**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

Washington, D.C. 20549

 

**FORM 10-Q**

 

(X) QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

For the Quarterly Period Ended September 30, 2008

 

( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

For the Transition Period From ____ TO___

 

Commission File No. 000-53118

 

**RFMC GLOBAL DIRECTIONAL FUND, LP**

 

 

| **Delaware**             | **20-8870560**      |
|--------------------------|---------------------|
| (a Delaware Partnership) | (I.R.S. Employer    |
|                     | Identification No.) |

 

**4 Benedek Road**

**Princeton, New Jersey 08540**

**(609) 921-0717**

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

| YES |    X      | NO ____ |
|-----|-----------------------------------------|---------|

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

| Large Accelerated Filer ______                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Accelerated Filer ______

  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------|
| Non-accelerated filer   X        (do not check if a                                                                                     Smaller reporting company) | Smaller Reporting Company ______ |

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

| YES |   ____ | NO    X      |
|-----|-------------|-----------------------------------------------------------|

 

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**RFMC GLOBAL DIRECTIONAL FUND, LP**

**INDEX TO FORM 10-Q**

 

 

| **PART I – FINANCIAL INFORMATION**  |                                                                                        |
|-------------------------------------------|---------------------------------------------------------------------------------------------|
|                                      | Page                                                                                        |
| Item 1.                                   | Condensed Financial Statements                                                              | 3 |
|                                      | Condensed Statements of Financial Condition                                                 | 3 |
|                                      | Condensed Statements of Income (Loss) and General Partner Incentive Allocation              | 4 |
|                                      | Condensed Statement of Changes in Partners’ Capital  (Net Asset Value)           | 5 |
|                                      | Notes to Condensed Financial Statements                                                     | 6 |
| Item 2.                                   | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 15 |
| Item 3.                                   | Quantitative and Qualitative Disclosures About Market Risk                                  | 18 |
| Item 4T.                                  | Controls and Procedures                                                                     | 19 |
| ******PART II – OTHER INFORMATION** |
| Item 1.                                   | Legal Proceedings                                                                           | 19 |
| Item 1A.                                  | Risk Factors                                                                                | 19 |
| Item 2.                                   | Unregistered Sales of Equity Securities and Use of Proceeds                                 | 19 |
| Item 3.                                   | Defaults Upon Senior Securities                                                             | 20 |
| Item 4.                                   | Submission of Matters to a Vote of Security Holders                                         | 20 |
| Item 5.                                   | Other Information                                                                           | 20 |
| Item 6.                                   | Exhibits                                                                                    | 20 |

 

 

|   | 2 |
|--------|---|

 

 

----

**PART I - FINANCIAL INFORMATION**

**Item 1. Condensed Financial Statements**

 

**RFMC GLOBAL DIRECTIONAL FUND, LP**

**CONDENSED STATEMENTS OF FINANCIAL CONDITION**

As of September 30, 2008 (Unaudited) and December 31, 2007

_______________

 

 

|                                                                                                                                                                                                                                                        |   | **September 30,****2008** |       | **December 31,****2007** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|------------|--------------------------|--------|
| **ASSETS**                                                                                                                                                                                                                                                  |   |                      |       |                     |   |
| EQUITY IN COMMODITY FUTURES TRADING ACCOUNT:                                                                                                                                                                                                                |   |                      |       |                     |   |   |   |
| Due from broker (including margin deposits of $3,292,797 for 2008 and $2,120,381 for 2007)                                                                                                                                                        |   | $                         | 4,517,067  |                     | $      | 4,870,950 |   |
| Net unrealized gains on open positions                                                                                                                                                                                                                      |   |                      | 406,628    |                     |   | 281,684 |   |
|                                                                                                                                                                                                                                                        |   |                      | 4,923,695  |                     |   | 5,152,634 |   |
| CASH AND CASH EQUIVALENTS                                                                                                                                                                                                                                   |   |                      | 21,687,478 |                     |   | 1,979,155 |   |
| DUE FROM GENERAL PARTNER                                                                                                                                                                                                                                    |   |                      | 69,583     |                     |   | 9,100 |   |
| INTEREST RECEIVABLE AND OTHER ASSETS                                                                                                                                                                                                                        |   |                      | 9,622      |                     |   | 33,079 |   |
| **TOTAL ASSETS**                                                                                                                                                                                                                                            |   | $                         | 26,690,378 |                     | $      | 7,173,968 |   |
| **LIABILITIES AND PARTNERS’ CAPITAL**

**LIABILITIES:**                                                                                                                                                                                               |   |                      |       |                     |   |   |   |
| Prepaid subscriptions                                                                                                                                                                                                                                       |   | $                         | 0          |                     | $      | 235,000 |   |
| Redemptions payable                                                                                                                                                                                                                                         |   |                      | 292,105    |                     |   | 133,353 |   |
| Other accrued expenses                                                                                                                                                                                                                                      |   |                      | 81,621     |                     |   | 122,472 |   |
| Accrued management fees                                                                                                                                                                                                                                     |   |                      | 158,244    |                     |   | 43,551 |   |
| **TOTAL LIABILITIES**                                                                                                                                                                                                                                       |   |                      | 531,970    |                     |   | 534,376 |   |
| **PARTNERS’ CAPITAL**                                                                                                                                                                                                                                 |   |                      |       |                     |   |   |   |
| Limited partners – Investor Class (21,625.8889 and 4,308.2391fully redeemable units at September 30, 2008 and December 31, 2007,                                    respectively)                                                                     |   |                      | 23,291,303 |                     |   | 4,339,665 |   |
| Limited partners – Institutional Class – Series 1 (1,629.8510                                    and 1,595.6911 fully redeemable units at September 30, 2008 and                                    December 31, 2007, respectively)            |   |                      | 1,858,805  |                     |   | 1,638,843 |   |
| Limited partners – Institutional Class – Series 2 (265.9028                                    and 42.4523 fully redeemable units at September 30, 2008 and                                    December 31, 2007, respectively)                 |   |                      | 296,282    |                     |   | 43,279 |   |
| General partner – Institutional Class – Series 3 (296.1586                                    and 566.2617 fully redeemable units at September 30, 2008 and                                    December 31, 2007, respectively)                 |   |                      | 712,018    |                     |   | 617,805 |   |
| **TOTAL PARTNERS’ CAPITAL**                                                                                                                                                                                                                           |   |                      | 26,158,408 |                     |   | 6,639,592 |   |
| **TOTAL LIABILITIES AND PARTNERS’ CAPITAL**                                                                                                                                                                                                           |   | $                         | 26,690,378 |                     | $      | 7,173,968 |   |
| **NET ASSET VALUE PER UNIT –**                                                                                                                                                                                                                        |   |                      |       |                     |   |   |   |
| Investor Class (based on Partners’ Capital of $23,291,303 and $4,339,665                                    and 21,625.8889 and 4,308.2391 fully redeemable units outstanding)                                                                        |   | $                         | 1,077.01   |                     | $      | 1,007.29 |   |
| Institutional Class – Series 1 (based on Partners’ Capital of $1,858,805                                    and $1,638,843 and 1,629.8510 and 1,595.6911 fully redeemable units                                    outstanding)                 |   | $                         | 1,140.48   |                     | $      | 1,027.04 |   |
| Institutional Class – Series 2 (based on Partners’ Capital of $296,282 and                                    $43,279 and 265.9028 and 42.4523 fully redeemable units outstanding)                                                              |   | $                         | 1,114.25   |                     | $      | 1,019.47 |   |
| Institutional Class – General Partner – Series 3 (based on Partners’ Capital                                    of $712,018 and $617,805 and 296.1586 and 566.2617 fully redeemable                                    units outstanding) |   | $                         | 2,404.18   |                     | $      | 1,091.02 |   |

 

See Notes to Financial Statements

 

|   | 3 |
|--------|---|

 

 

----

**RFMC GLOBAL DIRECTIONAL FUND, LP**

**CONDENSED STATEMENTS OF LOSS AND GENERAL PARTNER INCENTIVE ALLOCATION**

For the Three Months and Nine Months Ended September 30, 2008 and for the Period

August 1, 2007 (commencement of operations) to September 30, 2007

(Unaudited)

_______________

 

|                                                                                                                                    |   | **Nine Months****Ended****September 30, 2008** |       | **Three Months****Ended****September 30, 2008** |   | **August 1, 2007 (commencement****of operations) to****September 30, 2007** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|------------|-------------------------------------------------|--------|-----------------------------------------------------------------------------|--------|
| **NET INVESTMENT LOSS**                                                                                                                 |   |                                           |       |                                            |   |                                                                        |   |
| Income:                                                                                                                                 |   |                                           |       |                                            |   |                                                                        |   |   |   |   |
| Interest income                                                                                                                         |   | $                                              | 322,186    |                                            | $      | 123,331                                                                     |   | $ | 27,019 |   |
| Expenses:                                                                                                                               |   |                                           |       |                                            |   |                                                                        |   |   |   |   |
| Brokerage commissions                                                                                                                   |   |                                           | 1,041,211  |                                            |   | 454,918                                                                     |   |   | 40,182 |   |
| Management fees                                                                                                                         |   |                                           | 494,946    |                                            |   | 224,042                                                                     |   |   | 20,627 |   |
| Accounting and administrative fees                                                                                                      |   |                                           | 277,004    |                                            |   | 139,589                                                                     |   |   | 43,000 |   |
| Other expenses                                                                                                                          |   |                                           | 19,133     |                                            |   | 2,469                                                                       |   |   | 1,041 |   |
| Total expenses                                                                                                                          |   |                                           | 1,832,294  |                                            |   | 820,018                                                                     |   |   | 104,850 |   |
| Net investment loss                                                                                                                     |   |                                           | (1,510,108 | )                                               |   | (697,687                                                                    | )      |   | (77,831 | ) |
|                                                                                                                                    |   |                                           |       |                                            |   |                                                                        |   |   |   |   |
| **TRADING PROFITS (LOSSES)**                                                                                                            |   |                                           |       |                                            |   |                                                                        |   |   |   |   |
| Profits (losses) on trading of commodity futures:

       Net realized gains (losses) on closed positions |   |                                           | 1,901,278  |                                            |   | (351,591                                                                    | )      |   | (286,249 | ) |
| Change in net unrealized gains on open positions                                                                                   |   |                                           | 124,944    |                                            |   | (1,532,783                                                                  | )      |   | 419,280 |   |
| Total trading profits (losses)                                                                                                          |   |                                           | 2,026,222  |                                            |   | (1,884,374                                                                  | )      |   | 133,031 |   |
|                                                                                                                                    |   |                                           |       |                                            |   |                                                                        |   |   |   |   |
| **NET INCOME (LOSS)**                                                                                                                   |   |                                           | 516,114    |                                            |   | (2,582,061                                                                  | )      |   | 55,200 |   |
| Less: General Partner incentive allocation                                                                                              |   |                                           | 619,635    |                                            |   | 0                                                                           |   |   | 11,040 |   |
| General Partner incentive allocation waived                                                                                             |   |                                           | (26,485    | )                                               |   | 0                                                                           |   |   | (1,189 | ) |
|                                                                                                                                    |   |                                           |       |                                            |   |                                                                        |   |   |   |   |
| **NET INCOME (LOSS) AFTER GENERAL PARTNER INCENTIVE ALLOCATION**                                                                        |   | $                                              | (77,036    | )                                               | $      | (2,582,061                                                                  | )      | $ | 45,349 |   |
|                                                                                                                                    |   |                                           |       |                                            |   |                                                                        |   |   |   |   |
| **NET INCOME (LOSS) AFTER GENERAL PARTNER INCENTIVE ALLOCATION PER UNIT**                                                               |   |                                           |       |                                            |   |                                                                        |   |   |   |   |
| Investor Class                                                                                                                          |   | $                                              | 69.72      |                                            | $      | (105.44                                                                     | )      | $ | (16.55 | ) |
| Institutional Class – Series 1                                                                                                    |   | $                                              | 113.44     |                                            | $      | (98.67                                                                      | )      | $ | (9.54 | ) |
| Institutional Class – Series 2                                                                                                    |   | $                                              | 94.78      |                                            | $      | (99.61                                                                      | )      | $ | (11.40 | ) |
| Institutional Class – General Partner – Series 3                                                                            |   | $                                              | 1,313.16   |                                            | $      | (207.78                                                                     | )      | $ | 6.86 |   |

 

 

 

See Notes to Financial Statements

 

|   | 4 |
|--------|---|

 

 

----

**RFMC GLOBAL DIRECTIONAL FUND, LP**

**CONDENSED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL (NET ASSET VALUE)**

For the Nine Months Ended September 30, 2008 and for the Period

August 1, 2007 (commencement of operations) to September 30, 2007

(Unaudited)

_______________

 

 

|                                                              |   | **Partners’ Capital** |   |
|-------------------------------------------------------------------|--------|-----------------------------|--------|
|                                                              |   |                        |   | **Institutional Class** |   |   |
|                                                              |   | **Investor Class**          |   | **Series 1** |   | **Series 2** |   | **Series 3** |   |   |   |
|                                                              |   | **Units**                   |   | **Amount** |   | **Units** |   | **Amount** |   | **Units** |   | **Amount** |   | **Units** |   | **Amount** |   | **Total** |   |
| Balances at January 1, 2008                                  |   | 4,308.2391                  |   | $ | 4,339,665 |   | 1,595.6911 |   | $ | 1,638,843 |   | 42.4523 |   | $ | 43,279 |   | 566.2617 |   | $ | 617,805 |   | $ | 6,639,592 |   |
| Additions                                                         |   | 18,020.2167                 |   |   | 20,030,227 |   | 90.1302 |   |   | 100,823 |   | 179.5383 |   |   | 209,917 |   | 8.1102 |   |   | 14,231 |   |   | 20,355,198 |   |
| Redemptions                                                       |   | (702.5669                   | )      |   | (744,346 | ) | (12.9545 | ) |   | (15,000 | ) | — |   |   | — |   | (278.2133 | ) |   | (593,150 | ) |   | (1,352,496 | ) |
| Transfers                                                         |   | —                     |   |   | — |   | (43.0158 | ) |   | (53,303 | ) | 43.9122 |   |   | 53,303 |   | — |   |   | — |   |   | — |   |
| Net income (loss):                                                |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| General partner incentive allocation                              |   | —                     |   |   | — |   | — |   |   | — |   | — |   |   | — |   | — |   |   | 593,150 |   |   | 593,150 |   |
| Allocation to all partners                                        |   | —                     |   |   | (334,243 | ) | — |   |   | 187,442 |   | — |   |   | (10,217 | ) | — |   |   | 79,982 |   |   | (77,036 | ) |
| Balances at September 30, 2008                          |   | 21,625.8889                 |   | $ | 23,291,303 |   | 1,629.8510 |   | $ | 1,858,805 |   | 265.9028 |   | $ | 296,282 |   | 296.1586 |   | $ | 712,018 |   | $ | 26,158,408 |   |
|                                                              |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                              |   | **Investor Class**          |   | **Series 1** |   | **Series 2** |   | **Series 3** |   |   |   |
|                                                              |   | **Units**                   |   | **Amount** |   | **Units** |   | **Amount** |   | **Units** |   | **Amount** |   | **Units** |   | **Amount** |   | **Total** |   |
| Balances at August 1, 2007 (commencement of operations) |   | —                     |   | $ | — |   | — |   | $ | — |   | — |   | $ | — |   | — |   | $ | — |   | $ | — |   |
| Additions                                                         |   | 2,861.4346                  |   |   | 2,750,000 |   | 1,588.5805 |   |   | 1,588,458 |   | 42.4523 |   |   | 40,000 |   | 600.6350 |   |   | 600,566 |   |   | 4,979,024 |   |
| Redemptions                                                       |   | —                     |   |   | — |   | — |   |   | — |   | — |   |   | — |   | (9.7840 | ) |   | (9,851 | ) |   | (9,851 | ) |
| Net income (loss):                                                |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| General partner incentive allocation                              |   | —                     |   |   | — |   | — |   |   | — |   | — |   |   | — |   | — |   |   | 9,851 |   |   | 9,851 |   |
| Allocation to all partners                                        |   | —                     |   |   | 64,079 |   | — |   |   | (15,036 | ) | — |   |   | 1,968 |   | — |   |   | (5,662 | ) |   | 45,349 |   |
| Balances at September 30,  2007                         |   | 2,861.4346                  |   | $ | 2,814,079 |   | 1,588.5805 |   | $ | 1,573,422 |   | 42.4523 |   | $ | 41,968 |   | 590.8510 |   | $ | 594,904 |   | $ | 5,024,373 |   |

 

 

 

 

See Notes to Financial Statements

 

|   | 5 |
|--------|---|

 

 

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**RFMC GLOBAL DIRECTIONAL FUND, LP**

**NOTES TO CONDENSED FINANCIAL STATEMENTS**

For the Nine Months Ended September 30, 2008 and for the Period

August 1, 2007 (commencement of operations) to September 30, 2007

(Unaudited)

_______________

 

| 1. | BASIS OF PRESENTATION

  |
|----|-------------------------------|

The interim condensed financial statements of RFMC Global Directional Fund, LP (the “Partnership”), included herein, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and Rule 10-01 of Regulation S-X. Accordingly, they do not include all the                    information and footnotes required by accounting principles generally accepted in the United States of America for complete annual financial statements. These condensed financial statements are unaudited and should be read in conjunction with the audited financial statements and notes thereto included in the Partnership’s Annual Report on Form 10-12G for the period ended December 31, 2007. The Partnership follows the same accounting policies in the preparation of                    interim reports as set forth in the annual report. In the opinion of management, the financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of the financial position, results of operations and changes in partners’ capital for the interim periods presented and are not necessarily indicative of a full year’s results.

| 2. | PARTNERSHIP ORGANIZATION

  |
|----|----------------------------------|

The Partnership is a Delaware limited partnership, which was organized on March 19, 2007 and commenced trading operations on August 1, 2007. The Partnership may engage in the speculative trading of commodity futures contracts, options on commodities or commodity futures contracts, and forward contracts. The Partnership may also invest in entities (including other                    partnerships or funds) that trade commodity interests.

Ruvane Fund Management Corporation is the general partner of the Partnership (the “General Partner”) and is registered as a Commodity Pool Operator, Commodity Trading Advisor, and an Introducing Broker with the Commodity Futures Trading Commission (CFTC). The General Partner is required by the Limited Partnership Agreement, as amended and restated, (the                    “Agreement”) to contribute $1,000 to the Partnership.

In accordance with the Agreement, the Partnership offers limited partnership interests through a private offering pursuant to Regulation D as adopted under section 4(2) of the Securities Act of 1933, as amended. The Partnership will offer limited partnership interests up to an aggregate of $100,000,000; provided that the General Partner may increase the amount of interests                    that will be offered in increments of $10,000,000, after notice to the limited partners.

The Partnership offers two classes of limited partnership interests; the Institutional Class and the Investor Class. Commission charges, General Partner management fees and incentive allocations to the General Partner will differ between Classes and/or Series, but in all other respects the Institutional Class interests and the Investor Class interests will be identical.                    The Institutional Class and Investor Class interests will also be traded pursuant to the same trading program and at the same Trading Level (as defined in the Confidential Offering Memorandum).

The General Partner has selected Welton Investment Corporation (the “Advisor”) as the Partnership’s trading advisor. All of the Partnership’s assets will initially be traded pursuant to the Advisor’s Global Directional Portfolio, which follows a proprietary quantitative trading strategy. The General Partner, in the future, may allocate the                    Partnership’s assets to other trading strategies and investment programs.

The Partnership shall end upon the withdrawal, insolvency or dissolution of the General Partner or a decline of greater than fifty percent of the net assets of the Partnership as defined in the Agreement, or the occurrence of any event which shall make it unlawful for the existence of the Partnership to be continued.

 

|   | 6 |
|--------|---|

 

 

----

**RFMC GLOBAL DIRECTIONAL FUND, LP**

**NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)**

For the Nine Months Ended September 30, 2008 and for the Period

August 1, 2007 (commencement of operations) to September 30, 2007

(Unaudited)

_______________

 

| 3. | SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
|----|---------------------------------------------|

|   | A. | Cash and Cash Equivalents |
|--------|----|---------------------------|

The Partnership has defined cash and cash equivalents as cash and short-term, highly liquid investments with maturities of three months or less when acquired. These investments are classified as Level 1 fair value estimates (quoted prices in active markets for identical assets) under the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value                    Measurements” (“FAS 157”).

|   | B. | Due from Broker |
|--------|----|-----------------|

Due from broker represents cash required to meet margin requirements and excess funds not required for margin which are typically invested in 30 day commercial paper and U.S. Treasury bills which are carried at cost plus accrued interest, which approximates market value. The fair value of the U.S. Treasury bills as of September 30, 2008 and December 31, 2007 was $0 and                    $996,367, respectively. The Partnership is subject to credit risk to the extent that any broker with whom the Partnership conducts business is unable to deliver cash balances or securities, or clear securities transactions on the Partnership’s behalf. The General Partner monitors the financial condition of the brokers with which the Partnership conducts business and believes that the likelihood of loss under the aforementioned circumstances is remote.

|   | C. | Revenue Recognition |
|--------|----|---------------------|

Investments in commodity futures contracts are recorded on the trade date and open contracts are recorded in the financial statements at their fair value on the last business day of the reporting period, based on quoted market prices. Accordingly, such contracts are classified as Level 1 fair value estimates under the provisions of FAS 157. Gains or losses are realized when                    contracts are liquidated, on a first-in-first-out basis. Realized gains are netted with realized losses for financial reporting purposes and shown under the caption “Net realized gains (losses) on closed positions” in the Condensed Statements of Income (Loss) and General Partner Incentive Allocation. “Net unrealized gains on open positions” are reflected in the Condensed Statements of Financial Condition. Any change in net unrealized gain or loss from                    the preceding period is reported in the Condensed Statements of Income (Loss) and General Partner Incentive Allocation under the caption “Change in net unrealized gains on open positions”. Interest income is recognized on an accrual basis.

|   | D. | Brokerage Commissions |
|--------|----|-----------------------|

Investor Class interests will pay the General Partner a monthly flat-rate brokerage commission of up to approximately 0.583% of the net asset value of such interests as of the beginning of each month (an annual rate of up to 7.00%). The General Partner will pay from this amount up to 3% per annum to properly registered selling agents as compensation for their ongoing services                    to the Partnership. To the extent the General Partner pays less than 3% to a selling agent with respect to any limited partnership interests sold by such selling agent, the brokerage commission charged with respect to those limited partnership interests will be reduced accordingly. A separate series of Investor Class interests will be established for differing brokerage commission rates charged. During the nine months ended September 30, 2008 and the period August 1, 2007                    (commencement of operations) to September 30, 2007, all

 

7

 

 

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**RFMC GLOBAL DIRECTIONAL FUND, LP**

**NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)**

For the Nine Months Ended September 30, 2008 and for the Period

August 1, 2007 (commencement of operations) to September 30, 2007

(Unaudited)

_______________

 

| 3. | SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
|----|---------------------------------------------|

|   | D. | Brokerage Commissions (continued) |
|--------|----|-----------------------------------|

Investor Class interests were charged a flat rate brokerage commission equal to an annual rate of 7.00%.

Institutional Class interests will pay the General Partner a monthly flat-rate brokerage commission of 0.333% of the net asset value of such interests as of the beginning of each month (a 4.00% annual rate).

In addition to any applicable selling agent fees, the General Partner will also pay from its brokerage commission all floor brokerage, exchange, clearing and NFA fees with respect to the Partnership’s trading. The Partnership will pay all other execution costs, including give-up charges and service fees assessed by certain forward dealing desks. For the three and nine                    months ended September 30, 2008, such execution costs totaled $1,241 and $5,521, respectively. For the period August 1, 2007 (commencement of operations) to September 30, 2007, such execution costs totaled $491.

Commissions and execution costs charged to each Class or Series were as follows: 

|                                                | **Nine Months****Ended****September 30, 2008** |           | **Three Months****Ended****September 30, 2008** |         | **August 1, 2007                                    (commencement of                                    operations) to                                    September 30, 2007** |
|------------------------------------------------|-----------------------------------------------------|-----------|------------------------------------------------------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Investor Class                                 | $                                                   | 956,727   |                                                 | $       | 425,773                                                                                                                                                                        |   | $ | 25,974 |
| Institutional Class - Series 1            |                                                | 56,576    |                                                 |    | 18,939                                                                                                                                                                         |   |   | 10,167 |
| Institutional Class - Series 2            |                                                | 5,084     |                                                 |    | 2,956                                                                                                                                                                          |   |   | 197 |
| Institutional Class General Partner - Series 3 |                                                | 22,824    |                                                 |    | 7,250                                                                                                                                                                          |   |   | 3,844 |
| Total                                          |  $                                             | 1,041,211 |                                                 |  $ | 454,918                                                                                                                                                                        |   | $  | 40,182 |

 

For the three and nine months ended September 30, 2008, the General Partner received brokerage commissions of $375,279 and $900,305, respectively, from the Partnership. During the period August 1, 2007 (commencement of operations) to September 30, 2007, the General Partner received brokerage commissions of $18,231 from the Partnership. As of September 30, 2008 and December 31,                    2007, $69,583 and $9,100, respectively, were due from the General Partner for reimbursement of broker commissions advanced by the Partnership.

|   | E. | Statement of Cash Flows |
|--------|----|-------------------------|

The Partnership has elected not to provide a Statement of Cash Flows as permitted by Statement of Financial Accounting Standard No. 102, “Statement of Cash Flows – Exemption of Certain Enterprises and Classification of Cash Flows from Certain Securities Acquired for Resale.”

|   | F. | Allocation of Income (Loss) |
|--------|----|-----------------------------|

Net realized and unrealized trading profits and losses, interest income and other operating income and expenses, prior to flat-rate brokerage commission, management fees and incentive allocations, are allocated to the partners monthly in proportion to their capital account

8

 

 

----

**RFMC GLOBAL DIRECTIONAL FUND, LP**

**NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)**

For the Nine Months Ended September 30, 2008 and for the Period

August 1, 2007 (commencement of operations) to September 30, 2007

(Unaudited)

_______________

 

| 3. | SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
|----|---------------------------------------------|

balances, as defined in the Agreement. Each partner is then charged its applicable Class and/or Series flat-rate brokerage commission, management fees and incentive allocations.

|   | G. | Incentive Allocation |
|--------|----|----------------------|

The General Partner is entitled to a quarterly incentive allocation equal to 20% of New Profits (as defined in the Confidential Offering Memorandum), if any. The term “New Profits” is defined as the increase, if any, in the adjusted net asset value of the assets allocated to trading. The General Partner waived a portion of its incentive allocation from                    Institutional Class – Series 1 and Series 3 interests during the period August 1, 2007 (commencement of operations) to September 30, 2007, and for the nine month period ended September 30, 2008.  No incentive allocations were earned by the General Partner during the three months ended September 30, 2008. The General Partner incentive allocation, net of waived amounts for the nine months ended September 30, 2008 and for the period August 1, 2007 (Commencement                    of Operations) to September 30, 2007 were as follows:

 

|                                 |   | **Nine Months****Ended****September 30, 2008** |    | **August 1, 2007 (commencement of****operations) to****September 30, 2007** |   |
|--------------------------------------|--------|------------------------------------------------|---------|-----------------------------------------------------------------------------|--------|
| Investor Class                       |   | $                                              | 508,025 |                                                                        | $      | 6,192 |   |
| Institutional Class – Series 1 |   |                                           | 58,208  |                                                                        |   | 2,588 |   |
| Institutional Class – Series 2 |   |                                           | 3,427   |                                                                        |   | 92 |   |
| Institutional Class – Series 3 |   |                                           | 23,490  |                                                                        |   | 979 |   |
|                                 |   | $                                              | 593,150 |                                                                        | $      | 9,851 |   |

 

The General Partner will pay three-fourths of any incentive allocation it receives to the Advisor, and the General Partner may distribute a portion of its share of the incentive allocation to properly registered selling agents as compensation for their ongoing services to the Partnership.

|   | H. | Management Fees |
|--------|----|-----------------|

Investor Class and Institutional Class – Series 2 interests pay the General Partner a quarterly management fee equal to 1⁄4 of 1% (1% annually) of the net assets of the Partnership (as defined in the Agreement) as of the beginning of each calendar quarter before deducting accrued ordinary legal, accounting and auditing fees and before any incentive allocation to                    the General Partner. Institutional Class – Series 1 and Series 3 interests are not assessed a management fee by the General Partner. The management fees earned by the General Partner were as follows:

 

9

 

 

----

**RFMC GLOBAL DIRECTIONAL FUND, LP**

**NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)**

For the Nine Months Ended September 30, 2008 and for the Period

August 1, 2007 (commencement of operations) to September 30, 2007

(Unaudited)

_______________

 

| 3. | SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
|----|---------------------------------------------|

 

|                                 | **Nine Months****Ended****September 30, 2008** |    | **Three Months****Ended****September 30, 2008** |   | **August 1, 2007 (commencement of****operations) to****September 30, 2007** |
|--------------------------------------|-----------------------------------------------------|---------|------------------------------------------------------|--------|-----------------------------------------------------------------------------|
| Investor Class                       | $                                                   | 124,634 |                                                 | $      | 65,127                                                                      |   | $ | 3,107 |
| Institutional Class – Series 2 |                                                | 1,235   |                                                 |   | 778                                                                         |   |   | 33 |
| Total                                | $                                                   | 125,869 |                                                 | $      | 65,905                                                                      |   | $ | 3,140 |

 

As of September 30, 2008 and December 31, 2007, $7 and $5,087, respectively, was due to the General Partner for management fees.

In addition to the management fee paid to the General Partner, the Advisor also assesses each Class and Series of interests a management fee equal to 1⁄4 of 2% (2% per year) of the month-end Trading Level for each month during such quarter. Trading level shall mean the Partnership’s net assets allocated to the Advisor times the leverage to be employed by the                    Advisor from time to time upon the discretion of the General Partner. The leverage ratio is 1.2 times the net assets of the Partnership. As such, the Advisor’s management fee will approximate 2.4% per annum of the Partnership’s net assets. The management fees earned by the Advisor were as follows:

 

|                                                         | **Nine Months****Ended****September 30, 2008** |    | **Three Months****Ended****September 30, 2008** |   | **August 1, 2007                                    (commencement of****operations) to****September 30, 2007** |
|--------------------------------------------------------------|-----------------------------------------------------|---------|------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------|
| Investor Class                                               | $                                                   | 319,478 |                                                 | $      | 141,230                                                                                                        |   | $ | 9,044 |
| Institutional Class – Series 1                         |                                                | 33,229  |                                                 |   | 10,984                                                                                                         |   |   | 6,039 |
| Institutional Class – Series 2                         |                                                | 2,965   |                                                 |   | 1,718                                                                                                          |   |   | 121 |
| Institutional Class – General Partner – Series 3 |                                                | 13,405  |                                                 |   | 4,205                                                                                                          |   |   | 2,283 |
| Total                                                        | $                                                   | 369,077 |                                                 | $      | 158,137                                                                                                        |   | $ | 17,487 |
|                                                              |                                                     |         |                                                      |        |                                                                                                                |  |  |  |

 

As of September 30, 2008 and December 31, 2007, $158,237 and $38,464, respectively, was due to the Advisor for management fees.

|   | I. | Administrative Expenses |
|--------|----|-------------------------|

The Partnership pays all legal, accounting, auditing, and other administrative and operating expenses and fees associated with the operation of the Partnership.

The General Partner advanced the organizational and initial offering costs of the Partnership totaling $23,910. The Partnership reimbursed the General Partner for the advanced costs and also amortized the total initial offering costs of $29,633 over the twelve month period ended July 31, 2008. During the period August 1, 2007 (commencement of operations) to September                    30, 2007, initial offering cost of $1,041 was amortized into expense. During the three and nine months ended September 30, 2008, initial offering costs of $2,469 and $19,133, respectively, were amortized into expense. As of September 30, 2008 and December 31, 2007, initial offering costs payable to the General Partner totaled $0 and $20,590, respectively.

The General Partner will pay the continuous offering costs of the Partnership.

 

10

 

 

----

**RFMC GLOBAL DIRECTIONAL FUND, LP**

**NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)**

For the Nine Months Ended September 30, 2008 and for the Period

August 1, 2007 (commencement of operations) to September 30, 2007

(Unaudited)

_______________

 

| 3. | SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
|----|---------------------------------------------|

 

|   | J. | Income Taxes |
|--------|----|--------------|

No provision for income taxes has been provided in the accompanying financial statements as each partner is individually liable for taxes, if any, on his or her share of the Partnership’s profits.

The Partnership accounts for uncertainties in income tax positions taken or expected to be taken under the provision of Financial Accounting Standards Board Interpretation No. 48 (FIN 48) entitled “Accounting*For Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109*.” FIN 48 had no                    impact on the Partnership’s financial statements.

|   | K. | Subscriptions |
|--------|----|---------------|

Partnership units may be purchased on the first day of each month at the net asset value per unit determined on the last business day of the previous month. Partners’ contributions received in advance for subscriptions are recorded as prepaid subscriptions in the Condensed Statements of Financial Condition.

|   | L. | Redemptions |
|--------|----|-------------|

Limited partners may redeem some or all of their units at net asset value per unit as of the last business day of each month with at least ten days written notice to the General Partner.

|   | M. | Estimates |
|--------|----|-----------|

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income                    (loss) and expenses during the reporting period. Estimates include accrual of expenses such as administrative fees. Actual results could differ from these estimates.

|   | N. | Recently Issued Accounting Pronouncements |
|--------|----|-------------------------------------------|

In September 2006, the Financial Accounting Standards Board (“FASB”) issued FAS 157. FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. The Partnership adopted FAS 157 as of January 1, 2008. The adoption of FAS 157 did not have a material impact on the Partnership’s financial                    statements.

Fair value of an investment is the amount that would be received to sell the investment in an orderly transaction between market participants at the measurement date (i.e. the exit price).

 

11

 

 

----

**RFMC GLOBAL DIRECTIONAL FUND, LP**

**NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)**

For the Nine Months Ended September 30, 2008 and for the Period

August 1, 2007 (commencement of operations) to September 30, 2007

(Unaudited)

_______________

 

| 3. | SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
|----|---------------------------------------------|

 

|   | N. | Recently Issued Accounting Pronouncements (continued) |
|--------|----|-------------------------------------------------------|

FAS 157 established a hierarchal disclosure framework which prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available active quoted prices or for                    which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Investments measured and reported at fair value are classified and disclosed in one of the following categories:

Level I – Quoted prices are available in active markets for identical investments as of the reporting date. The type of investments included in Level I are publicly traded investments. As required by FAS 157, the Partnership does not adjust the quoted price for these investments even in situations where the Partnership holds a large position and a sale could reasonably                    impact the quoted price.

Level II – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. Investments which are generally included in this category are investments valued using market data.

Level III – Pricing inputs are unobservable and include situations where there is little, if any, market activity for the investment. Fair value for these investments are determined using valuation methodologies that consider a range of factors, including but not limited to the price at which the investment was acquired, the nature of the investment, local market                    conditions, trading values on public exchanges for comparable securities, current and projected operating performance and financing transactions subsequent to the acquisition of the investment. The inputs into the determination of fair value require significant management judgment. Due to the inherent uncertainty of these estimates, these values may differ materially from the values that would have been used had a ready market for these investments existed. Investments that                    are included in this category generally are privately held debt and equity securities.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The General Partner’s assessment of the significance of a particular input to the fair value                    measurement in its entirety requires judgment, and considers factors specific to the investment.

The following table summarizes the valuation of the Partnership’s investments by the above FAS 157 fair value hierarchy levels as of September 30, 2008:

 

|                                                                                  | **Total**                               | **Level I**                             | **Level II** | **Level III** |
|---------------------------------------------------------------------------------------|-----------------------------------------|-----------------------------------------|--------------|---------------|
| Net unrealized gains on                                      open positions | $      406,628 | $      406,628 | N/A          | N/A           |
| Money market mutual funds                                                             | $ 20,700,859                            | $ 20,700,859                            | N/A          | N/A           |

 

 

12

 

 

----

**RFMC GLOBAL DIRECTIONAL FUND, LP**

**NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)**

For the Nine Months Ended September 30, 2008 and for the Period

August 1, 2007 (commencement of operations) to September 30, 2007

(Unaudited)

_______________

 

| 3. | SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
|----|---------------------------------------------|

|   | N. | Recently Issued Accounting Pronouncements (continued) |
|--------|----|-------------------------------------------------------|

In October 2008, the FASB issued FASB Staff Position 157-3 (“FSP 157-3”), *Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active*, which clarifies the application of FAS 157 in a market that is not active.  FSP 157-3 is effective upon issuance, including prior periods for which financial statements have not                    been issued.  The implementation of FSP 157-3 did not have a material impact on the Partnership's financial statements.

In March 2008, the FASB issued Statement of Financial Accounting Standards (FASB) No. 161, “*Disclosures about Derivative Instruments and Hedging Activities – An Amendment to FASB Statement No. 133*” (“FAS 161”). FAS 161 amends FASB Statement No. 133 (“FAS 133”) to provide an enhanced                    understanding of how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for under FAS 133, and how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. FAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The implementation of FAS 161 is not expected to have a                    material impact on the Partnership’s financial statements.

|   | O. | Indemnifications |
|--------|----|------------------|

The Partnership has entered into agreements, which provide for the indemnifications against losses, costs, claims and liabilities arising from the performance of their individual obligations under such agreements, except for gross negligence or bad faith. The Partnership has had no prior claims or payments pursuant to these agreements. The Partnership’s individual                    maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Partnership that have not yet occurred. However, based on previous experience, the Partnership expects the risk of loss to be remote.

 

13

 

 

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**RFMC GLOBAL DIRECTIONAL FUND, LP**

**NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)**

For the Nine Months Ended September 30, 2008 and for the Period

August 1, 2007 (commencement of operations) to September 30, 2007

(Unaudited)

_______________

 

| 4. | FINANCIAL HIGHLIGHTS |
|----|----------------------|

The following sets forth the financial highlights for the periods presented:

 

|                                                                         | **Nine Months Ended September 30, 2008**                                          |   |
|------------------------------------------------------------------------------|-----------------------------------------------------------------------------------|--------|
|                                                                         | **Investor****Class**                                                             |   | **Institutional****Class****Series – 1** |   | **Institutional****Class****Series – 2** |   |
| Per Unit Operating Performance(for a Unit outstanding for the entire period) |                                                                              |   |   |   |   |   |   |   |   |   |
| Net Asset Value, Beginning of the period                                     |                                                                              | $      | 1,007.29  |   | $ | 1,027.04 |   | $ | 1,019.47 |   |
| Income (loss) from operations                                                |                                                                              |   |   |   |   |   |   |   |   |   |
| Net investment loss                                                          |                                                                              |   | (115.39) |   |   | (89.35) |   |   | (84.69) |   |
| Net trading profits                                                          |                                                                              |   | 185.11 |   |   | 202.79 |   |   | 179.47 |   |
| Net income                                                                   |                                                                              |   | 69.72 |   |   | 113.44 |   |   | 94.78 |   |
| Net Asset Value, End of the period                                           |                                                                              | $      | 1,077.01 |   | $ | 1,140.48 |   | $ | 1,114.25 |   |
| Total Return(1), (5)                                                         |                                                                              |   | 6.92 | % |   | 11.05 | % |   | 9.30 | % |
| Total Return (prior to incentive allocation)(2), (5)                         |                                                                              |   | 10.01 | % |   | 14.52 | % |   | 11.55 | % |
| Supplemental Data                                                            |                                                                              |   |   |   |   |   |   |   |   |   |
| Ratios of expenses to average net assets                                     |                                                                              |   |   |   |   |   |   |   |   |   |
| Expenses prior to incentive allocation(4), (6)                               |                                                                              |   | 13.26 | % |   | 8.47 | % |   | 9.79 | % |
| Incentive allocation(5)                                                      |                                                                              |   | 3.05 | % |   | 3.14 | % (6) |   | 2.14 | % |
| Total expenses                                                               |                                                                              |   | 16.31 | % |   | 11.61 | % |   | 11.93 | % |
| Ratios of net investment loss to average net assets(3), (4), (6)             |                                                                              |   | (11.03) | % |   | (6.32) | % |   | (7.69) | % |
|                                                                         |                                                                              |   |   |   |   |   |   |   |   |   |
|                                                                         | **Period from August 1, 2007 ( commencement of operations) to December 31, 2007** |   |
|                                                                         | **Investor****Class**                                                             |   | **Institutional****Class****Series – 1** |   | **Institutional****Class****Series – 2** |   |
| Per Unit Operating Performance(for a Unit outstanding for the entire period) |                                                                              |   |   |   |   |   |   |   |   |   |
| Net Asset Value, Beginning of the period                                     |                                                                              | $      | 1,000.00 |   | $ | 1,000.00 |   | $ | 1,000.00 |   |
| Income (loss) from operations                                                |                                                                              |   |   |   |   |   |   |   |   |   |
| Net investment loss                                                          |                                                                              |   | (60.93) |   |   | (42.35) |   |   | (50.85) |   |
| Net trading profits                                                          |                                                                              |   | 68.22 |   |   | 69.39 |   |   | 70.32 |   |
| Net income                                                                   |                                                                              |   | 7.29 |   |   | 27.04 |   |   | 19.47 |   |
| Net Asset Value, End of the period                                           |                                                                              | $      | 1,007.29 |   | $ | 1,027.04 |   | $ | 1,019.47 |   |
| Total Return(1), (5)                                                         |                                                                              |   | 0.73 | % |   | 2.70 | % |   | 1.95 | % |
| Total Return (prior to incentive allocation)(2), (5)                         |                                                                              |   | 1.56 | % |   | 3.32 | % |   | 3.01 | % |
| Supplemental Data                                                            |                                                                              |   |   |   |   |   |   |   |   |   |
| Ratios of expenses to average net assets                                     |                                                                              |   |   |   |   |   |   |   |   |   |
| Expenses prior to incentive allocation(4), (6)                               |                                                                              |   | 14.54 | % |   | 9.54 | % |   | 11.25 | % |
| Incentive allocation(5)                                                      |                                                                              |   | 0.90 | % |   | 0.61 | %(6) |   | 1.14 | % |
| Total expenses                                                               |                                                                              |   | 15.44 | % |   | 10.15 | % |   | 12.39 | % |
| Ratios of net investment loss to average net assets(3), (4), (6)             |                                                                                   |        | (10.96) | % |   | (6.14) | % |  | (7.66) | % |

 

| __________ |  |
|------------|--|

| (1) | Total return is derived as ending net asset value less beginning net asset value divided by beginning net asset value. |
|-----|------------------------------------------------------------------------------------------------------------------------|

| (2) | Total return (prior to incentive allocation) is derived as net income per unit and adding back incentive allocation per unit divided by the opening net asset value per unit. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (3) | Net investment loss ratio excludes the effects of incentive allocations.                                                                                                      |

| (4) | Annualized, except that certain non recurring expenses, such as professional fees, were not annualized for purposes of computing the ratios of expenses prior to incentive allocation and net investment loss to average net assets. Each Class and/or Series of interests commenced operations on August 1, 2007. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Not annualized. |
|-----|-----------------|

| (6) | Net of 1.01% and 0.30% effect of waiver of incentive allocations during the nine months ended September 30, 2008 and the period ended December 31, 2007, respectively. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

* * * * *

 

|   | 14 |
|--------|----|

 

 

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**Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations**

RFMC Global Directional Fund, LP (the “Partnership”) is a limited partnership organized under the Delaware Revised Uniform Limited Partnership Act. The business of the Partnership is to trade, buy, sell or otherwise acquire, hold or dispose of commodity futures contracts, options on physical commodities and on commodity futures contracts, forward contracts, and                    any rights pertaining thereto (“Commodity Interests”) and to engage in all activities incident thereto. The Partnership may also invest in entities (including other partnerships or funds) that trade Commodity Interests. The objective of the Partnership is the appreciation of its assets through speculative trading. Ruvane Fund Management Corporation is the General Partner of the Partnership (the “General Partner”) and Welton Investment Corporation                    (“WIC” or the “Advisor”) is the Partnership’s trading advisor (the “Advisor”).

The success of the Partnership is dependent upon the ability of the Advisor to generate trading profits through the speculative trading of Commodity Interests sufficient to produce capital appreciation after payment of all fees and expenses. Future results will depend in large part upon the Commodity Interests markets in general, the performance of the Advisor, the amount                    of additions and redemptions and changes in interest rates. Although extensive leverage is available in futures markets, the General Partner will monitor WIC’s trading so that leverage remains within levels acceptable to the General Partner, in its sole discretion. Currently, the leverage that WIC will employ on behalf of the Partnership is 1.2, or 20% higher than the actual funds allocated to WIC (such amount is referred to herein as the “Trading Level”).                    In general, margin commitments for the Partnership will range between 15% and 20% of capital. Margin commitments represent that portion of the capital of the Partnership which is committed as margin for futures contracts. Margins are good faith deposits which must be made with a commodity broker in order to initiate or maintain an open position in a futures contract. Because of the nature of these factors and their interaction, past performance is not indicative of future                    results. As a result, any recent increases in net realized or unrealized gains may have no bearing on any results that may be obtained in the future.

The Partnership incurs substantial charges from the payment of brokerage commissions to the General Partner, payment of management fees to the Advisor, payment of management fees and incentive allocations to the General Partner and administrative expenses. The Partnership is required to make trading profits to avoid depleting and exhausting its assets from the payment of                    such fees, allocations and expenses.

The markets in which the Commodity Interests trade are constantly changing in character and in degree of volatility. All of the Partnership’s assets currently are allocated to WIC’s Global Directional Portfolio, which is a proprietary quantitative trading strategy, and will be traded at a leverage ratio of 1.2. The General Partner, in the future, may allocate                    the Partnership’s assets to other trading strategies and investment programs.

The Partnership pays to the General Partner a flat-rate monthly brokerage commission of up to approximately 0.583% of the net asset value of the limited partnership interests of the Partnership as of the beginning of each month (a 7.00% annual rate) for the Investor Class. The General Partner will pay from this amount up to 3% to properly registered selling agents as                    compensation for their ongoing services to the Partnership. Institutional Class interests will pay the General Partner a monthly flat-rate brokerage commission of 0.333% of the net asset value of such interests as of the beginning of each month (a 4.00% annual rate). In addition to payments to properly registered selling agents, the General Partner pays from this amount all commission charges and fees with respect to the Partner’s trading in Commodity Interests. The                    flat-rate monthly commission is common among programs such as the Partnership.

*Summary of Critical Accounting Policies*

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported in the Partnership’s financial statements. The critical accounting estimates and related judgments                    underlying the Partnership’s financial statements are summarized below. In applying these policies, management makes judgments that frequently require estimates about matters that are inherently uncertain. The Partnership’s significant accounting policies are described in detail in Note 3 of the Notes to the Condensed Financial Statements.

Investments in commodity futures, options and forward contracts are recorded on the trade date and open contracts are recorded in the financial statements at their fair value on the last business day of the reporting period.  The difference between the original cost basis of the contract and fair value is recorded in income as a net unrealized gain or loss on open                    positions in the Condensed Statements of Financial Condition. Realized gains and losses on closed contracts are recorded on a first-in-first-out basis. Interest income is recognized on an accrual basis. All Commodity Interests and financial instruments are recorded at fair value in the financial statements. Fair value is based on quoted market prices or estimates of fair value.

 

15

 

 

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                The Partnership records all investments at fair value in its financial statements, with changes in fair value reported as a component of Trading Profits (Losses) in the Condensed Statements of Income (Loss) and General Partner Incentive Allocation. Generally, fair                    values are based on quoted market prices; however, in certain circumstances, significant judgments and estimates are involved in determining fair value in the absence of an active market closing price.

*Results of Operations*

Three Months Ended September 30, 2008

For the quarter ended September 30, 2008, the Partnership had total net trading losses comprised of ($351,591) in net realized losses on closed positions, and ($1,532,783) in change in net unrealized gains on open positions. The Partnership also had interest income of $123,331.

In July 2008, the Partnership was unprofitable. The Partnership had losses in crude oil, the Euro Bund, corn, aluminum and natural gas; the Partnership had gains in nickel, the Swiss Franc, the Mexican Peso and US and global stock indices. The Partnership recorded a net loss of $2,124,937. In August 2008, trading was unprofitable as the Partnership had losses in the                    Australian Dollar, Norwegian Kroner, the New Zealand Dollar, aluminum, tin and soybeans; the Partnership had gains in the Swiss Franc, Japanese and US fixed income instruments, non-US stock indices and natural gas. The Partnership recorded a net loss of $1,674,661. In September 2008, trading was profitable. The Partnership had gains in nickel, Canadian and UK stock indices, and the Euro; the Partnership had losses in UK fixed income instruments, tin and Asian stock indices.                    The Partnership recorded a net gain of $1,217,537.

For the quarter ended September 30, 2008, the Partnership had expenses comprised of $454,918 in brokerage commissions (including clearing and exchange fees), $224,042 in management fees, $139,589 in accounting and administrative fees, and $2,469 in other expenses. Brokerage commissions and management fees vary primarily as a result of change in assets under management,                    which are affected by net income, and capital subscriptions and redemptions. Accounting and administrative fees consist primarily of professional fees and other expenses relating to the Partnership’s reporting requirements under the Securities Exchange Act of 1934, as amended.

As a result of above, the Partnership recorded a net loss after General Partner incentive allocation of $2,582,061 for the quarter.

At September 30, 2008, the net asset value of the Partnership was $26,158,408, compared to its net asset value of  $6,639,592 at December 31, 2007.

During the quarter, the Partnership had no credit exposure to counterparties that are participants of foreign commodities exchanges or to counterparties dealing in over the counter contracts which is considered to be material.

Nine Months Ended September 30, 2008

For the nine months ended September 30, 2008, the Partnership had total net trading profits comprised of $1,901,278 in net realized gains on closed positions, and $124,944 in change in net unrealized gains on open positions. The Partnership also had interest income of $322,186.

In January 2008, the Partnership was profitable. The Partnership earned profits trading in US and Japanese fixed income instruments, gold, and the New Zealand dollar; the Partnership generated losses in the Japanese Yen, Swiss Franc, crude oil and gasoline. The Partnership recorded a net gain of $374,283. In February 2008, trading was profitable as the Partnership had gains in                    natural gas, the Australian Dollar, soybeans, aluminum, crude oil and copper; the Partnership generated losses in US fixed income instruments, the Swiss Franc, the Canadian Dollar and US stock indices. The Partnership recorded a net gain of $766,795. In March 2008, trading was slightly profitable. The Partnership had gains in Japanese fixed income instruments, the Euro, the Japanese Yen and natural gas; the Partnership had losses in soybeans, European fixed income                    instruments, US

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stock indices and sugar. The Partnership recorded a net gain of $86,786. In April 2008, the Partnership had a small loss. The Partnership had losses in Japanese and US fixed income instruments, cattle, the Japanese Yen, US stock indices, aluminum and the New Zealand dollar; the Partnership generated gains in crude oil natural gas, RBOB gasoline European fixed income instruments and the Swiss                    Franc. The Partnership recorded a net loss of $146,554. In May 2008, trading was profitable as the Partnership had gains in nickel, heating oil, crude oil, natural gas, RBOB gasoline, and European fixed income instruments; the Partnership generated losses in US stock indices, the Eurodollar, the British Pound and gold. The Partnership recorded a net gain of $1,091,702 In June 2008, trading was profitable. The Partnership had gains in corn, European fixed income instruments,                    natural gas, US stock indices, soybeans and tin; the Partnership had losses in US fixed income instruments, Asian stock indices and the New Zealand Dollar. The Partnership recorded a net gain of $925,163. In July 2008, the Partnership was unprofitable. The Partnership had losses in crude oil, the Euro Bund, corn, aluminum and natural gas; the Partnership had gains in nickel, the Swiss Franc, the Mexican Peso and US and global stock indices. The Partnership recorded a net                    loss of $2,124,937. In August 2008, trading was unprofitable as the Partnership had losses in the Australian Dollar, Norwegian Kroner, the New Zealand Dollar, aluminum, tin and soybeans; the Partnership had gains in the Swiss Franc, Japanese and US fixed income instruments, non-US stock indices and natural gas. The Partnership recorded a net loss of $1,674,661. In September 2008, trading was profitable. The Partnership had gains in nickel, Canadian and UK stock indices, and                    the Euro; the Partnership had losses in UK fixed income instruments, tin and Asian stock indices. The Partnership recorded a net gain of $1,217,537.

For the nine months ended September 30, 2008, the Partnership had expenses comprised of $1,041,211 in brokerage commissions (including clearing and exchange fees), $494,946 in management fees, $277,004 in accounting and administrative fees, and $19,133 in other expenses. Brokerage commissions and management fees vary primarily as a result of change in assets under                    management, which are affected by net income, and capital subscriptions and redemptions. Accounting and administrative fees consist primarily of professional fees and other expenses relating to the Partnership’s reporting requirements under the Securities Exchange Act of 1934, as amended.

As a result of above, the Partnership recorded a net loss after General Partner incentive allocation of $77,036 for the nine months ended September 30, 2008.

*Liquidity and Capital Resources*

In general, the Advisor trades only those Commodity Interests that have sufficient liquidity to enable it to enter and close out positions without causing major price movements. Notwithstanding the foregoing, most United States commodity exchanges limit the amount by which certain commodities may move during a single day by regulations referred to as “daily price                    fluctuation limits” or “daily limits.” Pursuant to such regulations, no trades may be executed on any given day at prices beyond daily limits the price of a futures contract occasionally has exceeded the daily limit for several consecutive days, with little or no trading, thereby effectively preventing a party from liquidating its position. While the occurrence of such an event may reduce or eliminate the liquidity of a particular market, it will not                    eliminate losses and may, in fact, substantially increase losses because of the inability to liquidate unfavorable positions. In addition, if there is little or no trading in a particular futures or forward contract that the Partnership is trading, whether such liquidity is caused by any of the above reasons or otherwise, the Partnership may be unable to liquidate its position prior to its expiration date, of thereby requiring the Partnership to make or take delivery of the                    underlying interests of the Commodity Interests.

The Partnership’s capital resources are dependent upon three factors: (a) the income or losses generated by the Advisor; (b) the capital invested or redeemed by the limited partners; and (c) the capital invested or redeemed by the General Partner. The Partnership sells limited partnership units to investors from time to time in private placements pursuant to                    Regulation D of the Securities Act of 1933, as amended. As of the last day of any month, a limited partner may redeem all of its limited partnership units on 10 days’ prior written notice to the General Partner.

The General Partner is required to contribute $1,000 to the Partnership. All capital contributions by the General Partner necessary to maintain such capital account balance are evidenced by units of general partnership interest, each of which has an initial value equal to the net asset value per unit at the time of such contribution. The General Partner may withdraw any                    excess above its required capital contribution without notice to the limited partners and may also contribute any greater amount to the Partnership.

 

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**Item 3. Quantitative and Qualitative Disclosures About Market Risk.**

The Partnership is a commodity pool engaged in the speculative trading of commodity futures contracts (including agricultural and non-agricultural commodities, currencies and financial instruments), options on commodities or commodity futures contracts, and forward contracts. The risk of market sensitive instruments is integral to the Partnership’s primary business                    activities.

The futures interests traded by the Partnership involve varying degrees of related market risk. Such market risk is often dependent upon changes in the level or volatility of interest rates, exchange rates, and/or market values of financial instruments and commodities. Fluctuations in related market risk based upon the aforementioned factors result in frequent changes in                    the fair value of the Partnership’s open positions, and, consequently, in its earnings and cash flow. The Partnership accounts for open positions on the basis of mark-to-market accounting principles. As such, any gain or loss in the fair value of the Partnership’s open positions is directly reflected in the Partnership’s earnings, whether realized or unrealized.

The Partnership’s total market risk is influenced by a wide variety of factors including the diversification effects among the Partnership’s existing open positions, the volatility present within the markets and the liquidity of the markets. At varying times, each of these factors may act to exacerbate or mute the market risk associated with the Partnership. It                    is anticipated that the following will be the primary trading risk exposures of the Partnership for the year 2008, by market sector:

*Interest Rate.*

Interest rate risk is a significant market exposure of the Partnership. Interest rate movements in one country as well as relative interest rate movements between countries materially impact the Partnership’s profitability. The Partnership’s primary interest rate exposure is to interest rate fluctuations in the United States and the other G-7 countries. The                    General Partner anticipates that G-7 interest rates will remain the primary market exposure of the Partnership for the foreseeable future.

*Currency.*

The Partnership’s currency exposure is to exchange rate fluctuations, primarily in the following countries: Germany, England, Japan, France, Switzerland, Australia, Canada and United States. The Partnership may have some additional currency exposure in New Zealand, Brazil, Mexico and South Africa. These fluctuations are influenced by interest rate changes as well as                    political and general economic conditions. The General Partner does not anticipate that the risk profile of the Partnership’s currency sector will change significantly in the future.

*Commodity.*

The Partnership’s primary metals market exposure is to fluctuations in the price of gold, silver and copper. The Partnership may have some additional market exposure to aluminum, zinc, tin and nickel. The Partnership also has commodity exposures in the price of soft commodities, which are often directly affected by severe or unexpected weather conditions. The General                    Partner anticipates that the Advisor will maintain an emphasis in the commodities described above. Additionally, the Partnership had exposure to energies (gas, oil) as of September 30, 2008, and it is anticipated that positions in this sector will continue to be evaluated on an ongoing basis.

The Partnership measures its market risk, related to its holdings of commodity interests based on changes in interest rates, foreign currency rates, and commodity prices utilizing a sensitivity analysis. The sensitivity analysis estimates the potential change in fair values, cash flows and earnings based on a hypothetical 10% change (increase and decrease) in interest,                    currency and commodity prices. The Partnership used September 30, 2008 market rates and prices on its instruments to perform the sensitivity analysis. The sensitivity analysis has been prepared separately for each of the Partnership’s market risk exposures (interest rate, currency rate, and commodity price) instruments.

The estimates are based on the market risk sensitive portfolios described in the preceding paragraph above. The potential loss in earnings is based on an immediate change in:

 

 

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| • | The prices of the Partnership’s positions resulting from a 10% change in interest rates.                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | The U.S. dollar equivalent balances of the Partnership’s currency exposures due to a 10% shift in currency exchange rates.                                                                                                                                                                                                                                                                                                                                                                             |
| • | The market value of the Partnership’s Commodity Interests due to a 10% change in the price of the Commodity Instruments. The Partnership has determined that the impact of a 10% change in market rates and prices on its fair values, cash flows and earnings would not be material. The Partnership has disclosed the potential loss to earnings                                    of its commodity price, interest rate and currency exchange rate sensitivity positions as of September 30, 2008. |

 

The potential loss in earnings for each market risk exposure as of September 30, 2008 was:

 

|   | Currency exchange rate risk | $ | 28,125  |  |
|--------|-----------------------------|---|---------|--|
|   | Commodity price risk        | $ | 85,782  |  |
|   | Interest rate risk          | $ | 220,443 |  |

 

**Item 4T. Controls and Procedures**

The President of the General Partner (who serves as the principal executive officer and financial officer of the Partnership) evaluated the effectiveness of the design and operation of the Partnership’s disclosure controls and procedures, which are designed to ensure that the Partnership records, processes, summarizes and reports in a timely and effective manner the                    information required to be disclosed in the reports filed with or submitted to the Securities and Exchange Commission. Based upon this evaluation, the General Partner concluded that, as of September 30, 2008 the Partnership’s disclosure controls are effective and ensure that information required to be disclosed in the reports filed under the Securities Exchange Act of 1934 are accumulated and communicated to management of the General Partner (which consists of the                    principal of the General Partner) to allow timely decisions regarding required disclosure. There were no significant changes in the Partnership’s internal controls or in other factors that could significantly affect those controls during the third quarter of 2008.  During the quarter NAV Consulting, Inc. replaced LAMP Technologies LLC as a provider of accounting and reporting services for the Partnership.

**PART II. OTHER INFORMATION**

**Item 1. Legal Proceedings.**

The General Partner is not aware of any pending legal proceedings to which the Partnership or the General Partner is a party or to which any of their assets are subject.

**Item 1A. Risk Factors**

There are no material changes from the risk factors disclosed in the Partnership’s Form 10.

**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds**

There currently is no established public trading market for the Limited Partnership Units. As of September 30, 2008, 23,817.8013 Partnership Units were held by 267 Limited Partners and the General Partner. All of the Limited Partnership Units are “restricted securities” within the meaning of Rule 144 promulgated under the Securities Act of 1933, as amended (the “Securities                    Act”), and may not be sold unless registered under the Securities Act or sold in accordance with an exemption therefrom, such as Rule 144. The Partnership has no plans to register any of the Limited Partnership Units for resale. In addition, the Partnership Agreement contains certain restrictions on the transfer of Limited Partnership Units. Pursuant to the Partnership Agreement, the General Partner has the sole discretion to determine whether distributions (other than                    on redemption of Limited Partnership Units), if any, will be made to partners. The Partnership has never paid any distributions and does not anticipate paying any distributions to partners in the foreseeable future. From January 1, 2008 through September 30, 2008, a total of 18,297.9954 Partnership Units were subscribed for the aggregate subscription amount of $20,355,198. The monthly subscriptions of these Partnership Units are as follows:

 

 

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| **Date of Subscription** | **Amount of****Subscriptions** |
|--------------------------|--------------------------------|
| January 2008             | $                              | 238,533 |
| February 2008            | $                              | 2,117,347 |
| March 2008               | $                              | 3,429,846 |
| April 2008               | $                              | 8,574,042 |
| May 2008                 | $                              | 5,114,993 |
| June 2008                | $                              | 195,139 |
| July 2008                | $                              | 459,244 |
| August 2008              | $                              | 104,681 |
| September 2008           | $                              | 121,373 |

 

Investors in the Partnership who subscribed through a selling agent may have been charged a sales commission at a rate negotiated between such selling agent and the investor. Such sales commission in no event exceeded 4% of the subscription amount. All of the sales of Partnership Units were exempt from registration pursuant to Section 4(2) of the Securities Act and Regulation D promulgated                    thereunder.

**Item 3. Defaults Upon Senior Securities**

None.

**Item 4. Submission of Matters to a Vote of Security Holders**

None.

**Item 5. Other Information**

None.

 

| **Item 6. Exhibits** |
|----------------------|
| 31.1                 | Rule 13a - 14(a)/15d-14(a) Certification |
| 32.1                 | Section 1350 Certification |

 

 

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

 

|                    |   | RFMC GLOBAL DIRECTIONAL FUND LP                                                                                         |
|-------------------------|--------|-------------------------------------------------------------------------------------------------------------------------|
|                    |   |                                                                                                                    |
|                    |   |                                                                                                                    |
| Date: November 19, 2008 |   | By: Ruvane Fund Management Corporation

Its: General Partner                                                            |
|                    |   |                                                                                                                    |
|                    |   | By:/s/ Robert L. Lerner 

Robert L. Lerner

President, Principal Executive Officer and Principal Financial Officer |

 

 

 

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