Morgan Stanley Managed Futures
Kaiser I, LLC
Interim Financial Statements
				        For the Six Months Ended
   June 30, 2009 and 2008 (Unaudited)














THE ENCLOSED TRADING COMPANY FINANCIAL STATEMENTS AND
FOOTNOTE DISCLOSURE ARE PRESENTED PURSUANT TO REGULATION
S-X.












<page> <table> Morgan Stanley Managed Futures Kaiser I, LLC
Statements of Financial Condition (Unaudited)
<caption>

	   June 30,	        December 31,
               2009      	         2008
	  $	        $

ASSETS

	<c>	<c>

Trading Equity:
    Unrestricted cash	 41,804,288	  42,382,976
    Restricted cash	      952,683	           198,311

         Total cash	   42,756,971	     42,581,287

   Net unrealized gain (loss) on open contracts (Newedge)	     (352,178)                           26,936

 	   Total Trading Equity	42,404,793	42,608,223

Contributions receivable	686,008	              ?
Interest receivable 	                 244	              ?

	   Total Assets	     43,091,045	      42,608,223

LIABILITIES AND MEMBERS? CAPITAL

LIABILITIES
Withdrawals payable                               2,538,959     	    3,572,037
Accrued management fees                           71,502	            69,280
Accrued administrative fees 	          12,513                            12,124
Accrued incentive fee	             ?			       254,693
Interest payable	             ?				 	 632

	   Total Liabilities	      2,622,974	       3,908,766

MEMBERS? CAPITAL
Non-Managing Members	    40,468,071	   38,699,457

       Total Members? Capital	     40,468,071	   38,699,457

       Total Liabilities and Members? Capital	       43,091,045	   42,608,223


<fn>









The accompanying notes are an integral part of these financial statements.
</table>
<page> <table> Morgan Stanley Managed Futures Kaiser I, LLC
Statements of Operations (Unaudited)
<caption>

                        For the Three Months	                            For the Six Months
  	               Ended June 30,     	                            Ended June 30,

                                         2009                       2008    	  2009   	              2008
                                             $	   $	       $ 	      $


	<c>	<c>			<c>			<c>
INVESTMENT INCOME
	Interest income	            623		       140,515		         3,929     	           179,205

EXPENSES
	Management fees	202,214	194,069	396,422 	 	231,907
	Administrative fees	        35,388	         33,962	      69,374	 	           40,584
	Brokerage, clearing and transaction fees	23,442	26,341	36,393		32,792
	Incentive fees	        ?      	      160,584	       8,230		             229,702

		   Total Expenses 	      261,044	       414,956	    510,419		         534,985

NET INVESTMENT LOSS 	    (260,421)	      (274,441)	   (506,490)		        (355,780)

TRADING RESULTS
Trading profit (loss):
	Realized	441,086	889,415	178,791	 	1,264,878
	Net change in unrealized	         (325,495)	       167,875	    (379,114)	               188,909

		  Total Trading Results	       115,591	    1,057,290	    (200,323)		      1,453,787

NET INCOME (LOSS) 	      (144,830)	     782,849	   (706,813)		      1,098,007


NET INCOME (LOSS) ALLOCATION
Managing Member	                                             ? 	                           ?	?		68,260
Non-Managing Members	                (144,830)               782,849                 (706,813)	1,029,747



<fn>










The accompanying notes are an integral part of these financial statements.


</table>


<page> <table> Morgan Stanley Managed Futures Kaiser I, LLC
Statements of Changes in Members? Capital
For the Six Months Ended June 30, 2009 and 2008 (Unaudited)
<caption>



	       Managing	      Non-Managing
	       Member       	     Members  	     Total
                         $                                  $                              $

                   <c>                        <c>                                      <c>
Members? Capital,
	December 31, 2007	             2,764,664	4,240,351	    7,005,015

Capital Contributions                ?    		34,786,673		  34,786,673

Net Income	         68,260	     1,029,747	    1,098,007

Capital Withdrawals        	        (2,832,924) 	                    (313,714)            (3,146,638)

Members? Capital,
   June 30, 2008                                ?                         39,743,057 	           39,743,057




Members? Capital,
	December 31, 2008                    ?	                          38,699,457           38,699,457

Capital Contributions                       ?    		                    10,875,590	         10,875,590

Net Loss	                                                             ?	                              (706,813)	     (706,813)

Capital Withdrawals                        ?  	    	          (8,400,163)	           (8,400,163)

Members? Capital,
   June 30, 2009                        ?	  	                40,468,071 	           40,468,071


<fn>













The accompanying notes are an integral part of these financial statements.

</table>
<page>  <table> Morgan Stanley Managed Futures Kaiser I, LLC
Statements of Cash Flows (Unaudited)
<caption>

	             For the Six Months Ended June 30,

	        2009     	           2008
	  $	      $


	<c>	<c>
CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)                                                                                (706,813)		    1,098,007
Noncash item included in net income (loss):
	Net change in unrealized                                                                 379,114                       (188,909)

Increase in operating assets:
	Restricted cash	                                                                           (754,372)                   (1,196,506)
	Interest receivable 	    (244)	    (39,632)

Increase (decrease) in operating liabilities:
	Accrued management fees	                                                               2,222	                  53,673
	Accrued administrative fees 	                                                             389	      	                 9,393
	Accrued incentive fees 	                                                                  (254,693)	                116,514
     Interest payable 	              (632)                           ?

Net cash used for operating activities	                       (1,335,029)	              (147,460)


CASH FLOWS FROM FINANCING ACTIVITIES

Capital contributions 	                                                                   10,189,582                   34,786,673
Capital withdrawals	                                                                          (9,433,241)	    (3,359,660)

Net cash provided by financing activities	                           756,341	              31,427,013

Net increase (decrease) in unrestricted cash	                    (578,688)	              31,279,553

Unrestricted cash at beginning of period	                                        42,382,976	     7,271,650

Unrestricted cash at end of period   	                                             41,804,288	                  38,551,203

<fn>








The accompanying notes are an integral part of these financial statements.




</table>
<page> <table>Morgan Stanley Managed Futures Kaiser I, LLC
Condensed Schedules of Investments
June 30, 2009 and December 31, 2008 (Unaudited)
<caption>



Futures and Forward Contracts
       Long
  Unrealized
  Gain/(Loss)

Percentage of
  Members? Capital
    Short
Unrealized
   Gain/(Loss)

 Percentage of
Members? Capital
         Net
   Unrealized
  Gain/(Loss)

$
%
   $
    %
$


<c>
<c>
<c>
<c>
         <c>

June 30, 2009, Members? Capital: $40,468,071



Commodity
      (8,560)
       (0.02)
       5,562
           0.01
    (2,998)
Equity
       9,142
        0.02
    (10,335)
          (0.02)
    (1,193)
Foreign currency
  (172,355)
       (0.42)
  (116,149)
          (0.29)
(288,504)
Interest rate
            (70)
         ?
    (31,688)
      (0.08)
     (31,758)






     Grand Total:
    (171,843)
       (0.42)
  (152,610)
          (0.38)
       (324,453)

     Unrealized Currency Loss




         (0.07)

     (27,725)

     Total Net Unrealized Loss on Open Contracts



   (352,178)


December 31, 2008, Members? Capital: $38,699,457



Foreign currency
        (512)
           ?
      (2,955)
           (0.01)
 (3,467)
Interest rate
       70,606
        0.18
         ?
              ?
   70,606






     Grand Total:
       70,094
        0.18
       (2,955)
           (0.01)
      67,139

     Unrealized Currency Loss




           (0.10)

   (40,203)

     Total Net Unrealized Gain on Open Contracts





    26,936



<fn>








The accompanying notes are an integral part of these financial statements.




</table>


<page> Morgan Stanley Managed Futures Kaiser I, LLC
Notes to Financial Statements
June 30, 2009 (Unaudited)

1.  Summary of Significant Accounting Policies

The unaudited financial statements contained herein include, in
the opinion of management, all adjustments necessary for a fair
presentation of the results of operations and financial condition
of Morgan Stanley Managed Futures Kaiser I, LLC (?Kaiser I, LLC?
or the ?Trading Company?). The financial statements and condensed
notes herein should be read in conjunction with the Trading
Company?s December 31, 2008 Annual Report.

Organization ? Kaiser I, LLC was formed on April 4, 2007, as a
Delaware limited liability company under the Delaware Limited
Liability Company Act (the ?Act?), to facilitate investments by
Morgan Stanley managed futures funds. The Trading Company
commenced operations on August 1, 2007. The Trading Company?s
trading manager is Demeter Management LLC (?Demeter?), a wholly-
owned subsidiary of Morgan Stanley Smith Barney Holdings LLC,
which in turn is majority owned by Morgan Stanley and minority
owned by Citigroup Inc. (?Citigroup?).  Demeter has retained
Kaiser Trading Group Pty Ltd. (?Kaiser? or the ?Trading Advisor?)
to engage in the speculative trading of commodities, domestic and
foreign futures contracts, forward contracts, foreign exchange
commitments, options on physical commodities and on futures
contracts, spot (cash) commodities and currencies, exchange of
futures contracts for physicals transactions and futures
contracts transactions, and any rights pertaining thereto
(collectively, ?Futures Interests?) (refer to Note 3. Financial
Instruments) on behalf of the Trading Company. Each member (each
investor in the Trading Company, a ?Member?) invests its assets
in the Trading Company, which allocates substantially all of its
assets in the trading program of Kaiser, an unaffiliated Trading
Advisor to make investment decisions for the Trading Company. As
of June 30, 2009, Morgan Stanley Managed Futures LV, L.P. (a
Delaware limited partnership), Morgan Stanley Managed Futures MV,
L.P. (a Delaware limited partnership), and Morgan Stanley
Strategic Alternatives, L.P. (?SAFLP?) (a Delaware limited
partnership) were the Members of the Trading Company.

   On April 30, 2009, Demeter Management Corporation was
converted to a Delaware limited liability company and changed its
name to Demeter Management LLC.  Prior to June 1, 2009, Demeter
was wholly owned by Morgan Stanley.  Demeter does not believe
that the change in ownership of Demeter had a material impact on
the Trading Company?s Members. At all times Demeter served as the
trading manager of the Trading Company and it continues to do so.
The change in ownership occurred pursuant to the transaction in
which Morgan Stanley and Citigroup agreed to combine the Global
Wealth Management Group of Morgan Stanley and the Smith Barney
division of Citigroup Global Markets Inc. into a new joint
venture. The transaction closed on June 1, 2009.

<page> Morgan Stanley Managed Futures Kaiser I, LLC
Notes to Financial Statements (continued)

1.  Summary of Significant Accounting Policies (cont?d)

Organization (cont?d) ? Prior to December 31, 2007, the commodity
brokers for the Trading Company were Morgan Stanley & Co.
Incorporated (?MS&Co.?) and Morgan Stanley & Co. International
plc (?MSIP?). MS&Co. also acted as the counterparty on all
trading of the foreign currency forward contracts. Morgan Stanley
Capital Group Inc. (?MSCG?) acted as the counterparty on all
trading of the options on foreign currency forward contracts.
MS&Co. and its affiliates acted as the custodians of the Trading
Company?s assets. MS&Co., MSIP, and MSCG are wholly-owned
subsidiaries of Morgan Stanley.

   Effective January 2, 2008, the Trading Company commenced using
Newedge Financial Inc. (?Newedge?) as its primary commodity
broker with respect to the assets traded by the Trading Company
on behalf of the Members by Kaiser. Newedge also acts as the
counterparty on all trading of foreign currency forward
contracts, including options on such contracts. The Trading
Company continues to maintain an account with MS&Co., where the
Trading Company?s excess cash assets are held. The Trading
Company maintains separate clearing accounts with Newedge where
the Trading Company?s futures, options and foreign currency
forward contracts and margin funds related thereto are held.

Use of Estimates ? The financial statements are prepared in
accordance with accounting principles generally accepted in the
United States of America (?GAAP?), which require management to
make estimates and assumptions that affect the reported amounts
in the financial statements and related disclosures.  Management
believes that the estimates utilized in the preparation of the
financial statements are prudent and reasonable.  Actual results
could differ from those estimates.

Revenue Recognition ? Futures Interests are open commitments
until settlement date, at which time they are realized. They are
valued at fair value, generally on a daily basis, and the
unrealized gains and losses on open contracts (the difference
between contract trade price and market price) are reported in
the Statements of Financial Condition as net unrealized gains or
losses on open contracts. The resulting net change in unrealized
gains and losses is reflected in the change in unrealized trading
profit (loss) on open contracts from one period to the next on
the Statements of Operations.  The fair value of exchange-traded
futures, options and forwards contracts is determined by the
various futures exchanges, and reflects the settlement price for
each contract as of the close of business on the last business
day of the reporting period. The fair value of foreign currency
forward contracts is extrapolated on a forward basis from the



<page> Morgan Stanley Managed Futures Kaiser I, LLC
Notes to Financial Statements (continued)

1.  Summary of Significant Accounting Policies (cont?d)

Revenue Recognition ? spot prices quoted as of approximately 3:00
P.M. (E.T.) of the last business day of the reporting period. The
fair value of non-exchange-traded foreign currency option
contracts is calculated by applying an industry standard model
application for options valuation of foreign currency options,
using as input, the spot prices, interest rates, and option
implied volatilities quoted as of approximately 3:00 P.M. (E.T.)
on the last business day of the reporting period.

  Monthly, Newedge credits the Trading Company with interest
income on 100% of its average daily funds held at Newedge. Assets
deposited with Newedge as margin will be credited with interest
income at a rate approximately equivalent to what Newedge pays or
charges other customers on such assets deposited as margin.
Assets not deposited as margin with Newedge will be credited with
interest income at the rate equal to the monthly average of the
4-week U.S. Treasury bill discount rate less 0.15% during such
month but in no event less than zero. For purposes of such
interest payments, Net Assets do not include monies owed to the
Trading Company on Futures Interests.

   The Trading Company?s functional currency is the U.S. dollar;
however, the Trading Company may transact business in currencies
other than the U.S. dollar. Assets and liabilities denominated in
currencies other than the U.S. dollar are translated into U.S.
dollars at the rates in effect at the date of the Statements of
Financial Condition. Income and expense items denominated in
currencies other than the U.S. dollar are translated into U.S.
dollars at the rates in effect during the period. Gains and
losses resulting from the translation to U.S. dollars are
reported in income currently.

Members? Capital - The Members? Capital of the Trading Company is
equal to the total assets of the Trading Company (including, but
not limited to, all cash and cash equivalents, accrued interest,
and the fair value of all open Futures Interests contract
positions and other assets) less all liabilities of the Trading
Company (including, but not limited to, management fees,
incentive fees, and extraordinary expenses), determined in
accordance with GAAP.

Trading Equity ? The Trading Company?s asset ?Trading Equity,?
reflected on the Statements of Financial Condition, consists of
(a) cash on deposit with Newedge, to be used as margin for
trading; (b) net unrealized gains or losses on futures and
forward contracts, which are valued at fair value and calculated
as the difference between original contract value and fair value;
and, if any, (c) options purchased at fair value. Options written
at fair value are recorded in ?Liabilities?.


<page> Morgan Stanley Managed Futures Kaiser I, LLC
Notes to Financial Statements (continued)

1. Summary of Significant Accounting Policies (cont?d)

Trading Equity (cont?d) ? The Trading Company, in its normal
course of business, enters into various contracts with Newedge
acting as its commodity broker.  Pursuant to the brokerage
agreement with Newedge, to the extent that such trading results
in unrealized gains or losses, these amounts are offset and
reported on a net basis on the Trading Company?s Statements of
Financial Condition.

   The Trading Company has offset its fair value amounts
recognized for forward contracts executed with the same
counterparty as allowable under the terms of their master netting
agreement with Newedge, as the counterparty on such contracts.
The Trading Company has consistently applied its right to offset.

Restricted and Unrestricted Cash ? The cash held by the Trading
Company is on deposit with Newedge in futures interests trading
accounts to meet margin requirements as needed. As reflected on
the Trading Company?s Statements of Financial Condition,
restricted cash equals the cash portion of assets on deposit to
meet margin requirements plus the cash required to offset
unrealized losses on foreign currency forwards and options
contracts. All of these amounts are maintained separately. Cash
that is not classified as restricted cash is therefore classified
as unrestricted cash.

Brokerage, Clearing and Transaction Fees ? The Trading Company
accrues and pays brokerage, clearing and transaction fees to
Newedge. Brokerage fees and transaction costs are paid as they
are incurred on a half-turn basis at 100% of the rates Newedge
charges retail commodity customers and parties that are not
clearinghouse members.  In addition, the Trading Company pays
transactional and clearing fees as they are incurred.

Administrative Fee ? The Trading Company accrues and pays MS&Co.
a monthly fee to cover all administrative and operating expenses
(the ?Administrative Fee?).  The monthly Administrative Fee is
equal to 1/12 of 0.35% (a 0.35% annual rate) of the beginning of
the month Members? Capital of the Trading Company.

Capital Contributions ? Capital contributions by the Members may
be made monthly pending Demeter?s approval. Such capital
contributions will increase each Member?s pro rata share of the
Trading Company?s Members? Capital.

   Demeter initially invested capital directly in the Trading
Company. As of March 31, 2008, Demeter redeemed all seed capital
investments in the Trading Company. All seed capital investments
by Demeter in the Trading Company participated on the same terms
as the investments made by the Members in the Trading Company.

<page> Morgan Stanley Managed Futures Kaiser I, LLC
Notes to Financial Statements (continued)

1. Summary of Significant Accounting Policies (cont?d)

Capital Withdrawals ? Each Member may withdraw all or a portion
of its capital as of the last business day of the month. The
request for withdrawal must be received in writing by Demeter at
least three business days prior to the end of such month. Such
capital withdrawals will decrease each Member?s pro rata share of
the Trading Company?s Members? Capital. Demeter may require the
withdrawal of a capital account under certain circumstances, as
defined in the operating agreement.

Distributions ? Distributions, other than capital withdrawals,
are made on a pro-rata basis at the sole discretion of Demeter.
No distributions have been made to date. Demeter does not intend
to make any distributions of the Trading Company?s profits.

Income Taxes ? No provision for income taxes has been made in the
accompanying financial statements, as Members are individually
responsible for reporting income or loss based upon their pro
rata share of  the Trading Company?s revenue and expenses for
income tax purposes. The Trading Company files U.S. federal and
state tax returns.

   Financial Accounting Standards Board (?FASB?) Interpretation
No. 48, ?Accounting for Uncertainty in Income Taxes, an
interpretation of FASB Statement No. 109? (?FIN 48?), clarifies
the accounting for uncertainty in income taxes recognized in a
Trading Company?s financial statements, and prescribes a
recognition threshold and measurement attribute for financial
statement recognition and measurement of a tax position taken or
expected to be taken. Generally, 2007 and 2008 tax years remain
subject to examination by U.S. federal and most state tax
authorities.

Dissolution of the Trading Company ? The Trading Company shall be
dissolved upon the first of the following events to occur:

    (1)	The sole determination of Demeter; or
    (2)	The written consent of the Members holding not less
than a majority interest in capital with or without
cause; or
(3)	The occurrence of any other event that causes the
dissolution of the limited liability company under the
Act.




<page> Morgan Stanley Managed Futures Kaiser I, LLC
Notes to Financial Statements (continued)

2. Trading Advisor

    Demeter retains Kaiser to make all trading decisions for the
Trading Company.

    Fees paid to Kaiser by the Trading Company consist of a
management fee and an incentive fee as follows:

Management Fee ? The Trading Company accrues and pays Kaiser a
monthly management fee based on a percentage of Members? Capital
as described in the advisory agreement among the Trading Company,
Demeter, and Kaiser.

Incentive Fee ? The Trading Company pays Kaiser a quarterly
incentive fee equal to 20% of the New Trading Profits earned by
each Member.  Such fee is accrued on a monthly basis, but is not
payable until the end of each calendar quarter.

   New Trading Profits represent the amount by which profits from
Futures Interests trading exceed losses after management fees,
brokerage fees and transaction costs, and administrative fees are
deducted. When Kaiser experiences losses with respect to the
Members? Capital as of the end of a calendar quarter, Kaiser must
recover such losses before it is eligible for an incentive fee in
the future. Losses are reduced for capital withdrawn from the
Trading Company.

   Prior to April 1, 2008, SAFLP allocated substantially all of
its assets to Morgan Stanley Strategic Alternatives, L.L.C. and
paid each Trading Advisor an incentive fee equal to 20% of the
New Trading Profit generated by such Trading Advisor as of the
end of each calendar month. Beginning April 1, 2008, SAFLP
invested a portion of its assets into the Trading Company and any
loss carryforward for the Trading Advisor at March 31, 2008, was
carried through and adjusted to the Trading Company.


3. Financial Instruments

     The Trading Advisor trades Futures Interests on behalf of
the Trading Company. Futures and forwards represent contracts for
delayed delivery of an instrument at a specified date and price.
Risk arises from changes in the value of these contracts and the
potential inability of counterparties to perform under the terms
of the contracts.  There are numerous factors which may
significantly influence the fair value of these contracts,
including interest rate volatility.





<page> Morgan Stanley Managed Futures Kaiser I, LLC
Notes to Financial Statements (continued)

3. Financial Instruments (cont?d)

  The fair value of exchange-traded contracts is based on the
settlement price quoted by the exchange on the day with respect
to which fair value is being determined. If an exchange-traded
contract could not have been liquidated on such day due to the
operation of daily limits or other rules of the exchange, the
settlement price shall be the settlement price on the first
subsequent day on which the contract could be liquidated. The
fair value of off-exchange-traded contracts is based on the fair
value quoted by the counterparty.

   The exchange-traded contracts are accounted for on a trade-
date basis and fair-valued on a daily basis. The off-exchange-
traded contracts are fair valued monthly.

   The Trading Company accounts for its derivative investments in
accordance with the provisions of Statement of Financial
Accounting Standards (?SFAS?) No. 133, ?Accounting for Derivative
Instruments and Hedging Activities? (?SFAS No. 133?).  SFAS No.
133 defines a derivative as a financial instrument or other
contract that has all three of the following characteristics:

(1)	One or more underlying notional amounts or payment
provisions;
(2)	Requires no initial net investment or a smaller initial
net investment than would be 	required relative to
changes in market factors; and
    (3)	Terms require or permit net settlement.

   Generally, derivatives include futures, forward, swaps or
options contracts, and other financial instruments with similar
characteristics such as caps, floors, and collars.

   The net unrealized gains (losses) on open contracts, reported
as a component of ?Trading Equity? on the Statements of Financial
Condition, and their longest contract maturities were as follows:
<table> <caption>

		           Net Unrealized Gains/(Losses)
			                       on Open Contracts			           Longest Maturities
				                      Off-					                    Off-
	 	                   Exchange-	    Exchange-			   Exchange-	 Exchange-
        Date		        Traded	      Traded                   Total	     Traded	    Traded
			            $		          $		           $
       
				<c>		<c>		<c>		<c>		<c>
        June 30, 2009   	      (63,674)            (288,504)	    (352,178)	    Nov. 2009          Jul. 2009
        December 31, 2008           26,936                    ?                        26,936	    Mar. 2009	          ?
</table>
<page> Morgan Stanley Managed Futures Kaiser I, LLC
Notes to Financial Statements (continued)

4.  Derivative Instruments and Hedging Activities

   In March 2008, the FASB issued SFAS No. 161, ?Disclosures
about Derivative Instruments and Hedging Activities, an amendment
of FASB Statement No. 133? ("SFAS No. 161"). SFAS No. 161 is
intended to improve financial reporting about derivative
instruments and hedging activities by requiring enhanced
disclosures to enable investors to better understand how those
instruments and activities are accounted for; how and why they
are used; and their effects on a Trading Company?s financial
position, financial performance, and cash flows.  SFAS No. 161
was effective as of January 1, 2009, for the Trading Company.

   The Trading Company?s objective is to profit from speculative
trading in Futures Interests.  Therefore, the Trading Advisor for
the Trading Company will take speculative positions in Futures
Interests where they feel the best profit opportunities exist for
their trading strategy. As such, the absolute quantity (the total
of the open long and open short positions) has been presented as
a part of the volume disclosure, as position direction is not an
indicative factor in such volume disclosures. In regards to
foreign currency forward trades, each notional quantity amount
has been converted to an equivalent contract based upon an
industry convention.

   The following table summarizes the valuation of the Trading
Company?s investments by the above SFAS No. 161 disclosure as of
June 30, 2009 and reflects the contracts outstanding at such
time.
<table> <caption>

The Effect of Trading Activities on the Statements of Financial Condition for the Six Months Ended June 30, 2009:



   Futures and Forward Contracts

             Long
        Unrealized
         Gain

L           Long
         Unrealized
       Loss

            Short
        Unrealized
          Gain

Short
Unrealized
  Loss

        Net
     Unrealized
    Gain/(Loss)

Total Number
of Outstanding
Contracts

  $
$
      $
        $
    $



<c>
<c>
 <c>
 <c>
                                <c>
                                <c>
Tr  Commodity
                ?
          (8,560)
         5,562
             ?
                 (2,998)
                    18
K   Equity
                9,900
             (758)
           ?
         (10,335)
                 (1,193)
                    93
Foreign currency
              24,200
      (196,555)
             ?
        (116,149)
             (288,504)
                  595
K   Interest rate
                 ?
             (70)
               8,939
       (40,627)
               (31,758)
                  144
K        Total
       34.100
   (205,943)
        14,501
     (167,111)
             (324,453)

K        Unrealized currency loss




               (27,725)

       Total net unrealized loss on open contracts                            (352,178)


 </table>








<page> Morgan Stanley Managed Futures Kaiser I, LLC
Notes to Financial Statements (continued)

4.  Derivative Instruments and Hedging Activities (cont?d)

   The following tables summarize the net trading results of the
Trading Company during the three and six month periods as
required by SFAS No. 161.
<table> <caption>

The Effect of Trading Activities on the Statements of Operations for the Three and Six Months Ended June 30, 2009
included in Total Trading Results:


For the Three Months
For the Six Months

Ended June 30, 2009
Ended June 30, 2009



Type of Instrument
$
$


<c>
<c>
Tr  Commodity
           153,301
           298,217
K   Equity
            (21,300)
           270,460
K   Foreign currency
           345,903
          (189,687)
K   Interest rate
        (354,614)
        (591,791)
K   Unrealized currency gain (loss)
            (7,699)
            12,478
K        Total
          115,591
         (200,323)


Line Items on the Statements of Operations for the Three and Six Months Ended June 30, 2009:


For the Three Months
For the Six Months

Ended June 30, 2009
Ended June 30, 2009



Trading Results
$
$



Tr  Realized
                 441,086
                 178,791
K   Net change in unrealized
                (325,495)
                (379,114)
K      Total Trading Results
            115,591
          (200,323)

</table>

5. Fair Value Measurements

   As defined by SFAS No. 157, ?Fair Value Measurements?, fair
value is the amount that would be recovered when an asset is sold
or an amount paid to transfer a liability, in an ordinary
transaction between market participants at the measurement date
(exit price). Market price observability is impacted by a number
of factors, including the types of investments, the
characteristics specific to the investment, and the state of the
market (including the existence and the transparency of
transactions between market participants). Investments with
readily available actively quoted prices in an ordinary market
will generally have a higher degree of market price observability
and a lesser degree of judgment used in measuring fair value.






<page> Morgan Stanley Managed Futures Kaiser I, LLC
Notes to Financial Statements (continued)

5. Fair Value Measurements (cont?d)

   SFAS No. 157 requires use of a fair value hierarchy that
prioritizes the inputs to valuation techniques used to measure
fair value into three levels: Level 1 ? unadjusted quoted market
prices in active markets for identical assets and liabilities;
Level 2 - inputs other than unadjusted quoted market prices that
are observable for the asset or liability, either directly or
indirectly (including quoted prices for similar investments,
interest rates, credit risk); and Level 3 - unobservable inputs
for the asset or liability (including the Trading Company?s own
assumptions used in determining the fair value of investments).

     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 Trading Company?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 tables summarize the valuation of the Trading
Company?s investments by the above SFAS No. 157 fair value
hierarchy as of June 30, 2009 and December 31, 2008:
<table> <caption>

June 30, 2009





Quoted Prices in
   Active Markets for
  Identical Assets
        (Level 1)

  Significant Other
   Observable
       Inputs
     (Level 2)

  Significant
   Unobservable
     Inputs
   (Level 3)





     Total
  Assets


<c>
<c>
 <c>

<c>

Net unrealized loss  on open contracts

                      $(63,674)

$(288,504)


n/a


$(352,178)


December 31, 2008





Quoted Prices in
   Active Markets for
  Identical Assets
        (Level 1)

  Significant Other
   Observable
       Inputs
     (Level 2)

  Significant
   Unobservable
     Inputs
   (Level 3)





     Total
  Assets

Net unrealized gain  on open contracts

                      $26,936

?

n/a


$26,936

</table>



<page> Morgan Stanley Managed Futures Kaiser I, LLC
Notes to Financial Statements (continued)

6. Investment Risk
   The Members? investments in the Trading Company expose the
Members to various types of risks that are associated with
Futures Interests trading and markets in which the Trading
Company invests. The significant types of financial risks which
the Trading Company is exposed to are market risk, liquidity
risk, and counterparty risk.

   The rapid fluctuations in the market prices of Futures
Interests in which the Trading Company invests make the Members?
investments volatile. If Kaiser incorrectly predicts the
direction of prices in the Futures Interests in which it invests,
large losses may occur.

   Illiquidity in the markets in which the Trading Company
invests may cause less favorable trade prices.  Although Kaiser
will generally purchase and sell actively traded contracts where
last trade price information and quoted prices are readily
available, the prices at which a sale or purchase occur may
differ from the prices expected because there may be a delay
between receiving a quote and executing a trade, particularly in
circumstances where a market has limited trading volume and
prices are often quoted for relatively limited quantities.





























<page> Morgan Stanley Managed Futures Kaiser I, LLC
Notes to Financial Statements (continued)

6. Investment Risk (cont?d)

   The credit risk on Futures Interests arises from the potential
inability of counterparties to perform under the terms of the
contracts.  The Trading Company has credit risk because Newedge
acts as commodity broker and the counterparty with respect to
most of the Trading Company?s assets. The Trading Company?s
exposure to credit risk associated with counterparty
nonperformance is typically limited to the cash deposits with, or
other form of collateral held by, the counterparty. The Trading
Company?s assets deposited with Newedge are segregated or secured
in accordance with the Commodity Exchange Act and the regulations
of the Commodity Futures Trading Commission (the ?CFTC?) and are
expected to be largely held in non-interest bearing bank accounts
at a U.S. bank or banks, but may also be invested in any other
instruments approved by the CFTC for investment of customer
funds. Exchange-traded futures, exchange-traded forward, and
exchange-traded futures-styled options contracts are marked to
market on a daily basis, with variations in value settled on a
daily basis. With respect to the Trading Company?s off-exchange-
traded forward currency contracts and forward currency options
contracts, there are no daily settlements of variation in value,
nor is there any requirement that an amount equal to the net
unrealized gains (losses) on such contracts be segregated.
However, the Trading Company is required to meet margin
requirements equal to the net unrealized loss on open forward
currency contracts in the Trading Company accounts with the
counterparty, which is accomplished by daily maintenance of the
cash balance in a custody account held at Newedge. The Trading
Company had assets on deposit with Newedge, acting as a commodity
broker for the Trading Company?s trading of Futures Interests,
totaling $42,693,297 and $42,608,223 at June 30, 2009, and
December 31, 2008, respectively. With respect to those off-
exchange-traded forward currency contracts, including options on
such contracts, the Trading Company is at risk to the ability of
Newedge, the sole counterparty on all such contracts, to perform.
The Trading Company has a netting agreement with Newedge. The
agreement, which seeks to reduce both the Trading Company?s and
the counterparty? exposure on off-exchange-traded forward
currency contracts, including options on such contracts, should
materially decrease the Trading Company?s credit risk in the
event of Newedge?s bankruptcy or insolvency.











<page> Morgan Stanley Managed Futures Kaiser I, LLC
Notes to Financial Statements (continued)

7. Recent Accounting Pronouncements

(a) Determining Fair Value When the Volume and Level of Activity
for the Asset or Liability Have Significantly Decreased and
Identifying Transactions That Are Not Orderly

   In April 2009, the FASB issued FASB Staff Position (?FSP?)
SFAS No. 157-4, Determining Fair Value When the Volume and Level
of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly (?FSP
SFAS No.157-4?). FSP SFAS No. 157-4 provides additional guidance
for determining fair value and requires new disclosures regarding
the categories of fair value instruments, as well as the inputs
and valuation techniques utilized to determine fair value and any
changes to the inputs and valuation techniques during the period.
FSP SFAS No. 157-4 is effective for the quarter ended June 30,
2009. The adoption of FSP SFAS No. 157-4 did not have a material
impact on the Trading Company?s financial statements.


(b) Interim Disclosures about Fair Value of Financial Instruments

   In April 2009, the FASB issued FSP SFAS No. 107-1 and
Accounting Principals Board (?APB?) No. 28-1, Interim Disclosures
About Fair Value of Financial Instruments (?FSP SFAS No. 107-1?
and ?APB No. 28-1?). The staff position requires fair value
disclosures of financial instruments on a quarterly basis, as
well as new disclosures regarding the methodology and significant
assumptions underlying the fair value measures and any changes to
the methodology and assumptions during the reporting period.  FSP
SFAS No. 107-1 and APB No. 28-1 are effective for the quarter
ended June 30, 2009. The adoption of FSP SFAS No. 107-1 and APB
No. 28-1 did not have a material impact on the Trading Company?s
financial statements.

(c)  Subsequent Events

   In May 2009, the FASB issued SFAS No. 165, Subsequent Events
(?SFAS No. 165?).  SFAS No. 165 establishes general standards of
accounting for and disclosure of events that occur after the
balance sheet date but before financial statements are issued or
are available to be issued. It requires the disclosure of the
date through which an entity has evaluated subsequent events and
the basis for that date; that is, whether that date represents
the date the financial statements were issued or were available
to be issued. SFAS No. 165 is effective for the quarter ended
June 30, 2009. Management has performed its evaluation of
subsequent events through August 14, 2009, the date these
financial statements were issued.



<page> Morgan Stanley Managed Futures Kaiser I, LLC
Notes to Financial Statements (concluded)

7. Recent Accounting Pronouncements (cont?d)

(d)  Accounting Standards Codification

   On June 29, 2009, the FASB issued Statement No. 168, ?FASB
Accounting Standards Codification? and the Hierarchy of Generally
Accepted Accounting Principles ? a replacement of FASB Statement
No. 162.  The FASB has stated that the FASB Accounting Standards
Codification (?Codification?) will become the source of
authoritative U.S. GAAP recognized by the FASB to be applied by
nongovernmental entities. Once effective, the Codification?s
content will carry the same level of authority, effectively
superseding Statement No. 162. In other words, the GAAP hierarchy
will be modified to include only two levels of GAAP: authoritative
and nonauthoritative. Statement No. 168 is effective for financial
statements issued for interim and annual periods ending after
September 15, 2009.