produced losses and were reversed.  Near year-end these short positions in highyield currencies were profitable.

 

Commodity prices overallexhibited broad swings.  Energy pricesexperienced a strong upward thrust with crude oil hitting successive new alltime highs into early July.  Thereafter,energy prices collapsed.  As a result,long energy positions were very profitable in the January-June period,produced losses and were reversed to short positions over the summer, and shortenergy positions were profitable in the fourth quarter.  Returns from metals trading were alsovolatile: strong gains from generally long positions in the January-June periodwere offset by losses over the summer, which were followed by strong gains fromshort industrial metals positions during the fourth quarter.  Trading of agricultural commodities followeda similar pattern.  Long positions atfirst produced profits, but then generated losses as they were reversed toshort positions which subsequently produced profits.

 

*2007*

 

During 2007, thePartnership achieved a net realized and unrealized gain of $22,149,013 from itstrading operations (including foreign exchange transactions andtranslations).  Brokerage commissions of$3,533,293, administrative expenses of $385,059 and custody fees of $22,648were paid or accrued.  The Partnershippaid a profit share to the General Partner of $3,048,112.  Interest income of $7,278,769 offset thePartnership’s expenses resulting in a net gain of $22,438,670.  An analysis of the trading gain (loss) bysector is as follows:

 

| **Sector**     | ** ** | **% Gain (Loss)** | ** ** |
|----------------|------------|-------------------|------------|
| ** **     | ** ** | ** **        | ** ** |
| Currencies     |       | 4.17              | %          |
| Energies       |       | 1.57              | %          |
| Grains         |       | 3.92              | %          |
| Interest Rates |       | 2.20              | %          |
| Livestock      |       | 0.32              | %          |
| Metals         |       | 2.01              | %          |
| Softs          |       | (0.99             | %)         |
| Stock Indices  |       | 1.79              | %          |
|           |       |              |       |
| Total          |       | 14.99             | %          |

 

The Partnership produceda gain in 2007.  Strong returns wereobtained from trading currency forwards and grain futures.  Solid profits were also attributable tointerest rate, metal, energy and stock index futures trading.  The only sector to register a loss for theyear was soft commodities.

 

 

10

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During the first half of2007, the Partnership’s positions, which are all driven by our technicalmodels, reflected several themes: solid global growth, high worldwide liquidity,a gradual tightening of monetary policies worldwide, and a diminution of thedollar’s role in worldwide trade and reserve management.  As a result, the Partnership, in terms of its broad structure, took short positions ininterest rates, U.S. Dollar trading, except against low interest ratecurrencies such as the Japanese Yen and Swiss Franc, cross currency trading oflower interest rate currencies and natural gas futures; mixed positions insofts and livestock; moderately long positions in crude oil and petroleumproducts futures; and long positions in high interest rate currencies, equityindex futures, grain futures and precious and industrial metal futures.

 

The positions infinancials and metals were highly profitable, while energy, grain and livestocktrading were unprofitable during the January-June period.

 

During the summer, thespreading impact of the sub-prime problem triggered a sharp and widespreaddrying up of liquidity, a broad based contraction of “risk-oriented” trades,and a flight to quality. In particular, equities were sold, government andshort-term interest rate instruments were bought, the dollar was in demand, andcarry trades were unwound. As the financial market turmoil spread, concernabout slowing growth caused metals and energy futures to be sold. All theseactions occurred simultaneously and produced trend reversals in virtually allof the positions held in the portfolio. Hence, while our portfolio is diversified across over 100 positions in 8sectors, diversification was ineffective and markets became almost universallycorrelated.  In response to these losses,our directional and volatility models substantially lowered our position sizes,reducing exposures by almost two-thirds.

 

During the final fourmonths of 2007, many of the trends which had been disrupted by the marketdislocations of August reasserted themselves. In particular, short dollarpositions, long energy positions and long precious metal positions were allprofitable.  Interest rate trading wasprofitable largely because a flight to quality and safety produced gains on newlong positions, particularly in US Treasury and short-term futures.  In addition, a profitable bull market ingrains, which had arisen over the summer, continued and accelerated. On theother hand, the expanding turmoil in financial markets proved impervious to theefforts of Central Banks, leading to a sell-off in equities that generatedlosses as the Partnership’s long stock index positions were being reduced andreversed.   Also, a continued unwindingof carry trades led to losses in cross currency trading.

 

*2006*

 

During 2006, thePartnership achieved a net realized and unrealized gain of $13,862,815 from itstrading operations (including foreign exchange transactions andtranslations).  Brokerage commissions of$4,317,248, administrative expenses of $448,912 and custody fees of $26,883were paid or accrued.  The Partnershippaid a profit share to the General Partner of $2,092,010.  Interest income of $8,039,516 offset thePartnership’s expenses resulting in a net gain of $15,017,278.  An analysis of the trading gain (loss) bysector is as follows:

 

| **Sector**     | ** ** | **% Gain (Loss)** | ** ** |
|----------------|------------|-------------------|------------|
|           |       |              |       |
| Currencies     |       | (5.88             | )%         |
| Energies       |       | 0.32              | %          |
| Grains         |       | (2.02             | )%         |
| Interest Rates |       | 1.26              | %          |
| Livestock      |       | (0.60             | )%         |
| Metals         |       | 8.78              | %          |
| Softs          |       | (0.31             | )%         |
| Stock Indices  |       | 8.01              | %          |
|           |       |              |       |
| Total          |       | 9.56              | %          |

 

The Partnership generateda moderate gain for the year.  Trading ofmetals and stock index futures produced significant profits, and trading ofinterest rate and energy futures added small gains.  On the other hand, currency trading resultedin a sizable loss, and trading activity in grains, livestock and softs wassomewhat negative.

 

 

11

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Strong economicconditions worldwide underpinned industrial and precious metal prices.  Periodic fears of shortages also buoyed theprices of industrial metals.  Concernabout inflation, a weaker U.S. Dollar, and reserve diversification out ofdollars provided an added boost to precious metal prices.  In addition, introduction of a silver ETFalongside the existing gold ETFs increased the demand for precious metals.  Consequently, long positions in copper, zinc,nickel, tin, aluminum, lead, gold, silver, and platinum were profitable.

 

Broad based growth,encompassing the emerging markets—led by China and India—the U.S., Europe, andby year-end even Japan encouraged investors worldwide.  Hence, long positions in European, Chinese,Hong Kong, and U.S. stock index futures were profitable.

 

During the first half of2006, short positions in short-term and long-term interest rate futures werewidely profitable as interest rates rose on the back of strong growth,inflation worries, and Fed Funds rate increases.  By July, however, there was growing concernthat tighter Central Bank monetary policies throughout the world might induce agrowth slowdown.  As a result, interestrates, particularly long-term interest rates, came down and losses on shortpositions offset most of the earlier gains. The downward pressure on long-term interest rates was augmented by OPECand Bank of China purchases of longer term government bonds for reservemanagement purposes.  On balance, therewas still a modest profit for the year from interest rate trading.

 

Currency trading wasunprofitable throughout the year. Significant volatility without sustained trends characterized mostcurrency markets.  Market participantscontinued to discuss the likelihood of a weaker dollar, but with the Bank ofChina tightly controlling the movements of the Yuan, fluctuations in most majorcurrencies were restrained and no sustained dollar move occurred.

 

Elsewhere, trading ofgrains, softs, and livestock was somewhat unprofitable, while energy tradingproduced a fractional gain.

 

Off-Balance SheetArrangements

 

The Partnership does not engage in off-balance sheet arrangements withother entities.

 

Contractual Obligations

 

The Partnership does notenter into any contractual obligations or commercial commitments to make futurepayments of a type that would be typical for an operating company or that wouldaffect its liquidity or capital resources. The Partnership’s sole business is trading futures and forward currencycontracts, both long (contracts to buy) and short (contracts to sell).  All such contracts are settled by offset, notdelivery.  Substantially all suchcontacts are for settlement within four months of the trade date andsubstantially all such contracts are held by the Partnership for less than fourmonths before being offset or rolled over into new contracts with similarmaturities.   The Partnership’s FinancialStatements, included as Exhibit 13.01 to this report, present a CondensedSchedule of Investments setting forth net unrealized appreciation(depreciation) of the Partnership’s open future and forward currency contracts,both long and short, at December 31, 2008.

 

Item 7A.   Quantitativeand Qualitative Disclosures about Market Risk

 

Notapplicable.

 

Item 8.   Financial Statements and Supplementary Data

 

The report of Deloitte &Touche LLP for the fiscal years ended December 31, 2008 and 2007, asrequired by this item, is included as Exhibit 13.01 to this report.

 

Item 9.   Changes in and Disagreements with Accountantson Accounting and Financial Disclosure

 

None.

 

12

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Item9A.   Controls and Procedures

 

The General Partner, withthe participation of the General Partner’s principal executive officers andprincipal financial officer, has evaluated the effectiveness of the design andoperation of its disclosure controls and procedures with respect to thePartnership as of the end of the fiscal year covered by this Annual Report,and, based on their evaluation, have concluded that these disclosure controlsand procedures are effective.  There wereno significant changes in the General Partner’s internal controls with respectto the Partnership or in other factors applicable to the Partnership that couldsignificantly affect these controls subsequent to the date of their evaluation.

 

*Changesin Internal Control over Financial Reporting*

 

Section 404 of theSarbanes-Oxley Act of 2002 requires the General Partner to evaluate annuallythe effectiveness of its internal controls over financial reporting as of theend of each fiscal year, and to include a management report assessing theeffectiveness of its internal control over financial reporting in all annualreports. There were no changes in the Partnership’s internal control overfinancial reporting during the quarter ended December 31, 2008 that havematerially affected, or are reasonably likely to materially affect, ourinternal control over financial reporting.

 

*Management’sAnnual Report on Internal Control over Financial Reporting*

 

The General Partner isresponsible for establishing and maintaining adequate internal control over thePartnership’s financial reporting. Internal control over financial reporting isdefined in Rules 13a-15(f) and 15d-15(f) under the Exchange Actas a process designed by, or under the supervision of, a company’s principalexecutive and principal financial officers and effected by a company’s board ofdirectors, management and other personnel to provide reasonable assuranceregarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with GAAP. The GeneralPartner’s internal control over financial reporting includes those policies andprocedures that:

 

·   pertain to the maintenance ofrecords that, in reasonable detail, accurately and fairly reflect thetransactions and dispositions of the Partnership’s assets;

 

·   provide reasonable assurance thattransactions are recorded as necessary to permit preparation of the Partnership’sfinancial statements in accordance with GAAP, and that the Partnership’sreceipts and expenditures are being made only in accordance with authorizationsof the General Partner’s management and directors; and

 

·   provide reasonable assuranceregarding prevention or timely detection of unauthorized acquisition, use ordisposition of the Partnership’s assets that could have a material effect onthe Partnership’s financial statements.

 

Because of its inherentlimitations, internal control over financial reporting may not prevent or detectmisstatements. Projections of any evaluation of effectiveness to future periodsare subject to the risk that controls may become inadequate because of changesin conditions, or that the degree of compliance with the policies or proceduresmay deteriorate.

 

The General Partnerassessed the effectiveness of its internal control over financial reportingwith respect to the Partnership as of December 31, 2008. In making thisassessment, management used the criteria set forth by the Committee ofSponsoring Organizations of the Treadway Commission (COSO) in Internal Control— Integrated Framework.  Based on its assessment, management has concludedthat, as of December 31, 2008, the General Partner’s internal control overfinancial reporting with respect to the Partnership is effective based on thosecriteria.

 

This annual report doesnot include an attestation report of the Partnership’s independent registeredpublic accounting firm regarding control over financial reporting.  TheGeneral Partner’s report was not subject to attestation by the Partnership’sregistered public accounting firm pursuant to rules of the SEC thattemporarily permit the Partnership to only provide the General Partner’s reportin this report.

 

13

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Item9B.   Other Information.

 

None.

 

PART III

 

Item10.   Directors, Executive Officers andCorporate Governance

 

(a, b)   Identificationof Directors and Executive Officers

 

The Partnership has nodirectors or executive officers.  ThePartnership is controlled and managed by the General Partner.

 

The General Partner, is aDelaware corporation organized in May 1982 to manage discretionaryaccounts in futures and forward markets. It is the corporate successor to a futures trading and advisory organizationwhich has been continuously managing assets in the currency and futures marketsusing quantitative, systematic techniques since 1971.

 

The principals and seniorofficers of the General Partner as of December 31, 2008 are as follows:

 

***Harvey Beker, age 55.***   Mr. Bekeris Co-Chief Executive Officer and Co-Chairman of the General Partner and TheMillburn Corporation.  He received aBachelor of Arts degree in economics from New York University (“NYU”) in 1974and a Master of Business Administration degree in finance from NYU in1975.  From June 1975 to July 1977,Mr. Beker was employed by Loeb Rhoades, Inc. where he developed andtraded silver arbitrage strategies.  FromJuly 1977 to June 1978, Mr. Beker was a futures trader atClayton Brokerage Co. of St. Louis.  Mr. Bekerhas been employed by The Millburn Corporation since June 1978 andinitially served as the Director of Operations for its affiliate, MillburnPartners.  During his tenure at theGeneral Partner (including its affiliates, Millburn Partners and CommInVest) hehas been instrumental in the development of the research, trading andoperations areas.  Mr. Beker becamea principal of the firm in June 1982, and a partner in the predecessor toShareInVest in April 1982.  Mr. Bekerbecame registered as an Associated Person of the General Partner effective November 25,1986.  Additionally, he became listed asa principal and registered as an associated person of The Millburn Corporationeffective February 8, 1984 and May 23, 1989, respectively.  Mr. Beker was an associated person andlisted principal of ShareInVest from February 20, 1986 until February 25,2007.

 

***Gregg R. Buckbinder, age 50.***   Mr. Buckbinderis Senior Vice-President and Chief Operating Officer of the General Partner andThe Millburn Corporation.  He joined theGeneral Partner and The Millburn Corporation in January 1998 from OdysseyPartners, L.P. where he was responsible for the operation, administration andaccounting of the firm’s merchant banking and managed account businesses from July 1990through December 1997.  Mr. Buckbinderwas employed by Tucker Anthony, a securities broker and dealer, from June 1985to July 1990 where he was First Vice President and Controller, and from August 1983to June 1984 where he designed and implemented various operations andaccounting systems.  He was with thepublic accounting firm of Ernst & Whinney from June 1984 to June 1985as a manager in the tax department and from September 1980 to August 1983as a senior auditor, with an emphasis on clients in the financial servicesbusiness.  Mr. Buckbinder graduated *cum laude* from Pace University (“Pace”) in 1980 with aB.B.A. in accounting and received an M.S. in taxation from Pace in 1988.  He is a Certified Public Accountant and amember of the American Institute of Certified Public Accountants.  Mr. Buckbinder became listed as aprincipal of the General Partner effective February 5, 1999.  He became listed as a principal of TheMillburn Corporation effective March 23, 1998.  Mr. Buckbinder also became a partner inShareInVest in January 2000.  Mr. Buckbinderwas a listed principal of ShareInVest from February 28, 2001 until February 25,2007.

 

***George E. Crapple, age 64.***   Mr. Crappleis Co-Chief Executive Officer and Co-Chairman of the General Partner and TheMillburn Corporation.  In 1966 hegraduated with honors from the University of Wisconsin where his field ofconcentration was economics and he was elected to Phi Beta Kappa.  In 1969 he graduated from Harvard Law School,**magna cum laude**, where hewas a member of the Harvard Law Review. He was a lawyer with Sidley & Austin, Chicago, Illinois, from1969 until April 1, 1983, as a partner since 1975, specializing incommodities, 

 

14

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securities, corporate andtax law.  He was first associated withthe General Partner in 1976 and joined the General Partner and The MillburnCorporation (including its affiliates, Millburn Partners and CommInVest) on April 1,1983 on a full-time basis.  He became apartner in ShareInVest in April 1984. Mr. Crapple is a Director, Member of the Executive Committee,Chairman of the Appeals Committee and a former Chairman of the Eastern RegionalBusiness Conduct Committee of the NFA, past Chairman of the Managed FundsAssociation, a member of the Global Markets Advisory Committee of the CFTC anda member of the board of directors of the Futures Industry Association (“FIA”).  Mr. Crapple became listed as a principaland registered as an associated person of the General Partner effective September 13,1984 and April 2, 1988, respectively. Additionally, he became listed as a principal and registered as anassociated person of The Millburn Corporation effective April 9, 1981 and May 23,1989, respectively.  He was also anassociated person and listed principal of ShareInVest from February 20,1986 until February 25, 2007.

 

***Steven M. Felsenthal, age 39.********* Mr. Felsenthalis General Counsel and Chief Compliance Officer of the General Partner and TheMillburn Corporation.  Prior to joiningthe General Partner and its affiliates in January 2004, Mr. Felsenthalwas a senior associate in the investment management group at Schulte Roth &Zabel LLP (September 1999-January 2004), where he represented andadvised hedge funds, registered investment companies, investment advisers,broker-dealers and banks in connection with all facets of their assetmanagement businesses, and was a member of the tax department of Kramer, Levin,Naftalis & Frankel LLP (October 1996-September 1999).  He graduated**cum laude** from Yeshiva University in 1991 with a B.A. degreein political science, and **order ofthe coif** from Fordham University School of Law in 1996, where he alsoserved as an editor of the Fordham Environmental Law Journal.  Mr. Felsenthal received an LL.M degreein taxation from NYU School of Law in 2001 and has written and been quoted innumerous published articles, and frequently speaks at conferences, on varioustopics related to investment management. Mr. Felsenthal is a member of the New York State Bar, Chairman ofthe Managed Funds Association CPO/CTA Advisory Committee and a member of theEditorial Board of the Journal of Securities Law, Regulation and Finance.  Mr. Felsenthal became listed as aprincipal of the General Partner and The Millburn Corporation effective June 24,2004.  Mr. Felsenthal also served asGeneral Counsel and Chief Compliance Officer of ShareInVest.

 

Edward Ferara, age31.  Mr. Ferara is a Vice Presidentand the Associate Director of Research of The Millburn Corporation.  He joined The Millburn Corporation in August 2003and is responsible for the design and implementation of the General Partner’squantitative trading strategies.  Hegraduated *summa cum laude* from The Cooper Unionfor the Advancement of Science and Art in 1999 with a B.E. in mechanicalengineering and received an S.M. degree from the Massachusetts Institute ofTechnology (“M.I.T.”) in 2001.  Mr. Ferarawas employed as an associate analyst by Moody’s Investor Services from February 2002to July 2003.

 

***Mark B. Fitzsimmons, age 61.****** ***Mr. Fitzsimmons is a SeniorVice-President of the General Partner and The Millburn Corporation.  His responsibilities include both businessdevelopment and investment strategy.  Hejoined the General Partner and its affiliates in January 1990 from MorganStanley & Co. Incorporated where he was a Principal and Manager ofinstitutional foreign exchange sales and was involved in strategic trading forthe firm from October 1987 until January 1990.  From September 1977 to October 1987he was with Chemical Bank New York Corporation (“Chemical”), first as a SeniorEconomist in Chemical’s Foreign Exchange Advisory Service and later as aVice-President and Manager of Chemical’s Corporate Trading Group.  While at Chemical he also traded both foreignexchange and fixed income products.  FromSeptember 1973 to September 1977 Mr. Fitzsimmons was employed bythe Federal Reserve Bank of New York, dividing his time between theInternational Research Department and the Foreign Exchange Department.  He graduated *summa cumlaude* from the University of Bridgeport, Connecticut in 1970 with aB.S. degree in economics.  His graduatework was done at the University of Virginia, where he received a certificate ofcandidacy for a Ph.D. in economics in 1973. Mr. Fitzsimmons became listed as a principal of the General Partnereffective July 2, 1993.  He becamelisted as a principal and registered as an associated person of The MillburnCorporation effective June 20, 1995 and October 12, 1992,respectively.  Mr. Fitzsimmons wasalso a partner in ShareInVest beginning in January 2000.  Mr. Fitzsimmons was a listed principalof ShareInVest from May 19, 1999 until February 25, 2007.

 

***Barry Goodman, age 51.*********  Mr. Goodmanis Executive Vice-President, Director of Trading and a member of the ResearchCommittee of the General Partner and The Millburn Corporation.  Mr. Goodman joined the General Partnerand The Millburn Corporation (including its affiliate, Millburn Partners) in November 1982as Assistant Director of Trading.  Hisresponsibilities include overseeing the firm’s trading operations and managingits trading 

 

15

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relationships, as well asthe design and implementation of trading systems.  From September 1980 through October 1982he was a commodity trader for E. F. Hutton & Co., Inc. (“E.F.Hutton”).  At E.F. Hutton, he alsodesigned and maintained various technical indicators and coordinated researchprojects pertaining to futures markets.  Mr. Goodmangraduated **magna cum laude** fromHarpur College of the State University of New York in 1979 with a B.A. ineconomics.  Mr. Goodman becamelisted as a principal and registered as an associated person of the GeneralPartner effective December 19, 1991 and May 23, 1989,respectively.  He also became listed as aprincipal and registered as an associated person of The Millburn Corporationeffective June 20, 1995 and April 5, 1989, respectively.  He became a partner in ShareInVest in January 1994.Mr. Goodman was a listed principal of ShareInVest from May 19, 1999until February 25, 2007.

 

***Dennis B. Newton, age 57.********* Mr. Newtonis a Senior Vice-President of the General Partner and The MillburnCorporation.  His primaryresponsibilities are in administration and business development.  Prior to joining the General Partner and TheMillburn Corporation in September 1991, Mr. Newton was President ofPhoenix Asset Management, Inc., a registered commodity pool operator from April 1990to August 1991 and President of its affiliated introducing broker, PhoenixFutures Inc. (“Phoenix”), from March 1990 to June 1991.  Prior to his employment with Phoenix, Mr. Newtonwas a Director of Managed Futures with Prudential-Bache Securities Inc. (“Prudential-Bache”)from October 1987 to March 1990 and was associated with itsaffiliated FCM entity, Prudential Securities Futures Management, Inc.  Mr. Newton joined Prudential-Bache fromHeinold Asset Management, Inc.  (“Heinold”),and its affiliated FCM, Heinold Commodities Inc., where he was a member of thesenior management team from October 1974 to October 1987.  Heinold was a pioneer and one of the largestsponsors of funds utilizing futures and currency forward trading.  Mr. Newton became listed as a principaland registered as an associated person and branch office manager of the GeneralPartner effective May 14, 1997, May 30, 1991 and December 16,1991, respectively.  He also becamelisted as a principal of The Millburn Corporation effective May 5, 2004.

 

***Grant N. Smith, age 57.***   Mr. Smithis Executive Vice-President and Co-Director of Research of the General Partnerand The Millburn Corporation.  He isresponsible for the design, testing and implementation of quantitative tradingstrategies, as well as for planning and overseeing the computerizeddecision-support systems of the firm.  Hereceived a B.S. degree from M.I.T. in 1974 and an M.S. degree from M.I.T. in1975.  While at M.I.T., he held severalteaching and research positions in the computer science field and participatedin various projects relating to database management.  He joined the predecessor entity to TheMillburn Corporation in June 1975, and has been continuously associatedwith the General Partner, The Millburn Corporation and their affiliates sincethat time.  Mr. Smith became listedas a principal of the General Partner effective December 19, 1991.  He became listed as a principal andregistered as an associated person of The Millburn Corporation effective June 20,1995 and May 21, 1992, respectively. Mr. Smith also became a partner in ShareInVest in January 1994.  Mr. Smith was a listed principal ofShareInVest from May 19, 1999 until February 25, 2007.

 

***Tod A. Tanis, age 54.***  Mr. Tanisis a Vice President, Principal Accounting Officer and Director of Operations ofthe General Partner and The Millburn Corporation.  He is responsible for overseeing operationsand accounting for the firm’s commodity pools. He graduated from Grove City College in May 1976 with a B.A. inaccounting and joined the General Partner and The Millburn Corporation in May of1983.  Prior to joining the GeneralPartner and its affiliates, he was with E.F. Hutton, where he was a Managerfrom December 1982 to April 1983; a Supervisor from August 1982to December 1982; an International Accountant from April 1979 to August 1982;and a staff accountant from June 1978 to April 1979.  As a Manager at E.F. Hutton, he wasresponsible for all internal and external commodity reporting.  Mr. Tanis also served as a JuniorAccountant and then International Staff Accountant with Merrill Lynch &Company from September 1976 to May 1978.  Mr. Tanis became listed as a principalof the General Partner and The Millburn Corporation effective July 14,2004.

 

(c)   Identificationof Certain Significant Employees

 

None.

 

(d)   FamilyRelationships

 

None.

 

16

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(e)   BusinessExperience

 

See Item 10 (a, b) above.

 

(f)   Involvementin Certain Legal Proceedings

 

None.

 

(g)   Codeof Ethics

 

The Partnership has noemployees, officers or directors and is managed by the General Partner. The General Partner has adopted an Executive Code of Ethics that applies to itsprincipal executive officers, principal financial officer and principalaccounting officer.  A copy of this Executive Code of Ethics may beobtained at no charge by written request to Millburn Ridgefield Corporation,411 West Putnam Avenue, Greenwich, Connecticut 06830 or by calling 203-625-7554(ask for Client Services).

 

(h)   AuditCommittee Financial Expert

 

Because the Partnershiphas no employees, officers or directors, the Partnership has no auditcommittee.  The Partnership is managed bythe General Partner.  Gregg Buckbinderserves as the General Partner’s “audit committee financial expert.”  Mr. Buckbinder is not independent of themanagement of the General Partner.  TheGeneral Partner is a privately owned corporation managed by itsshareholders.  It has no independentdirectors.

 

Item 11.   Executive Compensation

 

The Partnership has nodirectors, officers or employees.  Noneof the directors, officers or employees of the General Partner receivecompensation from the Partnership.  TheGeneral Partner makes all trading decisions on behalf of the Partnership.  The General Partner receives monthlybrokerage commissions of 0.458 of 1% of the Partnership’s Net Assets (which isreduced to 0.167 of 1% of Net Assets, plus the cost of all commissions andclearing charges due to third-party brokers, for partners who acquire theirInterests directly through the General Partner) and an annual profit share of20% of any new trading profit.

 

Item12.   Security Ownership of Certain Beneficial Ownersand Management

 

(a)   Security Ownership of Certain Beneficial Owners

 

As of December 31, 2008, the General Partner knows of thefollowing persons who own beneficially more than 5% of the Partnership’sInterests as follows:

 
| ** **                           | ** ** | ** **            | ** ** | **Percentage of Limited Partnership** | ** ** |
|--------------------------------------|------------|-----------------------|------------|---------------------------------------|------------|
| ** **                           | ** ** | **Value of Interest** | ** ** | **Interests**                         | ** ** |
| **Name and Address**                 | ** ** | **Held  Directly**    | ** ** | **Held****Indirectly****(1)**         | ** ** | **% Directly** | ** ** | **% Indirectly** | ** ** |
|                                 |       |                  |       |                                  |       |   |   |   |   |
| Malcolm H.  Wiener                   |       |                  |       |                                  |       |   |   |   |   |
| c/o Millburn  Ridgefield Corporation |       |                  |       |                                  |       |   |   |   |   |
| 411 W. Putnam  Avenue                |       |                  |       |                                  |       |   |   |   |   |
| Greenwich, CT  06830                 |       |                  |       | $                                     | 22,360,041 |   |   |   | 13.69 | % |
|                                 |       |                  |       |                                  |       |   |   |   |   |
| ALFA Investors                       |       |                  |       |                                  |       |   |   |   |   |
| 2108 E. South  Blvd.                 |       |                  |       |                                  |       |   |   |   |   |
| Montgomery, AL  36116                |       | $                     | 9,816,905  |                                  |       |   | 6.01 | % |   |   |
|                                      |            |                       |            |                                       |            |  |  |  |  |  |  |

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(1)                                  Interests held indirectly includeInterests with respect to which a person holds voting or dispositionpower:  (i) by virtue of serving asone of two or fewer trustees, custodian or officer of the beneficial ownerwhich is a charitable entity, benefit plan or custody account for the benefitof a minor; (ii) with respect to certain Interests owned by members of aperson’s immediate family; or (iii) through a self directed benefit plan.

 

17

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All of the Partnership’sgeneral partner interest is held by the General Partner.

 

(b)   Security Ownership of Management

 

The Partnership has no officers or directors.  Under the terms of the Limited PartnershipAgreement, the Partnership’s affairs are managed by the General Partner, whichhas discretionary authority over the Partnership’s trading.  As of December 31, 2008, the GeneralPartner’s interest was valued at $3,950,576, which constituted 2.36% of thePartnership’s capital as of December 31, 2008.

 

As of December 31, 2008, the directors and executive officers ofthe General Partner own beneficially Interests as follows:

 
| ** **                                                          | ** ** | ** **             | ** ** | **Percentage  of Limited Partnership** | ** ** |
|---------------------------------------------------------------------|------------|------------------------|------------|----------------------------------------|------------|
| ** **                                                          | ** ** | **Value of  Interest** | ** ** | **Interests**                          | ** ** |
| **Name**                                                            |       | **Held  Directly**     | ** ** | **Held Indirectly(2)**                 | ** ** | **%  Directly** | ** ** | **%  Indirectly** |   |
|                                                                |       |                   |       |                                   |       |   |   |   |   |
| Harvey Beker                                                        |       | $                      | 733,112    |                                   | $          | 10,917,629 |   | 0.45 | % | 6.68 | % |
|                                                                |       |                   |       |                                   |       |   |   |   |   |
| Gregg Buckbinder                                                    |       |                   |       | $                                      | 540,454    |   |   |   | 0.33 | % |
|                                                                |       |                   |       |                                   |       |   |   |   |   |
| George Crapple                                                      |       | $                      | 41,890     |                                   | $          | 6,331,190 |   | 0.03 | % | 3.88 | % |
|                                                                |       |                   |       |                                   |       |   |   |   |   |
| Steven M.  Felsenthal                                               |       |                   |       | $                                      | 69,583     |   |   |   | 0.04 | % |
|                                                                |       |                   |       |                                   |       |   |   |   |   |
| Edward Ferara                                                       |       |                   |       | $                                      | 152,375    |   |   |   | 0.09 | % |
|                                                                |       |                   |       |                                   |       |   |   |   |   |
| Mark Fitzsimmons                                                    |       |                   |       | $                                      | 3,170,141  |   |   |   | 1.94 | % |
|                                                                |       |                   |       |                                   |       |   |   |   |   |
| Barry Goodman                                                       |       |                   |       | $                                      | 3,178,992  |   |   |   | 1.95 | % |
|                                                                |       |                   |       |                                   |       |   |   |   |   |
| Dennis Newton                                                       |       |                   |       | $                                      | 543,979    |   |   |   | 0.33 | % |
|                                                                |       |                   |       |                                   |       |   |   |   |   |
| Grant Smith                                                         |       | $                      | 2,406,605  |                                   | $          | 1,476,806 |   | 1.47 | % | 0.90 | % |
|                                                                |       |                   |       |                                   |       |   |   |   |   |
| Tod Tanis                                                           |       |                   |       | $                                      | 748,661    |   |   |   | 0.46 | % |
|                                                                |       |                   |       |                                   |       |   |   |   |   |
| directors and  executive officers of the General Partner as a group |       | $                      | 3,181,607  |                                   | $          | 27,129,810 |   | 1.95 | % | 16.60 | % |

----

(2)                                  Interests held indirectly includeInterests with respect to which a person holds voting or disposition power:  (i) by virtue of serving as one of twoor fewer trustees, custodian or officer of the beneficial owner which is acharitable entity, benefit plan or custody account for the benefit of a minor; (ii) withrespect to certain Interests owned by members of a person’s immediate family;or (iii) through a self directed benefit plan.

 

(c)   Changes in Control

 

None.

 

18

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(d)   SecuritiesAuthorized for Issuance Under Equity Compensation Plans

 

None.

 

Item13.   Certain Relationships and Related Transactions

 

See “Item 11.  Executive Compensation” and “Item12.  Security Ownership of CertainBeneficial Owners and Management.” The Partnership allocated to the General Partner $3,779,342 in brokeragefees and allocated $5,129,390 in profit share to the New Profits Memo Accountfor the year ended December 31, 2008. The General Partner’s interest showed an allocation of income of$1,309,623 for the year ended December 31, 2008.  The Partnership allocated to the General Partner$3,533,293 in brokerage fees and allocated $3,048,112 in profit share to theNew Profits Memo Account for the year ended December 31, 2007.  The General Partner’s interest showed anallocation of income of $848,969 for the year ended December 31, 2007.  The General Partner has paid certainadministrative expenses to third-parties on behalf of the Partnership, relatedto legal, accounting, auditing, printing, postage and similar administrativeexpenses, and has been or will be reimbursed without interest by thePartnership.  The Partnership paysadministrative expenses for legal, audit and accounting services, up to 0.25 of1% per annum of the Partnership’s average month-end net assets.  A portion of such expenses are paid to anaffiliate of the General Partner, The Millburn Corporation, for the provisionof accounting services to the Partnership. The Partnership incurred administrative expenses of $420,720 during theyear ended December 31, 2008 of which $272,572 was paid or was payable toThe Millburn Corporation.  ThePartnership incurred administrative expenses of $385,059 during the year ended December 31,2007 of which $254,148 was paid or was payable to The MillburnCorporation.  The General Partner paysall administrative expenses in excess of 0.25 of 1% per annum of thePartnership’s average month-end net assets. The Partnership is prohibited from making any loans.

 

Item14.   Principal Accountant Fees and Services

 

(1)                                  Audit Fees

 

The aggregate fees forprofessional services rendered by Deloitte & Touche LLP in connectionwith their audit of the Partnership’s financial statements in connection withthe statutory and regulatory filings for the years ended December 31, 2008and 2007 were approximately $85,000 and $83,000, respectively.

 

(2)                                  Audit-Related Fees

 

There were no fees forassurance and related services rendered by Deloitte & Touche LLP forthe years ended December 31, 2008 and 2007.

 

(3)                                  Tax Fees

 

The aggregate fees forprofessional services rendered by Deloitte & Touche LLP for taxcompliance, advice or planning services rendered by Deloitte & ToucheLLP for the benefit of the Partnership for the years ended December 31,2008 and 2007 were approximately $16,250 and $7,900, respectively.

 

(4)                                  All Other Fees

 

None

 

(5)                                  Pre-Approval Policies

 

The board of directors ofthe General Partner pre-approves the engagement of the Partnership’s auditorfor all services to be provided by the auditor.

 

19

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PART IV

 

Item15.   Exhibitsand Financial Statement Schedules

 

(a)(1)   Financial Statements

 

The following areincluded with the 2008 Report of Independent Registered Public Accounting Firm,a copy of which is filed herewith as Exhibit 13.01.

 

Affirmationof Millburn Ridgefield Corporation

Report of IndependentRegistered Public Accounting Firm

Statements of FinancialCondition

Condensed Schedules ofInvestments

Statements of Operations

Statements of Changes inPartners’ Capital

Statements of Financial Highlights

Notes to FinancialStatements

 

(a)(2)   Financial Statement Schedules

 

All Schedules are omittedfor the reason that they are not required or are not applicable becauseequivalent information has been included in the financial statements or the notesthereto.

 

(a)(3)   Exhibits as required by Item 601 of Regulation S-K

 

The following exhibitsare included herewith.

 

| **Designation** | ** ** | **Description**                                                                  |
|-----------------|------------|----------------------------------------------------------------------------------|
|            |       |                                                                             |
| 13.01           |       | 2008 Report of  Independent Registered Public Accounting Firm                    |
|            |       |                                                                             |
| 31.1            |       | Rule 13a-14(a)/15d-14(a) Certification  of Principal Executive Officer |
|            |       |                                                                             |
| 31.2            |       | Rule 13a-14(a)/15d-14(a) Certification  of Principal Executive Officer |
|            |       |                                                                             |
| 31.3            |       | Rule 13a-14(a)/15d-14(a) Certification  of Principal Financial Officer |
|            |       |                                                                             |
| 32.1            |       | Section 1350  Certification of Principal Executive Officer                  |
|            |       |                                                                             |
| 32.2            |       | Section 1350  Certification of Principal Executive Officer                  |
|            |       |                                                                             |
| 32.3            |       | Section 1350  Certification of Principal Financial Officer                  |

 

The following exhibits were filed by the Partnership as a part of itsRegistration Statement on Form 10 (Reg. No. 000-50725) on April 29,2004 and are incorporated herein by reference.

 
| **Exhibit Number** | ** ** | **Description of Document**                                                 |
|-------------------------|------------|-----------------------------------------------------------------------------|
|                    |       |                                                                        |
| 3.01                    |       | Amended and Restated Certificate of Limited  Partnership of Nestor Partners |
|                    |       |                                                                        |
| 4.01                    |       | Amended and Restated Agreement of Limited  Partnership of Nestor Partners   |
|                    |       |                                                                        |
| 10.01                   |       | Form of ISDA Master Agreement and Credit  Support Annex                |

 

20

----

 
| 10.02    |   | ISDA Master Agreement, Schedule, and Credit Support  Annex between Nestor Partners and Merrill Lynch International Bank Limited        |
|----------|--------|----------------------------------------------------------------------------------------------------------------------------------------|
|     |   |                                                                                                                                   |
| 10.03    |   | ISDA Master Agreement, Schedule, and Credit Support  Annex between Nestor Partners and Dresdner Bank A.G.                              |
|     |   |                                                                                                                                   |
| 10.04(a) |   | Foreign Exchange Customer Agreement between Nestor  Partners and Morgan Stanley & Co. Incorporated                            |
|     |   |                                                                                                                                   |
| 10.04(b) |   | Customer Agreement Foreign Currency Option  Transactions between Nestor Partners and Morgan Stanley Capital Group Inc.                 |
|     |   |                                                                                                                                   |
| 10.05    |   | International Foreign Exchange and Options Master  Agreement between Deutsche Bank AG and Nestor Partners                              |
|     |   |                                                                                                                                   |
| 10.06    |   | Acknowledgement of Separate Risk Disclosure  Statements and Customer Agreement between Merrill Lynch Futures Inc. and  Nestor Partners |
|     |   |                                                                                                                                   |
| 10.07    |   | Customer Agreement between Warburg Dillon Reed LLC  and Nestor Partners                                                                |
|     |   |                                                                                                                                   |
| 10.08    |   | Futures and Options Agreement for Institutional  Customers between Deutsche Morgan Grenfell Inc. and Nestor Partners                   |

 

21

----

 

SIGNATURES

 

Pursuant to therequirements of Section 13 or 15(d) of the Securities Exchange Act of1934, the Registrant has duly caused this report to be signed on its behalf bythe undersigned, thereunto duly authorized, on the 30th day of March, 2009.

 
|   | NESTOR PARTNERS |
|--------|-----------------|
|   |            |   |
|   | By:             | Millburn Ridgefield  Corporation, |
|   |            | General Partner |
|   |            |   |
|   | By:             | /s/ Harvey Beker |
|   |            | Harvey Beker |
|   |            | Co-Chief Executive  Officer |

 

Pursuant to therequirements of the Securities Exchange Act of 1934, this report has beensigned below by the following persons on behalf of the General Partner of theRegistrant and in the capacities and on the date indicated.

 
| **Signature**         | ** ** | **Title with  General Partner**   | ** ** | **Date**            |
|-----------------------|------------|----------------------------------------|------------|---------------------|
|                  |       |                                   |       |                |
| /s/ Harvey Beker      |       | Co-Chief                               |       | March 30, 2009 |
| Harvey Beker          |       | Executive Officer and  Director        |       |                |
|                  |       | (Principal Executive  Officer)         |       |                |
|                  |       |                                   |       |                |
| /s/ George E. Crapple |       | Co-Chief Executive                     |       | March 30, 2009 |
| George E. Crapple     |       | Officer and Director                   |       |                |
|                  |       | (Principal Executive  Officer)         |       |                |
|                  |       |                                   |       |                |
| /s/ Gregg Buckbinder  |       | Chief Financial and  Operating Officer |       | March 30, 2009 |
| Gregg Buckbinder      |       | (Principal Financial  Officer)         |       |                |
|                  |       |                                   |       |                |
| /s/ Tod A. Tanis      |       | Vice President                         |       | March 30, 2009 |
| Tod A. Tanis          |       | (Principal Accounting  Officer)        |       |                |

 

          (Being the principal executive officers, the principalfinancial officer and principal accounting officer, and a majority of thedirectors of Millburn Ridgefield Corporation)

 

22

----

 

EXHIBIT INDEX

 

The following exhibitsare included herewith.

 

| **Designation** | ** ** | **Description**                                                                  |
|-----------------|------------|----------------------------------------------------------------------------------|
|            |       |                                                                             |
| 13.01           |       | 2008 Report of  Independent Registered Public Accounting Firm                    |
|            |       |                                                                             |
| 31.1            |       | Rule 13a-14(a)/15d-14(a) Certification  of Principal Executive Officer |
|            |       |                                                                             |
| 31.2            |       | Rule 13a-14(a)/15d-14(a) Certification  of Principal Executive Officer |
|            |       |                                                                             |
| 31.3            |       | Rule 13a-14(a)/15d-14(a) Certification  of Principal Financial Officer |
|            |       |                                                                             |
| 32.1            |       | Section 1350  Certification of Principal Executive Officer                  |
|            |       |                                                                             |
| 32.2            |       | Section 1350  Certification of Principal Executive Officer                  |
|            |       |                                                                             |
| 32.3            |       | Section 1350  Certification of Principal Financial Officer                  |

 

The following exhibits were filed by the Partnership as a part of itsRegistration Statement on Form 10 (Reg. No. 000-50725) on April 29,2004 and are incorporated herein by reference.

 
| **Exhibit Number** | ** ** | **Description of Document**                                                                                                            |
|-------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------|
|                    |       |                                                                                                                                   |
| 3.01                    |       | Amended and Restated Certificate of Limited  Partnership of Nestor Partners                                                            |
|                    |       |                                                                                                                                   |
| 4.01                    |       | Amended and Restated Agreement of Limited  Partnership of Nestor Partners                                                              |
|                    |       |                                                                                                                                   |
| 10.01                   |       | Form of ISDA Master Agreement and Credit  Support Annex                                                                           |
|                    |       |                                                                                                                                   |
| 10.02                   |       | ISDA Master Agreement, Schedule, and Credit Support  Annex between Nestor Partners and Merrill Lynch International Bank Limited        |
|                    |       |                                                                                                                                   |
| 10.03                   |       | ISDA Master Agreement, Schedule, and Credit Support  Annex between Nestor Partners and Dresdner Bank A.G.                              |
|                    |       |                                                                                                                                   |
| 10.04(a)                |       | Foreign Exchange Customer Agreement between Nestor  Partners and Morgan Stanley & Co. Incorporated                            |
|                    |       |                                                                                                                                   |
| 10.04(b)                |       | Customer Agreement Foreign Currency Option  Transactions between Nestor Partners and Morgan Stanley Capital Group Inc.                 |
|                    |       |                                                                                                                                   |
| 10.05                   |       | International Foreign Exchange and Options Master  Agreement between Deutsche Bank AG and Nestor Partners                              |
|                    |       |                                                                                                                                   |
| 10.06                   |       | Acknowledgement of Separate Risk Disclosure  Statements and Customer Agreement between Merrill Lynch Futures Inc. and  Nestor Partners |
|                    |       |                                                                                                                                   |
| 10.07                   |       | Customer Agreement between Warburg Dillon Reed LLC  and Nestor Partners                                                                |
|                    |       |                                                                                                                                   |
| 10.08                   |       | Futures and Options Agreement for Institutional  Customers between Deutsche Morgan Grenfell Inc. and Nestor Partners                   |

 

23

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