UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549
               --------------------------------------------
                                 FORM 10-K

(MARK ONE)
|X|        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                      SECURITIES EXCHANGE ACT OF 1934
                FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004
                                     OR
|_|     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                      SECURITIES EXCHANGE ACT OF 1934
             FOR THE TRANSITION PERIOD FROM _______ TO _______

                     COMMISSION FILE NUMBER: 000-50723

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

          DELAWARE
 State or Other Jurisdiction of                   04-3638229
 Incorporation or Organization)        (I.R.S. Employer Identification No.)

        701 MOUNT LUCAS ROAD
   PRINCETON, NEW JERSEY                             08540
(Address of Principal Executive Offices)           (Zip Code)

                               (609) 497-5500
            (Registrant's Telephone Number, including Area Code)
              -----------------------------------------------

      Securities registered pursuant to Section 12(b) of the Act: None

                                                        Name of each exchange
                                                        ---------------------
         Title of each class                             on which registered
         -------------------                             -------------------



        Securities registered pursuant to Section 12(g) of the Act:

                Units of Limited Liability Company Interests

     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 such shorter period
that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (ss. 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of Registrant's knowledge,
in definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K. [X]

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

     The Registrant's Units of Limited Liability Company Interests are not
traded on any market and, accordingly, have no aggregate market value. The
net asset value of the Units of Limited Liability Company Interests as of
June 30, 2004 held by non-affiliates was $855,015,131.

                    DOCUMENTS INCORPORATED BY REFERENCE

  Certain exhibits are incorporated by reference in Item 15 of this report

<PAGE>

                             TABLE OF CONTENTS                            Page

                                   PART I

ITEM 1.  BUSINESS.........................................................2

         PERFORMANCE OF THE COMPANY.......................................6

         CERTAIN RISK FACTORS............................................40

ITEM 2.  PROPERTIES......................................................69

ITEM 3.  LEGAL PROCEEDINGS...............................................69

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.............69

                                  PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
         STOCKHOLDER MATTERS AND ISSUER
         PURCHASES OF EQUITY SECURITIES..................................69

ITEM 6.  SELECTED FINANCIAL DATA.........................................71

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS.......................................72

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK......87

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.....................90

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
         AND FINANCIAL DISCLOSURE........................................91

ITEM 9A. CONTROLS AND PROCEDURES.........................................91

                                  PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE MANAGING MEMBER AND
         REGISTRANT......................................................91

ITEM 11. EXECUTIVE COMPENSATION..........................................94

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
         MANAGEMENT......................................................96

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..................96

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES..........................99

                                  PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES......................99

<PAGE>

                                   PART I

ITEM 1. BUSINESS

                   GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

     Goldman Sachs Hedge Fund Partners,  LLC (the  "Company") is a Delaware
limited  liability  company  organized  in  March  2002  to  operate  as an
investment  fund.  Goldman  Sachs  Hedge  Fund  Strategies  LLC ("GS  HFS")
(formerly  Goldman  Sachs  Princeton  LLC),  a Delaware  limited  liability
company,  serves as the Company's managing member (the "Managing  Member").
As of December 31, 2004, the Company had  approximately  $960.3 million net
assets under management.

     From its  inception in April 2002 through July 2003,  the Company grew
through  subscriptions  of new investors.  The Company  believes its growth
during this period  follows with the general  national trend of significant
inflows  achieved by other hedge funds  during this  period.  From April 1,
2002  through  July 1, 2003,  the Company  received  approximately  834 new
investors  averaging over 50 new investors a month and had a maximum of 104
new investors  subscribing  to the Company in July 2003.  Moreover,  during
that period,  total  subscriptions in the Company exceeded $880 million and
averaged over $55 million per month with approximately $121.8 million being
invested  in July 2003.  During this period the Company had at least 30 new
investors each month and at least $24.5 million  invested every month.  The
numbers of investors that came into the Company during this period does not
represent the number of investors in the Company  today due to  redemptions
made by investors during the same period.  From July 2003 through September
2004,  the Company only took in  investments  from  existing  investors and
limited  subscriptions from new qualified investors;  however,  starting in
October  2004,  the  Company  began  accepting  additional  amounts  of new
subscriptions again and the Company continued to do so through December 31,
2004.  For the period from October 1, 2004 through  December 31, 2004,  the
Company had 96 new investors  and  $94,175,000  of aggregate  subscriptions
from  existing and new  investors.  The Company may close again at any time
without  notice  at  the  sole  discretion  of  the  Managing  Member.  The
acceptance of future  subscriptions in the Company and the continued growth
of the  Company  will be  determined  by the  Managing  Member  in its sole
discretion.

                             INVESTMENT PROGRAM

INVESTMENT OBJECTIVE AND APPROACH

     The Company's  investment  objective is to target attractive long-term
risk-adjusted  returns across a variety of market  environments  with lower
volatility than, and minimal  correlation to, the broad equity markets.  To
achieve this objective,  the Company  allocates all or substantially all of
its assets  among  privately  placed  investment  funds (such funds and any
successor   funds  thereto,   individually,   an   "Investment   Fund"  and
collectively the "Investment  Funds") managed by the Managing Member,  each
of which  allocates  its  assets to, or invests  in  entities  managed  by,
independent investment managers (collectively,  the "Advisors") that employ
a  broad  range  of  investment  strategies  primarily  within  one  of the
following four hedge fund sectors:  the tactical trading sector, the equity
long/short  sector,  the relative value sector and the event driven sector.
Currently,  substantially  all of the Company's assets are invested in four
Investment  Funds,  each of which is managed by the  Managing  Member.  The
existing  Investment Funds are Goldman Sachs Global Tactical  Trading,  LLC
("GTT"),  Goldman Sachs Global  Equity  Long/Short,  LLC ("GELS"),  Goldman
Sachs Global  Relative  Value,  LLC ("GRV") and Goldman  Sachs Global Event
Driven,  LLC ("GED").  The assets of each  Investment Fund are allocated to
Advisors,  directly or  indirectly,  pursuant to  discretionary  investment
management  agreements  or,  in the  discretion  of the  Investment  Fund's
managing member (currently, in each case, the Managing Member), by means of
investments  in funds managed by Advisors  ("Advisor  Funds").  (References
herein to Advisors include Advisor Funds where the context permits). One or
more of the Investment Funds have in the past and may from time to time not
accept   additional   subscriptions  or  limit  the  amount  of  additional
subscriptions from third parties because certain of the Advisors with which
they  invest are no longer  accepting  additional  investments.  Under such
circumstances,  the  Managing  Member  does not expect to allow  additional
investors  to  subscribe  for  units in the  Company  except as a result of
redemptions  in the  Company.  However,  even if the  Investment  Funds are
closed generally,  the Investment Funds may accept  additional  investments
from the Company for  rebalancing  or other  purposes.  As of December  31,
2004, the Company's proportionate share of each individual investment in an
Advisor owned,  directly or indirectly,  by any individual  Investment Fund
did not exceed 5% of the Company's equity.

     Each of the existing  Investment Funds is a Delaware limited liability
company.  A brief  description of the investment  objective and approach of
each of the existing Investment Funds is set forth under  "--Description of
the Investment Funds and the Performance of the Investment  Funds" below in
this Item.

     The   hedge   fund   sectors    referenced   herein   are   subjective
classifications  made by the managing  member of an Investment  Fund in its
sole discretion.  Such classifications are based on information provided by
the Advisors to the managing member of the relevant Investment Fund and may
differ  from  classifications  of  similarly  named  sectors  made by other
industry  participants.  In  addition,  although  each  Advisor to which an
Investment Fund allocates assets invests principally  utilizing  investment
strategies  within  such  Investment  Fund's  hedge  fund  sector,  certain
Advisors to which an  Investment  Fund  allocates  assets may also  utilize
other  investment  strategies  that are either related or unrelated to such
hedge fund sector.

     There can be no  assurance  that the Company or any of the  Investment
Funds will achieve its investment  objective or that the portfolio  design,
risk  monitoring  and  hedging  strategies  of  the  Company  or any of the
Investment Funds will be successful. See "CERTAIN RISK FACTORS."

     The Company  may hold cash or invest the  Company's  cash  balances at
such times and in any  instruments  it deems  appropriate,  including  cash
equivalents  and  other  short  term  securities,   pending  investment  in
Investment  Funds, in order to fund anticipated  redemptions or expenses of
the Company,  or otherwise in the sole  discretion of the Managing  Member.
Such  balances may also be invested in money market funds  sponsored by The
Goldman Sachs Group, Inc. or its affiliates, including Goldman, Sachs & Co.
("Goldman  Sachs")  (collectively  referred to herein,  together with their
affiliates,  directors, partners, trustees, managers, members, officers and
employees,  as the "GS Group") and the Company will not be  reimbursed  for
any fees  accruing to any  affiliate of the GS Group in respect of any such
investment.  The Company  generally  reinvests any available  income earned
from  investments  of its cash balances in accordance  with its  investment
program.  The  Investment  Funds are also  permitted to hold cash or invest
their cash balances in the same manner.

ALLOCATION AMONG THE INVESTMENT FUNDS

     The Managing Member may allocate the Company's  assets across the four
hedge fund sectors in a manner  consistent with the Company's  objective of
targeting attractive long-term risk-adjusted returns. In order to determine
such  allocation,  the Managing  Member  periodically  establishes  a model
allocation among the four hedge fund sectors.  In order to accomplish this,
the Managing Member  estimates the long-term  risk,  return and correlation
expectations of each of the Investment  Funds. For these purposes,  risk is
measured by  volatility,  and  volatility is determined  utilizing  various
models chosen by the Managing  Member.  The Managing  Member  utilizes this
model  allocation  as a benchmark  and will either  allocate the  Company's
assets among the Investment Funds in a manner roughly  consistent with such
benchmark or, in its sole discretion, will make tactical allocations to one
or more  Investment  Funds,  which  could  result  in an  overweighting  or
underweighting  to one or more of the hedge fund sectors on a risk adjusted
basis.  Through June 30, 2004,  the Managing  Member  allocated on an equal
risk adjusted  basis among the  Investment  Funds.  As of July 1, 2004, the
Managing  Member  implemented  an  adjustment  to weights,  reflecting  the
Managing  Member's updated  expectations for return,  risk and correlations
for the Investment Funds. The Managing Member periodically re-evaluates the
contribution  to the risk and return of the  Company  from each  investment
sector and may in its sole discretion  re-allocate the Company's  assets or
weights of the investment sector as it deems advisable. Reallocation may be
considered  due to such  factors as are  deemed  relevant  by the  Managing
Member,   which  may  include  change  in  return,   risk  and  correlation
expectations,   changes  in  market  conditions,  differences  in  relative
performance  among  the  Investment  Funds,  changes  in the  amount of the
Company's leverage and the addition or elimination of Investment Funds. Due
to the restrictions on redemptions and additional  subscriptions imposed by
the  Investment  Funds and the  Advisors  and other  factors,  the Managing
Member may not always be able to  re-allocate  the Company's  assets at the
time and in the manner  that it would  otherwise  seek to do. See  "CERTAIN
RISK   FACTORS--GENERAL   RISKS--Risks  Related  to  the  Company  and  the
Investment Funds' Performance and Operation--There can be no Assurance that
the  Managing  Member's  Decisions   Regarding  Risk  Allocations  will  be
Successful;  Inaccurate  Information  Provided by the  Advisors  May Have a
Material Adverse Effect on Implementing the Company's Investment Objective"
and "--SPECIAL RISKS OF THE COMPANY'S STRUCTURE--Risks  Associated with the
Company Investing in Other  Entities--Advisors may have Limited Capacity to
Manage Additional  Investment Fund Investments." The models used to measure
risk, and the methodologies  utilized to allocate the assets of the Company
among the  Investment  Funds,  may be changed or modified  by the  Managing
Member at any time  without  notice or  approval of  investors  in its sole
discretion.

     As of December 31,  2004,  2003 and 2002,  respectively,  the members'
equity  of  the  Company  was   allocated   among  the   Investment   Funds
approximately  as described in the tables below.  Members'  equity,  or net
assets, means the total assets of the Company less total liabilities of the
Company at the time of  determination  in  accordance  with U.S.  generally
accepted accounting principles ("GAAP").  Total assets means the sum of the
Company's  cash  and  cash   equivalents,   other  assets  and  investments
determined at any time in accordance with GAAP as of that date. The figures
represent actual  allocations of the Company's  members' equity and not the
allocation of the expected risk of the Company among the Investment  Funds.
The  allocations of the Company's  members' equity will change from time to
time in accordance with the Company's  investment objective and strategies.
In addition, the tables below also provide the approximate allocation among
the  Investment  Funds of the adjusted  members'  equity as of December 31,
2004 and 2003. The adjusted members' equity excludes Redemptions payable of
$128,546,636  payable  after  December 31, 2004 and  $34,529,625  which was
payable  after  December  31, 2003.  The  Managing  Member made a strategic
reallocation  among the Investment Funds as of July 1, 2004. The adjustment
to the  weights  implemented  as of July 1,  2004  reflected  the  Managing
Member's  updated  expectations  for return,  risk and correlations for the
Investment  Funds.  The Company's  investments are carried at fair value as
determined  by the  Company's  attributable  share of the net assets of the
respective   Investment   Fund.   Fair  values  are  determined   utilizing
information  supplied  by  each  individual  Investment  Fund  net of  each
Advisor's  management  and  incentive fee and are not a guarantee of actual
realizable  amounts.  See  "CERTAIN  RISK  FACTORS--SPECIAL  RISKS  OF  THE
COMPANY'S   STRUCTURE--Risks   Related  to  the  Company's   Structure--The
Company's  Financial  Statements  are,  and in the Future will be, Based on
Estimates of Valuations  Provided by Third Party  Advisors Which May not be
Accurate  or May Need to be Adjusted in the  Future,"  "--Risks  Associated
with the Company Investing in Other  Entities--Valuation  of the Investment
Funds'  Investments Will be Based Upon Valuations  Provided by the Advisors
Which are Generally not Audited;  Uncertainties  in Valuations Could Have a
Material   Adverse  Effect  on  the  Company's  Net  Assets"  and  ITEM  7.
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS--Critical Accounting Policies and Estimates."


                                          DECEMBER 31, 2004
<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------
                                                         FAIR VALUE OF COMPANY'S  FAIR VALUE OF COMPANY'S
                              FAIR VALUE OF COMPANY'S      INVESTMENT AS A % OF     INVESTMENT AS A % OF
   INVESTMENT FUND            INVESTMENT IN $ AMOUNT        MEMBERS' EQUITY (1)  ADJUSTED MEMBERS' EQUITY(2)
--------------------------- --------------------------- ------------------------ --------------------------
          <S>                      <C>                           <C>                       <C>
          GTT                      $248,081,137                  25.91%                    22.84%
--------------------------- --------------------------- ------------------------ --------------------------
          GELS                     $226,276,134                  23.63%                    20.84%
--------------------------- --------------------------- ------------------------ --------------------------
          GRV                      $350,409,379                  36.60%                    32.27%
--------------------------- --------------------------- ------------------------ --------------------------
          GED                      $268,186,702                  28.01%                    24.69%
--------------------------- --------------------------- ------------------------ --------------------------
          Total                  $1,092,953,352               114.15%(3)                100.64%(3)
--------------------------- --------------------------- ------------------------ --------------------------
<FN>
    (1)  Members' equity,  used in the calculation of the investments as a
         % of members' equity, is reduced for member  redemptions that are
         paid after the balance sheet date.

    (2)  Adjusted  members'  equity,   used  in  the  calculation  of  the
         investments  as  a  percentage  of  adjusted   members'   equity,
         represents  members' equity excluding  Redemptions payable in the
         amount of $128,546,636 that are payable after December 31, 2004.

    (3)  The total value of the Company's  investments  in the  Investment
         Funds  exceeded  100% of members'  equity and  adjusted  members'
         equity,  respectively,   because  members'  equity  and  adjusted
         members' equity both reflected certain accrued liabilities of the
         Company, including fees and expenses, and, in addition,  members'
         equity also  reflected  redemptions  payable  after  December 31,
         2004.
</FN>
</TABLE>

<TABLE>
<CAPTION>

                                                DECEMBER 31, 2003

    ---------------------------- --------------------------- ------------------------ ---------------------------
                                        FAIR VALUE OF              FAIR VALUE OF              FAIR VALUE OF
                                          COMPANY'S                 COMPANY'S             COMPANY'S INVESTMENT
                                       INVESTMENT IN $          INVESTMENT AS A % OF       AS A % OF ADJUSTED
         INVESTMENT FUND                  AMOUNT                  MEMBERS'EQUITY(1)          MEMBERS' EQUITY(2)
    ---------------------------- --------------------------- ------------------------ ---------------------------
              <S>                        <C>                        <C>                       <C>
              GTT                        $249,583,571                26.74%                     25.79%
    ---------------------------- --------------------------- ------------------------ ---------------------------
              GELS                       $140,117,348                15.01%                     14.48%
    ---------------------------- --------------------------- ------------------------ ---------------------------
              GRV                        $359,311,989                38.50%                     37.12%
    ---------------------------- --------------------------- ------------------------ ---------------------------
              GED                        $221,899,920                23.78%                     22.93%
    ---------------------------- --------------------------- ------------------------ ---------------------------
              Total                      $970,912,828               104.03%(3)                 100.32%(3)
    --------------------------- --------------------------- ------------------------ ---------------------------
<FN>
    (1)  Members' equity,  used in the calculation of the investments as a
         % of members' equity, is reduced for member  redemptions that are
         paid after the balance sheet date.

    (2)  Adjusted  members'  equity,   used  in  the  calculation  of  the
         investments  as  a  percentage  of  adjusted   members'   equity,
         represents  members' equity excluding  Redemptions payable in the
         amount of $34,529,625 that were payable after December 31, 2003.

    (3)  The total value of the Company's  investments  in the  Investment
         Funds  exceeded  100% of members'  equity and  adjusted  members'
         equity,  respectively,   because  members'  equity  and  adjusted
         members' equity both reflected certain accrued liabilities of the
         Company, including fees and expenses, and, in addition,  members'
         equity also  reflected  redemptions  payable  after  December 31,
         2003.
</FN>
</TABLE>

<TABLE>
<CAPTION>
                             DECEMBER 31, 2002

    ---------------------------  --------------------------  ---------------------------
                                                               FAIR VALUE OF COMPANY'S
                                  FAIR VALUE OF COMPANY'S       INVESTMENT AS A % OF
           INVESTMENT FUND        INVESTMENT IN $ AMOUNT           MEMBERS' EQUITY
    ---------------------------  ------------------------    ---------------------------
                <S>                   <C>                             <C>
                GTT                    $98,921,553                     25.81%
    --------------------------- ------------------------     ---------------------------
                GELS                   $53,355,947                     13.92%
    --------------------------- ------------------------     ---------------------------
                GRV                   $146,920,415                     38.34%
    --------------------------- ------------------------     ---------------------------
                GED                    $84,386,691                     22.02%
    --------------------------- ------------------------     ---------------------------
                Total                 $383,584,606                    100.09% (1)
    --------------------------- ------------------------     ---------------------------
<FN>
    (1)  The total value of the Company's  investments  in the  Investment
         Funds exceeded 100% of the Company's members' equity, because the
         Company's  members' equity reflected certain accrued  liabilities
         of the Company, including fees and expenses.
</FN>
</TABLE>


                         PERFORMANCE OF THE COMPANY

     For the years ended  December 31, 2004,  December 31, 2003 and for the
period from  commencement of operations on April 1, 2002 until December 31,
2002,  the Company had net returns as described in the tables  below.  Past
performance  of the Company is not  indicative of future  results which may
vary. The Company's net return has been computed  based on the  performance
of the Company net of all fees and  expenses  including,  among  others (i)
incentive  allocations to the Managing Member and (ii) a monthly management
fee to the Managing Member. See "FEES AND EXPENSES."

<TABLE>
<CAPTION>
                    JANUARY 1, 2004 - DECEMBER 31, 2004

    -------------------------------- --------------------------- ----------------------------
                                         MONTH OF ISSUANCE OF        NET RETURN FOR PERIOD
          SERIES OF UNITS(1)                    UNITS                    OUTSTANDING(2)
    -------------------------------- --------------------------- ----------------------------
           <S>                                <C>                           <C>
           Class A Series 1                   January                       5.53%
    -------------------------------- --------------------------- ----------------------------
           Class A Series 2                   February                      4.48%
    -------------------------------- --------------------------- ----------------------------
           Class A Series 3                   July                          4.95%
    -------------------------------- --------------------------- ----------------------------
           Class A Series 4                   August                        5.73%
    -------------------------------- --------------------------- ----------------------------
           Class A Series 5                   September                     5.72%
    -------------------------------- --------------------------- ----------------------------
           Class A Series 6                   October                       4.98%
    -------------------------------- --------------------------- ----------------------------
           Class A Series 7                   November                      4.01%
    -------------------------------- --------------------------- ----------------------------
           Class A Series 8                   December                      1.12%
    -------------------------------- --------------------------- ----------------------------
<FN>
    (1)  As of December 31, 2004, the Company had 8 series of Class A
         units outstanding. Each series of Class A units is identical
         in every regard  except with  respect to its  individualized
         incentive allocation base.

    (2)  The net  return is shown for the month of  issuance  through
         December 31, 2004.

</FN>
</TABLE>

<TABLE>
<CAPTION>
                    JANUARY 1, 2003 - DECEMBER 31, 2003

    -------------------------------- --------------------------- ----------------------------
                                         MONTH OF ISSUANCE OF        NET RETURN FOR PERIOD
            SERIES OF UNITS(1)                   UNITS                   OUTSTANDING(2)
    -------------------------------- --------------------------- ----------------------------
       <S>                                   <C>                            <C>
       Class A Series 1                      January                        9.60%
    -------------------------------- --------------------------- ----------------------------
       Class A Series 2                      February                       7.98%
    -------------------------------- --------------------------- ----------------------------
       Class A Series 3                      March                          6.87%
    -------------------------------- --------------------------- ----------------------------
       Class A Series 4                      April                          7.65%
    -------------------------------- --------------------------- ----------------------------
       Class A Series 5                      May                            6.59%
    -------------------------------- --------------------------- ----------------------------
       Class A Series 6                      June                           3.77%
    -------------------------------- --------------------------- ----------------------------
       Class A Series 7                      July                           3.74%
    -------------------------------- --------------------------- ----------------------------
       Class A Series 8                      August                         4.64%
    -------------------------------- --------------------------- ----------------------------
       Class A Series 9                      November                       1.65%
    -------------------------------- --------------------------- ----------------------------
       Class A Series 10                     December                       1.35%
    -------------------------------- --------------------------- ----------------------------
<FN>
    (1)  As of December 31, 2003,  the Company had 10 series of Class
         A units  outstanding.  Each  series  of  Class  A  units  is
         identical  in  every  regard  except  with  respect  to  its
         individualized  incentive allocation base. Effective January
         1,  2004,  Class A Series 2 through  Class A Series 10 units
         were collapsed  into Class A Series 1 units.  Class A Series
         (other  than  Class A Series 1)  issued  in  future  periods
         represent  issuances  of new series and are  different  from
         those series collapsed effective January 1, 2004.

    (2)  The net  return is shown for the month of  issuance  through
         December 31, 2003.
</FN>
</TABLE>

<TABLE>
<CAPTION>
                           APRIL 1, 2002 - DECEMBER 31, 2002

    -------------------------------- --------------------------- ----------------------------
                                         MONTH OF ISSUANCE OF        NET RETURN FOR PERIOD
            SERIES OF UNITS(1)                   UNITS                   OUTSTANDING(2)
    -------------------------------- --------------------------- ----------------------------
           <S>                                 <C>                          <C>
           Class A Series 1                    April                        3.97%
    -------------------------------- --------------------------- ----------------------------
           Class A Series 2                    May                          3.88%
    -------------------------------- --------------------------- ----------------------------
           Class A Series 3                    June                         3.19%
    -------------------------------- --------------------------- ----------------------------
           Class A Series 4                    July                         2.33%
    -------------------------------- --------------------------- ----------------------------
           Class A Series 5                    August                       2.52%
    -------------------------------- --------------------------- ----------------------------
           Class A Series 6                    September                    1.51%
    -------------------------------- --------------------------- ----------------------------
           Class A Series 7                    October                      0.75%
    -------------------------------- --------------------------- ----------------------------
           Class A Series 8                    November                     1.77%
    -------------------------------- --------------------------- ----------------------------
           Class A Series 9                    December                     2.34%
    -------------------------------- --------------------------- ----------------------------
<FN>
    (1)  As of December 31, 2002, the Company had 9 series of Class A
         units outstanding. Each series of Class A units is identical
         in every regard  except with  respect to its  individualized
         incentive  allocation base. Effective January 1, 2003, Class
         A Series 2  through  Class A Series 9 units  were  collapsed
         into  Class A  Series 1 units.  Class A Series  (other  than
         Class  A  Series  1)  issued  in  future  periods  represent
         issuances of new series and are different  from those series
         collapsed effective January 1, 2003.

    (2)  The  net  return  is shown for the month of issuance through
         December 31, 2002.
</FN>
</TABLE>

     The  Company  only has one class of shares  at  present,  Class A. The
Class A Series  Units are  subject  to a  management  fee and an  incentive
allocation.  Separately, the Investment Funds (GTT, GELS, GRV and GED) each
offer  separate  classes of shares.  Among the classes of shares offered by
the Investment  Funds,  each has offered Class C Series units which are not
subject to management fees and incentive  allocations at an Investment Fund
level (although management fees and incentive  allocations are paid to each
of the Advisors in which the  Investment  Funds  invest).  The Company only
owns Class C Series of the  Investment  Funds.  The intent  behind this fee
arrangement  was to create a fee  structure  such that  holders  of Class A
Series  Units  of the  Company  are not - in  addition  to  management  and
incentive  allocations  paid to the  Company  (as  well as  management  and
incentive  allocations  paid to  individual  Advisors)  - also  subject  to
management  fees and incentive  allocations  paid by each of the Investment
Funds. Therefore,  holders of a fee bearing class of the Company indirectly
own "no-fee-shares" of the Investment Funds.  Through its investment in the
Investment  Funds,  the  Company  bears a pro  rata  portion  of all  other
offering,  organizational  and operating  expenses of the Investment Funds,
including  the  administration  fee for the Managing  Member's  services as
administrator  of each  Investment  Fund,  and a pro  rata  portion  of the
Advisor  compensation paid by the Investment  Funds.  Returns in the tables
above are shown net of these expenses. See "FEES AND EXPENSES."

     The table below compares the historical cumulative total net return of
the Company's Units for the investment  periods indicated in the table with
the 3 Month LIBOR rate, the Lehman Brothers Aggregate Index, the MSCI World
Index and the S&P 500  Index.  3 Month  LIBOR  rate,  the  Lehman  Brothers
Aggregate  Index,  the MSCI World Index and the S&P 500 Index are  commonly
used as comparative  indices by hedge fund  investors.  The Managing Member
does not manage the Company in respect of any particular index.  References
to market or composite  indices,  benchmarks or other  measures of relative
market  performance  over a specified period of time (referred to herein as
an index or  collectively  as indices) are provided for  information  only.
Reference to these indices does not imply that the  portfolio  will achieve
returns,   volatility  or  other  results  similar  to  the  indices.   The
composition  of an index may not reflect the manner in which a portfolio is
constructed  in  relation  to  expected  or  achieved  returns,   portfolio
guidelines, restrictions, sectors, correlations, concentrations, volatility
or tracking  error  targets,  all of which are subject to change over time.
These  indices  are  unmanaged  and the  figures  for an index  reflect the
reinvestment  of dividends  but do not reflect the deduction of any fees or
expenses  which would reduce  returns.  The holders of Units of the Company
(each  referred to as a "Member" and  collectively  the  "Members")  cannot
invest directly in indices.

<TABLE>
<CAPTION>

    ------------------------ ------------  ------------  --------------  -------------  -------------
                                                             LEHMAN
                                                            BROTHERS
                                             3 MONTH        AGGREGATE      MSCI WORLD      S&P 500
        INVESTMENT PERIOD     COMPANY (1)     LIBOR          INDEX           INDEX          INDEX
    ------------------------ ------------  ------------  --------------  -------------  -------------
      <S>                        <C>           <C>           <C>             <C>            <C>
      1/1/2004 - 12/31/2004      5.53%         1.48%          4.34%          14.72%         10.88%
    ------------------------ ------------  ------------  --------------  -------------  -------------
      1/1/2003 - 12/31/2003      9.60%         1.23%          4.11%          33.11%         28.68%
    ------------------------ ------------  ------------  --------------  -------------  -------------
      4/1/2002 - 12/31/2002      3.97%         1.42%         10.16%         (20.16)%       (22.31)%
    ------------------------ ------------  ------------  --------------  -------------  -------------
<FN>
    (1)  Company  returns  shown are the net  returns for Class A Series 1
         for each of the  investment  periods  shown.  See  above  for the
         Company's net returns for Class A Series 2-8, Class A Series 2-10
         and Class A Series 2-9 for 2004, 2003 and 2002, respectively.
</FN>
</TABLE>

DESCRIPTION OF THE INVESTMENT  FUNDS AND THE  PERFORMANCE OF THE INVESTMENT
FUNDS

     The annual net returns  shown for each  Investment  Fund in the tables
below  have  been  computed  based  on the  performance  of the  respective
Investment  Fund net of all expenses  allocated by each  Investment Fund to
the Company for periods shown  following the  commencement  of the Company.
Past  performance  of the  Investment  Funds is not  indicative  of  future
results which may vary significantly.  The Company owns  "no-fee-shares" in
each  Investment  Fund and  accordingly  the  Company  was not  charged any
incentive  allocation  or  management  fee by the  Managing  Member  in its
capacity as managing member of each of the Investment  Funds. See "FEES AND
EXPENSES."

GOLDMAN SACHS GLOBAL TACTICAL TRADING, LLC

     GTT's  investment   objective  is  to  target   attractive   long-term
risk-adjusted  returns by  allocating  its assets to  Advisors  that employ
strategies  primarily within the tactical trading sector.  Tactical trading
strategies are directional  trading strategies that generally fall into one
of the following two  categories:  managed  futures  strategies  and global
macro strategies. Managed futures strategies involve trading in futures and
currencies globally, generally using systematic or discretionary approaches
based on identified trends. In formulating these strategies, GTT's Advisors
generally use quantitative  models or discretionary  inputs to speculate on
the direction of individual markets or subsectors of markets. Discretionary
inputs may include  macroeconomic  and fundamental  data (such as inflation
estimates and  supply/demand  characteristics  of  individual  markets) and
technical data (such as market price patterns, market volatility estimates,
and trading volume statistics).  Global macro strategies  generally utilize
analysis of  macroeconomic  and  financial  conditions  to develop views on
country, regional or broader economic themes and then seek to capitalize on
such  views.  Other  strategies  may be  employed  as  well.  The  Advisors
generally invest GTT's assets in a diversified portfolio composed primarily
of futures contracts, forward contracts,  physical commodities,  options on
futures and on  physical  commodities  and other  derivative  contracts  on
foreign currencies,  interest rates, financial  instruments,  stock indexes
and  other  financial  market  indexes,  metals,  grains  and  agricultural
products, petroleum and petroleum products, livestock and meats, oil seeds,
tropical products and softs (such as sugar, cocoa, coffee and cotton).  GTT
Advisors also engage in the speculative  trading of securities,  including,
but  not  limited  to,  equity  and  debt  securities  (including,  without
limitation,  high yield  securities and emerging  market  securities),  and
other  securities.  Those GTT Advisors that trade securities may do so on a
cash  basis  or using  options  or other  derivative  instruments.  Certain
Advisors  may  utilize  other  investment  media,  such as swaps  and other
similar instruments and transactions.  All speculative trading on behalf of
GTT is  conducted  at the  direction  of the  Advisors.  The  GTT  Advisors
generally  trade on behalf of GTT on commodities  and securities  exchanges
worldwide as well as in the interbank  foreign  currency forward market and
various other  over-the-counter  markets. GTT allocates its assets pursuant
to discretionary  investment advisory agreements and through investments in
Advisor Funds.

     As of  December  31,  2004,  GTT's  managing  member  (currently,  the
Managing Member) had allocated GTT's assets, directly or indirectly,  to 23
Advisors,   although  this  number  may  change  materially  over  time  as
determined by GTT's managing  member.  GTT's managing member generally does
not allocate  more than 25% of GTT's total assets to any single GTT Advisor
at the time of  allocation.  GTT is a successor  fund to The Directors Fund
Limited  Partnership  which  commenced its  operations  in 1986.  Effective
January 2, 2002,  pursuant to the Delaware Revised Uniform  Partnership Act
and the Delaware  Limited  Liability  Company Act, GTT was converted from a
Delaware  limited  partnership to a Delaware limited  liability  company at
which time its name was changed from The Directors Fund Limited Partnership
to Goldman Sachs Global  Tactical  Trading,  LLC. GTT was converted  from a
limited partnership to a limited liability company in order to bring GTT in
line  with the  Managing  Member's  other  funds  with  similar  investment
programs, which are organized as limited liability companies.

     GS  Group  owned  approximately  7% of GTT as of  December  31,  2004,
exclusive  of any direct or  indirect  ownership  of GTT by or through  the
Company.

     For the past five years from January 1, 2000 to December 31, 2004, GTT
had net returns on invested assets as described in the table below.

    --------------------------------- ------------------------------------
        INVESTMENT PERIOD                       NET RETURN FOR PERIOD
    --------------------------------- ------------------------------------
      1/1/2004 - 12/31/2004(1)                         3.88%
    --------------------------------- ------------------------------------
      1/1/2003 - 12/31/2003(1)                        11.61%
    --------------------------------- ------------------------------------
      1/1/2002 - 12/31/2002(2)                        10.99%
    --------------------------------- ------------------------------------
      1/1/2001 - 12/31/2001(3)                         9.25%
    --------------------------------- ------------------------------------
      1/1/2000 - 12/31/2000(3)                         1.18%
    --------------------------------- ------------------------------------

    (1)  Net return is based on the performance of Class C Series 1 units.
         Class C Series 1 units  ("no-fee-shares") of GTT (including those
         issued to the  Company)  are not  subject to  management  fees or
         incentive  allocations  paid or made to GS HFS as managing member
         of GTT and  therefore  returns do not  reflect the payment of any
         such  fees  or  the  making  of any  allocations  to GS  HFS.  In
         addition,  returns  for Class C Series 1 units  during the entire
         period reflect returns net of the compensation  paid to Advisors.
         The   returns   shown  are  also  net  of  the   payment   of  an
         administration fee to GS HFS by GTT.

    (2)  Annual net return is based on the performance of Class A Series 1
         units (for the period from January 1, 2002 to March 31, 2002) and
         Class C Series 1 (for the  period  from the  commencement  of the
         Company's  operations  on April 1, 2002 to  December  31,  2002).
         Class A Series 1 units of GTT are  subject to a 1.25%  management
         fee  and a 5%  incentive  allocation  paid  or  made to GS HFS as
         managing  member of GTT.  The returns  shown,  to the extent they
         reflect Class A Series 1 units, are net of the management fee and
         the incentive allocation paid by GTT to GS HFS as managing member
         of GTT.  The  Company did not invest in Class A Series 1 units of
         GTT. Class C Series 1 units  ("no-fee-shares")  of GTT (including
         those issued to the Company) are not subject to  management  fees
         or  incentive  allocations  paid or  made  to GS HFS as  managing
         member of GTT and therefore  returns,  to the extent they reflect
         Class C Series 1 units,  do not  reflect  the payment of any such
         fees or the making of any  allocations  to GS HFS.  In  addition,
         returns  for  Class A Series 1 units  and  Class C Series 1 units
         during the entire period reflect returns net of the  compensation
         paid to Advisors.  The returns  shown are also net of the payment
         of an administration  fee to GS HFS by GTT. Returns for the Class
         A Series 1 units  are shown for  periods  prior to the  Company's
         commencement  of  operations  on April 1, 2002  since GTT did not
         have no-fee-shares outstanding during such periods.

    (3)  Annual net return is based on the performance of Class B Series 1
         units  and is  net of a 3%  management  fee  and a 25%  incentive
         allocation  paid or made to GS HFS as managing member of GTT. GTT
         did not bear any additional Advisor compensation  expenses during
         this  period  because  such  expenses  were  paid by GS HFS,  and
         therefore  returns do not  reflect  any  additional  fees paid to
         Advisors. The Company did not invest in Class B Series 1 units of
         GTT.  Effective  January 1, 2002, the Class B Series 1 units were
         converted to Class A Series 1 units.

GOLDMAN SACHS GLOBAL EQUITY LONG/SHORT, LLC

     GELS'  investment  objective  is to  target  attractive  risk-adjusted
returns  with  volatility  lower than the broad equity  markets,  primarily
through  long and  short  investment  opportunities  in the  global  equity
markets.  As of December 31, 2004,  GELS' managing member  (currently,  the
Managing Member) had allocated GELS' assets, directly or indirectly,  to 27
Advisors,   although  this  number  may  change  materially  over  time  as
determined by GELS' managing member.  GELS' Advisors'  strategies generally
involve  making  long and  short  equity  investments,  often  based on the
Advisor's  assessment of fundamental  value compared to market price. It is
anticipated  that GELS'  Advisors  will employ a wide range of styles.  For
example,  the GELS  Advisors  may (i) focus on  companies  within  specific
industries;  (ii) focus on companies only in certain  countries or regions;
(iii) focus on companies with specified levels of market capitalization; or
(iv) employ a more diversified approach, allocating assets to opportunities
across investing  styles,  industry sectors and geographic  regions.  Other
strategies may be employed as well.  GELS' managing  member  generally does
not allocate  more than 25% of GELS' total assets to any single  Advisor at
the time of  allocation.  GELS was  organized on July 1, 2001 and commenced
its operations on August 1, 2001.

     GS Group  owned  approximately  3% of GELS as of  December  31,  2004,
exclusive  of any direct or  indirect  ownership  of GELS by or through the
Company.

     Since GELS  commenced its  operations on August 1, 2001 until December
31, 2004,  it had net returns on invested  assets as described in the table
below.

    ------------------------------    -------------------------------
          INVESTMENT PERIOD                 NET RETURN FOR PERIOD
    ------------------------------    -------------------------------
          1/1/2004 - 12/31/2004(1)                    9.27%
    ------------------------------    -------------------------------
          1/1/2003 - 12/31/2003(1)                   13.73%
    ------------------------------    -------------------------------
          1/1/2002 - 12/31/2002(2)                    0.02%
    ------------------------------    -------------------------------
          8/1/2001 - 12/31/2001(3)                    1.58%
    ------------------------------    -------------------------------

     (1)  Net return is based on the performance of Class C Series 1 units.
          Class C Series 1 units ("no-fee-shares") of GELS (including those
          issued to the  Company)  are not  subject to  management  fees or
          incentive  allocations  paid or made to GS HFS as managing member
          of GELS and  therefore  returns do not reflect the payment of any
          such  fees  or  the  making  of any  allocations  to GS  HFS.  In
          addition,  returns  for Class C Series 1 units  during the entire
          period reflect returns net of the compensation  paid to Advisors.
          The   returns   shown  are  also  net  of  the   payment   of  an
          administration fee to GS HFS by GELS.

     (2)  Annual net return is based on the performance of Class A Series 1
          units (for the period from January 1, 2002 to March 31, 2002) and
          Class C Series 1 (for the  period  from the  commencement  of the
          Company's  operations  on April 1, 2002 to  December  31,  2002).
          Class A Series 1 units of GELS are subject to a 1.25%  management
          fee and a 5% incentive allocation by GS HFS as managing member of
          GELS.  The  returns  shown,  to the extent they  reflect  Class A
          Series 1 units,  are net of the  management fee and the incentive
          allocation  paid by GELS to GS HFS as  managing  member  of GELS.
          Class C Series 1 units ("no-fee-shares") of GELS (including those
          issued to the  Company)  are not  subject to  management  fees or
          incentive  allocations  paid or made to GS HFS as managing member
          of GELS and therefore returns, to the extent they reflect Class C
          Series 1 units,  do not  reflect  the payment of any such fees or
          the making of any allocations to GS HFS. In addition, returns for
          Class A Series 1 units  and  Class C  Series 1 units  during  the
          entire period  reflect  returns net of the  compensation  paid to
          Advisors.  The  returns  shown are also net of the  payment of an
          administration  fee to GS HFS by GELS.  Returns  for the  Class A
          Series 1 units  are  shown  for  periods  prior to the  Company's
          commencement  of  operations  on April 1, 2002 since GELS did not
          have no-fee-shares outstanding during such periods.

     (3)  Annual net return is based on the performance of Class A Series 1
          units.  Class A Series 1 units  of GELS  are  subject  to a 1.25%
          management fee and a 5% incentive  allocation  paid or made to GS
          HFS as managing  member of GELS. The returns shown are net of the
          management  fee and the incentive  allocation  paid by GELS to GS
          HFS as  managing  member of GELS.  The  Company did not invest in
          Class A Series 1 units of GELS. The returns shown are also net of
          the payment of an administration fee to GS HFS by GELS.

GOLDMAN SACHS GLOBAL RELATIVE VALUE, LLC

     GRV's  investment  objective  is to  target  attractive  risk-adjusted
absolute  returns  with  volatility  and  correlation  lower than the broad
equity markets by allocating  assets to Advisors that operate  primarily in
the global relative value sector.  As of December 31, 2004,  GRV's managing
member  (currently,  the  Managing  Member)  had  allocated  GRV's  assets,
directly or  indirectly,  to 29 Advisors,  although  this number may change
materially over time as determined by GRV's managing member. GRV's managing
member  generally  does not allocate more than 25% of GRV's total assets to
any single  Advisor at the time of allocation.  Relative  value  strategies
seek to profit from the  mispricing  of  financial  instruments,  capturing
spreads  between  related  securities that deviate from their fair value or
historical norms.  Directional and market exposures are generally held to a
minimum  or  completely  hedged.  Strategies  that may be  utilized  in the
relative value sector include convertible arbitrage,  equity arbitrage, and
fixed-income arbitrage, each of which is described in greater detail below.
Other strategies may be employed as well.

Convertible Arbitrage

     Convertible bond arbitrage  strategies  consist of buying  convertible
bonds and shorting an appropriate  number of shares of the issuer's  common
stock.  The stock  short  sale is  intended  to hedge the stock  price risk
arising from the equity conversion  feature of the convertible bond. Due to
the bond features of  convertibles,  credit and interest rate risk may also
be hedged.

Credit Relative Value

     Credit relative value encompasses  strategies that take long and short
positions in corporate bonds or their derivatives to capture  misvaluations
between  single  issues as well as between  portfolios or indices and their
underlying  constituents.  Strategies may also involve a capital  structure
component  to  capture  mispricings  between  equity  and  corporate  debt.
Strategies  are  driven  by  both  qualitative   fundamental  analysis  and
quantitative considerations.  Portfolios are constructed to ensure that the
directional exposure to credit spreads is minimal.

Equity Arbitrage

     Equity arbitrage  strategies try to avoid market direction  influences
and seek to  generate  returns  primarily  from stock  selection.  Advisors
construct long and short baskets of equity  securities they determine to be
mispriced relative to each other,  typically with similar  characteristics.
Portfolios  are  generally  designed to exhibit  zero or low beta to equity
markets.  Beta measures the degree to which an asset's price changes when a
reference  asset's  price  changes.  For  example,  a beta greater than one
suggests that for every 1% change in the reference asset's price, the asset
will move greater than 1%.

Fixed Income Arbitrage

     Fixed-income  arbitrage  strategies seek to exploit pricing  anomalies
that  might  exist  across   fixed-income   securities  and  their  related
derivatives.   Although   some   fixed-income   strategies   are  based  on
macroeconomic considerations,  the strategies are primarily quantitative in
nature, and financial modeling is an integral  component.  Opportunities in
fixed-income instruments or baskets of securities are found when securities
deviate from  historical  relationships  or fair value as determined by the
Advisor.  These  relationships  can be  temporarily  distorted by exogenous
shocks to  fixed-income  supply and demand or by structural  changes in the
fixed-income  market.  Markets covered are  predominantly G10 and developed
countries,   although  some  specialists   employ  similar   techniques  in
developing country fixed-income markets.

Multi-Strategy

     Multi-strategy  Advisors  invest across a range of  strategies.  GRV's
Advisors tend to be more opportunistic in targeting specific relative value
strategies  during  differing  market  environments.   In  addition,  these
Advisors may have exposures that have traditionally been described as being
within  the  event  driven   sector,   such  as  merger   arbitrage,   high
yield/distressed  securities and other special  situations  (e.g.,  capital
structure   arbitrage,    spin-offs,    recapitalizations,    divestitures,
litigations and regulatory changes, among others).

     GS  Group  owned  approximately  5% of GRV as of  December  31,  2004,
exclusive  of any direct or  indirect  ownership  of GRV by or through  the
Company.

     GRV was organized on November 1, 2001 and commenced its  operations on
January 1, 2002.  Since  commencement  of its operations on January 1, 2002
until  December  31,  2004,  GRV had net  returns  on  invested  assets  as
described in the table below.

    -----------------------------------    ------------------------------
            INVESTMENT PERIOD                     NET RETURN FOR PERIOD
    -----------------------------------    ------------------------------
          1/1/2004 - 12/31/2004(1)                      5.38%
    -----------------------------------    ------------------------------
          1/1/2003 - 12/31/2003(1)                      7.11%
    -----------------------------------    ------------------------------
          1/1/2002 - 12/31/2002(2)                      4.93%
    -----------------------------------    ------------------------------

    (1)  Net return is based on the performance of Class C Series 1 units.
         Class C Series 1 units  ("no-fee-shares") of GRV (including those
         issued to the  Company)  are not  subject to  management  fees or
         incentive  allocations  paid or made to GS HFS as managing member
         of GRV and  therefore  returns do not  reflect the payment of any
         such  fees  or  the  making  of any  allocations  to GS  HFS.  In
         addition,  returns  for Class C Series 1 units  during the entire
         period reflect returns net of the compensation  paid to Advisors.
         The   returns   shown  are  also  net  of  the   payment   of  an
         administration fee to GS HFS by GRV.

    (2)  Annual net return is based on the performance of Class A Series 1
         units (for the period from January 1, 2002 to March 31, 2002) and
         Class C Series 1 (for the  period  from the  commencement  of the
         Company's  operations  on April 1, 2002 to  December  31,  2002).
         Class A Series 1 units of GRV are charged a 1.25%  management fee
         and a 5%  incentive  allocation  by GS HFS as managing  member of
         GRV. The returns shown, to the extent they reflect Class A Series
         1  units,  are  net of  the  management  fee  and  the  incentive
         allocation  paid by GRV to GS HFS as managing  member of GRV. The
         Company did not invest in Class A Series 1 units of GRV.  Class C
         Series 1 units  ("no-fee-shares")  of GRV (including those issued
         to the Company) are not subject to  management  fees or incentive
         allocations  paid or made to GS HFS as managing member of GRV and
         therefore  returns,  to the extent they reflect  Class C Series 1
         units,  do not reflect the payment of any such fees or the making
         of any  allocations  to GS HFS. In addition,  returns for Class A
         Series  1 units  and  Class C Series 1 units  during  the  entire
         period reflect returns net of the compensation  paid to Advisors.
         The   returns   shown  are  also  net  of  the   payment   of  an
         administration  fee to GS HFS by GRV.  Returns  for  the  Class A
         Series 1 Units  are  shown  for  periods  prior to the  Company's
         commencement  of  operations  on April 1, 2002  since GRV did not
         have no-fee-shares outstanding during such periods.

GOLDMAN SACHS GLOBAL EVENT DRIVEN, LLC

     GED's  investment  objective  is to  target  attractive  risk-adjusted
absolute  returns  with  volatility  and  correlation  lower than the broad
equity markets by allocating  assets to Advisors that operate  primarily in
the global event driven  sector.  As of December 31, 2004,  GED's  managing
member  (currently,  the  Managing  Member)  had  allocated  GED's  assets,
directly or  indirectly,  to 19 Advisors,  although  this number may change
materially over time as determined by GED's managing member. GED's managing
member  generally  will not allocate more than 25% of GED's total assets to
any single Advisor at the time of allocation.  Event driven strategies seek
to identify  security price changes resulting from corporate events such as
restructurings, mergers, takeovers, spin-offs and other special situations.
Corporate event  arbitrageurs  generally choose their  investments based on
their  perceptions  of the likelihood  that the event or  transaction  will
occur,  the  amount of time that the  process  will take and the  perceived
ratio of  return  to risk.  Strategies  that may be  utilized  in the event
driven   sector   include   risk   arbitrage/special   situations,   credit
opportunities/distressed  securities and multi-strategy  investing, each of
which is  described  in  greater  detail  below.  Other  strategies  may be
employed as well.

Risk Arbitrage/Special Situations

     Risk  arbitrageurs  seek to capture the price spread  between  current
market prices and the value of securities upon  successful  completion of a
takeover or merger  transaction.  The  availability of spreads reflects the
unwillingness  of other market  participants  to take on  transaction-based
risk,  i.e.,  the risk that the  transaction  will not be completed and the
price of the company being acquired will fall. Risk  arbitrageurs  evaluate
this risk and seek to create  portfolios  that reduce  specific event risk.
Special  situations  such as spin-offs  and corporate  reorganizations  and
restructurings  offer additional  opportunities  for event driven managers.
Often these strategies are employed  alongside risk arbitrage or distressed
investing. A GED Advisor's ability to evaluate the effect of the impact and
timing of the event and to take on the associated  event risk is the source
of the returns.  GED Advisors  differ in the degree to which they hedge the
equity market risk of their portfolios.

Credit Opportunities/Distressed Securities

     Credit  opportunities/distressed  securities strategies invest in debt
or equity securities of firms in or near bankruptcy. GED Advisors differ in
terms of the level of the capital structure in which they invest, the stage
of the restructuring  process at which they invest, and the degree to which
they   become   actively   involved  in   negotiating   the  terms  of  the
restructuring.

     GS  Group  owned  approximately  2% of GED as of  December  31,  2004,
exclusive  of any direct or  indirect  ownership  of GED by or through  the
Company.

     GED was organized on November 1, 2001 and commenced its  operations on
April 1, 2002.  Since  commencement  of its  operations  until December 31,
2004,  GED had net returns on  invested  assets as  described  in the table
below.

    -----------------------------------    ------------------------------
            INVESTMENT PERIOD                     NET RETURN FOR PERIOD
    -----------------------------------    ------------------------------
         1/1/2004 - 12/31/2004(1)                      12.70%
    -----------------------------------    ------------------------------
         1/1/2003 - 12/31/2003(1)                      18.09%
    -----------------------------------    ------------------------------
         4/1/2002 - 12/31/2002(1)                      (0.66)%
    -----------------------------------    ------------------------------


     (1)  Net return is based on the performance of Class C Series 1 units.
          Class C Series 1 units  ("no-fee-shares") of GED (including those
          issued to the  Company)  are not  subject to  management  fees or
          incentive  allocations  paid or made to GS HFS as managing member
          of GED and  therefore  returns do not  reflect the payment of any
          such  fees  or  the  making  of any  allocations  to GS  HFS.  In
          addition,  returns  for Class C Series 1 units  during the entire
          period reflect returns net of the compensation  paid to Advisors.
          The   returns   shown  are  also  net  of  the   payment   of  an
          administration fee to GS HFS by GED.


OVERVIEW OF THE INVESTMENT PROCESS OF THE INVESTMENT FUNDS

     In its capacity as managing  member of each of the  Investment  Funds,
the Managing  Member  employs a dynamic  investment  process which includes
Advisor   selection,   portfolio  design  and  ongoing  risk  analysis  and
monitoring.  The Goldman Sachs Group, Inc. acquired the assets and business
of Commodities  Corporation  Limited,  a Princeton New  Jersey-based  asset
management   firm   established  in  1969,   specializing   in  alternative
investments,   and  contributed   them  to  a  newly  formed  wholly  owned
subsidiary,  Commodities  Corporation  LLC, which was renamed Goldman Sachs
Princeton  LLC in May 2001,  and which  changed  its name to Goldman  Sachs
Hedge Fund Strategies LLC in December 2004. The Managing  Member  (together
with  the   predecessor   entity)  has  over  30  years  of  experience  in
constructing  diversified  portfolios by selecting,  allocating  among, and
monitoring absolute  return-oriented  (i.e., returns not measured against a
benchmark) or  "skill-based"  Advisors.  Skill-based  Advisors are Advisors
which, as a result of their particular  investment  style and skills,  have
the  potential to be  profitable  regardless of the direction of the market
(i.e.,  unlike  long-only  Advisors,  which would be expected to make money
when markets go up, and not during periods of market decline). The Managing
Member has also developed computer systems and operational  capabilities to
assist in the monitoring of Advisors.

     An Investment  Fund's  managing  member seeks to identify  Advisors to
which it may allocate such Investment Fund's assets.  The Advisor selection
process includes a review by the Investment  Fund's managing  member's team
of  professionals,  which  may  include  representatives  of its  portfolio
management,  Advisor selection, risk and quantitative analysis, compliance,
tax, legal, finance and operations areas.

     Both  qualitative  and  quantitative  criteria are  factored  into the
Advisor  selection  process.  These criteria include  portfolio  management
experience, strategy, style, historical performance, including risk profile
and  drawdown  (i.e.,  downward  performance)  patterns,   risk  management
philosophy and the ability to absorb an increase in assets under management
without a diminution  in returns.  The managing  member of each  Investment
Fund also examines the organizational infrastructure, including the quality
of the investment  professionals  and staff,  the types and  application of
internal  controls,  and any potential for conflicts of interest.  However,
the Company and the  Investment  Funds do not control the  Advisors and are
frequently  not able to review the  actual  books and  investments  of many
Advisors  since  this is  proprietary  information  and in many  cases such
information is not shared with the managing member of the Investment Funds,
neither on a historical nor a current basis.

     In  determining  the relative  allocations of capital to each Advisor,
the managing  member of an  Investment  Fund  considers the risk and return
characteristics  of each of the Advisors,  including  the average  expected
volatility  of  returns,  drawdown  patterns  and  liquidity  and  leverage
characteristics.  In  addition,  each  Investment  Fund's  managing  member
considers how each Advisor's returns are expected to correlate to the other
Advisors  in the  portfolio.  It is  expected  that  allocations  will vary
significantly  over  time as  returns  for  different  Advisors  vary.  The
managing member of an Investment Fund also may adjust allocations from time
to time when it deems it appropriate to do so. In addition,  it is expected
that individual  allocations  will grow larger or smaller as each Advisor's
performance varies over time.

     The identity and number of the Investment  Fund's  Advisors may change
materially  over  time.  The  managing  member  of an  Investment  Fund may
withdraw from or invest with different  Advisors without prior notice to or
the consent of the  Company,  the Members or the members of the  Investment
Fund.

     The managing  member of an  Investment  Fund may invest a  substantial
portion of the Investment  Fund's assets with Advisors who may have limited
track records and Advisor Funds with limited operating  histories.  In such
cases,  the  Advisors  or  individual  members  of their  management  teams
generally  will  have  had,  in the  Investment  Fund's  managing  member's
opinion,  relevant  experience trading in the strategies that such Advisors
are expected to utilize.  However, the Company and the Investment Funds are
not able to ensure  Members  that each of the  Advisors,  even  those  with
longer track  records,  will perform as expected or not  undertake  actions
that would not be in the best interest of the Company or the Members.

LEVERAGE AND OTHER STRATEGIES

Leverage

     Advisors may utilize leverage in their investment  programs.  Leverage
may take the form of trading on margin, use of derivative  instruments that
are  inherently   leveraged,   and  other  forms  of  direct  and  indirect
borrowings.  Advisors  generally will determine the amount of leverage they
utilize,  provided that  limitations on leverage may be imposed on Advisors
by their  investment  management  agreements  or law,  if  applicable.  The
managing member of the Investment Funds, on behalf of each Investment Fund,
may seek to adjust the degree of leverage with which such  Investment  Fund
as a whole  invests by taking the Advisors'  anticipated  leverage use into
account when allocating and reallocating the Investment Fund's assets among
the Advisors.  However, the managing member of an Investment Fund generally
will not have any right to adjust the amount of leverage utilized by any of
the  Advisors,  and  generally  does not exercise  such right if available.
Adjustments to an Investment Fund's overall leverage level will be based on
factors deemed relevant by its managing member, including its assessment of
the  risk/reward  parameters of the Advisors and the  strategies  currently
included in such Investment Fund's investment portfolio.

     The managing  member of an Investment Fund may also elect, in its sole
discretion,  to cause an Investment Fund to invest indirectly in an Advisor
Fund through a swap, option or other structure  designed to provide greater
leverage  than a direct  investment in the Advisor Fund. As of December 31,
2004,  none of the Investment  Funds had invested  indirectly in an Advisor
Fund through such a swap, option or other structure,  however, the managing
member  of an  Investment  Fund  may  elect  to do so in  the  future.  See
"--Additional  Methods  of  Investing  in Advisor  Funds by the  Investment
Funds" below and "CERTAIN  RISK  FACTORS--INVESTMENT  RELATED  RISKS--Risks
Related to Investment and  Trading--The  Use of Leverage May  Substantially
Increase  the  Adverse  Impact to Which the  Investment  Funds'  Investment
Portfolios May be Subject."

     The Company and each  Investment  Fund may,  but are not  required to,
borrow (including through direct borrowings,  borrowings through derivative
instruments,  or otherwise) from the GS Group or other parties, when deemed
appropriate  by its  managing  member,  including to make  investments  and
distributions  in  respect  of  redemptions  of  membership  units,  to pay
expenses or for other  purposes.  During the year ended  December 31, 2003,
the  Company  entered  into a  borrowing  facility  with a major  financial
institution (the "Facility Counterparty"). The facility was structured as a
call spread  option  that had been  issued by the  Company to the  Facility
Counterparty.  Under the terms of the facility,  the Company  received cash
and redeposited  the amount with the Facility  Counterparty in a collateral
account.  The  Company  had the  right to draw  funds  from the  collateral
account to use for liquidity purposes.  Under the facility, the Company was
able to draw,  at any given time,  up to a total  amount of the  collateral
account at the time of withdrawal.  However,  in no event could the Company
have drawn an amount under the facility  exceeding 5% of the  Company's net
asset value. The effective interest rate on funds drawn from the collateral
account  was LIBOR + 0.875%.  The  Company  also paid the  equivalent  of a
commitment fee of 0.25% on the undrawn funds.  As of December 31, 2003, the
Company had received an amount of $47.5 million under the facility,  all of
which had been redeposited as collateral and remained undrawn.  In February
2004,  the size of the facility was reduced to $20.0 million and in October
2004 the facility expired. On November 24, 2004, the Company entered into a
credit  facility  with  a new  financial  institution  (the  "New  Facility
Counterparty").  The Company made an initial  borrowing of $1 million under
this facility.  Subject to rejection by the New Facility Counterparty,  the
Company may request to borrow up to $45.0 million in the aggregate.  At the
time of any borrowing, the aggregate amounts borrowed may not exceed 10% of
the Company's  net asset value and at all other times the aggregate  amount
borrowed may not exceed 15% of the Company's net asset value. The effective
interest  rate on the  borrowed  amounts  equals LIBOR plus 0.85% per annum
compounded daily. The Company also pays an  administration  and structuring
fee calculated as 0.10% per annum on the aggregate amount of $45.0 million.
The  proceeds of the  borrowings  must be used  primarily  for  purposes of
refinancing existing  indebtedness,  making further investment in a pool of
funds,  funding  liquidity  of  redemptions  of  Units in the  Company  and
managing the cash flow of the Company.  The amount of cash borrowed totaled
$3.0  million at December 31, 2004.  As security  for its  borrowings,  the
Company  granted the New Facility  Counterparty a security  interest in the
Company's   cash  accounts  and  any  other  account  that  contains  other
investment  property (other than to the extent that it comprises  shares of
funds  in the  pool of funds in which  the  Company  has  invested)  of the
Company.  The terms of the facility include various restrictive  covenants,
including  restrictions on additional  indebtedness,  liens and fundamental
changes to the Company's business. See ITEM 7. "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL  CONDITION AND RESULTS OF  OPERATIONS--Liquidity  and
Capital  Resources"  and Note 7 to the  financial  statements  for  further
description of the credit facility. Each Investment Fund has entered into a
similar facility with the New Facility  Counterparty.  Each Investment Fund
may pledge its assets in order to secure any such borrowings.  The Advisors
may also borrow funds or enter into other similar  transactions  (including
from or with the GS  Group).  The  managing  member of the  Company  and an
Investment Fund may modify, as applicable,  the Company's or the Investment
Fund's borrowing  policies,  including the purposes of borrowings,  and the
length of time that the Company or the  Investment  Fund may hold portfolio
securities  purchased with borrowed money. The rights of any lenders to the
Company or an Investment Fund to receive payments of interest or repayments
of principal  will be senior to those of the members of the Company and the
Investment Fund and the terms of any borrowings may contain provisions that
limit the activities of the Company and the Investment Fund.

Temporary and Defensive Strategies

     The  Company and the  Investment  Funds may,  from time to time,  take
temporary  or  defensive   positions  in  cash,  cash  equivalents,   other
short-term  securities  or  money  market  funds  to  attempt  to  minimize
volatility caused by adverse market,  economic,  or other  conditions.  Any
such  temporary or defensive  positions  could  prevent the Company and the
Investment Funds from achieving their investment  objectives.  In addition,
the Company may, in the Managing Member's sole discretion,  hold cash, cash
equivalents,  other  short-term  securities or  investments in money market
funds pending  allocation to Investment Funds, in order to fund anticipated
redemptions,  expenses  of the  Company  or  other  operational  needs,  or
otherwise in the sole  discretion of the Managing  Member.  The  Investment
Funds are  permitted to hold cash or invest their cash balances in the same
manner as the Company.

Potential Investments

     The Advisors may invest in securities,  assets and  instruments of any
type, long or short, including,  without limitation, the following:  equity
securities and instruments  including,  without limitation,  common stocks,
preferred  stocks,  equity index  futures and  forwards,  interests in real
estate  investment  trusts,   convertible  debt  instruments,   convertible
preferred stock, equity interests in trusts, partnerships,  joint ventures,
limited liability companies,  warrants and stock purchase rights, swaps and
structured notes; fixed income instruments  including bonds,  interest rate
futures   contracts   and  swaps,   options  on  futures,   indices,   loan
participations  and government and corporate debt  instruments  (both rated
and unrated);  currencies and  speculative  positions on  currencies,  spot
transactions,  currency forwards, cross currency swaps, options and futures
on currencies; commodities, including without limitation, spot transactions
in commodities,  commodities futures and swaps and options on futures;  and
structured  financial  products,   including  mortgage-backed   securities,
pass-throughs and other asset-backed  securities (both investment-grade and
non-investment  grade). The Advisors may employ short selling, and trade in
securities  without  active  public  markets,   indices,   over-the-counter
options,  when-issued and forward  commitment  securities and engage in the
borrowing and lending of portfolio securities. The Advisors may also engage
in  derivative  transactions  including  swaps and  repurchase  and reverse
repurchase  agreements or other  strategies  to hedge  against  securities,
currencies or interest rates or to manage risk relating to their  portfolio
investments,  to leverage  their  portfolio  and to  establish  speculative
positions.  The  Advisors  may invest in both U.S.  and  non-U.S.  issuers,
including issuers based in emerging market countries.

Additional Methods of Investing in Advisor Funds by the Investment Funds

     An Investment  Fund will typically  invest directly in an Advisor Fund
by purchasing an interest in such Advisor  Fund.  There may be  situations,
however,  where  an  Advisor  Fund is not  open  or  available  for  direct
investment  by the  Investment  Fund or where the  managing  member of such
Investment Fund elects for other reasons to invest indirectly in an Advisor
Fund. Such an instance may arise, for example,  where the Investment Fund's
proposed allocation does not meet an Advisor Fund's investment minimums. On
occasions  where the managing  member of an Investment Fund determines that
an indirect  investment is the most effective or efficient means of gaining
exposure to an Advisor Fund, the  Investment  Fund may invest in an Advisor
Fund  indirectly by purchasing a structured note or entering into a swap or
other contract,  paying a return approximately equal to the total return of
an Advisor Fund. In the case of a structured  note or swap, a  counterparty
would agree to pay to the  Investment  Fund a return based on the return of
the Advisor Fund, in exchange for  consideration  from the Investment  Fund
equivalent to the cost of  purchasing an ownership  interest in the Advisor
Fund.  The  Investment  Fund may also invest  indirectly  in an  investment
vehicle  or  "feeder  fund"  established  by  the  managing  member  of the
Investment  Funds, the Advisor or their respective  affiliates that invests
all of their assets in an Advisor Fund. In addition,  in the  discretion of
the managing member of the Investment  Funds, an indirect  investment in an
Advisor Fund of the type described above may be structured so as to provide
greater  leverage than a direct  investment in the Advisor Fund,  which may
increase the risks to the Investment  Fund relative to a direct  investment
in the Advisor Fund. Indirect investment through a swap or similar contract
in an Advisor  Fund  carries  with it the credit risk  associated  with the
counterparty. Indirect investments will generally be subject to transaction
and other  fees,  which  will  reduce  the value of the  Investment  Fund's
investment.  There can be no assurance that the Investment  Fund's indirect
investment  in an Advisor Fund through a structured  note or swap will have
the same or similar results as a direct investment in the Advisor Fund, and
the  Investment  Fund's  value may  decrease  as a result of such  indirect
investment.

     Any  references  in this  annual  report  on Form  10-K  (the  "Annual
Report") to strategies or techniques  utilized by the Advisors on behalf of
the  Investment  Funds include  strategies  or  techniques  utilized by (i)
Advisors  pursuant to investment  management  agreements  entered into with
either the Investment  Fund or separate  Cayman Islands  limited  liability
companies  formed by the  managing  member of an  Investment  Fund  (each a
"Portfolio  Company" and  collectively the "Portfolio  Companies")  through
which the Investment Fund allocates assets to such Advisor, or (ii) Advisor
Funds in which an Investment Fund invests. See "PORTFOLIO  COMPANIES" below
in this Item.

     The Company's investment program and the investment program of each of
the Investment Funds are speculative and entail  substantial  risks.  There
can be no assurance that the investment  objectives of the Company and each
of  the   Investment   Funds,   including   their   risk   monitoring   and
diversification goals, will be achieved, and results may vary substantially
over time.  Advisors of each  Investment  Fund may consider it appropriate,
subject  to  applicable   regulations,   to  utilize  forward  and  futures
contracts,  options,  swaps,  other  derivative  instruments,  short sales,
margin and other  forms of  leverage  in their  investment  programs.  Such
investment  techniques  can  substantially  increase the adverse  impact to
which an Investment Fund's, and the Company's,  investment portfolio may be
subject. See "CERTAIN RISK FACTORS."

                          INTERNATIONAL ACTIVITIES

     The Company  allocates its assets to the Investment  Funds who in turn
allocate their assets to Advisors located  throughout the world.  From time
to time, these Advisors invest in securities of non-U.S. issuers, including
companies based in less developed countries (i.e., "emerging markets"),  or
in  securities  issued by the  governments  outside  the United  States.  A
portion of the Company's assets,  therefore,  ultimately may be invested in
securities  and  other  financial   instruments   denominated  in  non-U.S.
currencies,  the  prices of which are  translated  into  U.S.  dollars  for
purposes of  calculating  the Company's net asset value.  Some Advisors may
invest   exclusively   in  securities  and  other   financial   instruments
denominated in non-U.S.  currencies.  The  Investment  Funds have invested,
from time to time,  up to 30%-40% of their  assets  with  Advisors  located
outside the United States or in non-U.S.  markets or financial instruments.
The amount so invested  outside the United  States  could be  significantly
greater than such amount at any particular  time in the future.  Historical
international  investment  activity  may not be  indicative  of  current or
future levels.

     The value of the Company's  assets and  liabilities may fluctuate with
U.S.  dollar  exchange  rates  as well as with  the  price  changes  of the
Advisors'   investments  in  the  various  local  markets  and  currencies.
Investing in securities of companies  which are  generally  denominated  in
non-U.S.  currencies involve certain  considerations  comprising both risks
and opportunities not typically  associated with investing in securities of
U.S. issuers.  See "CERTAIN RISK  FACTORS--INVESTMENT  RELATED RISKS--Risks
Related to  International  Investments--Trading  on Foreign  Exchanges  May
Involve Higher Risk of Financial  Irregularities and/or Lack of Appropriate
Risk  Monitoring and Controls,"  "--Non-U.S.  Investments  Involve  Special
Risks  not  Usually  Associated  with  Investments  in  U.S.   Securities,"
"--Investment  in Emerging Markets Involves  Significant  Risks,  including
Inflation and Currency Devaluations,"  "--Foreign Currency Transactions and
Exchange  Rate Risk  Create  Additional  Risks for  Advisors  Investing  in
Certain Financial Instruments," and "--Non-U.S. Futures Transactions Afford
Less  Protection  as Rules of a Foreign  Exchange  May Not be Enforced by a
Domestic Regulator."

                            PORTFOLIO COMPANIES

     The  Investment  Funds may  allocate  assets to  Advisors  (i) through
direct or  indirect  investments  in Advisor  Funds,  (ii)  through  direct
allocation of assets held in a separately  managed  account  pursuant to an
investment management agreement between the Investment Fund and the Advisor
or such similar arrangement as is determined by the managing member of such
Investment Fund or (iii) through investments in Portfolio  Companies,  each
of which allocates its assets to a single Advisor via a separately  managed
account.  The  managing  member  of the  Investment  Funds or an  affiliate
thereof  is the  investment  manager  of each  Portfolio  Company,  and the
officers  and all or a majority  of the  directors  of each such entity are
persons  that are  employed  by,  or are  otherwise  affiliated  with,  the
managing  member  of the  Investment  Funds  or its  affiliates.  Portfolio
Companies may have other investors in addition to the Investment Funds. See
"POTENTIAL CONFLICTS OF INTEREST." It is expected that one investor in each
Portfolio  Company is a Cayman Islands limited liability company managed by
the  managing  member  of  the  Investment   Funds  and  formed  to  accept
subscriptions from non-U.S. persons and U.S. tax-exempt entities.

     Each  Portfolio  Company (or the  investment  manager on behalf of the
Portfolio Company) will enter into an investment  management agreement with
an Advisor  selected by the managing  member of the  applicable  Investment
Fund. Each investment management agreement provides for the payment of fees
and expenses of the Advisor,  any  restrictions on the Advisor  relating to
the management of the assets,  including  restrictions relating to leverage
and investment strategies, if applicable, and rights of the managing member
of the applicable  Investment  Fund with respect to ongoing  monitoring and
risk management,  which may include rights to receive reports,  require the
disposition of positions, and withdraw all or a portion of an allocation to
the Advisor.  Each Portfolio  Company,  however,  reserves the right in its
sole  discretion  and for any reason to waive fees of, or impose  different
fees on, any investor, as may be agreed to by the Portfolio Company and the
investor.  Each  Portfolio  Company  may, by  agreement  with its  Advisor,
structure  the  Advisor's  fees  (or a  portion  thereof)  as an  incentive
allocation or other arrangement.

     The governing documents of each Portfolio Company provide, among other
things,  for the  management  of the  Portfolio  Company  by its  board  of
directors,  redemption  rights of  shareholders  of the  Portfolio  Company
(which will be negotiated on a  case-by-case  basis with each  shareholder,
provided  that the  Investment  Funds have the right to redeem their shares
upon  request,  subject to any  restrictions  contained  in the  investment
management  agreement  between  the  Portfolio  Company  and the  Advisor),
certain fees and expenses as  discussed  below and in "FEES AND  EXPENSES,"
and   indemnification  and  exculpation  of  the  managing  member  of  the
Investment  Funds,  in  its  capacity  as  the  investment  manager  of the
Portfolio  Company)  and  its  affiliates.  The  board  of  directors  of a
Portfolio  Company  may cause such  entity to list its shares on the Irish,
Luxembourg  or other  stock  exchange,  or to enter into a  transaction  or
series of transactions in which the  shareholders of the Portfolio  Company
become  beneficial  owners of economically  comparable  equity interests of
another entity,  which may be domiciled outside the Cayman Islands, so long
as (i) the shareholders of the Portfolio Company do not suffer any material
adverse economic effect as a result thereof or (ii) the shareholders of the
Portfolio  Company  receive prior written notice of any initial  listing or
transaction  and an opportunity to redeem their  interests in the Portfolio
Company prior to the effectiveness of the initial listing or transaction.

     The managing member of the Investment  Funds does not currently charge
any management fee or performance-based  fee or allocation at the Portfolio
Company level. In 2004, each Portfolio  Company paid the managing member of
the Investment Funds (or other entity selected by the Portfolio  Company to
be its administrator) an administration  fee, accruing daily and calculated
and  paid on a  monthly  basis,  equal to  one-twelfth  of 0.20% of the net
assets of the  Portfolio  Company as of the end of each  month,  calculated
prior to any reduction in net assets due to Advisor fees. Effective January
1, 2005, an administration  fee is no longer charged by the Managing Member
at the Portfolio  Company  level.  The Portfolio  Companies may also retain
another   entity   not   affiliated    with   the   Managing    Member   as
sub-administrator.  Fees payable to such  sub-administrator  may be payable
out of an  administration  fee, if such a fee  exists,  or pursuant to such
other  arrangements  as may be agreed  to by the  Managing  Member  (in its
capacity  as  investment   manager  of  the  Portfolio  Company)  and  such
sub-administrator. See "--FEES AND EXPENSES."

     Each  Portfolio  Company bears its own offering,  organizational,  and
operating expenses,  including any management and incentive fees payable to
the Advisor of the  Portfolio  Company's  assets  pursuant to the Portfolio
Company's investment  management agreement.  The Company bears,  indirectly
through its investment in the  Investment  Funds, a pro rata portion of the
expenses of each Portfolio  Company in which the  Investment  Funds invest.
See "--FEES AND EXPENSES."

     References  in this  Annual  Report to assets  or  investments  of the
Company,  the Investment  Funds and the Advisors shall be deemed to include
interests in Portfolio  Companies and assets and  investments  of Portfolio
Companies to the extent of the Company's and the Investment Funds' indirect
interest therein, whether or not so indicated, where the context permits.

                             FEES AND EXPENSES

     The Company pays the  Managing  Member a monthly  management  fee (the
"Management  Fee") equal to  one-twelfth  of 1.25% of the net assets of the
Company as of the end of the applicable  month,  appropriately  adjusted to
reflect  capital   appreciation  or  depreciation  and  any  subscriptions,
redemptions or  distributions.  For purposes of determining  the Management
Fee, net assets are not reduced to reflect any accrued incentive allocation
(the "Incentive Allocation").  See "--Capital Accounts; Allocation of Gains
and Losses" below. In return for receiving the Management Fee, the Managing
Member,  among other  things,  constructs  the portfolio of the Company and
evaluates and monitors the performance of each of the Investment Funds. The
managing  member of each of the  Investment  Funds (which is currently  the
Managing  Member)  does not  receive  a  separate  management  fee from the
Investment Funds for investments in the Investments Funds by the Company as
the Company owns "no-fee shares" of each of the Investment Funds.

     The  Company  is  currently  issued  units  of a class  of  membership
interests of each Investment Fund  (no-fee-shares)  which is not subject to
any management fees or incentive allocation charged by the Managing Member,
although  the  Company  may be  charged  management  fees  or an  incentive
allocation in the future.  As the Company owns no-fee shares in each of the
Investment  Funds,  there are no incentive  allocations or management  fees
paid to the Managing Member in respect of the Company's investments in each
of the  Investment  Funds.  The  ratios  shown  below  do not  reflect  the
inclusion  of  the  Company's  proportionate  shares  of  expenses  of  the
Investment  Funds,  including  the  administration  fees paid,  directly or
indirectly, by the Investment Funds.

     Fees and Expenses for the Company for the year ended December 31, 2004
are as follows:

<TABLE>
<CAPTION>
                           Class A    Class A    Class A   Class A   Class A    Class A     Class A    Class A
                           Series 1   Series 2   Series 3  Series 4  Series 5   Series 6    Series 7   Series 8
                           --------   --------   --------  --------  --------   --------    --------   --------
<S>                        <C>        <C>        <C>       <C>       <C>        <C>        <C>         <C>
Ratios to average
net assets (annualized):
   Expenses                1.48%      1.48%      1.35%     1.32%     1.31%      1.28%      1.29%       1.27%
   Incentive allocation    0.28%      0.23%      0.26%     0.29%     0.29%      0.25%      0.20%       0.06%
                          -----------------------------------------------------------------------------------
   Total expenses
     and incentive
     allocation            1.76%      1.71%      1.61%     1.61%     1.60%      1.53%      1.49%       1.33%
                          ========== ========== ========= ========= ========== ========== =========== ========
</TABLE>

     The table below sets forth  certain  information  with  respect to the
Company  including  fees and expenses  paid to the  Managing  Member by the
Company.  The dollar amounts of fees and expenses are shown for fiscal year
2004 and are based on a $1,000,000  investment  in Class A Series 1 made as
of January 1, 2004.

    -------------------------- --------------------- --------------------
       FEES AND EXPENSES         PERCENTAGE AMOUNT      DOLLAR AMOUNT
    -------------------------- --------------------- --------------------
          Management Fee              1.25%(1)              $12,901(4)

          Incentive Allocation           5%(2)               $2,787(4)

          Administration Fee          0.20%(3)               $2,073(4)

          Placement Fee                  None                  None

          Entry Fee                      None                  None

          Exit Fee                       None                  None

          Minimum Subscription Amount    N/A             $1,000,000(5)

     (1)  The Managing Member  receives a monthly  Management Fee, equal to
          one-twelfth  of 1.25% of the net assets of the  Company as of the
          end of the applicable  month,  appropriately  adjusted to reflect
          capital  appreciation  or  depreciation  and  any  subscriptions,
          redemptions or distributions. See "--Capital Accounts; Allocation
          of Gains and Losses" below.

     (2)  At the  end of each  fiscal  year of the  Company,  the  Managing
          Member is entitled to receive an Incentive Allocation equal to 5%
          of the increase in the NAV (as defined  below in this section) of
          each  series of Units.  The  Managing  Member  does not receive a
          payment or make a contribution  in the event of a decrease in the
          NAV of a series of Units,  however  the  Managing  Member is only
          entitled  to  receive  an  Incentive  Allocation  relating  to an
          increase in NAV of a series of Units if the NAV of such series is
          above a prior high NAV. See  "--Capital  Accounts;  Allocation of
          Gains and Losses."

     (3)  The Company bears a pro rata portion of the administration fee to
          the Managing Member for services provided to the Investment Funds
          and Portfolio  Companies.  In 2004, each of the Investment  Funds
          paid its  managing  member  (currently  the  Managing  Member) an
          administration  fee of 0.20% for  services  rendered  to it.  The
          Dollar  Amount  (which  is  approximate   based  on  calculation)
          reflects the total  administration fee comprised of the Company's
          aggregate   pro  rata  portion  for  services   provided  to  the
          Investment  Funds and the fee directly  payable by the  Portfolio
          Companies  based on an investment of $1,000,000 in Class A Series
          1 Units as of  January 1, 2004.  Effective  January 1, 2005,  the
          Managing  Member  agreed to change  the  administration  fee rate
          charged at the  Investment  Fund level from 0.20% to the fee rate
          charged to each  Investment Fund by SEI (as defined below in this
          section).  It is expected that initially the  Administration  Fee
          Rate (as defined below in this section) will  generally be in the
          range of 0.08% to 0.10%,  but such rate may be exceeded,  subject
          to a maximum of approximately  0.20%, if the total assets managed
          by the  Managing  Member  that  are  administered  by SEI and its
          affiliates  declines or if an Investment Fund allocates a greater
          percentage  of its  assets  to  Portfolio  Companies  or  Managed
          Accounts  (as defined  below in this  section)  than is currently
          anticipated.

     (4)  Based on an investment of $1,000,000 in Class A Series 1 Units as
          of January 1, 2004.

     (5)  The minimum  subscription  by a purchaser of Units is $1,000,000,
          although the Managing Member, in its sole discretion,  may accept
          subscriptions below the minimum.

     The  Managing  Member  currently  serves as the  administrator  of the
Company   (in  such   capacity   the   "Administrator")   pursuant   to  an
administration    agreement   (the   "Administration    Agreement").    The
Administrator  is responsible  for  calculating the net asset value ("NAV")
for the Company,  and maintaining capital accounts,  valuing securities and
other  assets,  including  securities  which  are not  readily  marketable,
assisting  in the  preparation  of  financial  statements  and tax returns,
assisting in the  preparation and  distribution  of reports,  maintaining a
registry of ownership and providing certain other administrative  services.
See "CERTAIN RISK FACTORS--SPECIAL RISKS OF THE COMPANY'S  STRUCTURE--Risks
Related to Company's Structure--The Company's Financial Statements are, and
in the Future will be, Based on Estimates of  Valuations  Provided by Third
Party  Advisors Which May not be Accurate or May Need to be Adjusted in the
Future."

     The Investment  Funds and the Portfolio  Companies have entered into a
similar  administration  agreement with the Managing  Member.  The Managing
Member does not receive a fee directly  from the Company for its service as
the  Administrator.  In 2004, the administrator of each Investment Fund and
each  Portfolio  Company  (currently  the  Managing  Member  in each  case)
received an administration fee, accruing daily and calculated and paid on a
monthly  basis,  equal to  one-twelfth  of 0.20% of the net  assets of such
Investment Fund or Portfolio  Company (in the case of the Investment Funds,
without taking into account their investments in Portfolio  Companies so as
to avoid duplication) as of the end of each month,  appropriately  adjusted
to reflect  capital  appreciation or  depreciation  and any  subscriptions,
redemptions or distributions.  Therefore, no administration fee was paid at
the  Investment  Fund  level with  respect to any assets of the  Investment
Funds attributable to investments in Portfolio Companies.

     Effective  January 1, 2005,  the Managing  Member agreed to change the
administration  fee  rate  (the   "Administration   Fee")  charged  at  the
Investment Fund level from 0.20% to the fee rate charged to each Investment
Fund by SEI Global Services,  Inc. ("SEI"). In addition,  effective January
1, 2005, an administration  fee is no longer charged by the Managing Member
at the Portfolio Company level, and the  administration  fee charged at the
Investment Fund level will be paid with respect to assets of the Investment
Funds  invested in  Portfolio  Companies.  The  Administration  Fee Rate is
determined each month, without notice to Members, based on the total assets
managed  by the  Managing  Member  that  are  administered  by SEI  and its
affiliates.  In determining  the  Administration  Fee Rate, each Investment
Fund is assessed a higher rate in respect of assets  allocated to Portfolio
Companies and managed accounts  ("Managed  Accounts").  It is expected that
initially  the  Administration  Fee Rate will  generally be in the range of
0.08% to 0.10%,  but such rate may be exceeded if the total assets  managed
by the  Managing  Member that are  administered  by SEI and its  affiliates
declines or if an  Investment  Fund  allocates a greater  percentage of its
assets  to  Portfolio  Companies  or  Managed  Accounts  than is  currently
anticipated.  However,  the Administration Fee Rate is subject to a maximum
of approximately  0.20%. For purposes of determining the administration fee
payable by the  Investment  Funds,  NAV will not be reduced to reflect  any
accrued but unpaid incentive  allocation or management fees of the Managing
Member.  The Company  will bear its pro rata  portion of these fees through
its investments in the Investment Funds.

     The  Administrator  and the Company entered into an agreement with SEI
to serve as the  sub-administrator  of the Company effective March 1, 2004.
In addition to the services  described  above, SEI is expected to assist in
the  preparation  of the  Company's  periodic and other  reports  including
filing such reports with the Securities and Exchange Commission (the "SEC")
and other services associated with the Company being a registrant under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").  Pursuant
to the agreement,  the  Administrator is responsible for paying the fees of
SEI. The Company pays no  additional  fees to SEI. The Managing  Member (in
its  capacity  as the  administrator  of each  Investment  Fund)  and  each
Investment  Fund have  entered into a similar  agreement  with SEI, and the
Managing  Member  and  each  Portfolio   Company  may  enter  into  similar
agreements with SEI. In the future,  the Managing Member may cease to serve
as the administrator of the Company and one or more of the Investment Funds
and the Portfolio  Companies and SEI may perform such duties directly.  The
Managing Member and SEI are currently discussing implementing such changes.

     The Managing  Member and the Company may, in the future,  engage other
entities,  which may be unaffiliated  with the Managing Member,  to provide
administration  or other services to the Company,  the Investment  Funds or
the Portfolio Companies as administrator or sub-administrator. The terms of
any such  engagement  shall be subject to such terms and  conditions as the
Managing  Member  and  such  other  entity  may  agree.  The  terms of such
engagement  may  differ  from the  terms  and  conditions  under  which the
Managing  Member or one or more of its affiliates  provides  administration
services to the Company,  including  without  limitation  the  compensation
arrangements and indemnification obligations.

     Pursuant to the  Administration  Agreement,  the Company has agreed to
indemnify the  Administrator  against any loss or liability  arising out of
any claim asserted or threatened by any third party in connection  with the
Administrator's   performance  of  its  obligations  or  duties  under  the
Administration  Agreement,  except where such loss or liability arises as a
result of gross negligence, willful misconduct or reckless disregard on the
part of the Administrator.  Pursuant to the agreement with SEI, the Company
has agreed to indemnify SEI under similar circumstances.

     The  Company  bears  all of its  own  operating  expenses,  including,
without limitation, legal expenses;  professional fees (including,  without
limitation,  fees and  expenses of  consultants  and  experts)  relating to
investments;  costs and expenses  relating to any  amendment of the Amended
and Restated  Limited  Liability  Company  Agreement  of the Company  dated
January 1, 2004 (as it may be amended or  modified  from time to time,  the
"LLC  Agreement")  or  the  Company's  other  organizational  documents  or
subscription  agreement or any  modification  or  supplement to the Private
Placement Memorandum for the Company (as it may be supplemented or modified
from  time  to  time,  the  "Memorandum"),  and  any  distribution  of such
documentation  to the Members;  accounting,  auditing  and tax  preparation
expenses;  fees and  expenses  of other  agents of the  Company;  taxes and
governmental  fees;  printing and mailing  expenses;  expenses  relating to
transfers and redemptions of Units; fees and out-of-pocket  expenses of any
service company retained to provide accounting and bookkeeping  services to
the  Company;  quotation or valuation  expenses;  expenses  relating to the
acquisition,  holding and disposition of investments (e.g.,  expenses which
the  Managing  Member  determines  to be related to the  investment  of the
assets  of  the  Company,   including,  among  others,  research  expenses,
brokerage fees and commissions,  expenses relating to short sales, clearing
and settlement charges,  custodial fees and expenses, costs and charges for
equipment  or services  used in  communicating  information  regarding  the
Company's  transactions  between the Managing Member and other agents, bank
service  fees,   interest  expenses,   borrowing  costs  and  extraordinary
expenses); insurance premiums; costs incurred in connection with any claim,
litigation,  arbitration, mediation, government investigation or dispute in
connection  with the business of the Company and the amount of any judgment
or  settlement  paid in connection  therewith,  or the  enforcement  of the
Company's  rights  against  any person or entity;  costs and  expenses  for
indemnification  or  contribution  payable by the  Company to any person or
entity  (including,  without  limitation,  pursuant to the  indemnification
obligations  described  under ITEM 12.  "INDEMNIFICATION  OF DIRECTORS  AND
OFFICERS"  in the  Form 10  filed  on  April  28,  2004,  as  amended  (the
"Registration Statement")); and all costs and expenses incurred as a result
of dissolution, winding-up and termination of the Company.

     The  Company  in the past has borne its  organizational  expenses  and
continues to bear expenses  incurred in connection  with the offer and sale
of Units, including printing costs and legal fees and other expenses of the
Company,  the Managing  Member and any placement  agent and other  expenses
relating  to the  offering  of  Units.  In  addition,  the  Company  bears,
indirectly  through its  investment  in each  Investment  Fund its pro rata
portion of the  offering,  organizational  and  operating  expenses of such
Investment  Fund,  including  expenses  related to the  investment  of such
Investment Fund's assets,  such as fees to the Advisors,  Portfolio Company
and  Advisor  Fund  fees  and  expenses,  brokerage  commissions,  expenses
relating to short sales,  clearing and settlement charges,  custodial fees,
bank service fees,  interest  expenses,  borrowing costs and  extraordinary
expenses.

     Each   of   the   Managing   Member,   the   Administrator   and   any
sub-administrator  pays its own overhead costs and expenses,  including the
salaries, fringe benefits and other compensation costs of its employees.

     The Managing Member,  the Administrator or any  sub-administrator  may
pay certain of the Company's or any Investment  Fund's  expenses  described
above.  The  Company  or  applicable  Investment  Fund will  reimburse  the
Managing Member, the Administrator or any sub-administrator, as applicable,
for the payment of any such expenses.

     The Managing Member has the right, in its sole discretion, to waive or
impose  different  fees on the Members as may be agreed to by the  Managing
Member and the Member  (including by means of a rebate or the issuance of a
new class of Units) and to make appropriate amendments to the LLC Agreement
to reflect any such fee arrangements.  Similarly,  each Investment Fund has
the right, in its sole discretion and for any reason,  to waive fees of, or
impose  different  fees  on,  its  investors,  as may be  agreed  to by the
Investment Fund and the investor.

     Advisors are  compensated  by the  Investment  Funds on terms that may
include  fixed and/or  performance-based  fees or  allocations.  Currently,
aggregate fixed fees of most Advisors  generally  range from  approximately
0.5% to 4% (annualized) of each Advisor's allocation, and performance-based
fees or  allocations  generally  range  from 18% to 25% of the net  capital
appreciation  in  each  individual  Advisor's  investments  for  the  year.
However,  each  Investment Fund may, in the sole discretion of its managing
member,  allocate assets to Advisors that receive fixed and/or  performance
based fees that exceed these ranges. The Company will bear a pro rata share
of the Advisor compensation paid by the Investment Funds.

     Performance-based  compensation  is  typically  not paid to an Advisor
until the Advisor makes up prior losses. See "CERTAIN RISK FACTORS--GENERAL
RISKS--Risks  Related to the Units,  Liquidity of Units and the Offering of
Units--Special  Considerations  are  Applicable  to the  Units;  After  the
Initial Offering of Units Subsequent  Purchasers of Units may Suffer Losses
Because of Previously Established Open Positions."

CAPITAL ACCOUNTS; ALLOCATION OF GAINS AND LOSSES

     The Company  maintains a separate  capital account on the books of the
Company for each series of Units and for each Member,  with respect to each
series of Units held by such Member. Each capital account with respect to a
series  of  Units  will  be (i)  increased  by the  amount  of any  capital
contributions in respect of such series, (ii) decreased for any payments in
redemption  of, or any  distributions  in respect  of, such  series,  (iii)
increased or decreased  as of the close of each  accounting  period by such
series'  allocable share of the net appreciation or net depreciation of the
net assets of the Company (as determined  below), and (iv) decreased by any
Incentive  Allocation  (discussed  below) and any Management Fee accrual in
respect of such series. For each accounting period, the net appreciation or
net depreciation of the net assets of the Company (before reduction for any
Management  Fee) shall be  allocated to each series of Units pro rata based
upon the relative  capital  accounts of each series as of the  beginning of
such  accounting  period,  prior  to  any  year-to-date  accrued  Incentive
Allocation.  Each Member's  capital  account with respect to each series of
Units shall equal the capital account of such series of Units multiplied by
the  percentage  of Units in such  series  owned  by such  Member.  Capital
accounts  will be  appropriately  adjusted for  exchanges of Units from one
series into another series, the Incentive  Allocation  discussed below, and
for other events and items as determined by the Managing Member.

     The NAV of a series of Units  equals the capital  account with respect
to such series of Units, and the NAV per Unit of a series shall be equal to
the NAV of such series divided by the number of  outstanding  Units of such
series.

     At the end of each fiscal year of the Company (or other period used to
determine  the  Incentive  Allocation),  the  Managing  Member  receives an
Incentive  Allocation equal to 5% of the increase in the NAV of each series
of Units  (appropriately  adjusted as determined by the Managing  Member in
its  sole  discretion  for  additional  contributions,   distributions  and
redemptions,  and determined prior to any Incentive Allocation accrual with
respect to such  series of Units,  but after the  deduction  of all Company
expenses for the period,  including  the  Management  Fee allocable to that
series)  above the Prior High NAV (as defined  below) of such  series.  The
Managing  Member does not receive a payment or make a  contribution  in the
event of a decrease in the NAV of a series of Units,  however the  Managing
Member is only entitled to receive an Incentive  Allocation  relating to an
increase  in NAV of a series of Units if the NAV of such  series is above a
prior high NAV.  The "Prior High NAV" with  respect to a series of Units is
equal to the NAV of such series immediately  following the date as of which
the last  Incentive  Allocation  has been made with  respect to such series
(or, if no Incentive  Allocation with respect to such series has been made,
the NAV of such series  immediately  following the initial offering of such
series), appropriately adjusted as determined by the Managing Member in its
sole   discretion   for   additional   contributions,   distributions   and
redemptions.

     The Incentive Allocation will be in addition to any  performance-based
fees paid to the  Advisors.  The  Incentive  Allocation  with  respect to a
series of Units accrues daily and is credited to the capital account of the
Managing  Member as of December 31 of each year out of the capital  account
of such series.  In the event of an  intra-year  redemption  of Units,  any
accrued Incentive Allocation with respect to such Units will be credited to
the capital account of the Managing Member upon redemption.

     Each  of the  Investment  Funds  has  entered  into  performance-based
compensation  arrangements with the Managing Member as its managing member,
which  are  similar  or  identical  to the  arrangements  described  above.
However,  as a member of each of the Investment Funds, the Company receives
membership  units of a class, the NAV of which is not reduced in connection
with any  performance-based  allocations made to the managing member of the
Investment Funds.

     The managing member of the Investment  Funds may invest the Investment
Funds'  assets in Advisor  Funds or Managed  Accounts  managed by  Advisors
affiliated  with Goldman Sachs.  In each such case, the managing  member of
the Investment Funds and the Managing Member will ensure that the aggregate
fees and allocations paid to or received by the affiliated  Advisor and the
Managing  Member  will not  exceed  the fees that a member  (including  the
Company) otherwise would incur if the Advisor were not so affiliated.

     The Managing  Member reserves the right,  in its sole  discretion,  to
apply different  performance-based  percentage  allocations and performance
compensation  arrangements  to  any  Member,  as may  be  agreed  to by the
Managing  Member and such Member without  notice to the other Members.  The
managing member of the Investment Funds has a similar right with respect to
members of each of the Investment Funds.

     The LLC  Agreement  provides  that the  Managing  Member may amend the
provisions  of the LLC Agreement  relating to the  Incentive  Allocation to
conform  to  applicable  law or  regulatory  authorities,  so  long as such
amendment does not increase the Incentive Allocation in respect of a Member
to more than the amount  that would  otherwise  be  determined  absent such
amendment.

                            THE MANAGING MEMBER

     GS HFS, a  Delaware  limited  liability  company,  serves as  Managing
Member of the Company and currently acts as the managing  member of each of
the Investment Funds. The Managing Member is responsible for the management
and operations of the Company.  As managing member of the Investment Funds,
GS HFS is  responsible  for the management and operations of the Investment
Funds,  including the  selection of the Advisors with which the  Investment
Funds invest their assets.  GS HFS, in its capacity as Managing  Member and
as managing  member of the Investment  Funds, is permitted to delegate some
of its investment management responsibilities to its advisory affiliates or
other persons as set forth in the LLC  Agreement and the limited  liability
company  agreements  for  the  relevant  Investment  Funds.  The  principal
business of the Managing Member is to function as an investment manager for
multi-advisor funds and to select advisors to make investments on behalf of
such funds.

     The  Managing  Member is an advisory  affiliate  of Goldman  Sachs and
Goldman  Sachs  Asset  Management,  a  unit  of the  Investment  Management
Division of Goldman Sachs ("GS Asset Management" and, together with Goldman
Sachs  Asset  Management,  L.P.,  a  Delaware  limited  partnership  and  a
successor  to  certain  of the  asset  management  businesses  of GS  Asset
Management, "GSAM"). Each of the Managing Member, Goldman Sachs and GSAM is
a wholly owned subsidiary of The Goldman Sachs Group, Inc.

     Goldman  Sachs,  one of the  world's  oldest  and  largest  investment
banking and securities firms, was founded in 1869. GSAM, formed in 1988, is
located at 32 Old Slip, New York, New York 10005.  GS HFS is located at 701
Mount Lucas Road, Princeton, New Jersey 08540.

     The Company has no  employees.  As of December 31, 2004,  the Managing
Member  was  supported  by  approximately  125  employees  of the GS  Group
worldwide,  of which approximately 29 allocated at least a portion of their
time to portfolio  management of the Company and the Investment  Funds. The
Company's assets were managed, indirectly through the Company's investments
in the Investment Funds, by approximately 98 Advisors.

     The  Managing  Member may  withdraw  any  interest  it may have as the
Managing  Member,  and may  substitute  an entity that is an  affiliate  of
Goldman  Sachs as the  Managing  Member of the  Company.  From time to time
certain  qualified  officers and employees of the Managing Member,  Goldman
Sachs  and its  affiliates  may  invest,  directly  or  indirectly,  in the
Company.  Subject to the redemption  provisions of the LLC  Agreement,  any
such party may redeem any Units that it may acquire without prior notice to
the non-managing  members.  The managing member of each Investment Fund has
such rights with respect to its interests therein.  Members of the GS Group
have from time to time made and  withdrawn  investments  in  certain of the
Investment  Funds.  Redemptions of any amount may be made by members of the
Managing  Member and  Affiliates  at any time,  without  prior  notice,  in
accordance with the redemption  provisions of the limited liability company
agreement of the applicable Investment Fund.

     It is not presently  expected that the Investment  Funds'  Advisors or
any of their respective  principals will purchase Units or membership units
in the Investment Funds.

     The Managing  Member also manages a number of other  investment  funds
that have investment programs that are similar to those of the Company. See
"POTENTIAL CONFLICTS OF INTEREST."

                      POTENTIAL CONFLICTS OF INTEREST

GENERAL CATEGORIES OF CONFLICTS ASSOCIATED WITH THE COMPANY

     The Goldman Sachs Group, Inc. is a worldwide,  full-service investment
banking,   broker-dealer,   asset   management   and   financial   services
organization.  As a result,  The  Goldman  Sachs  Group,  Inc.,  GSAM,  the
Managing  Member (for  purposes of this  "POTENTIAL  CONFLICTS OF INTEREST"
section,  in its capacities as Managing  Member of the Company and managing
member of each of the Investment  Funds) and their  affiliates,  directors,
partners,    trustees,    managers,   members,   officers   and   employees
(collectively,  for  purposes of this  "POTENTIAL  CONFLICTS  OF  INTEREST"
section,  "Goldman  Sachs"),  including  those who may be  involved  in the
management,   sales,   investment  activities,   business  operations,   or
distribution  of the  Company  or the  Investment  Funds,  are  engaged  in
businesses  and have  interests  other than that of managing the Company or
the Investment  Funds.  In addition,  the investment  managers to which the
Investment  Funds  directly or indirectly  allocate  their assets and their
affiliates,  directors, partners, trustees, managers, members, officers and
employees  (collectively,  for  purposes of this  "POTENTIAL  CONFLICTS  OF
INTEREST" section, the "Advisors") may similarly have clients,  businesses,
and  interests  in addition to managing  assets of the  applicable  Advisor
Fund, Portfolio Company or Managed Account. The activities and interests of
Goldman  Sachs  and  the  Advisors  include  potential  multiple  advisory,
transactional and financial and other interests in securities,  instruments
and companies  that may be directly or indirectly  purchased or sold by the
Company,  Investment Funds,  Advisor Funds,  Portfolio Companies or Managed
Accounts and their service  providers,  including  without  limitation  the
Advisors.  These are  considerations  of which Members should be aware, and
which may cause conflicts that could  disadvantage the Investment Funds and
the Company.

     Present and future  activities  of Goldman  Sachs and the  Advisors in
addition to those  described  in this  "POTENTIAL  CONFLICTS  OF  INTEREST"
section may give rise to additional conflicts of interest.

     As a registered  investment adviser under the Investment  Advisers Act
of 1940 (the "Investment Advisers Act"), the Managing Member is required to
file a Form ADV with the SEC.  Form ADV contains  information  about assets
under  management,  types  of  fee  arrangements,   types  of  investments,
potential conflicts of interest,  and other relevant information  regarding
the Managing Member. A copy of Part 1 of the Managing  Member's Form ADV is
available  on the  SEC's  website  (www.sec.gov).  A copy  of Part 2 of the
Managing  Member's  Form ADV will be  provided  to Members  or  prospective
Members upon request.

     By having made an  investment  in the  Company,  a Member is deemed to
have  acknowledged and assented to the existence of potential  conflicts of
interest relating to Goldman Sachs and the Advisors,  and to the operations
of the Company,  Investment Funds,  Advisor Funds,  Portfolio Companies and
Managed Accounts in the face of these conflicts.

POTENTIAL  CONFLICTS  RELATING TO THE  SELECTION OF  ADVISORS,  THE SALE OF
COMPANY UNITS AND THE ALLOCATION OF INVESTMENT OPPORTUNITIES

     GOLDMAN SACHS' INTERESTS HAVE THE POTENTIAL TO INFLUENCE THE SELECTION
     OF ADVISORS FOR THE COMPANY AND THE INVESTMENT FUNDS

     The interests of Goldman Sachs,  including the Managing Member and its
personnel,  may create potential conflicts in the selection of Advisors for
the Investment  Funds and in the sale of Company Units. The Managing Member
will select Advisors for the Investment Funds in accordance with its duties
to clients.  However, given the breadth of Goldman Sachs' activities, it is
expected  that Goldman  Sachs may receive  various  forms of  compensation,
commissions,  payments,  rebates or services from  Advisors,  and provide a
variety of products and services to them. The amount of such  compensation,
commissions, payments, rebates or services to Goldman Sachs may increase if
an  Investment  Fund  invests  with  such  Advisors.   Such   compensation,
commissions,  payments,  rebates or services may incentivize  Goldman Sachs
and its personnel to select such Advisors over other  Advisors  which might
also be appropriate for the Investment Funds.

     Goldman Sachs is a  full-service  investment  banking,  broker-dealer,
asset   management  and  financial   services   organization  and  a  major
participant in global financial  markets.  As such, it acts as an investor,
investment  banker,  research  provider,   investment  manager,   financer,
advisor,  market maker, trader, prime broker,  lender, agent and principal,
and has other direct or indirect  interests,  in the global  fixed  income,
currency,  commodity,  equity and other  markets in which the Company,  the
Investment  Funds and the  Advisors  directly  and  indirectly  invest.  In
addition,  it is  likely  that the  Advisors  will  invest  in,  engage  in
transactions  with,  make  voting  decisions  with  respect  to,  or obtain
services from entities for which Goldman Sachs performs or seeks to perform
investment  banking or other services.  It is also likely that the Advisors
will engage in transactions with or obtain services from Goldman Sachs, and
invest in  securities  in which  Goldman  Sachs makes a market or has other
direct or  indirect  interests.  While  decisions  for the  Company and the
Investment Funds will be made consistent with Goldman Sachs' obligations to
manage  the  Company  and  the  Investment  Funds  appropriately,  business
relationships  and the fees,  compensation  and other  benefits  to Goldman
Sachs  arising  therefrom  may in certain  cases  incentivize  the Managing
Member to select certain  Advisors as opposed to other Advisors which might
also be appropriate for the Investment Funds.

     For  example,  while the  Managing  Member  will  select  Advisors  in
accordance with its fiduciary  obligations to the Investment Funds, Goldman
Sachs may also provide  brokerage  or other  services to Advisors or act as
prime  broker  for  Advisors.  Payments  to  Goldman  Sachs  for  providing
brokerage  or other  services  or acting  as prime  broker  will  generally
increase  as the size of the  assets  that an  Advisor  manages  increases.
Therefore,  investment by an Investment  Fund with an Advisor where Goldman
Sachs acts as prime broker, or to which Goldman Sachs provides brokerage or
other services,  will likely result in additional revenues to Goldman Sachs
and its personnel.  Goldman Sachs may provide  research  products and other
products and services to an Advisor and receive revenues in connection with
these  activities.  Goldman Sachs may receive  price  discounts or services
from Advisors based on its relationships with such Advisors.  In connection
with services Goldman Sachs may provide Advisors, Goldman Sachs will act in
its own commercial interests. As a result, investment with Advisors will be
subject to many of the same conflicts arising from Goldman Sachs activities
described herein.

     In  addition,   if  an  Advisor  provides  fee   "breakpoints,"   such
breakpoints  may be affected by Goldman Sachs' business  relationships  and
levels or accounts  other than with  respect to the  applicable  Investment
Fund,  and may  directly  or  indirectly  benefit  Goldman  Sachs and other
proprietary or client accounts of Goldman Sachs.

     GOLDMAN SACHS'  FINANCIAL AND OTHER  INTERESTS AND  RELATIONSHIPS  MAY
     INCENTIVIZE GOLDMAN SACHS TO PROMOTE THE SALE OF COMPANY UNITS

     Goldman Sachs,  and its sales  personnel and other  financial  service
providers,  have  interests  in  promoting  sales  of the  Company  and the
Investment  Funds and certain  Advisors.  With respect to Goldman Sachs and
its personnel,  the remuneration and  profitability of activity relating to
the Company and the  Investment  Funds may be greater than the provision of
other  services  and sales of other  products  that  might be  provided  or
offered. For example, Goldman Sachs and its sales personnel may directly or
indirectly  receive a portion  of the fees and  commissions  charged to the
Company and the Investment  Funds.  Such fees and commissions may be higher
than for other products or services, and the remuneration and profitability
to Goldman Sachs and such personnel  resulting from  transactions on behalf
of  the  Company  and  the  Investment   Funds  may  be  greater  than  the
remuneration and profitability resulting from other products.

     Goldman Sachs may also have business relationships with, and purchase,
or  distribute  or sell,  services  or products  from or to,  distributors,
consultants and others who recommend the Company,  the Investment  Funds or
the Advisors,  or who engage in transactions  with or for the Company,  the
Investment  Funds or the Advisors.  For example,  Goldman  Sachs  regularly
participates  in industry  and  consultant  sponsored  conferences  and may
purchase  educational,  data related or other services from  consultants or
other third  parties that it deems to be of value to its  personnel and its
business. The products and services purchased from consultants may include,
but are not  limited  to,  those that help  Goldman  Sachs  understand  the
consultant's   points  of  view  on  the  investment   management  process.
Consultants  and other  third  parties  that  provide  consulting  or other
services to  potential  investors  in the  Company  may  receive  fees from
Goldman Sachs, the Company or the Investment Funds, or the Advisor Funds in
connection  with the  distribution  of Company Units or other Goldman Sachs
products. In addition, Goldman Sachs personnel,  including employees of the
Managing Member, may have board, advisory, brokerage or other relationships
with  issuers,   distributors,   consultants   and  others  that  may  have
investments  with the Advisors or that may recommend  investments  with the
Advisors or  distribute  Advisor  Funds or engage in  transactions  for the
Advisors.  As a result,  those persons and  institutions may have conflicts
associated  with their  promotion of the Company,  the Investment  Funds or
Advisors  or  other  dealings  with the  Company,  the  Investment  Fund or
Advisors that would create incentives for them to promote the Company,  the
Investment Fund or Advisors or raise other conflicts.

     POTENTIAL   CONFLICTS   RELATING   TO  THE   ALLOCATION   OF   ADVISOR
     OPPORTUNITIES  AMONG THE  INVESTMENT  FUNDS AND  OTHER  GOLDMAN  SACHS
     ACCOUNTS

     Goldman Sachs,  including the Managing  Member,  currently  manages or
advises,  or may  in the  future  manage  or  advise,  accounts  or  funds,
including  accounts  or  funds  that  may  provide  greater  fees or  other
compensation,  including  performance-based  fees,  to Goldman  Sachs or in
which Goldman Sachs or its personnel  have an interest  (collectively,  the
"Client/GS Accounts"),  that have investment objectives that are similar to
those of the  Company  and/or  the  Investment  Funds.  The advice to those
Client/GS  Accounts  may compete or conflict  with the advice  given to the
Investment  Funds,  or may involve a  different  timing or nature of action
taken than with respect to the Investment Funds. For example, an Investment
Fund may compete with Client/GS Accounts for investment opportunities.

     Client/GS  Accounts  may wish to invest  with  Advisors  with which an
Investment  Fund invests or that would be an appropriate  investment for an
Investment  Fund.  Because Advisors may limit the number of investors in or
the size of their  Advisor  Funds or the amount of assets that they manage,
Client/GS  Accounts may compete with the Investment  Funds for  appropriate
investment   opportunities.   In   determining   the   allocation  of  such
opportunities among an Investment Fund and Client/GS Accounts,  a number of
factors may be considered by the Managing Member that may include,  without
limitation,  the  relative  sizes  of the  applicable  accounts  and  their
expected  future  sizes,  the expected  future  capacity of the  applicable
Advisor,  the  investment   objectives  and  guidelines,   risk  tolerance,
availability  of other  investment  opportunities,  and available  cash for
investment of the Investment Fund and such Client/GS Accounts. Fees charged
by the  Advisors  also  have  the  potential  to cause  conflicts  with the
Managing  Member's  allocation  decisions.  See "--Goldman Sachs' Interests
Have the  Potential to Influence  the Selection of Advisors for the Company
and the Investment Funds" above.

     Allocation  of  investment   opportunities   with  Advisors  among  an
Investment Fund and other  Client/GS  Accounts will be made by the Managing
Member  in a  manner  that it  considers,  in its  sole  discretion,  to be
reasonable  and  equitable  over time.  Allocation  among  accounts  in any
particular  circumstance  may be  more  or  less  advantageous  to any  one
account.  The Managing Member may determine that an investment  opportunity
or particular  purchases or sales are appropriate for one or more Client/GS
Accounts or for itself or an affiliate,  but not for an Investment Fund, or
is appropriate  for, or available to, the Investment  Fund but in different
sizes,  structures,  terms  or  timing  than  is  appropriate  for  others.
Therefore, the amount, timing, structuring or terms of an investment by the
Investment  Funds may  differ  from,  and  performance  may be lower  than,
investments  and  performance  of  other   Client/GS   Accounts.   Although
allocating investment  opportunities with Advisors among an Investment Fund
and other  Client/GS  Accounts may create  potential  conflicts of interest
because of the  interest of Goldman  Sachs or its  personnel  in such other
Client/GS  Accounts or because  Goldman  Sachs may receive  greater fees or
compensation  from such Client/GS  Accounts,  the Managing  Member will not
make  allocation  decisions based on such interests or such greater fees or
compensation.

     The  Managing  Member  also serves as the  managing  member of Goldman
Sachs Hedge Fund  Partners II, LLC, a Delaware  limited  liability  company
("HFP II"),  and Goldman  Sachs Hedge Fund  Partners  III,  LLC, a Delaware
limited  liability  company ("HFP III" and together with HFP II, the "Other
Existing  HFP  Funds").  The  Other  Existing  HFP  Funds  have  investment
objectives and utilize  strategies  similar to the Company.  Goldman Sachs,
including the Managing Member, may in the future form additional investment
funds, that have investment  objectives and utilize  investment  strategies
similar to the Company (any such fund, an "Additional HFP Fund"). Since the
Company,  the Other  Existing  HFP Funds and any  Additional  HFP Fund will
utilize similar  investment  strategies,  the Company may be competing with
the  Other  Existing  HFP Funds  and any  Additional  HFP Fund for the same
investment  opportunities.  For example, both the Company and HFP II invest
in GELS and GED. In addition,  the Other Existing HFP Funds invest in other
investment funds managed by the Managing Member or its affiliates that have
investment  objectives  and  strategies  that are similar to the Investment
Funds,  and also  allocate  their assets to Advisors in the same sectors as
the Investment  Funds. It is anticipated  that any Additional HFP Fund will
invest in  certain  of these  and other  investment  funds.  Allocation  of
investment opportunities will be made in a reasonable and equitable manner,
as determined by the Managing Member in its sole  discretion.  The Managing
Member may determine that an investment  opportunity is appropriate for the
Other Existing HFP Funds,  an Additional HFP Fund, or the investment  funds
in which they invest,  but not for the Company or the Investment  Funds, as
applicable,  which  may  have  adverse  effects  on  the  Company  and  the
Investment  Funds.  In  addition,  the fact  that the  Company,  the  Other
Existing HFP Funds and any  Additional HFP Fund  indirectly  allocate their
assets to Advisors in the same  sectors as the Company may create  capacity
issues for the Company in the future.

OTHER POTENTIAL CONFLICTS RELATING TO THE MANAGEMENT OF THE COMPANY AND THE
INVESTMENT FUNDS BY THE MANAGING MEMBER

     POTENTIAL  RESTRICTIONS  AND ISSUES  RELATING TO  INFORMATION  HELD BY
     GOLDMAN SACHS

     In connection  with its  management of the Company and the  Investment
Funds,  the Managing  Member may utilize  investment  policy  advisors or a
committee  which may include  personnel of Goldman Sachs or of unaffiliated
firms.  The  performance  by such persons of  obligations  related to their
consultation with Managing Member personnel could conflict with their areas
of primary responsibility within Goldman Sachs or elsewhere.  In connection
with their  activities with the Managing  Member,  such persons may receive
information regarding the proposed investment activities of the Company and
the Investment Funds that is not generally  available to the public.  There
will be no obligation on the part of such persons to make available for use
by the Company or Investment  Funds any information or strategies  known to
them or developed in connection with their own client, proprietary or other
activities. In addition,  Goldman Sachs will be under no obligation to make
available any research or analysis prior to its public dissemination.

     The  Managing  Member  may from  time to time have  access to  certain
fundamental analysis and proprietary  technical models developed by Goldman
Sachs and its personnel,  although  Goldman Sachs has no obligation to make
such  analysis and models  available to the Managing  Member.  The Managing
Member is not  obligated to use such  analysis or models,  and the Managing
Member is not obligated to effect  transactions on behalf of the Company or
the Investment Funds in accordance therewith.

     In addition, Goldman Sachs has no obligation to seek information or to
make  available  to or share with the Company or the  Investment  Funds any
information, investment strategies, opportunities or ideas known to Goldman
Sachs  personnel or developed or used in  connection  with other clients or
activities.  Goldman  Sachs and  certain of its  personnel,  including  the
Managing  Member or other  Goldman  Sachs  personnel  advising or otherwise
providing  services  to the  Company  or the  Investment  Funds,  may be in
possession of information not available to all Goldman Sachs personnel, and
such  personnel may act on the basis of such  information in ways that have
adverse effects on the Company or the Investment Funds.

     From time to time, Goldman Sachs may come into possession of material,
non-public information or other information that could limit the ability of
the Investment Funds to invest with Advisors. The investment flexibility of
the  Investment  Funds  may be  constrained  as a  consequence.  In  making
investment decisions for the Company and the Investment Funds, the Managing
Member is not  generally  permitted  to obtain or use  material  non-public
information  acquired by any  division,  department or affiliate of Goldman
Sachs in the course of their activities.

     POTENTIAL CONFLICTS RELATING TO GOLDMAN SACHS' PROPRIETARY  ACTIVITIES
     AND ACTIVITIES ON BEHALF OF OTHER ACCOUNTS

     The  results  of the  investment  activities  of the  Company  and the
Investment  Funds may differ  significantly  from the  results  achieved by
Goldman Sachs for its proprietary accounts and from the results achieved by
Goldman Sachs for other Client/GS Accounts.  Goldman Sachs may give advice,
and take action, with respect to any current or future Client/GS Account or
proprietary  or other  account that may compete or conflict with the advice
the Managing Member may give to the Company or the Investment Funds, or may
involve a  different  timing or nature of action  than with  respect to the
Company or the Investment Funds.

     Transactions  undertaken  by Goldman  Sachs or Client/GS  Accounts may
adversely impact the Company or the Investment Funds. Goldman Sachs and one
or more Client/GS  Accounts may buy or sell  positions  while an Investment
Fund  or  an  Advisor  Fund,   Portfolio  Company  or  Managed  Account  is
undertaking  the  same  or a  differing,  including  potentially  opposite,
strategy,  which could  disadvantage  the  Investment  Fund,  Advisor Fund,
Portfolio Company or Managed Account. For example, an Investment Fund or an
Advisor Fund,  Portfolio  Company or Managed Account may buy a security and
Goldman Sachs or its Client/GS  Accounts may establish a short  position in
that same security.  That subsequent short sale may result in impairment of
the  price  of the  security  which  the  Investment  Fund,  Advisor  Fund,
Portfolio  Company or Managed  Account  holds.  Conversely,  the Investment
Fund,  Advisor Fund,  Portfolio  Company or Managed Account may establish a
short  position in a security and Goldman Sachs or its  Client/GS  Accounts
may buy that same  security.  That  subsequent  purchase  may  result in an
increase of the price of the underlying position in the short sale exposure
of the Investment Fund, Advisor Fund, Portfolio Company or Managed Account.
In addition,  transactions in investments by one or more Client/GS Accounts
and  Goldman   Sachs  may  have  the  effect  of   diluting  or   otherwise
disadvantaging  the  values,   prices  or  investment   strategies  of  the
Investment Funds,  Advisor Funds,  Portfolio Companies or Managed Accounts,
particularly, but not limited to, in small capitalization,  emerging market
or less liquid strategies.  For example,  an Investment Fund, Advisor Fund,
Portfolio  Company or Managed Account may purchase or sell a position after
or at the same time Goldman Sachs or the Client/GS  Accounts  undertake the
same  strategy  which  may  increase  the  cost  of  that  strategy  to the
Investment  Fund,  Advisor Fund,  Portfolio  Company or Managed  Account or
otherwise disadvantage the Investment Fund, Advisor Fund, Portfolio Company
or Managed Account.

     In addition, conflicts may arise because portfolio decisions regarding
an Advisor  Fund,  Portfolio  Company or Managed  Account may benefit other
Client/GS  Accounts.   For  example,   the  sale  of  a  long  position  or
establishment of a short position by an Advisor Fund,  Portfolio Company or
Managed  Account  may impair the price of the same  security  sold short by
(and therefore benefit) Goldman Sachs or another Client/GS Account, and the
purchase of a security or covering of a short  position in a security by an
Advisor Fund,  Portfolio  Company or Managed Account may increase the price
of the same  security  held by (and  therefore  benefit)  Goldman  Sachs or
another Client/GS Account.

     The directors,  officers and employees of Goldman Sachs, including the
Managing Member, may buy and sell securities or other investments for their
own accounts  (including through funds managed by Goldman Sachs,  including
the  Managing  Member).  As a result of  differing  trading and  investment
strategies or  constraints,  positions may be taken by directors,  officers
and employees that are the same,  different from or made at different times
than positions taken for an Investment  Fund or the Company.  To reduce the
possibility  that the  Company  or an  Investment  Fund will be  materially
adversely  affected by the personal  trading  described above, the Managing
Member has  established  policies and procedures  that restrict  securities
trading in the personal accounts of investment professionals and others who
normally come into possession of information regarding the Company's or the
Investment Funds' portfolio transactions.

     Subject  to  applicable  law,  clients  of  Goldman  Sachs  (including
Client/GS  Accounts) may have, as a result of receiving  client  reports or
otherwise,  access to information  regarding  Goldman  Sachs'  transactions
(and,  when Goldman Sachs is a client of an Advisor,  transactions  of such
Advisor) or views which may affect their  transactions  outside of accounts
controlled by the Managing  Member's  personnel and as a result  negatively
impact  the  performance  of  the  Company,  the  Investment  Funds  or the
Advisors.  The Company, the Investment Funds and the Advisor Funds may also
be  adversely  affected  by cash flows and market  movements  arising  from
purchase and sales  transactions,  as well as increases in capital invested
in and redemptions from Advisor Funds, by other Client/GS Accounts.

     An  Advisor's  management  of an Advisor  Fund,  Portfolio  Company or
Managed Account may benefit Goldman Sachs.  For example,  the Advisors may,
subject to applicable  law, invest directly or indirectly in the securities
of companies affiliated with Goldman Sachs or in which Goldman Sachs has an
equity, debt or other interest. Subject to applicable law, the Advisors may
engage in  investment  transactions  which may result in  Goldman  Sachs or
other  Client/GS  Accounts  being  relieved  of  obligations  or  otherwise
divesting of investments.  The purchase, holding and sale of investments by
the  Advisors  may enhance  the  profitability  of Goldman  Sachs' or other
Client/GS  Accounts' own  investments in and its activities with respect to
such companies.

     Goldman  Sachs and its  clients  may  pursue or  enforce  rights  with
respect to an issuer in which an Advisor has invested, and those activities
may have an adverse effect on the applicable  Investment Fund and, in turn,
the Company. As a result, prices,  availability,  liquidity and terms of an
Advisor's  investments  may be  negatively  impacted by the  activities  of
Goldman  Sachs  or its  clients,  and  transactions  of an  Advisor  may be
impaired  or effected  at prices or terms that may be less  favorable  than
would otherwise have been the case.

     Goldman Sachs may create,  write,  sell or issue,  or act as placement
agent or distributor of, derivative instruments with respect to the Company
or  with  respect  to  which  the  underlying  securities,   currencies  or
instruments  may be  those in  which  the  Company  or an  Investment  Fund
invests,  or which may be otherwise based on the performance of the Company
or such  Investment  Fund.  The structure or other  characteristics  of the
derivative  instruments  may have an adverse effect on an Investment  Fund.
For  example,   the  derivative   instruments  could  represent   leveraged
investments  in the Company or an Investment  Fund or a Portfolio  Company,
and the leveraged  characteristics  of such investments  could make it more
likely,  due to  events  of  default  or  otherwise,  that  there  would be
significant  redemptions of interests  from the Company or such  Investment
Fund or Portfolio  Company  more quickly than might  otherwise be the case.
Goldman  Sachs,  acting in commercial  capacities  in connection  with such
derivative instruments,  may in fact cause such a redemption. This may have
an  adverse  effect  on  the  investment   management,   flexibility,   and
diversification  strategies of the Company,  Investment  Funds or Portfolio
Companies  and on the amount of fees,  expenses  and other  costs  incurred
directly or  indirectly  for the  account of the Company or the  Investment
Funds.  Similarly,  Goldman  Sachs  (including  its  personnel or Client/GS
Accounts) may also invest in the Company or an Investment Fund or Portfolio
Company,  hedge its derivative  positions by buying or selling Units in the
Company or units of interests in an  Investment  Fund or Portfolio  Company
and  reserves  the right to redeem  some or all of its  investments  at any
time. These  investments and redemptions will be made without notice to the
Members  or the  direct or  indirect  members  of the  Investment  Funds or
Portfolio Companies, as applicable, including the Company, and could result
in early  redemptions  that could  have  similarly  adverse  effects on the
Company or the Investment Funds.

     The Managing Member,  the Company and the Investment Funds may receive
research  products and services in connection  with the brokerage  services
that brokers (including,  without  limitation,  Goldman Sachs entities) may
provide  to the  Company,  the  Investment  Funds or one or more  Client/GS
Accounts.  Such products and services may disproportionately  benefit other
Client/GS  Accounts  relative to the Company or an Investment Fund based on
the amount of brokerage  commissions paid by the Company or such Investment
Fund,  as  applicable,  and such other  Client/GS  Accounts.  For  example,
research  or  other  services  that  are  paid  for  through  one  client's
commissions may not be used in managing that client's account. In addition,
Client/GS  Accounts  may receive the  benefit,  including  disproportionate
benefits,  of economies  of scale or price  discounts  in  connection  with
products  and  services  that  may be  provided  to  the  Company  and  the
Investment Funds and to Client/GS Accounts.

     POTENTIAL  CONFLICTS IN CONNECTION  WITH  INVESTMENTS IN GOLDMAN SACHS
     MONEY MARKET FUNDS

     To  the  extent  permitted  by  applicable  law,  the  Company  or any
Investment  Fund may invest all or some of its short term cash  investments
in any money market fund advised or managed by Goldman Sachs. In connection
with any such  investments,  the Company and the Investment  Funds will pay
all fees  pertaining  to the  investments  and no portion of any  advisory,
administrative  or 12b-1  fees  will be  offset  against  fees  payable  in
accordance with any such  investments  (i.e.,  there could be "double fees"
involved in making any such investment, which would not arise in connection
with a direct investment).  In such circumstances,  as well as in all other
circumstances   in  which  Goldman   Sachs   receives  any  fees  or  other
compensation  in  any  form  relating  to the  provision  of  services,  no
accounting  or  repayment  to the  Company or the  Investment  Funds or the
Members will be required.

     GOLDMAN SACHS MAY IN-SOURCE OR OUTSOURCE

     Subject to  applicable  law,  Goldman  Sachs,  including  the Managing
Member, may from time to time and without notice to investors  in-source or
outsource  certain  processes or functions in connection  with a variety of
services  that it provides to the  Company or the  Investment  Funds in its
administrative  or other  capacities.  Such  in-sourcing or outsourcing may
give rise to additional conflicts of interest.

     POTENTIAL  CONFLICTS  THAT  MAY  ARISE  WHEN  GOLDMAN  SACHS  PROVIDES
     BROKERAGE OR OTHER SERVICES TO THE ADVISORS,  THE INVESTMENT FUNDS AND
     THE COMPANY

     The  Managing   Member  may  select   Goldman   Sachs  to  enter  into
transactions and invest in futures, securities, currencies, swaps, options,
forward contracts or other instruments on behalf of the Investment Funds in
which Goldman Sachs,  acting as principal or on a proprietary basis for its
customers,  serves as the  counterparty.  The Company or an Investment Fund
may also enter  into  cross  transactions  in which  Goldman  Sachs acts on
behalf of the Company or such Investment  Fund, as applicable,  and for the
other  party to the  transaction.  Goldman  Sachs  may  have a  potentially
conflicting division of loyalties and responsibilities to both parties to a
cross transaction. For example, Goldman Sachs and its personnel may receive
compensation  or other payments  from, or have different  interests in, the
Company  or the  applicable  Investment  Fund  and the  other  party to the
transaction.  Goldman Sachs will only  consider  engaging in a principal or
cross  transaction  on behalf of the Company or the  Investment  Funds with
Goldman Sachs or its affiliates to the extent permitted by applicable law.

     When the  Managing  Member  chooses  Goldman  Sachs to act as  broker,
dealer,  agent, lender or advisor or in other commercial capacities for the
Company or the Investment  Funds, it is anticipated  that the  commissions,
mark-ups,  mark-downs,  financial advisory fees, underwriting and placement
fees,  sales fees,  financing and commitment  fees,  brokerage fees,  other
fees,  compensation  or profits,  rates,  terms and  conditions  charged by
Goldman Sachs will be in its view commercially reasonable, although Goldman
Sachs,  including its sales  personnel,  will have an interest in obtaining
fees and other  amounts that are  favorable to Goldman Sachs and such sales
personnel.  When the Managing Member chooses Goldman Sachs,  the Company or
an Investment  Fund may, to the extent  permitted by applicable law, borrow
funds from Goldman Sachs at rates and on other terms  arranged with Goldman
Sachs.

     Goldman  Sachs  (and its  personnel  and other  distributors)  will be
entitled to retain fees and other  amounts  that it receives in  connection
with its service to the Company,  the Investment  Funds and the Advisors as
broker,  dealer, agent, lender,  advisor or in other commercial capacities,
no accounting to the Company,  the Investment  Funds or the Members will be
required,  and no fees or other  compensation  payable by the Company,  the
Investment  Funds or the  Members  will be  reduced by reason of receipt by
Goldman Sachs of any such fees or other amounts.

     When an Advisor chooses Goldman Sachs to act as broker, dealer, agent,
lender or advisor  or in other  commercial  capacities  in  relation  to an
Advisor Fund, Portfolio Company or Managed Account,  Goldman Sachs may take
commercial steps in its own interests,  which may have an adverse effect on
the Company.  For example,  in connection  with prime  brokerage or lending
arrangements involving Advisors, Goldman Sachs may require repayment of all
or part of a loan at any time or from time to time.

     The Company  and each  Investment  Fund will be required to  establish
business  relationships  with its  counterparties  based on its own  credit
standing.  Goldman Sachs,  including the Managing Member, will not have any
obligation to allow its credit to be used in connection  with the Company's
or an Investment Fund's establishment of its business relationships, nor is
it expected that the Company's or an Investment Fund's  counterparties will
rely  on  the  credit  of  such  entities  in   evaluating   the  Company's
creditworthiness.

POTENTIAL  CONFLICTS  RELATING  TO  THE  SELECTION  OF  INVESTMENTS  BY THE
ADVISORS

     AN ADVISOR'S  INTERESTS  HAVE THE POTENTIAL TO INFLUENCE THE SELECTION
     OF INVESTMENTS

     Each  Advisor  may act as an  investor,  investment  banker,  research
provider,  investment manager,  financer,  advisor,  market maker,  trader,
prime broker, lender, agent or principal,  or have other direct or indirect
interests,  in the global fixed  income,  currency,  commodity,  equity and
other  markets in which the Advisor  trades.  Thus,  it is possible that an
Advisor  will  undertake  transactions  in  securities  in which it makes a
market or  otherwise  has  direct or  indirect  interests.  These  business
relationships and the fees, compensation and other benefits to the Advisors
arising  therefrom  may in certain cases  incentivize  the Advisors to make
certain  investments  for Advisor  Funds,  Portfolio  Companies  or Managed
Accounts over other investments which might also be appropriate.

     POTENTIAL   CONFLICTS   RELATING  TO  THE   ALLOCATION  OF  INVESTMENT
     OPPORTUNITIES AMONG THE ADVISORS' ACCOUNTS

     Advisors  may manage or advise  current or future  accounts  or funds,
including  accounts  or  funds  that  may  provide  greater  fees or  other
compensation, including performance-based fees, to the Advisors or in which
Advisors  or  their   personnel   have  an  interest   (collectively,   the
"Client/Advisor Accounts") that have investment objectives that are similar
to those of an Advisor Fund,  Portfolio  Company or Managed Account managed
by such Advisor.  Client/Advisor  Accounts may wish to invest in securities
or  instruments  in which an  Advisor  Fund,  Portfolio  Company or Managed
Account  invests  or  that  would  be an  appropriate  investment  thereby.
Therefore,  an Advisor or its personnel  may have a financial  incentive to
favor other Client/Advisor Accounts over an Advisor Fund, Portfolio Company
or Managed  Account  managed by such  Advisor  when  allocating  investment
opportunities and making purchase and sale decisions.

     An Advisor may determine that a particular  investment  opportunity or
particular   purchases   or  sales   are   appropriate   for  one  or  more
Client/Advisor  Accounts  or for  itself or an  affiliate,  but not for the
Advisor Fund, Portfolio Company or Managed Account managed by such Advisor,
or is  appropriate  for, or  available  to, such  Advisor  Fund,  Portfolio
Company or Managed Account, but in different sizes, terms or timing than is
appropriate for others.  Such decisions may create a potential  conflict of
interest. The amount,  timing,  structuring or terms of an investment by an
Advisor Fund,  Portfolio  Company or Managed  Account managed by an Advisor
may  differ  from,  and  performance  may be lower  than,  investments  and
performance of other Client/Advisor Accounts managed by the same Advisor.

OTHER POTENTIAL  CONFLICTS RELATING TO THE ADVISORS'  PORTFOLIO  MANAGEMENT
ACTIVITIES

     POTENTIAL  RESTRICTIONS  AND ISSUES  RELATING TO  INFORMATION  HELD BY
     ADVISORS

     In  connection  with its  management  of an  Advisor  Fund,  Portfolio
Company or  Managed  Account,  an Advisor  may  utilize  investment  policy
advisors  or a  committee  which may  include  personnel  of the Advisor or
unaffiliated firms. These individuals may, as a result,  obtain information
regarding the proposed activities of the Advisor Fund, Portfolio Company or
Managed Account managed by such Advisor which is not generally available to
the public.

     An Advisor  may from time to time have  access to certain  fundamental
analysis  and  proprietary   technical  models  developed  by  it  and  its
affiliates,  although the Advisor may not be permitted to use such analysis
and  models on behalf of the  Advisor  Fund,  Portfolio  Company or Managed
Account  that it manages.  Such  Advisor may not be  obligated  to use such
analysis or models,  and may not be  obligated  to effect  transactions  on
behalf of an Advisor  Fund,  Portfolio  Company or Managed  Account that it
manages in  accordance  therewith.  In  addition,  the  Advisor may have no
obligation to seek  information  or to make  available to or share with the
Advisor  Fund,  Portfolio  Company  or  Managed  Account  any  information,
investment  strategies,  opportunities  or ideas known to  personnel of the
Advisor  or  developed  or used in  connection  with  other  Client/Advisor
Accounts or activities.

     In  addition,  an  Advisor  and  certain  of its  personnel  may be in
possession of information not available to all Advisor personnel, including
the personnel advising or otherwise providing services to the Advisor Fund,
Portfolio  Company or Managed  Account  advised by such  Advisor,  and such
personnel  may act on the  basis  of such  information  in ways  that  have
adverse effects on such Advisor Fund, Portfolio Company or Managed Account.
The  Advisors  will  not  be  under  any  obligation  to  disseminate  such
information.

     From time to time,  an Advisor may come into  possession  of material,
non-public information or other information that could limit the ability of
an Advisor  Fund,  Portfolio  Company or  Managed  Account  managed by such
Advisor to buy and sell  investments.  The  investment  flexibility of such
Advisor Fund,  Portfolio Company or Managed Account may be constrained as a
consequence.

     POTENTIAL CONFLICTS RELATING TO AN ADVISOR'S PROPRIETARY ACTIVITIES ON
     BEHALF OF OTHER ACCOUNTS MANAGED BY ADVISORS

     The results of the investment activities of an Advisor Fund, Portfolio
Company  or  Managed  Account  may differ  significantly  from the  results
achieved by its Advisor for its  proprietary  accounts and from the results
achieved by the Advisor  for other  accounts  managed by it. An Advisor may
give advice, and take action, with respect to one or more accounts that may
compete or  conflict  with the advice the  Advisor  may give to the Advisor
Fund,  Portfolio Company or Managed Account managed by it, or may involve a
different  timing  or  nature of action  taken  than with  respect  to such
Advisor Fund, Portfolio Company or Managed Account.

     Transactions  undertaken  by Advisors or  Client/Advisor  Accounts may
adversely impact an Advisor Fund,  Portfolio Company or Managed Account. An
Advisor and its Client/Advisor  Accounts may buy or sell positions while an
Advisor Fund,  Portfolio Company or Managed Account managed by such Advisor
is undertaking  the same or a differing,  including  potentially  opposite,
strategy,  which could disadvantage the Advisor Fund,  Portfolio Company or
Managed  Account.  For example,  an Advisor Fund may buy a security and its
Advisor or such  Advisor's  Client/Advisor  Accounts may  establish a short
position in that same security.  That  subsequent  short sale may result in
impairment  of the price of the  security  which the  Advisor  Fund  holds.
Conversely,  the  Investment  Fund  may  establish  a short  position  in a
security and the Advisor or its  Client/Advisor  Accounts may buy that same
security.  That subsequent  purchase may result in an increase of the price
of the underlying position in the short sale exposure of the Advisor Fund.

     In addition, transactions in investments by one or more Client/Advisor
Accounts  or the  Advisor  may have the  effect of  diluting  or  otherwise
disadvantaging  the values,  prices or investment  strategies of an Advisor
Fund, Portfolio Company or Managed Account,  particularly,  but not limited
to, in small  capitalization,  emerging  market or less liquid  strategies.
This  may  occur  when  portfolio  decisions  regarding  an  Advisor  Fund,
Portfolio  Company  or  Managed  Account  are  based on  research  or other
information  that is also used to  support  portfolio  decisions  for other
Client/Advisor  Accounts  managed by personnel of the Advisor,  which could
impact  the  timing and  manner in which the  portfolio  decisions  for the
Advisor Fund, Portfolio Company or Managed Account and other Client/Advisor
Accounts  are  implemented.  When the Advisor or a  Client/Advisor  Account
implements a portfolio decision or strategy ahead of, or  contemporaneously
with,  similar  portfolio  decisions  or  strategies  for an Advisor  Fund,
Portfolio Company or Managed Account, market impact, liquidity constraints,
or other  factors could result in the Advisor  Fund,  Portfolio  Company or
Managed Account  receiving less favorable  trading results and the costs of
implementing  such portfolio  decisions or strategies could be increased or
the Advisor Fund,  Portfolio  Company or Managed Account could otherwise be
disadvantaged.  The  Advisor  may,  in certain  cases,  elect to  implement
internal policies and procedures designed to limit such consequences to the
Client/Advisor  Accounts as well as the Advisor Funds,  Portfolio Companies
and Managed Accounts, which may cause an Advisor Fund, Portfolio Company or
Managed  Account  to be unable to engage in certain  activities,  including
purchasing or disposing of securities, when it might otherwise be desirable
for it to do so.

     Conflicts may arise because portfolio  decisions  regarding an Advisor
Fund, Portfolio Company or Managed Account may benefit other Client/Advisor
Accounts.  For example,  the sale of a long position or  establishment of a
short position by an Advisor Fund may impair the price of the same security
sold short by (and therefore benefit) the Advisor or another Client/Advisor
Account,  and the purchase of a security or covering of a short position in
a security by an Advisor Fund may  increase the price of the same  security
held by (and  therefore  benefit)  the  Advisor or  another  Client/Advisor
Account.

     The  directors,  officers and employees of an Advisor may buy and sell
securities or other investments for their own accounts  (including  through
funds  managed  by the  Advisor).  As a result  of  differing  trading  and
investment strategies or constraints,  positions may be taken by directors,
officers and employees of an Advisor that are the same,  different  from or
made at different times than positions taken for an Advisor Fund, Portfolio
Company  or  Managed  Account  managed  by such  Advisor.  An  Advisor  may
establish, and Goldman Sachs has established,  policies and procedures that
restrict   securities  trading  in  the  personal  accounts  of  investment
professionals  and others who normally come into  possession of information
regarding the portfolio  transactions of an Advisor Fund, Portfolio Company
or Managed Account that it manages. However, there can be no assurance that
such policies and procedures will avoid all conflicts of interest.

     Subject  to  applicable   law,   clients  of  an  Advisor   (including
Client/Advisor  Accounts) may have, as a result of receiving client reports
or otherwise, access to information regarding the Advisor's transactions or
views which may affect their transactions outside of accounts controlled by
the personnel  providing  advice to an Advisor Fund,  Portfolio  Company or
Managed  Account  managed  by such  Advisor,  and in  connection  therewith
negatively  impact the performance of such Advisor Fund,  Portfolio Company
or Managed Account.

     An Advisor's  management of the assets of an Advisor  Fund,  Portfolio
Company or Managed Account may benefit the Advisor. For example, an Advisor
Fund,  Portfolio Company or Managed Account may, subject to applicable law,
invest  directly or  indirectly in the  securities of companies  affiliated
with the  Advisor  or in which the  Advisor  has an  equity,  debt or other
interest.  Subject to applicable law, an Advisor Fund, Portfolio Company or
Managed Account may engage in investment  transactions  which may result in
the Advisor or  Client/Advisor  Account being  relieved of  obligations  or
otherwise  divesting of an  investment.  The purchase,  holding and sale of
investments by an Advisor Fund,  Portfolio  Company or Managed  Account may
enhance the profitability of the Advisor's or its Client/Advisor  Accounts'
own investments in and its activities with respect to such companies.

     An Advisor  and its  clients  may also  pursue or enforce  rights with
respect to an issuer in which an Advisor Fund, Portfolio Company or Managed
Account has invested,  and those  activities  may have an adverse effect on
such  Advisor  Fund,  Portfolio  Company or Managed  Account.  As a result,
prices,  availability,  liquidity  and  terms of  Advisor  Fund,  Portfolio
Company or Managed Account  investments  may be negatively  impacted by the
activities of the Advisor or its clients,  and  transactions for an Advisor
Fund,  Portfolio  Company or Managed Account may be impaired or effected at
prices or terms that may be less favorable  than would  otherwise have been
the case.

     An Advisor may create, write, sell or issue, or act as placement agent
or  distributor  of,  derivative  instruments  with  respect  to which  the
underlying securities,  currencies or instruments may be those in which the
Advisor Fund,  Portfolio  Company or Managed Account managed by it invests,
or which may be based on the  performance  of such Advisor Fund,  Portfolio
Company or Managed Account.  The structure or other  characteristics of the
derivative  instruments  may have an adverse  effect on the  Advisor  Fund,
Portfolio  Company  or  Managed  Account.   For  example,   the  derivative
instruments could represent  leveraged  investments in an Advisor Fund, and
the  leveraged  characteristics  of  such  investments  could  make it more
likely,  due to  events  of  default  or  otherwise,  that  there  would be
significant  redemptions  of  interests  from the Advisor Fund more quickly
than  might  otherwise  be the case.  The  Advisor,  acting  in  commercial
capacities  in connection  with such  derivative  instruments,  may in fact
cause such a redemption.  This may have an adverse effect on the investment
management, flexibility, and diversification strategies of the Advisor Fund
and on the amount of fees,  expenses and other costs  incurred  directly or
indirectly  for the account of such  Advisor  Fund.  Similarly,  an Advisor
(including its personnel or Client/Advisor  Accounts) may also invest in an
Advisor  Fund, or hedge its  derivative  positions by buying or selling the
Advisor Fund and will generally  reserve the right to redeem some or all of
its investments at any time. These investments and redemptions will be made
without  notice to the  investors  in such  Advisor  Funds,  including  the
Investment  Funds,  and could result in early  redemptions  that could have
similarly adverse effects on the Advisor Funds.

     POTENTIAL  CONFLICTS THAT MAY ARISE WHEN AN ADVISOR ACTS IN A CAPACITY
     OTHER THAN  ADVISOR  TO THE  ADVISOR  FUNDS,  PORTFOLIO  COMPANIES  OR
     MANAGED ACCOUNTS

     To the extent  permitted by applicable  law, an Advisor may enter into
transactions and invest in futures, securities, currencies, swaps, options,
forward  contracts  or other  instruments  on  behalf of an  Advisor  Fund,
Portfolio  Company or Managed  Account  in which  such  Advisor,  acting as
principal  or on a  proprietary  basis  for its  customers,  serves  as the
counterparty.  An Advisor Fund,  Portfolio  Company or Managed  Account may
also enter into cross  transactions  in which its Advisor acts on behalf of
such Advisor Fund,  Portfolio  Company or Managed Account and for the other
party to the  transaction.  An Advisor may have a  potentially  conflicting
division of responsibilities to both parties to a cross transaction.

     When an Advisor acts as broker, dealer, agent, lender or advisor or in
other  commercial  capacities  in  relation to an Advisor  Fund,  Portfolio
Company or Managed  Account,  such Advisor may take commercial steps in its
own  interests,  which may have an  adverse  effect on such  Advisor  Fund,
Portfolio Company or Managed Account. For example, in connection with prime
brokerage  or lending  arrangements  involving an Advisor  Fund,  Portfolio
Company or Managed Account, an Advisor may require repayment of all or part
of a loan at any time or from time to time.

     To the extent permitted by applicable law, an Advisor Fund,  Portfolio
Company  or Managed  Account  may invest all or some of its short term cash
investments  in money market funds  advised or managed by its Advisor,  and
may  invest  in other  products  advised  or  managed  by its  Advisor.  In
connection with any such  investment,  the Company and the Investment Funds
will pay all fees  pertaining  to the  investment,  and no  portion  of any
advisory,  administrative or 12b-1 fees will be offset against fees payable
in accordance with any such investment (i.e.,  there could be "double fees"
involved in making any such investment, which would not arise in connection
with a direct investment).  In such circumstances,  as well as in all other
circumstances in which the Advisor receives any fees or other  compensation
in any form  relating  to the  provision  of  services,  no  accounting  or
repayment to the Company or Investments Funds will be required.

     When an Advisor acts as broker, dealer, agent, lender or advisor or in
other  commercial  capacities  for an Advisor  Fund,  Portfolio  Company or
Managed  Account,  it  is  anticipated  that  the  commissions,   mark-ups,
mark-downs, financial advisory fees, underwriting and placement fees, sales
fees,   financing  and  commitment   fees,   brokerage  fees,  other  fees,
compensation or profits,  rates,  terms and conditions charged thereby will
be in its view commercially reasonable, although the Advisor, including its
sales  personnel  will have an interest in obtaining fees and other amounts
which are favorable to such Advisor and its sales personnel.

     THE ADVISORS MAY IN-SOURCE OR OUTSOURCE

     Subject to applicable law,  Advisors may from time to time and without
notice to investors  in-source or outsource  certain processes or functions
in  connection  with  a  variety  of  services  that  they  provide  to the
Investment Funds,  Portfolio  Companies or Managed Accounts managed by them
in  their   administrative  or  other   capacities.   Such  in-sourcing  or
outsourcing may give rise to additional conflicts of interest.

     POTENTIAL  CONFLICTS IN CONNECTION  WITH  BROKERAGE  TRANSACTIONS  AND
     PROXY VOTING BY THE ADVISORS

     Purchases  and sales of  securities  for an  Advisor  Fund,  Portfolio
Company or Managed  Account  may be bunched or  aggregated  with orders for
other  Client/Advisor  Accounts of the Advisor  that  manages  such Advisor
Fund,  Portfolio Company or Managed Account.  An Advisor,  however,  is not
required to bunch or aggregate orders if portfolio management decisions for
different  accounts are made separately,  or if it determines that bunching
or aggregating would be inconsistent with its investment  management duties
or with client direction.  Prevailing trading activity  frequently may make
impossible  the receipt of the same price or execution on the entire volume
of securities  purchased or sold. When this occurs,  the various prices may
be averaged and the Advisor Fund,  Portfolio Company or Managed Account, as
applicable,  will be charged or credited with the average price.  Thus, the
effect of aggregation may operate on some occasions to the  disadvantage of
the Advisor Fund, Portfolio Company or Managed Account. In addition,  under
certain  circumstances,  an  Advisor  Fund,  Portfolio  Company  or Managed
Account will not be charged the same  commission or  commission  equivalent
rates in connection with a bunched or aggregated order.

     An Advisor and an Advisor Fund,  Portfolio  Company or Managed Account
managed by it may from time to time receive research  products and services
in connection with the brokerage services that brokers (including,  without
limitation,   affiliated  entities)  may  provide  to  such  Advisor  Fund,
Portfolio Company or Managed Account or one or more Client/Advisor Accounts
managed by such Advisor. Such products and services may  disproportionately
benefit  other  Client/Advisor  Accounts  relative  to such  Advisor  Fund,
Portfolio  Company or  Managed  Account  based on the  amount of  brokerage
commissions paid by such Advisor Fund, Portfolio Company or Managed Account
and such other  Client/Advisor  Accounts.  For  example,  research or other
services that are paid for through one client's commissions may not be used
in managing  that  client's  account.  In  addition,  other  Client/Advisor
Accounts may receive the benefit,  including  disproportionate benefits, of
economies  of scale or price  discounts  in  connection  with  products and
services that may be provided to the Advisor Funds,  Portfolio Companies or
Managed Accounts and to such other Client/Advisor Accounts.

     Advisors  may  adopt  policies  and  procedures  designed  to  prevent
conflicts of interest from influencing  proxy voting decisions they make on
behalf  of  advisory  clients,   including  the  Advisor  Funds,  Portfolio
Companies and/or Managed Accounts that they manage, and to help ensure that
such  decisions  are  made  in  accordance  with  the  Advisors'  fiduciary
obligations  to their  clients.  Nevertheless,  notwithstanding  such proxy
voting policies and procedures, actual proxy voting decisions of an Advisor
may  have the  effect  of  favoring  the  interests  of  other  clients  or
businesses of the Advisor and/or its affiliates, and of Goldman Sachs.

POTENTIAL REGULATORY RESTRICTIONS ON ADVISOR ACTIVITY

     From  time to time,  the  activities  of an  Advisor  Fund,  Portfolio
Company  or  Managed  Account  may  be  restricted  because  of  regulatory
requirements applicable to an Advisor and/or its internal policies designed
to comply with,  limit the  applicability  of, or otherwise  relate to such
requirements.  A client not  advised by an Advisor  would not be subject to
some of those considerations.  There may be periods when an Advisor may not
initiate or  recommend  certain  types of  transactions,  or may  otherwise
restrict or limit its advice in certain securities or instruments issued by
or related to  companies  for which the  Advisor is  performing  investment
banking, market making or other services or has proprietary positions.  For
example,   when  an  Advisor  is  engaged  in  an   underwriting  or  other
distribution  of securities  of, or advisory  services  for, a company,  an
Advisor Fund,  Portfolio Company or Managed Account managed by such Advisor
may be prohibited  from or limited in  purchasing or selling  securities of
that  company.  Similar  situations  could arise if personnel of an Advisor
serve as directors of companies  the  securities  of which an Advisor Fund,
Portfolio  Company or Managed  Account  managed by such  Advisor  wishes to
purchase or sell.  However,  if  permitted by  applicable  law, the Advisor
Fund,  Portfolio  Company or Managed Account may purchase  investments that
are issued,  or the subject of an underwriting,  distribution,  or advisory
assignment by its Advisor, or in cases in which the Advisor's personnel are
directors or officers of the issuer.

     The investment  activities of an Advisor for proprietary  accounts and
for other accounts may also limit the  investment  strategies and rights of
the Advisor  Fund,  Portfolio  Company or Managed  Account  managed by such
Advisor.  For example,  in  regulated  industries,  in certain  emerging or
international  markets, in corporate and regulatory ownership  definitions,
and in certain futures and derivative transactions, there are limits on the
aggregate  amount of  investment by  affiliated  investors  that may not be
exceeded  without the grant of a license or other  regulatory  or corporate
consent or, if exceeded,  may cause the Advisor to suffer  disadvantages or
business  restrictions.  If  certain  aggregate  ownership  thresholds  are
reached or certain transactions  undertaken,  the ability of the Advisor to
purchase  or  dispose  of  investments,  or  exercise  rights or  undertake
business  transactions,  may  be  restricted  by  regulation  or  otherwise
impaired.  As a result,  an  Advisor  may limit  purchases,  sell  existing
investments,  or  otherwise  restrict  or  limit  the  exercise  of  rights
(including voting rights) when the Advisor,  in its sole discretion,  deems
it appropriate in light of potential  regulatory  restrictions on ownership
or other impairments resulting in the reaching investment thresholds.


SAFEGUARDS  IMPLEMENTED  BY THE  MANAGING  MEMBER TO ADDRESS  CONFLICTS  OF
INTEREST

     The Managing  Member and its  personnel  will act in  accordance  with
their fiduciary duties to the Company and investors, and conduct themselves
in  accordance  with  professional  and ethical  standards.  Because of the
nature  of  the  Managing  Member's  business  and  the  businesses  of its
affiliates,  potential  conflicts  of interest  may arise.  To minimize the
effect of  potential  conflicts of  interest,  the Managing  Member and the
Company have put in place  policies and  procedures  and ethical  standards
which are described below. In addition, the Managing Member and the Company
have  disclosed  potential  conflicts  in this Annual  Report as well as in
other  materials  publicly  filed or sent to investors in  connection  with
their investment.

     Below is a  discussion  of three  general  categories  of conflicts of
interest that could affect the Company, and the general safeguards that the
Managing Member and the Company have put in place to address them.

CONFLICTS RESULTING FROM OTHER BUSINESS DEALINGS OF THE MANAGING MEMBER AND
ITS AFFILIATES

     The Managing  Member is a subsidiary of The Goldman Sachs Group,  Inc.
which is a worldwide, full-service investment banking, broker-dealer, asset
management and financial services organization.  As a result, Goldman Sachs
is engaged in  activities  that may result in  conflicts  of interest  with
those of the Company.  For example,  potential  conflicts of interests  may
arise if Goldman  Sachs were to provide  brokerage or other  services to an
Advisor of an Investment Fund or act as an Investment  Fund's prime broker.
In such  circumstances,  payments  to Goldman  Sachs  resulting  from these
relationships  will  generally  increase  as the size of the  assets of the
Advisor  increases.  This may  result  in the  Managing  Member  having  an
incentive to select for investment by the Company an Investment  Fund whose
Advisor has established such a relationship with Goldman Sachs over another
Investment  Fund  that  might  also  be  appropriate  for the  Company.  In
addition,  in  connection  with prime  brokerage  or  lending  arrangements
involving  Investment Funds,  Goldman Sachs may require repayment of all or
part of a loan at any time or from time to time.

     To minimize the effect of any potential conflict of interest resulting
from Goldman Sachs' other business operations, Goldman Sachs, including the
Managing  Member,  has  established  policies  and  procedures   addressing
potential  conflicts of interest.  Specifically,  Goldman  Sachs has put in
place  "Chinese  Walls"  policies  and  procedures,  which are  designed to
separate  the  various  functions  and  business  lines of  Goldman  Sachs,
including  the asset  management  and  brokerage  businesses.  As a result,
personnel of the Managing  Member that make  investment and other decisions
on behalf of the Company  ("Advisory  Personnel")  generally  perform their
duties for the Company without knowledge of other Goldman Sachs operations.

CONFLICTING OBLIGATIONS TO THE COMPANY AND OTHER ADVISORY ACCOUNTS

     The  Managing  Member may have  potential  conflicts  of  interest  in
connection  with other  accounts  it  manages  ("Advisory  Accounts").  For
example,  there  may be a  conflict  of  interest  in  connection  with the
Managing  Member's  allocation of investments or transaction  decisions for
the Company  and another  Advisory  Account  that may provide the  Managing
Member greater fees or other  compensation  than the Company,  particularly
where  there  is  limited  availability  or  limited  liquidity  for  those
investments.  This has the potential of providing the Managing  Member with
an incentive to allocate  investment  opportunities in a manner that favors
the other Advisory Account over the Company.

     To minimize the effect of any potential conflict of interest resulting
from the Managing Member's  conflicting  obligations to Advisory  Accounts,
including  its  allocation  practices,  the Managing  Member has  developed
policies and  procedures  addressing  these  conflicts,  which provide that
portfolio managers will allocate investment opportunities and make purchase
and sale decisions  among Advisory  Accounts in a manner that is reasonable
and equitable.  It is the policy of the Managing Member to allocate, to the
extent possible,  investment  opportunities to the Company over a period of
time on a fair and equitable basis relative to the Advisory  Accounts.  The
Managing  Member will generally  allocate  investments  and/or  transaction
decisions  among the Company and the  Advisory  Accounts  pro rata based on
their respective  relative amounts of capital available for investment.  In
circumstances when it is impossible or impracticable for investments and/or
transaction  decisions to be  allocated  among the Company and the Advisory
Accounts in such a manner,  the Managing  Member will seek to allocate such
investments and/or transaction decisions among the Company and the Advisory
Accounts  in a manner  that it  believes  is in the best  interests  of the
Company and the Advisory  Accounts after  considering,  among other things,
the respective investment guidelines and objectives,  portfolio weightings,
strategy exposure,  risk profile and risk tolerance,  current  investments,
cash flow and  anticipated  liquidity  needs,  expected future sizes of the
Company or the Advisory  Accounts  and  availability  of other  investments
opportunities for the Company and the Advisory Accounts.

PERSONAL INTERESTS OF ADVISORY PERSONNEL

     Employees  of the  Managing  Member may have  conflicts of interest in
connection  with  performing  their  duties on behalf of the  Company.  For
example,  employees  of the  Managing  Member may come into  possession  of
material,  non-public information or other information as a result of their
investment  activities on behalf of the Company or otherwise,  and they may
seek  to  improperly  benefit  from  such  information  by  trading  on the
information for their own personal benefit.

     To minimize the effect of any such potential conflict of interest, the
Managing Member has adopted policies and procedures that address  conflicts
of interest,  information  barriers  and the use of protected  information.
These policies state,  among other things,  that protected  information may
only be used in a manner  consistent  with the  purposes  for  which it was
created,  and may not be  disclosed to any other person who does not have a
need to know the  information  in order to  perform  his/her  duties and to
carry out the purposes for which the information was provided. Furthermore,
the Managing Member's policies  specifically address protected  information
relating to the trading activity of Advisors. These policies state that any
such  information  with respect to Advisors may not be used by employees of
the Managing  Member to make personal  investments  or in the management of
any other account of the Managing Member or its affiliates.

     The  Managing  Member also has policies  relating to personal  trading
generally.  Pursuant to these  policies,  employees  must  effect  personal
securities  transactions consistent with their fiduciary duties and subject
to professional and ethical standards. Among other things, the policies and
procedures of the Managing Member require,  subject to certain  exceptions,
pre-clearance  of  personal  securities  transactions  by  Managing  Member
employees and minimum holding periods for purchased securities.  Violations
of these  policies,  like all  Managing  Member  policies,  may  result  in
disciplinary actions up to and including  termination,  and may also result
in the breaking of specific  trades.  The personal  trading of employees of
the Managing Member is subject to monitoring by a compliance  department to
ensure compliance with these policies.

     In addition, employees of the Managing Member are subject to a code of
business  conduct and ethics that is applicable to The Goldman Sachs Group,
Inc. and its subsidiaries. Moreover, the Managing Member has also adopted a
Code of Ethics,  which is filed as an exhibit to this Annual  Report,  that
requires  persons  acting as chief  executive  and senior  officers  of the
Company to promote  honest  and  ethical  conduct,  including  the  ethical
handling of  conflicts  of  interests  between  personal  and  professional
relationships.

                                COMPETITION

     The  market  for  hedge  funds  and  hedge  fund  products  is  highly
competitive.  The Company  competes for  investors  with other hedge funds,
fund of  funds,  mutual  funds,  and  money  managers  who  employ  similar
investment  strategies  and  who  offer  similar  hedge  fund  products  to
investors.  New entities,  including  other hedge funds,  fund of funds and
money managers,  regularly enter the market, and there are limited barriers
to entry.  In addition,  new hedge fund products are  regularly  introduced
into  the  market  by  existing  funds.   The  Company  competes  with  its
competitors  on,  among  other  things,  the basis of its  reputation,  its
short-term  and  long-term  performance  and track  record,  access to, and
ability  to  select,   Advisors,  fees,  management  and  portfolio  teams,
strategies, client services and its ability to manage risk.

                                FISCAL YEAR

     The Company's  fiscal year ends on December 31 of each calendar  year.
The Managing Member, in its sole discretion, may change the fiscal year-end
of the Company.

                                 EMPLOYEES

     As of December 31, 2004,  the Company had no employees,  however,  the
Company is managed by the  Managing  Member  which as of December 31, 2004,
was supported by approximately 29 employees of the GS Group who allocate at
least a portion  of their time to the  management  of the  Company  and the
Investment Funds.

             SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

          investment strategies and allocations of assets;

          future performance; and

          trends in the four hedge fund sectors.

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

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

     In   light  of  the   significant   uncertainties   inherent   in  the
forward-looking  statements  included  in this  Annual  Report,  including,
without limitation, the risks set forth under "CERTAIN RISK FACTORS" below,
the   inclusion   of  such   information   should  not  be  regarded  as  a
representation  by the Company or the Managing  Member that the  investment
objectives  set forth in this Annual  Report will be achieved.  The Company
cautions  Members that  forward-looking  statements  are not guarantees and
that the actual  results could differ  materially  from those  expressed or
implied in the forward-looking statements.

     The  Company or the  Managing  Member do not  undertake  to update any
forward-looking  statement,  whether written or oral, that may be made from
time to time by the  Managing  Member of the Company or Company or on their
behalf.

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

                            CERTAIN RISK FACTORS

                               GENERAL RISKS

     The following  are certain risk factors that relate to the  operations
and terms of the Company and the Investment Funds.

           RISKS RELATED TO THE COMPANY AND THE INVESTMENT FUNDS'
                         PERFORMANCE AND OPERATION

LACK OF OPERATING  HISTORY OF THE COMPANY;  PAST PERFORMANCE OF THE COMPANY
IS NOT INDICATIVE OF FUTURE RESULTS

     Although the Managing Member also manages other investment funds which
have  historically had investment  programs similar to that of the Company,
the  Company  commenced  its  operations  on April 1,  2002 and has a short
independent  operating  history upon which  Members can evaluate its likely
performance.  Similarly, many current and future Advisors have or will have
had short  operating  histories.  The past  investment  performance  of the
Company, any of the Investment Funds or Advisors should not be construed as
an indication of the future results of such Advisors, the Investment Funds,
or of the  Company.  The results of other  accounts  and  investment  funds
previously  formed and managed by the Managing  Member  currently or in the
past,  which  have or have  had  investment  objectives,  strategies,  risk
profiles,  or investments that are similar to or different from the Company
or the Investment Funds, are not indicative of the results that the Company
or the Investment Funds may achieve.  The Investment Funds make investments
in different portfolios of securities and, accordingly,  their results and,
in turn, the results of the Company, may differ from the results previously
obtained by the Managing Member and those funds and accounts.

A  SUBSTANTIAL  PORTION OF AN  INVESTMENT  FUND'S  ASSETS  MAY BE  INVESTED
UTILIZING  STRATEGIES  WHICH ARE NOT  WITHIN ITS HEDGE  FUND  SECTOR;  MOST
ADVISORS DO NOT  PROVIDE  DETAILED  POSITION  INFORMATION  REGARDING  THEIR
PORTFOLIOS

     Although the managing member of an Investment Fund intends to allocate
assets to Advisors  whose  principal  investment  strategies are within the
specified hedge fund sector  referenced in its name, a substantial  portion
of the Investment Fund's assets may be invested utilizing strategies within
other investment sectors.  In addition,  the sectors referenced therein are
subjective  classifications  made  by  the  managing  member  in  its  sole
discretion.  Such  classifications  are  based  on  information  previously
provided by the Advisors and may differ from classifications into similarly
named sectors made by other industry  participants.  The managing member of
each Investment Fund will rely on information  previously  provided by each
Advisor in determining in its sole discretion that the principal investment
strategies  utilized  by an  Advisor  are  within  such  Investment  Fund's
specified hedge fund sector.

     The managing member of an Investment Fund seeks to select Advisors for
the Investment Fund that exhibit certain  operational,  management and risk
control standards in the daily investment of their portfolios. The managing
member  requests  historical  performance  and  position  data in  order to
evaluate  how  Advisors  behave  in  certain  environments.  However,  some
Advisors  have no operating  history and  therefore  such  performance  and
position data may not be available.  The managing member also requests that
each Advisor provide guidelines about the size of its typical positions and
the amount of leverage that it will use in managing assets.  These risk and
investment  guidelines  serve as a  framework  for the  managing  member to
conduct its ongoing risk monitoring on behalf of each Investment Fund as it
believes that there is value in regularly monitoring each Investment Fund's
Advisors to better  understand  such  Advisors' risk and sources of return.
The managing  member also conducts due diligence  visits with the Advisors,
which  may  include  representatives  of its  Advisor  selection,  risk and
quantitative analysis,  compliance and operations areas.  Accordingly,  the
managing  member seeks  Advisors who are willing to share  information  and
market  outlook and who agree to engage in a regular  dialogue  and provide
portfolio composition and profit and loss information  regularly,  although
the level of detail  will  vary by  Advisor.  However,  many  Advisors  are
unwilling  to  provide  significant  transparency,  e.g.  position  detail,
because such  information is  proprietary  to such  Advisors,  particularly
those  Advisors  operating in the event driven and relative  value sectors,
but also those in the equity  long/short and tactical  trading  sectors and
the Company may still choose to invest with such Advisors  because of their
historical  returns  and  reputation.  Moreover,  due  to  changes  in  the
investment  programs  of certain  Advisors  over time or the failure of the
Advisors to accurately  provide  information or to provide such information
in sufficient detail, it is possible that the Investment Fund's assets will
be allocated to Advisors  whose  principal  investment  strategies  are not
within its specified hedge fund sector for extended periods of time.

     As is customary with the funds-of-hedge funds, most of the Advisors do
not provide  the  managing  member of the  Investment  Funds with  detailed
position  reports because such information is proprietary to such Advisors.
These Advisors would not likely permit the Investment  Funds to invest with
them  if  such  an  information   requirement   was  a  condition  to  such
investments.  Also,  Advisors may not comply with their  stated  investment
strategies.  Members of the Company are assuming the risk that the Advisors
may  not  be  providing   accurate  and  timely   information  about  their
strategies,  performance and positions and that the information provided by
the Advisors  will  subsequently  be proven or  discovered to be inaccurate
and/or false.  Reference in this Annual Report to  information  received by
Advisors includes  information  received directly from the Advisors as well
as  information  received from  independent  administrators  or other third
party providers on behalf of such Advisors.

THERE CAN BE NO ASSURANCE THAT THE MANAGING  MEMBER'S  DECISIONS  REGARDING
RISK ALLOCATIONS WILL BE SUCCESSFUL; INACCURATE INFORMATION PROVIDED BY THE
ADVISORS MAY HAVE A MATERIAL  ADVERSE EFFECT ON IMPLEMENTING  THE COMPANY'S
INVESTMENT OBJECTIVE

     The  Managing  Member  will  have the  discretion  to  underweight  or
overweight allocations to hedge fund sectors from a risk perspective. As of
July 1, 2004, the Managing  Member  implemented an adjustment to weightings
among  the  Investment  Funds.  There is no  assurance  that its  decisions
regarding allocations of assets or weights will be successful. In addition,
the Company will be limited in its ability to make  changes to  allocations
due to the redemption provisions of the Investment Funds,  including notice
periods and  limited  redemption  dates and the  ability of the  Investment
Funds  to  suspend  and  postpone  redemptions.   In  addition,   any  such
allocations  will be made by the Company  based on  information  previously
provided by the Advisors.  If such information is inaccurate or incomplete,
it is possible that the Company's allocation to the hedge fund sectors from
a  risk  perspective  may  not  reflect  the  Managing   Member's  intended
allocations.  This could have a material  adverse  effect on the ability of
the Managing Member to implement the Company's investment objective.

NON-DIVERSIFIED  STATUS;  THE  MANAGING  MEMBER MAY ALLOCATE TO ONE OR MORE
ADVISORS A RELATIVELY LARGE PERCENTAGE OF AN INVESTMENT FUND'S ASSETS

     The Company is a "non-diversified" investment company. Thus, there are
no percentage limitations imposed by the Investment Company Act of 1940, as
amended (the  "Investment  Company Act") on the percentage of the Company's
assets  that may be  invested  in the  securities  of any one  issuer.  The
Company will allocate its assets to Investment Funds. Although the managing
member of the  Investment  Funds  intends  to  follow a  general  policy of
seeking  to  diversify  each  Investment   Fund's  capital  among  multiple
Advisors, the managing member may in its discretion depart from such policy
from time to time and one or more  Advisors  may be  allocated a relatively
large  percentage of an  Investment  Fund's  assets,  although the managing
member of the Investment Funds generally will not allocate more than 25% of
the total assets of an Investment Fund to any single Advisor at the time of
investment in such Advisor. Consequently,  losses suffered by such Advisors
of an Investment Fund could result in a proportionately higher reduction in
such  Investment  Fund's  capital  than  if  such  capital  had  been  more
proportionately allocated among a larger number of Advisors.

DEPENDENCE  ON THE MANAGING  MEMBER AND THE ADVISORS;  THE MANAGING  MEMBER
GENERALLY HAS LIMITED  ACCESS TO  INFORMATION  ON OR CONTROL OVER ADVISOR'S
PORTFOLIOS  AND  MEMBERS  ASSUME  THE  RISK  THAT  ADVISORS  MAY  KNOWINGLY
MISREPRESENT INFORMATION WHICH COULD HAVE A MATERIAL NEGATIVE IMPACT ON THE
COMPANY

     The Managing  Member  invests  assets of the Company in the Investment
Funds which in turn will invest in the  Advisors.  The  managing  member of
each of the Investment Funds,  which currently is the Managing Member,  has
the sole authority and responsibility for the selection of the Advisors for
that Investment  Fund. The success of each Investment Fund and, in turn, of
the  Company,  depends  upon the  ability  of the  managing  member  of the
Investment  Funds  and each  Investment  Fund's  Advisors  to  develop  and
implement  investment   strategies  that  achieve  each  Investment  Fund's
investment  objectives.  For example, an Advisor's inability to effectively
hedge an  investment  strategy  that it utilizes may cause the assets of an
Investment Fund allocated to such Advisor to significantly decline in value
and could  result in  substantial  losses to such  Investment  Fund and, in
turn, to the Company. The Investment Funds do not have any control over the
Advisors. Moreover, subjective decisions made by the Managing Member or the
managing member of an Investment Fund or by the Investment  Funds' Advisors
may cause the Company,  the Investment Fund or the Advisors to incur losses
or  to  miss  profit   opportunities  on  which  they  may  otherwise  have
capitalized.  Members  of the  Company  will  have no  right  or  power  to
participate in the management or control of the Company,  Investment Funds,
Portfolio  Companies,  Advisors  or  Advisor  Funds,  and  will not have an
opportunity  to evaluate in advance any  specific  investments  made by the
Company,  the Investment Funds,  Portfolio  Companies,  Advisors or Advisor
Funds, or the terms of any investments made by the Company,  the Investment
Funds, Portfolio Companies, Advisors or Advisor Funds.

     While the Managing  Member will select the  Investment  Funds in which
the  Company  invests,  the  Managing  Member  relies to a great  extent on
information  provided  by the  Advisors  and will  generally  have  limited
access,  if any  access at all,  to  information  regarding  the  Advisors'
portfolios  and  operations.   Most  Advisors   consider  this  information
proprietary and would not provide this  information  even if requested.  If
the Investment Funds only invested in Advisors who provided complete access
to their information, the Investment Funds would not be able to access many
Advisors with which they might otherwise wish to invest since many Advisors
with strong track records and/or limited capacity will not agree to provide
this access.  Limiting the Advisors that the Investment  Funds would invest
with would have a material  adverse impact on the Investment  Funds and, in
turn, the Company and its Members. Accordingly, the Investment Funds invest
with many  Advisors  who do not  provide any or all such  information,  and
Members who are not  willing to assume  this risk  should not retain  their
investment  in the Company.  There is a risk that  Advisors may  knowingly,
recklessly,  negligently or otherwise withhold or misrepresent  information
regarding  activities  that could have a  material  negative  impact on the
performance of an Investment  Fund and the Company.  Members of the Company
are assuming the risk that the  Advisors  will act in such a manner.  These
activities,  therefore,  could occur  without the knowledge of the Managing
Member,  and  could  have a  material  negative  impact  on  the  Company's
performance  and  financial  statements,  including,  among  other  things,
causing   a   restatement   of  prior   financial   statements.   Any  such
misrepresentation  or fraud by an Advisor  would  result in their  position
being  inaccurately  reflected in an Investment  Fund's,  and therefore the
Company's, financial statements. Once an Investment Fund learns of any such
misrepresentation or fraudulent activities,  it will likely be too late for
such  Investment  Fund to  withdraw  its assets from such  Advisor  without
having incurred significant losses due to its investment with such Advisor.

     In the  event  of  misrepresentation  and  fraud  committed  by  those
Advisors or hedge funds in which the Investment  Funds invest,  the Company
or, more likely the Investment  Funds,  will have remedies  available under
applicable  state and federal  securities and anti-fraud laws. As a general
matter, the Company does not have contractual  remedies available to it for
misrepresentation  and fraud,  however,  in certain limited cases where the
Investment  Funds invest through Managed  Accounts or Portfolio  Companies,
the Investment Funds may have certain contractual protections.  The Company
or the  Investment  Funds intend to pursue their  potential  legal remedies
based on an evaluation of litigation risks and costs involved in pursuing a
litigation.  In  addition,  in deciding  on whether or not to pursue  legal
remedies  available to them, the Company or the Investment  Funds will also
consider  the costs  involved in pursuing  any remedy and the risk that the
underlying  hedge  fund may  have  insufficient  assets  to  comply  with a
successful outcome. Accordingly, even if a legal remedy may be available to
the  Company  or the  Investment  Funds,  it may chose  not to pursue  such
remedy.

THE  INVESTMENT  FUNDS DO NOT  INTEND  TO  PARTICIPATE  IN  INITIAL  PUBLIC
OFFERINGS WHICH MAY LIMIT POTENTIAL GAINS

     The Investment Funds do not presently  intend to participate  directly
or indirectly in initial public  offerings,  which are subject to the rules
of the NASD that limit the ability of NASD member firms to sell  securities
in initial public  offerings to certain  classes of  "restricted  persons."
Securities  sold in certain  initial  public  offerings in the past have on
occasion  experienced initial,  sometimes rapid,  increases in market value
following such offerings. As a result, this could have an adverse effect on
the performance of the Investment Funds, and, in turn, the Company.

           RISKS RELATED TO THE COMPANY'S REGULATORY ENVIRONMENT

LIMITED REGULATORY OVERSIGHT; MEMBERS NOT AFFORDED PROTECTION OF INVESTMENT
COMPANY ACT

     The  Company and each of the  Investment  Funds,  in reliance  upon an
exemption  available to privately  offered  investment  companies,  are not
required to register as  investment  companies  and have not  registered as
such  under  the  Investment  Company  Act.  Thus,  the  provisions  of the
Investment Company Act intended to provide various protections to investors
(which, among other things, require investment companies to have a majority
of  disinterested   directors,   provide  limitations  on  leverage,  limit
transactions  between  investment  companies and their affiliates,  require
securities held in custody at all times to be individually  segregated from
the  securities  of any other  person and marked to clearly  identify  such
securities  as the  property of such  investment  company and  regulate the
relationship  between  the  adviser  and the  investment  company)  are not
applicable.  The  Managing  Member is  registered  as an adviser  under the
Investment Advisers Act.

     Moreover,  the  Advisor  Funds and  Portfolio  Companies  in which the
Investment   Funds  invest  generally  are  not  registered  as  investment
companies,  and the  Investment  Funds and the  Company,  in turn,  are not
provided  the  protections  of the  Investment  Company  Act. In  addition,
although  the SEC has  adopted  new  rules  that will  require  most of the
Advisors of the Investment  Funds to register as investment  advisers under
the Investment  Advisers Act, there is expected to be a significant  period
of time before such registrations are completed.  Therefore,  an Investment
Fund  as an  investor  with  such  Advisors  that  are  not  registered  as
investment advisers will not have the benefit of certain of the protections
of the Investment Advisers Act.

     The Advisor  Funds and Portfolio  Companies  generally do not maintain
their securities and other assets in the custody of a bank or a member of a
securities  exchange,   as  generally  required  of  registered  investment
companies in  accordance  with certain SEC rules.  A registered  investment
company  which  places  its  securities  in the  custody  of a member  of a
securities  exchange  is required  to have a written  custodian  agreement,
which  provides  that  securities  held in  custody  will  be at all  times
individually  segregated from the securities of any other person and marked
to clearly  identify  such  securities  as the property of such  investment
company and which contains other provisions  designed to protect the assets
of the registered  investment  company. It is anticipated that the Advisors
to which the Investment  Funds will allocate assets generally will maintain
custody  of their  assets  with  brokerage  firms  which do not  separately
segregate  such  customer  assets  as  would  be  required  in the  case of
registered  investment  companies.  Under the  provisions of the Securities
Investor  Protection  Act of 1970, as amended,  the  bankruptcy of any such
brokerage firm could have a greater  adverse  effect on an Investment  Fund
and, in turn,  on the Company,  than would be the case if custody of assets
were  maintained  in  accordance  with  the   requirements   applicable  to
registered  investment  companies.  There is also a risk that an Investment
Fund's  Advisor could  convert to its own use assets  committed to it by an
Investment  Fund or that a  custodian  could  convert to its own use assets
committed to it by an Investment Fund's Advisor.  There can be no assurance
that  the  Advisors  or the  entities  they  manage  will  comply  with all
applicable  laws and that  assets  of the  Investment  Funds  entrusted  to
Advisors by the Investment Funds will be protected.

     Furthermore,   in  accordance  with  U.S.  Commodity  Futures  Trading
Commission (the "CFTC") regulations, the Managing Member is registered as a
commodity  trading  advisor  ("CTA") and a commodity pool operator  ("CPO")
under the U.S.  Commodity  Exchange Act of 1974 as amended (the  "Commodity
Exchange Act"),  and all of the Advisors of each Investment Fund are either
registered  as  CTAs  or  have  indicated  to the  managing  member  of the
Investment Funds, that they are exempt from such registration.  Because the
Units are being privately  offered under both federal and state  securities
laws and Units may be purchased only by persons who are qualified  eligible
persons  pursuant  to Rule  4.7  under  the  Commodity  Exchange  Act,  the
Memorandum has not been filed with or reviewed by any regulatory authority.
The  Managing  Member  reserves  the right to  withdraw  any  registrations
relating to the Company in the future as permitted by applicable law.

THE COMPANY  FACES  LEGAL,  TAX AND  REGULATORY  RISKS WHICH MAY  ADVERSELY
AFFECT THE COMPANY

     Legal,  tax and regulatory  changes could occur during the term of the
Company that may adversely affect the Company  (including changes under the
Exchange  Act).  For  example,  the  regulatory  and  tax  environment  for
derivative  instruments  in  which  Advisors  of  an  Investment  Fund  may
participate  is  evolving,  and  changes in the  regulation  or taxation of
derivative  instruments  may  materially  adversely  affect  the  value  of
derivative instruments held by such Investment Fund and, in turn, the value
of the Company's assets,  and the ability of such Investment Fund to pursue
its trading strategies. Similarly, the regulatory environment for leveraged
investors  and for hedge funds  generally is  evolving,  and changes in the
direct or indirect  regulation  of  leveraged  investors or hedge funds may
materially  adversely  affect  the  ability  of the  Company  to pursue its
investment objective or strategies.

               RISKS RELATED TO THE UNITS, LIQUIDITY OF UNITS
                       AND THE OFFERING OF THE UNITS

UNITS WILL NOT BE LISTED AND WILL NOT BE MARKETABLE

     The  Company  does not  intend to list its Units  for  trading  on any
national securities exchange.  There is no secondary trading market for the
Units,  and none is  expected  to develop.  The Units are,  therefore,  not
readily marketable. Because the Company is a closed-end investment company,
its Units will not be  redeemable  at the option of Members,  other than on
each January 1 or July 1 (occurring  on or after the first  anniversary  of
the  purchase  of such Units by the  Member)  upon 60 days'  prior  written
notice  to the  Managing  Member,  and they  will not be  exchangeable  for
interests of any other funds.  See "--The Company is a Closed-End Fund With
Limited Liquidity and Limited Rights for Redemption" below.

THE COMPANY IS A CLOSED-END FUND WITH LIMITED  LIQUIDITY AND LIMITED RIGHTS
FOR REDEMPTION

     The Company is a  non-diversified,  closed-end  management  investment
company designed primarily for long-term investors,  and is not intended to
be a trading  vehicle.  Members should not retain their  investment in this
Company if they need a liquid  investment.  Closed-end  funds  differ  from
open-end management  investment  companies (commonly known as mutual funds)
in that  investors  in a  closed-end  fund do not have the  right to redeem
their shares on a daily basis at a price based on net asset value. In order
to be able to meet daily redemption  requests,  mutual funds are subject to
more stringent liquidity requirements than closed-end funds. In particular,
a mutual fund  generally  may not invest more than 15% of its net assets in
illiquid  securities.  The Managing Member believes that unique  investment
opportunities  exist in the market for  Investment  Funds.  However,  these
investments  are often  illiquid,  and a closed-end  fund's ability to make
such investments is limited.

     An  investment in the Company  provides  limited  liquidity  since the
Units are not freely  transferable and generally a Member is only permitted
to redeem Units,  upon 60 days' prior written notice to the Managing Member
(unless  such  notice  is  waived  by  the  Managing  Member  in  its  sole
discretion), as of the time immediately prior to the opening of business on
each January 1 or July 1 occurring on or after the first anniversary of the
purchase  of such Units by the  Member.  In  addition,  redemptions  may be
limited  or  postponed  under  limited  circumstances.  The same or similar
limitations  will  apply  to  the  Company's  investment  in  each  of  the
Investment Funds.

     The  Advisors  of the  Investment  Funds may  invest a portion of such
Investment  Fund's assets in securities and financial  instruments that are
not publicly  traded.  Such  non-publicly  traded  securities and financial
instruments may not be readily  disposable,  are difficult to value and, in
some  cases,  may  be  subject  to  contractual,  statutory  or  regulatory
prohibitions on disposition  for a specified  period of time. An investment
in the  Company  is  therefore  suitable  only  for  certain  sophisticated
investors  that will not be  materially  impacted by  postponements  of the
Company's normal redemption dates. Further, distributions of proceeds by an
Investment  Fund to the Company  upon the  Company's  withdrawal  from such
Investment Fund may be limited, in such Investment Fund's managing member's
sole discretion, because of restrictions imposed upon withdrawals under the
terms  of the  Advisor  Funds or  investment  management  agreements  in or
pursuant to which such Investment Fund's assets are invested,  or where, in
the  view  of the  managing  member,  the  disposal  of part or all of such
Investment  Fund's assets to meet withdrawal  requests would be prejudicial
to its  members.  Distributions  of proceeds by the Company upon a Member's
withdrawal may be limited, in the Managing Member's sole discretion, due to
the  above-described  circumstances  or where,  in the view of the Managing
Member,  the  disposal  of  part  or all of the  Company's  assets  to meet
withdrawal requests would be prejudicial to the Members.

REDEMPTIONS  OF  UNITS  ARE  SUBJECT  TO  SUBSTANTIAL  WAITING  PERIOD  AND
POTENTIALLY OUTDATED INFORMATION

     There  will be a  substantial  period of time  between  the date as of
which  Members must submit a request for  redemption  and the date they can
expect to receive  full  payment  for their  redemption  proceeds  from the
Company. Members whose Units are accepted for redemption bear the risk that
the  Company's  NAV  (which  is  based  upon  the net  asset  value  of the
underlying  Investment  Funds) may  fluctuate  significantly  in the 60-day
period between the date by which redemption  requests must be submitted and
the date as of which such Units are valued for purposes of such redemption.
Members  will have to decide  whether to request  that the  Company  redeem
their Units without the benefit of having current information regarding the
value of Units on a date proximate to the date on which Units are valued by
the Company for purposes of effecting such redemptions.  In addition, under
certain  exceptional  circumstances,  such as force  majeure,  the Managing
Member may find it necessary (i) to postpone  redemptions  if it determines
that the  disposition of investments to fund  redemptions  would  adversely
affect  NAV  per  Unit  or (ii) to set up a  reserve  for  undetermined  or
contingent  liabilities  and  withhold  a  certain  portion  of  redemption
proceeds.  Having an investment in the Company is suitable only for Members
who can bear the risks  associated with the limited  liquidity of the Units
and the underlying investments of the Company.

SUBSTANTIAL REDEMPTIONS COULD HAVE A MATERIAL ADVERSE EFFECT ON THE COMPANY

     Substantial  requests for the Company or an Investment  Fund to redeem
units of its members  could require the Company or the  Investment  Fund to
liquidate certain of its investments more rapidly than otherwise  desirable
in  order  to  raise  cash to fund the  redemptions  and  achieve  a market
position  appropriately  reflecting a smaller asset base. This could have a
material  adverse  effect on the value of the units  redeemed and the units
that remain outstanding.

REDEMPTION  MAY BE IN CASH OR  IN-KIND  UNDER  THE SOLE  DISCRETION  OF THE
MANAGING MEMBER;  MEMBERS MAY BEAR RISKS RELATED TO IN-KIND  SECURITIES AND
PAY FEES IN DISPOSING IN-KIND SECURITIES

     The Company generally expects to pay redemption proceeds in respect of
redeemed Units in cash. However, there can be no assurance that the Company
will have  sufficient cash to pay for Units that are being redeemed or that
it will be able to liquidate  investments  at  favorable  prices to pay for
redeemed  Units.  The  Company  may  in  certain  circumstances  distribute
securities  as  payment  for  redeemed  Units,  including  if making a cash
payment  would  result in a material  adverse  effect on the Company or the
Members,  or if the Company has received  distributions from the Investment
Funds in the form of securities that are  transferable  to the Members.  An
Investment  Fund may distribute  redemption  proceeds to the Company if the
Investment  Fund  receives  distributions  from its Advisors in the form of
securities.  It is possible that, upon the Company's withdrawal of all or a
portion of its assets  invested  in an  Investment  Fund,  the  Company may
receive  securities  that are  illiquid  or  difficult  to  value.  In such
circumstances,   the  Managing  Member  would  seek  to  dispose  of  these
securities in a manner that is in the best interests of the Company,  which
may include a  distribution  in-kind to its Members.  In the event that the
Company  makes such a  distribution  of  securities  as payment  for Units,
Members  will  bear any  risks  of the  distributed  securities  and may be
required to pay a brokerage  commission  or other costs in order to dispose
of such securities.

SPECIAL  CONSIDERATIONS  ARE  APPLICABLE  TO THE UNITS;  AFTER THE  INITIAL
OFFERING OF UNITS SUBSEQUENT  PURCHASERS OF UNITS MAY SUFFER LOSSES BECAUSE
OF PREVIOUSLY ESTABLISHED OPEN POSITIONS

     The Company may accept additional subscriptions for Units from time to
time as  determined by the Managing  Member and in accordance  with the LLC
Agreement.   Upon  the  approval  of  the  Managing  Member,  a  Member  or
prospective Member may make additional subscriptions for Units on the first
day of each calendar  quarter or at such other times as the Managing Member
may determine in its sole  discretion.  Historically,  the Company has from
time to time  taken in funds on a monthly  basis.  From  July 2003  through
September  2004,  the  Company  only  took  in  investments  from  existing
investors and limited subscriptions from new qualified investors,  however,
starting in October 2004, the Company began accepting additional amounts of
new subscriptions again and the Company continued to do so through December
31, 2004.

     Additional   subscriptions  will  dilute  the  indirect  interests  of
existing  Members in the Company's  investment  portfolio prior to any such
subscription,  which could have a material  adverse  impact on the existing
Members' interest in the Company if future Company investments underperform
the prior investments. The Investment Funds may be closed from time to time
to  investments  by new investors,  however,  the  Investment  Funds may be
reopened in the sole  discretion of the managing  member of each Investment
Fund.  Additional  subscriptions  for membership units as determined by the
managing  member of each Investment Fund and in accordance with its limited
liability  company  agreement  will dilute the  indirect  interests  of the
Investment  Fund's  existing  members,   including  the  Company,   in  the
Investment  Fund's  investment  portfolio  prior to any such  subscription,
which could have an adverse impact on the existing members' interest in the
Investment Fund if such Investment Fund's future  investments  underperform
its prior investments. In addition, it is expected that certain Advisors of
the  Investment   Funds  will  structure   performance-based   compensation
similarly to the  Company,  with such  compensation  being paid only if net
asset value  exceeds a high  watermark  equal to a previously  obtained net
asset value. Generally,  no performance-based  compensation will be paid by
an Investment  Fund to an Advisor until the assets  managed by such Advisor
appreciate above its high watermark,  and such  appreciation will be shared
pro rata by all of the  members  of such  Investment  Fund,  including  the
Company, not just those who were members at the time the high watermark was
set.  The  value  attributable  to  the  fact  that  no   performance-based
compensation  will be paid to an Advisor  until it  exceeds  its prior high
watermark  will not be taken  into  account  in  determining  the NAV of an
Investment  Fund or any  series  of its  membership  units.  Such  value to
existing  members of an Investment  Fund,  including  the Company,  will be
diluted by new  subscriptions  for such Investment Fund's membership units.
Because  the  new  membership   units  will  participate  in  any  positive
performance by the Advisor  before it hits its high  watermark  without the
Advisor being paid any  performance-based  compensation,  the  pre-existing
units in an Investment Fund, including those held by the Company,  will not
get the full benefit of the amount of the appreciation  that is not subject
to performance-based compensation.

     In addition, unlike purchasers who purchased the initial Units offered
by the Company, Units acquired following the initial offering of Units will
represent  indirect interests in operating funds which may have significant
open positions.  Since these Units will,  indirectly  through the Company's
investments  in each of the  Investment  Funds,  share  in each  Investment
Fund's  open  positions  which may have  been held for some  period of time
prior to the  issuance of the  additional  Units,  the  application  of the
relevant   Advisor's   trading  approach  to  such  positions  may  have  a
qualitatively  different  effect on the performance of the additional Units
than it does on the performance of previously issued Units. For example,  a
number  of  trading  approaches  may  become  more  aggressive  in terms of
willingness  to tolerate  losses in a position  and  increase the size of a
position  after an open trade has  generated a substantial  profit  because
subsequent  losses (up to a certain  level) are  perceived  as being only a
partial  give-back of prior  profits,  not an actual loss. As purchasers of
Units will not have received,  indirectly through the Company's investments
in the Investment Funds, the benefit of any profits on open positions prior
to the date on which  they  purchase  the  Units,  subsequent  losses  will
constitute an absolute loss to such holders,  not only a partial  give-back
of  profits.   In  addition,   certain   trading   approaches   may  follow
profit-taking strategies whereby they will liquidate or partially liquidate
a position after it has generated a predetermined  amount of profit.  Since
the new Units will not, indirectly through the Company's investments in the
Investment Funds, have had the benefit of any such profit prior to the date
on which they were issued,  Members holding such Units may find themselves,
indirectly  through the  Company's  investments  in the  Investment  Funds,
liquidated  out of a position  (which  would  have  continued  to  generate
substantial  profits) due to an Advisor "taking profits," none of which had
inured to their benefit.  Some approaches  apply similar  analyses based on
overall  portfolio  performance,  not just the  performance  of  particular
positions, with generally analogous effects.

                  SPECIAL RISKS OF THE COMPANY'S STRUCTURE

     This  section  discusses  certain  risks  related to the fact that the
Company  allocates its assets to Investment  Funds,  which  allocate  their
assets to Advisors.

                  RISKS RELATED TO THE COMPANY'S STRUCTURE

THE INVESTMENT FUNDS' AND THE ADVISORS'  INVESTMENTS MAY NOT BE DIVERSIFIED
AND THERE CAN BE NO  ASSURANCE  THAT THE  COMPANY'S  ALLOCATION  MODELS AND
METHODOLOGIES WILL ACHIEVE THE COMPANY'S ALLOCATION GOALS

     The  managing  member  of the  Investment  Funds  generally  will  not
allocate more than 25% of any Investment  Fund's total assets to any single
Advisor  at  the  time  of  allocation.  However,  following  the  time  of
allocation, the percentage of such Investment Fund's total assets allocable
to any  single  Advisor  could  exceed  the 25%  level  due to a number  of
factors,  including  redemptions  from the Investment  Fund and positive or
negative  performance  by an  Advisor as  compared  to other  Advisors.  No
assurance  is given as to any level of  multiple  Advisor  diversification.
Greater concentration with any single Advisor may entail additional risks.

     While the managing  member of the  Investment  Funds may seek Advisors
that utilize diversified investment  strategies,  there can be no assurance
that  market  or  other  events  will  not have an  adverse  impact  on the
strategies  employed by multiple  Advisors.  Advisors may at certain  times
hold  large  positions  in a  relatively  limited  number  of  investments.
Advisors may target or concentrate their investments in particular markets,
sectors,  or  industries.  Those  Advisors that  concentrate  in a specific
industry  or target a specific  sector will also be subject to the risks of
that industry or sector,  which may include,  but are not limited to, rapid
obsolescence  of  technology,  sensitivity to regulatory  changes,  minimal
barriers to entry,  and sensitivity to overall market swings.  As a result,
the NAVs of such Advisors may be subject to greater  volatility  than those
of investment  companies that are subject to  diversification  requirements
and this may  negatively  impact  the NAV of the  Investment  Funds and the
Company.

     The Company is designed to be broadly exposed to the hedge fund market
by  allocating  its assets to the  Investment  Funds in the four hedge fund
sectors:  tactical  trading,  equity  long/short,  relative value and event
driven.  Quantitative  analysis is  combined  with  judgment  to  determine
strategic allocations that will offer broad exposure to hedge fund returns.
Strategic  return,  risk and correlation  estimates inform the quantitative
analysis,  which  balances  returns and  contribution  to  portfolio  risk.
Judgment is applied to both  estimates and weights in an attempt to achieve
a  diversified  exposure  to hedge funds while  targeting  attractive  risk
adjusted  returns.  The  Managing  Member  periodically   re-evaluates  the
contribution  to the risk and return of the  Company  from each  investment
sector  and  may in the  future  in its  sole  discretion  re-allocate  the
Company's assets or weights of the investment sector as it deems advisable.
The  Managing  Member may at  certain  times be unable to  re-allocate  the
Company's  assets or weights among the Investment Funds as it determines is
advisable in order to achieve the Company's  objectives due to restrictions
on redemptions and additional subscriptions imposed by the Investment Funds
or Advisors.  If imbalances in the allocations occur because the Company is
unable to re-allocate on a timely basis,  because the Company's  allocation
models and methodologies are not successful, or otherwise, losses occurring
as a result could cause the Company to suffer significantly  greater losses
than would be the case if the Company's allocation goals had been achieved.

THE COMPANY'S FINANCIAL STATEMENTS ARE, AND IN THE FUTURE WILL BE, BASED ON
ESTIMATES OF VALUATIONS  PROVIDED BY THIRD PARTY  ADVISORS WHICH MAY NOT BE
ACCURATE OR MAY NEED TO BE ADJUSTED IN THE FUTURE

     Generally,  the managing member of the Investment  Funds does not, and
will not,  have any  ability to assess the  accuracy of the  valuations  or
other financial  information  received from each Investment Fund's Advisors
with respect to allocations not made through Managed Accounts. Although the
managing member of the Investment Funds may obtain information  provided by
the  Advisors  about their net asset  values,  the  managing  member of the
Investment   Funds  generally  does  not,  and  is  not  able  to,  confirm
independently   the  accuracy  of  such  valuations  (which  are  generally
unaudited  except  at  year-end)  except  in the case of  allocations  made
through Managed Accounts. Most Advisors treat their investment positions as
proprietary  information and many of them will not provide such information
to their  investors.  Furthermore,  the net asset  values  received  by the
managing  member  of the  Investment  Funds  from  each  Investment  Fund's
Advisors  will  typically be based on estimated or unaudited  reports only,
and  such  values  will be used to  calculate  NAVs  and fee  accruals  for
purposes of determining amounts payable on redemption to the extent audited
information  is not then  available.  In some  cases,  Advisors  do not use
independent  administrators  or other  third party  providers  to value and
report  their net asset  values.  In such  cases,  the  valuations  used to
determine the net asset values of these  Advisors will be dependent  solely
upon the Advisors for validation, and even when third parties are involved,
the Advisors may have primary  responsibility for determining the values of
the  portfolio  securities.  The  valuation  reports will not be audited by
third parties in most cases except at year-end. Valuations provided by each
Investment  Fund's  Advisors  may be subject to later  adjustment  based on
valuation information available at that time, including,  for example, as a
result  of  year-end  audits or other  valuation  reviews  conducted  by an
Advisor's  auditors.  Furthermore,  there is a risk that any  valuation  an
Investment  Fund  receives  from  an  Advisor  will  be  fraudulent  or may
inadvertently  contain  material  errors that the Investment  Funds and, in
turn, the Company would not know when it prepares its financial statements.
Members should  understand  that the Company cannot prevent this risk since
neither the Company nor the  Investment  Funds have access to the Advisors'
books and records.  Neither the Company nor the Investment Funds is a party
to any direct  agreements  with any  Advisor  providing  the Company or the
Investment Funds with a specific  contractual recourse in the case where an
Advisor has provided inaccurate or untimely  valuations.  Additionally,  an
Advisor  may  through  its  investment  documents  have  sought to limit or
eliminate its liability for inaccurate or untimely  valuations  entirely in
which case the  Company  may not have any  recourse.  The  Company  has not
entered into any direct agreements to indemnify any of the Advisors against
such  errors  or  omissions.  Any such  adjustments  resulting  from  wrong
valuations or errors in  calculations  may result in the Company  restating
its net asset value or having to restate its  financial  statements  at the
time  of  such  restatement,  as  well  as  for  prior  periods.  Any  such
restatement,  whether  increasing or decreasing  the net asset value of the
Company could have a material impact on the NAV of Member's Units.  Members
of the Company are  assuming  the risk that  valuations  may be  materially
incorrect  and/or  will need to be adjusted  and Members  should not retain
their investment in the Company if they are unwilling to assume such risks.
See "GENERAL  RISKS--Risks Related to the Company and the Investment Funds'
Performance  and  Operation--Dependence  on the  Managing  Member  and  the
Advisors;  the Managing Member  Generally has Limited Access to Information
on or Control over  Advisor's  Portfolios  and Members Assume the Risk that
Advisors May Knowingly Misrepresent Information Which Could Have a Material
Negative  Impact on the Company"  above and "SPECIAL RISKS OF THE COMPANY'S
STRUCTURE--Risks   Associated   with  the   Company   Investing   in  Other
Entities--Valuation of the Investment Funds' Investments Will be Based Upon
Valuations  Provided  by the  Advisors  Which are  Generally  not  Audited;
Uncertainties  in Valuations  Could Have a Material  Adverse  Effect on the
Company's Net Assets" below.

     If at any time the Managing Member determines, in its sole discretion,
that an incorrect number of Units was issued to a Member because the NAV in
effect on the date of issuance was materially  incorrect,  the Company will
adjust  such  Member's   Units  by   increasing  or  decreasing   them,  as
appropriate,  to such  number  of Units as would  have  been  issued at the
correct  NAV.  In  addition,  if at any time  after a  redemption  of Units
(including in connection  with any withdrawal of a Member from the Company)
the Managing Member  determines,  in its sole  discretion,  that the amount
paid to such  Member or  former  Member  pursuant  to such  redemption  was
materially  incorrect  (including  because  the NAV at which the  Member or
former Member purchased such Units was incorrect),  the Company will pay to
such Member or former Member any additional  amount that it determines such
Member  or former  Member  would  have been  entitled  to  receive  had the
redemption  been  effected at the correct NAV, or, in its sole  discretion,
seek  payment  from such  Member or  former  Member of (and such  Member or
former  Member  shall be required to pay) the amount of any excess  payment
that the Managing Member  determines such Member or former Member received,
in each case  without  interest.  If such a  determination  is made after a
Member  has  had all of its  Units  redeemed,  or if the NAV of a  Member's
remaining  Units is  insufficient  to cover the  amount of any  overpayment
(including,  without  limitation,  due to a decrease in the Company's NAV),
the Company  may be unable,  or may elect not under the  circumstances,  to
collect  the  amount  of any such  excess  payment,  and any  corresponding
restatement  of and  reduction in the NAV of the Company will  generally be
borne by the remaining Members of the Company.  The Company will be subject
to similar adjustment provisions as a member of the Investment Funds.

MEMBERS OF THE COMPANY ARE SUBJECT TO MULTIPLE  LEVELS OF FEES AND EXPENSES
BECAUSE OF THE COMPANY'S STRUCTURE AND THE FEE STRUCTURE OF THE COMPANY MAY
CREATE INCENTIVES FOR ADVISORS TO MAKE RISKY INVESTMENTS

     Although in many cases investor access to the Investment  Funds may be
limited or unavailable,  an investor who meets the conditions imposed by an
Investment Fund may be able to invest directly with the Investment Fund. By
investing in  Investment  Funds  indirectly  by having an investment in the
Company,  a Member of the Company bears a  proportionate  share of the fees
and  expenses  of  the  Company  (including   organizational  and  offering
expenses,  operating costs, sales charges,  brokerage transaction expenses,
and  administrative  fees)  and,   indirectly,   similar  expenses  of  the
Investment  Funds.  Thus, a Member of the Company will be subject to higher
operating  expenses  than  if he or  she  invested  in an  Investment  Fund
directly  or in a  closed-end  fund which did not utilize a "fund of funds"
structure.

     Each  Investment  Fund  generally  will  be  subject  to an  Advisors'
performance-based fee or allocation, irrespective of the performance of the
Investment Fund and the Company  generally.  Accordingly,  an Advisor to an
Investment  Fund with positive  performance  may receive  performance-based
compensation from the Investment Fund, and thus indirectly from the Company
and its Members,  even if the Company's  overall  performance  is negative.
Generally,  fees  payable to  Advisors of the  Investment  Funds range from
approximately 0.5% to 4% (annualized) of the average net asset value of the
Company's  investment,  and incentive  allocations or fees generally  range
from  18%  to 25% of an  Investment  Fund's  net  profits,  although  it is
possible  that such  ranges  may be  exceeded  for  certain  Advisors.  The
performance-based   compensation  received  by  the  Managing  Member,  the
managing  member of the Investment  Funds and an Advisor also may create an
incentive for such managing member or Advisor to make  investments that are
riskier  or more  speculative  than  those  that it might  have made in the
absence of the  performance-based  compensation.  Such  compensation may be
based on calculations of realized and unrealized gains made by the Managing
Member, the managing member of the Investment Funds and the Advisors.

THE COMPANY COULD INDIRECTLY INCUR  DUPLICATIVE  TRANSACTION  COSTS WITHOUT
ACCOMPLISHING A NET INVESTMENT RESULT

     Investment  decisions of the  Investment  Funds are generally  made by
their Advisors  independently of each other. As a result, at any particular
time,  one  Advisor  may  be  purchasing  securities  of  an  issuer  whose
securities  are being sold by another  Advisor.  Consequently,  the Company
could  indirectly incur  transaction  costs without  accomplishing  any net
investment result.

COMPENSATION  ARRANGEMENTS WITH THE MANAGING MEMBER AND THE ADVISORS OF THE
INVESTMENT  FUNDS  MAY  CREATE  INCENTIVES  FOR THE  MANAGING  MEMBER,  THE
INVESTMENT FUNDS OR THE ADVISORS TO MAKE RISKIER  INVESTMENTS OR TO INFLATE
RETURNS

     The Managing  Member of the Company and the Investment  Funds receives
an incentive allocation based upon the net capital  appreciation  allocated
to their members. In addition,  the Advisors of the Investment Funds, which
may include  affiliates of the Managing  Member,  may receive  compensation
based on the  performance of their  investments,  a pro rata share of which
will  be  borne  by the  Company  as a  member  of  each  Investment  Fund.
Accordingly,  there  often may be times  when a  particular  Advisor  of an
Investment  Fund may  receive  incentive  compensation  in  respect  of its
portfolio for a period even though such Investment  Fund's or the Company's
overall portfolio  depreciated during such period.  Incentive  compensation
arrangements  may also create an incentive  for the managing  member of the
Company and the Investment  Funds or the Advisors to make  investments that
are riskier or more speculative than would be the case if such arrangements
were not in  effect.  Such  incentives  could also  cause the  Advisors  to
artificially  or  fraudulently  inflate  the  actual  performance  of their
portfolio or the valuation of specific positions. In addition, because both
the  Managing  Member's  Incentive  Allocation  and  the  performance-based
compensation  of the  Advisors  are  calculated  on a basis which  includes
unrealized  appreciation of the Company's or an Investment Fund's assets or
a portion  thereof,  as the case may be,  they may be greater  than if such
compensation were based solely on realized gains and losses.

       RISKS ASSOCIATED WITH THE COMPANY INVESTING IN OTHER ENTITIES

PAST  PERFORMANCE OF AFFILIATED  FUNDS AND OF ADVISORS ARE NOT  NECESSARILY
INDICATIVE  OF THE RESULTS  THAT THE COMPANY  AND ANY  INVESTMENT  FUND MAY
ACHIEVE OR OF FUTURE RESULTS

     The  results of the  Investment  Funds and other  investment  funds or
accounts  formed or managed  by the GS Group,  including  other  investment
funds or accounts managed by the GS Group which have or have had investment
objectives  that are  similar  to those of the  Company  or the  Investment
Funds,  are not  necessarily  indicative of the results that the Company or
any Investment Fund may achieve.  The Company makes indirect investments in
a different  portfolio  of  securities  and,  accordingly,  its results are
independent of the previous results obtained by those funds.  Further,  the
Company and each  Investment Fund and their methods of operation may differ
in several  respects from prior GS Group  investment  vehicles or accounts;
e.g., there are different  investment and return  objectives and investment
allocation  strategies and the Company and each  Investment Fund utilizes a
different mix of Advisors  and, in certain  cases,  investment  techniques.
Similarly,  the past  investment  performance  of any of the Advisors  with
which the Investment Funds will invest or with which other investment funds
or accounts  managed by the GS Group  invest  should not be construed as an
indication  of the future  results of such  Advisors  or of the  Investment
Funds.  Potential  investors that desire performance or related information
with respect to the Investment  Funds or other  investment  funds formed or
managed by the GS Group should contact the Managing Member.

A MEMBER'S  INVESTMENT  IN THE COMPANY  WILL BE AFFECTED BY THE  INVESTMENT
POLICIES AND DECISIONS OF ADVISORS WHICH ARE OUTSIDE THE COMPANY'S CONTROL

     Because the Company  allocates  its assets to  Investment  Funds which
allocate  their assets to Advisors,  a Member's  investment  in the Company
will be affected by the investment  policies and decisions of an Advisor in
proportion  to the amount of Company  assets that  through  the  Investment
Funds are allocated to each  Advisor.  The net asset value of the interests
of the  Advisors,  and as a result,  the net asset value of the  Investment
Funds and, in turn, the Company, will fluctuate in response to, among other
things,  investment  decisions  made by the  Advisor,  various  market  and
economic  factors  related to the markets in which the Advisors  invest and
the  financial  condition  and  prospects  of issuers in which the Advisors
invest.  These risks will be outside the  control of the  Company.  Certain
risks related to the investment  strategies and techniques  utilized by the
Investment Funds and the Advisors are described under  "INVESTMENT  RELATED
RISKS" below.

LIMITATIONS ON ABILITY TO INVEST IN ADVISORS MAY RESULT IN ASSETS NOT BEING
USED TO PURSUE INVESTMENT OBJECTIVES

     In the event that the Investment  Funds are able to allocate assets to
Advisors  only at  certain  times,  the  Investment  Funds may hold cash or
invest any portion of its assets that is not  allocated to Advisors in cash
equivalents,  short-term  securities  or money  market  securities  pending
investment in Advisors.  During the time that the Investment  Fund's assets
are not allocated to Advisors, that portion of the Investment Fund's assets
will  not be used to  pursue  the  Investment  Funds'  and,  in  turn,  the
Company's investment objectives.

VALUATION  OF  THE  INVESTMENT  FUNDS'   INVESTMENTS  WILL  BE  BASED  UPON
VALUATIONS  PROVIDED  BY THE  ADVISORS  WHICH ARE  GENERALLY  NOT  AUDITED;
UNCERTAINTIES  IN VALUATIONS  COULD HAVE A MATERIAL  ADVERSE  EFFECT ON THE
COMPANY'S NET ASSETS

     The  valuation  of an  Investment  Fund's  investments  is  ordinarily
determined based upon monthly valuations provided by the Advisors which are
only audited annually.  Many of the securities in which Advisors invest may
not have a  readily  ascertainable  market  price and will be valued by the
Advisors without an independent  third party valuation.  In this regard, an
Advisor may face a conflict of interest in valuing the securities, as their
value will affect the Advisor's compensation.  Valuations of the securities
are very subjective and could prove in hindsight to have been wrong, and at
times by  significant  amounts.  Furthermore,  the  managing  member of the
Investment Funds may face a conflict of interest in overseeing the value of
the Investment  Funds'  investments,  as the value of the Investment Funds'
investments will affect such managing member's compensation. Although prior
to investing in any Advisor,  the managing  member of the Investment  Funds
generally  will seek to  conduct a due  diligence  review of the  valuation
methodology  utilized by such Advisor,  no assurances can be given that the
managing  member of the Investment  Funds will be given access to necessary
aspects of the  Advisors'  systems,  that such due  diligence  review  will
ascertain whether accurate  valuations will be provided by such Advisors to
the Investment Funds, that the Advisors will comply with their own internal
policies or procedures for keeping  records or making  valuations,  or that
the Advisors  policies and  procedures  and systems will not change without
notice  to the  Investment  Funds.  Moreover,  the  managing  member of the
Investment Funds will generally not have sufficient information in order to
be able to confirm or review the accuracy of valuations provided by Advisor
Funds  in which an  Investment  Fund  invests.  See  "GENERAL  RISKS--Risks
Related  to  the  Company  and  the  Investment   Funds'   Performance  and
Operation--Dependence on the Managing Member and the Advisors; the Managing
Member  Generally  has Limited  Access to  Information  on or Control  over
Advisor's  Portfolios  and  Members  Assume  the  Risk  that  Advisors  May
Knowingly  Misrepresent  Information  Which Could Have a Material  Negative
Impact on the Company." The net asset values or other valuation information
received by the managing member of the Investment Funds from an Advisor may
require estimations of the value of certain assets and liabilities, and may
be subject to later adjustment or revision by the Advisor, which adjustment
or revisions may be significant. Any such adjustment or revision may result
in either an  increase or decrease in the net asset value of the Company at
the time the Company is provided with information regarding the adjustment,
which adjustment or revision may be significant. If an Advisor's valuations
are  consistently  delayed  or  inaccurate,  the  managing  member  of  the
Investment  Funds will  consider  whether  the Advisor  continues  to be an
appropriate manager for the Investment Fund.  However,  the managing member
of the  Investment  Funds may elect in its sole  discretion  to retain  the
Advisor.  The Advisor's  information  could be inaccurate due to fraudulent
activity,  misvaluation  or inadvertent  error. In any case, the Investment
Funds may not  uncover  errors for a  significant  period of time.  If this
occurs in connection  with an investment in an Advisor Fund, the Investment
Fund may be  unable to sell  interests  in an  Advisor  Fund  quickly,  and
therefore  could be  obligated  to continue to hold such  interests  for an
extended  period of time. In such a case, or in the event that the managing
member of the Investment Funds does not receive a valuation from an Advisor
Fund, or determines, in its sole discretion, that a valuation is inaccurate
or incomplete, the managing member of the Investment Funds may, in its sole
discretion,  determine the fair value of an Investment  Fund's interests in
the  Advisor  Fund  independently  of the  Advisor's  valuations  based  on
information  available  to, and factors  deemed  relevant  by, the managing
member  of the  Investment  Funds  at the time of such  valuation.  Members
should  be  aware  that  situations  involving   uncertainties  as  to  the
valuations  by  Advisors  could  have  a  material  adverse  effect  on the
Company's net assets if the managing member of the Investment  Funds or the
Advisor's  judgments regarding  valuations should prove incorrect.  Members
who are  unwilling to assume such risks should not retain their  investment
in the  Company.  See  "--Risks  Related  to the  Company's  Structure--The
Company's  Financial  Statements  are,  and in the Future will be, Based on
Estimates of Valuations  Provided by Third Party  Advisors Which May not be
Accurate or May Need to be Adjusted in the Future" above.

INVESTMENT  FUND  ALLOCATIONS TO ADVISOR FUNDS ARE DIFFICULT TO MONITOR AND
CONTROL

     Each  Investment  Fund may invest all or a substantial  portion of its
assets in Advisor Funds,  rather than in all cases allocating  assets,  via
Portfolio  Companies or directly to Advisors,  pursuant to managed  account
agreements. It is expected that the managing member of the Investment Funds
generally  will have less  ability to monitor  investments  in the  Advisor
Funds,  to obtain full and  current  information  and to  exercise  control
rights over such  investments than with respect to allocations of assets to
Managed  Accounts.  This  could  have  a  material  adverse  effect  on the
performance of such investments and,  therefore,  on the performance of the
Investment Funds and the Company.

TRADING IN INVESTMENTS MAY BE ILLIQUID WHICH MAY CAUSE  SUBSTANTIAL  LOSSES
AND  MAY  NEGATIVELY  IMPACT  THE  ABILITY  TO  MAKE   DISTRIBUTIONS  TO  A
WITHDRAWING OR REDEEMING MEMBER

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

     The  above-described  circumstances  could  prevent the Advisors of an
Investment Fund from liquidating unfavorable positions promptly and subject
such Investment Fund and, in turn, the Company, to substantial losses. This
could also impair the Company's  ability to redeem its membership  units in
an  Investment  Fund in order to make  distributions  to a  withdrawing  or
redeeming Member in a timely manner.

MANAGED  ACCOUNT  ALLOCATIONS  EXPOSE  THE  INVESTMENT  FUNDS TO  LIABILITY
EXCEEDING ALLOCATIONS

     Each  Investment  Fund,  generally  through  Portfolio  Companies  and
possibly  directly,  may place  assets with a number of Advisors by opening
discretionary  Managed  Accounts rather than investing in Advisor Funds. It
is  possible,  given the  leverage at which  certain of the  Advisors of an
Investment  Fund will trade,  that  allocations of an Investment Fund to an
Advisor  through a managed  account  could result in losses that exceed the
amount  the  Investment  Fund had  allocated  to such  Advisor  to  invest.
Therefore,  Managed  Accounts expose the Investment  Funds to theoretically
unlimited liability. This risk is also applicable to allocations made by an
Investment Fund to Portfolio  Companies because of the possibility that the
limited  liability  provided by a Portfolio  Company could be  successfully
challenged based on various legal theories which could be proffered.

AN  INVESTMENT  FUND  MAY  NOT BE ABLE TO  VOTE  OR MAY  LIMIT  ITS  VOTING
ABILITIES

     Each  Investment  Fund may  determine to limit its voting  interest in
certain Advisors in order to avoid becoming  subject to certain  Investment
Company Act prohibitions  with respect to affiliated  transactions.  To the
extent the Investment Fund holds  non-voting  securities,  or contractually
forgoes  the  right  to vote in  respect  of the  voting  securities  of an
Advisor,  the  Investment  Fund  will not be able to vote on  matters  that
require  the  approval of the  interestholders  of the  Advisor,  including
matters  adverse to the  Investment  Fund's  and,  in turn,  the  Company's
interests.

LACK OF OPERATING HISTORY OF CERTAIN ADVISORS; PAST PERFORMANCE OF ADVISORS
IS NOT INDICATIVE OF FUTURE RESULTS

     Certain of the  Advisors  have  short or limited or even no  operating
histories.   In  addition,  the  information  the  managing  member  of  an
Investment  Fund has and will obtain  about an Advisor  may be limited.  As
such, the ability of the managing  member of an Investment Fund to evaluate
past performance or to validate investment strategies of such Advisors will
be limited.  Moreover,  even to the extent an Advisor has a long  operating
history, the past investment  performance of any of the Advisors should not
be construed as an indication  of the future  results of the Advisors or of
the  Investment  Funds  or  the  Company.   In  addition,   the  investment
professionals  within the  Advisors  and their  strategies  may change over
time.  This risk is related to, and enhanced  by, the risks  created by the
fact that the managing member of an Investment Fund relies upon information
provided to it by the Advisors  that is not,  and cannot be,  independently
verified.

ADVISORS  INVEST   INDEPENDENTLY  AND  MAY  HOLD  ECONOMICALLY   OFFSETTING
POSITIONS

     The  Advisors  of  the  Investment   Funds  generally   invest  wholly
independently of one another and may at times hold economically  offsetting
positions.  To the  extent  that  the  Advisors  do,  in  fact,  hold  such
positions,  the Investment  Funds and, in turn, the Company may not achieve
any gain or loss despite  incurring  fees and expenses in  connection  with
such  positions.  In addition,  an Advisor may be compensated  based on the
performance of its portfolio.  Accordingly, there may often be times when a
particular  Advisor  of an  Investment  Fund  may  receive  performance  or
incentive compensation in respect of its portfolio for a period even though
such  Investment  Fund's,  or the  Company's,  net asset value may not have
increased, or may even have decreased,  during such period. Furthermore, it
is not unlikely  that from time to time various  Advisors of an  Investment
Fund may be competing with each other for the same positions in one or more
markets.  There can be no assurance that choosing a combination of Advisors
for an Investment  Fund will prove to be any more successful than would the
selection of a single Advisor for such Investment Fund.

ADVISORS MAY HAVE LIMITED  CAPACITY TO MANAGE  ADDITIONAL  INVESTMENT  FUND
INVESTMENTS

     Certain Advisor's trading approaches  presently can accommodate only a
certain  amount of capital.  Each  Advisor  will  normally  endeavor not to
undertake  to  manage  more  capital  than  such  Advisor's   approach  can
accommodate   without  risking  a  potential   deterioration   in  returns.
Accordingly,  each Advisor has the right to refuse to manage some or all of
the Investment  Funds' assets that the Investment Fund may wish to allocate
to such Advisor.  Further, in the case of Advisors that limit the amount of
additional capital that they will accept from an Investment Fund, continued
sales of units and interests in Advisor Funds in which such Investment Fund
invests would dilute the  participation of such Investment  Fund's existing
members, including the Company, with such Advisor.

ADVISOR FUNDS'  SECURITIES ARE GENERALLY  ILLIQUID WHICH MAY INCREASE COSTS
AND LIMIT REDEMPTIONS

     The  securities  of the Advisor  Funds in which the  Investment  Funds
(directly  or through  Advisors)  invest or plan to invest may be illiquid.
Subscriptions  to purchase the  securities  of Advisor  Funds are generally
subject to restrictions or delays. In addition, the Investment Funds may be
limited in their  ability to make changes to  allocations  due to potential
redemption  restrictions of the Advisor Funds, including notice periods and
limited  redemption  dates, the ability of the Advisor Funds to suspend and
postpone  redemptions,  and lockups on  redemptions  of  securities  of the
Advisor Funds.  Further,  the Advisor may not be able to dispose of Advisor
Fund  securities  that it has  purchased in a timely manner and, if adverse
market conditions were to develop during any period in which the Advisor is
unable  to sell  Advisor  Fund  securities,  the  Advisor  might  obtain  a
significantly  less  favorable  price  than that  which  prevailed  when it
decided to buy or sell such securities.

FREQUENT TRADING AND TURNOVER  TYPICALLY  RESULT IN HIGH TRANSACTION  COSTS
AND THE INVESTMENT FUNDS HAVE NO CONTROL OVER THIS TURNOVER

     It is expected that  Advisors will make frequent  trades in securities
and other investments. Frequent trades typically result in high transaction
costs.  The  Advisors  may  invest  on  the  basis  of  short-term   market
considerations.  The turnover rate within the Advisors may be  significant,
potentially  involving  substantial  brokerage  commissions  and fees.  The
Investment  Funds and, in turn,  the Company will have no control over this
turnover.  As a result, it is anticipated that a significant portion of the
Company's income and gains, if any, may be derived from ordinary income and
short-term capital gains. In addition, the withdrawal of an Investment Fund
from an Advisor could  involve  expenses to the  Investment  Fund under the
terms of the Investment Fund's investment with that Advisor.

INDEMNIFICATION  OF  ADVISORS  MAY  CREATE  COSTS FOR THE  COMPANY  AND THE
INVESTMENT FUNDS

     The Company and the Investment Funds may agree to indemnify certain of
the Advisors and their respective officers,  directors, and affiliates from
any liability, damage, cost, or expense arising out of, among other things,
acts or omissions  relating to the offer or sale of units by the Investment
Funds.  Currently,  neither the Company nor the Investment Funds is a party
to any direct indemnification  agreements with Advisors.  Accordingly,  the
Company and the Investment Funds are under no direct contractual obligation
to indemnify any of the Advisors against inaccurate or untimely  valuations
of  investments  or net  asset  value  and  although  the  Company  and the
Investment Funds may, the Company and the Investment Funds currently do not
intend  to,  enter into any such  direct  indemnification  agreements  with
Advisors.

                          INVESTMENT RELATED RISKS

     This section  discusses the types of investments that Investment Funds
and the  Advisors,  as indicated,  make,  or are expected to make,  and the
principal risks  associated with such  investments.  It is possible that an
Advisor  or the  Investment  Funds  will  make  an  investment  that is not
described  below,  and  any  such  investment  will be  subject  to its own
particular risks.

                  RISKS RELATED TO INVESTMENT AND TRADING

AN INVESTMENT IN THE COMPANY INVOLVES A HIGH DEGREE OF RISK THAT THE ENTIRE
AMOUNT INVESTED MAY BE LOST; INVESTMENT RESULTS MAY VARY SUBSTANTIALLY OVER
TIME

     An investment in the Company involves a high degree of risk, including
the risk that the entire  amount  invested may be lost.  The Advisors  will
invest in and actively trade  financial  instruments  using  strategies and
investment  techniques with  significant  risk  characteristics,  including
risks arising from the volatility of the fixed income, commodity,  currency
and equity markets, risks of concentration,  risks of short sales, risks of
leverage,  risks  arising  from the  potential  illiquidity  of  derivative
instruments and the potential  illiquidity of certain emerging markets, the
risk of loss from  counterparty and broker defaults,  risk of inaccuracy of
information  received  from  Advisors  and the  risk of  borrowing  to meet
redemption  requests.  No  guarantee  or  representation  is made  that the
Company's,  the Investment Funds' or the Advisors'  investment program will
be  successful,   that  the  various  investment   strategies  utilized  or
investments  made will  have low  correlation  with each  other or that the
Company's   returns  will  exhibit  low  correlation   with  an  investor's
traditional  investment  portfolio.  Each Advisor's  investment program may
utilize  such  investment   techniques  as  margin   transactions,   option
transactions,  short sales, forward contracts and futures contracts,  which
involve   substantial   volatility  and  can,  in  certain   circumstances,
substantially increase the adverse impact to which the Investment Funds and
the Company may be subject.  All  investments  made by the Company risk the
loss of capital.  Investment  results may vary substantially over time. See
ITEM 1. "BUSINESS--INVESTMENT PROGRAM."

     PAST RESULTS OF THE COMPANY,  CERTAIN OF THE INVESTMENT FUNDS, AND THE
ADVISORS SELECTED BY ITS MANAGING MEMBER ARE NOT NECESSARILY  INDICATIVE OF
FUTURE PERFORMANCE.  NO ASSURANCE CAN BE MADE THAT PROFITS WILL BE ACHIEVED
OR THAT SUBSTANTIAL LOSSES WILL NOT BE INCURRED.

THE  ADVISORS  MAY BE UNABLE TO OR MAY CHOOSE NOT TO SEEK TO ACHIEVE  THEIR
INVESTMENT  GOALS;  ADVISORS MAY NOT BE ABLE TO LOCATE SUITABLE  INVESTMENT
OPPORTUNITIES

     Many of the  Advisors  will,  among  other  things,  seek  to  utilize
specialized investment strategies,  follow allocation methodologies,  apply
investment  models or  assumptions,  achieve a certain level of performance
relative  to  specified  benchmarks,  and  enter  into  hedging  and  other
strategies   intended,   among  other  things,   to  affect  the  Advisors'
performance,  risk  levels,  and/or  market  correlation.  There  can be no
assurance  that any Advisor will have success in achieving any goal related
to such  practices.  The  Advisors  may be unable to or may choose in their
judgment  not to seek to achieve such goals.  In addition,  there is a risk
that  Advisors  may invest  outside  their  strategies,  which could have a
negative impact on the Advisors' performance and in turn on the Company.

     The success of the Advisor's trading  activities will depend on, among
other things, the Advisor's ability to identify  overvalued and undervalued
investment  opportunities and to exploit price discrepancies in the capital
markets. Identification and exploitation of the investment strategies to be
pursued by an Advisor  involves a high degree of uncertainty.  No assurance
can be given that the Advisors will be able to locate  suitable  investment
opportunities  in which to deploy all their  capital.  A  reduction  in the
volatility and pricing inefficiency of the markets in which an Advisor will
seek to invest, as well as other market factors, will reduce the number and
scope of available opportunities for an Advisor's investment strategies.

THE USE OF LEVERAGE MAY SUBSTANTIALLY  INCREASE THE ADVERSE IMPACT TO WHICH
THE INVESTMENT FUNDS' INVESTMENT PORTFOLIOS MAY BE SUBJECT

     The Investment Funds, Portfolio Companies,  Advisors and Advisor Funds
may utilize leverage in their investment  programs.  Such leverage may take
the form of loans for borrowed  money,  trading on margin or other forms of
direct and indirect borrowings, or derivative instruments,  including among
others forward  contracts,  futures contracts,  options,  swaps and reverse
repurchase  agreements,  and other  instruments and  transactions  that are
inherently  leveraged.  The  utilization  of  leverage  will  increase  the
volatility  of  the  Company's  investments.  The  managing  member  of the
Investment  Funds may seek to adjust the degree of leverage with which each
Investment  Fund as a whole  invests  by taking the  Advisors'  anticipated
leverage use into account when allocating and  reallocating  the Investment
Fund's  assets among the  Advisors.  However,  the  managing  member of the
Investment  Funds generally will not have any right to adjust the amount of
leverage  utilized by any of the Advisors,  and generally does not exercise
such right if  available.  In the  discretion  of its managing  member,  an
Investment  Fund may make an  investment in an Advisor Fund through a swap,
option or otherwise in a manner structured to provide greater leverage than
a direct  investment in the Advisor  Fund,  which may increase the risks to
the Investment Fund relative to a direct investment in the Advisor Fund. In
addition,  the Advisors may buy and sell securities on margin and otherwise
utilize  leverage,  further  increasing  the  volatility  of the  Company's
investments.  The  use of  leverage  by  the  Investment  Funds,  Portfolio
Companies,  Advisors  and  Advisor  Funds may  substantially  increase  the
adverse impact to which the Investment Funds' investment  portfolios may be
subject.  Trading  securities  on margin  results in interest  charges and,
depending  on the  amount  of  trading  activity,  such  charges  could  be
substantial.  The level of interest rates generally, and the rates at which
an Investment  Fund,  Portfolio  Companies,  Advisors and Advisor Funds may
borrow in  particular,  can affect the operating  results of the Investment
Funds.  The low margin  deposits  normally  required in futures and forward
trading  permit a high degree of leverage;  accordingly,  relatively  small
price  movement  in  a  futures   contract  may  result  in  immediate  and
substantial  losses  to  the  investor.  Such  a high  degree  of  leverage
necessarily  entails a high degree of risk. In the event that an Investment
Fund or a Portfolio Company enters into an investment  management agreement
with an Advisor  that  utilizes  leverage in its  investment  program,  the
Investment  Fund or  Portfolio  Company  may  become  subject  to claims by
financial  intermediaries  that extended  "margin" loans in respect of such
managed account. Such claims could exceed the value of the assets allocated
to such Advisor by the  Investment  Fund.  The risks involved in the use of
leverage are increased to the extent that an Investment  Fund leverages its
capital. The Company generally will not utilize leverage directly, although
it may borrow to, among other things, fund redemptions and pay expenses.

     The  rights  of  any  lenders  to  the  Investment  Funds,   Portfolio
Companies,  Advisors and Advisor  Funds to receive  payments of interest or
repayments  of  principal  will be  senior to those of the  members  or the
investors  in such  Investment  Funds,  Portfolio  Companies,  Advisors and
Advisor Funds  respectively,  and the terms of any  borrowings  may contain
provisions  that limit certain  activities of the Investment  Funds and, in
turn, the Company, including the ability to make distributions.

CONVERGENCE  RISK MAY RESULT IN SIGNIFICANT  LOSSES OF THE INVESTMENT FUNDS
AND THE COMPANY

     The  Investment  Funds will  pursue  their  investment  objectives  by
investing  with  Advisors  that  will  take long  positions  in  securities
believed to be undervalued and short positions in securities believed to be
overvalued.  In the event that the perceived mispricings  underlying one or
more Advisors'  trading  positions were to fail to converge toward, or were
to diverge  further  from,  relationships  expected by such  Advisors,  the
Investment Funds and the Company may incur significant losses.

POSSIBLE EFFECTS OF SPECULATIVE  POSITION LIMITS COULD ADVERSELY AFFECT THE
OPERATIONS AND PROFITABILITY OF THE INVESTMENT FUNDS AND THE COMPANY

     The  CFTC,  the  U.S.  commodities   exchanges  and  certain  offshore
commodity  exchanges have  established  limits  referred to as "speculative
position limits" or "position  limits" on the maximum net long or net short
(or, for some  commodities,  the gross) positions which any person or group
of  persons  may  own,  hold or  control  in  certain  futures  or  options
contracts.  No such limits  presently exist in the forward contract markets
or on most foreign exchanges.

     Under currently applicable  regulations,  each of the Investment Funds
which  allocates its assets to Advisors who trade in  commodities  would be
required  to comply  with  position  limits as if it were a single  trader,
absent obtaining exemptive relief therefrom. However, pursuant to the rules
of several  principal  U.S.  commodities  exchanges  and the CFTC,  GTT has
obtained  exemptions  that  would  permit  it to not  aggregate  all of its
current  Advisors'  accounts for purposes of  determining  compliance  with
position  limits in  contracts  traded on these  exchanges  and to  utilize
expanded limits or separate  single limits per Advisor in contracts  traded
on such  exchanges.  In  addition,  many of the major U.S.  exchanges  have
eliminated  speculative  position  limits  and  have  substituted  position
accountability  rules that would permit  Advisors of an Investment  Fund to
trade  without  restriction  as long as the  Advisor  can  demonstrate  the
positions  acquired were not acquired for the purpose of  manipulating  the
market. To the extent a single speculative position limit is not applicable
to the Advisors' trading in any or all futures,  the different  Advisors of
an Investment  Fund are able to acquire larger  positions on behalf of such
Investment Fund. Absent such exemptive relief or exchange rule changes, the
position limits,  especially in certain markets,  may be quite restrictive.
There  can be no  assurance  that  exemptive  relief  will  continue  to be
available.  The  modification  of  trading  strategies  or  liquidation  of
positions  by the  Advisors,  if required to comply with  position  limits,
could adversely  affect the operations and  profitability of the Investment
Funds and therefore the Company.

     The  Commodity  Exchange  Act  provides  that  trading done by persons
directly or indirectly under the same control or trading as one pursuant to
an expressed or implied  agreement or understanding  will be aggregated for
determining   compliance  with  applicable  position  limits.  There  is  a
possibility  that  the  positions  held  by  some  or  all  Advisors  of an
Investment Fund and their  respective  principals would be aggregated under
one of the foregoing  principles or applicable  exchange  regulations  with
those  held by  certain  other  Advisors  of  such  Investment  Fund.  If a
commodity  exchange  or any other  regulatory  body were to  aggregate  the
positions  held by certain  Advisors of an  Investment  Fund, it may have a
material adverse effect on the ability of each of the affected  Advisors to
trade in such markets.

     The managing  member of the Investment  Funds will be responsible  for
ensuring that the Investment Funds do not exceed applicable position limits
due to trading orders placed by its Advisors and comply with any exemptions
the managing member has obtained or may obtain in the future.  The managing
member will  monitor the  Investment  Funds'  compliance  with  speculative
position  limits  by  requiring  Advisors,  once the  managing  member  has
informed  the  Advisors  that an  "early  warning"  level in the  number of
positions it holds in any futures contract has been reached,  to submit any
orders in that  futures  contract to a  "permission  desk," which will only
approve  further  orders if such  additional  orders  would not result in a
violation  of  applicable  limits.  Nonetheless,  in the  operation of such
permission  desk, the managing member will not exercise any discretion over
trading  decisions  for any account of the  Investment  Funds or reveal the
total  position  of an  Investment  Fund  or  the  positions  of any of its
Advisors to any other Advisors.

SHORT SELLING CREATES THE RISK OF SIGNIFICANT LOSSES

     Advisors may engage in short selling.  Short selling  involves selling
securities  that may or may not be owned and borrowing the same  securities
for delivery to the  purchaser,  with an obligation to replace the borrowed
securities  at a later date.  Short  selling  allows the investor to profit
from declines in the value of securities.  A short sale creates the risk of
a  theoretically  unlimited  loss,  in that  the  price  of the  underlying
security could  theoretically  increase without limit,  thus increasing the
cost of buying those  securities to cover the short position.  There can be
no assurance that the security  necessary to cover a short position will be
available  for  purchase.  Purchasing  securities  to close  out the  short
position  can itself  cause the price of the  securities  to rise  further,
thereby exacerbating the loss.

THE ABILITY OF AN INVESTMENT FUND TO HEDGE  SUCCESSFULLY WILL DEPEND ON THE
PARTICULAR  ADVISOR'S  ABILITY TO PREDICT  PERTINENT MARKET MOVEMENTS WHICH
CANNOT BE ASSURED

     The Investment Funds, Portfolio Companies,  Advisors and Advisor Funds
may or may not employ hedging techniques.  These techniques could involve a
variety  of   derivative   transactions,   including   futures   contracts,
exchange-listed  and  over-the-counter  put and call options on securities,
financial indices, forward foreign currency contracts, and various interest
rate transactions (collectively, "Hedging Instruments"). Hedging techniques
involve  risks   different  than  those  of  underlying   investments.   In
particular,  the variable degree of correlation  between price movements of
Hedging  Instruments  and price  movements  in the  position  being  hedged
creates the possibility  that losses on the hedge may be greater than gains
in the  value of an  Investment  Fund's  positions.  In  addition,  certain
Hedging Instruments and markets may not be liquid in all circumstances.  As
a result, in volatile markets, transactions in certain of these instruments
may not be able to be closed out  without  recurring  losses  substantially
greater than the initial  deposit.  Although the  contemplated use of these
instruments  should tend to  minimize  the risk of loss due to a decline in
the value of the hedged  position,  at the same time they tend to limit any
potential  gain that might  result  from an  increase  in the value of such
position.  The ability of an  Investment  Fund to hedge  successfully  will
depend on the  particular  Advisor's  ability to predict  pertinent  market
movements,  which cannot be assured. Advisors are not required to hedge and
there can be no assurance that hedging  transactions  will be available or,
even if undertaken,  will be effective.  In addition, it is not possible to
hedge fully or perfectly against currency fluctuations  affecting the value
of securities denominated in non-U.S. currencies because the value of those
securities  is likely to fluctuate as a result of  independent  factors not
related to  currency  fluctuations.  Finally,  the daily  variation  margin
deposit requirements in futures contracts that may be sold by an Investment
Fund,  Portfolio  Company,  Advisor or Advisor Fund would create an ongoing
greater potential financial risk than would options transactions, where the
exposure  is limited to the cost of the  initial  premium  and  transaction
costs paid by the Investment Fund,  Portfolio  Company,  Advisor or Advisor
Fund.

FORWARD  CONTRACTS MAY ENTAIL  SIGNIFICANT  RISKS AND  UNCERTAINTIES  WHICH
COULD RESULT IN SUBSTANTIAL LOSSES TO THE INVESTMENT FUNDS AND THE COMPANY

     Advisors may enter into forward  contracts,  which are the purchase or
sale of a specific quantity of a commodity,  government  security,  foreign
currency,  or other financial instrument at the current or spot price, with
delivery  and  settlement  at a  specified  future  date.  Because  it is a
completed contract, a purchase forward contract can be a cover for the sale
of a futures  contract.  The Advisors may enter into forward  contracts for
hedging  purposes and non-hedging  purposes  (i.e.,  to increase  returns).
Forward  contracts are  transactions  involving an Advisor's  obligation to
purchase  or sell a specific  instrument  at a future  date at a  specified
price.  Forward  contracts may be used by the Advisors for hedging purposes
to protect  against  uncertainty  in the level of future  foreign  currency
exchange rates, such as when an Advisor anticipates purchasing or selling a
foreign  security.  For example,  this technique would allow the Advisor to
"lock in" the U.S. dollar price of the security. Forward contracts may also
be used to attempt to protect the value of an Advisor's  existing  holdings
of foreign  securities.  There may be,  however,  an imperfect  correlation
between an Advisor's foreign securities  holdings and the forward contracts
entered into with respect to those holdings.  Forward contracts may also be
used for non-hedging purposes to pursue an Advisor's investment  objective,
such as when an Advisor anticipates that particular foreign currencies will
appreciate or depreciate in value,  even though  securities  denominated in
those currencies are not then held in the Advisor's portfolio.  There is no
general  requirement  that the  Advisors  hedge all or any portion of their
exposure to foreign currency risks.

     Forward contracts and options thereon,  unlike futures contracts,  are
not traded on exchanges and are not standardized; rather, banks and dealers
act as principals in these  markets,  negotiating  each  transaction  on an
individual basis. Forward and "cash" trading is substantially  unregulated;
there is no limitation on daily price  movements and  speculative  position
limits are not  applicable.  The principals who deal in the forward markets
are  not  required  to  continue  to  make  markets  in the  currencies  or
commodities  they  trade  and  these  markets  can  experience  periods  of
illiquidity,  sometimes of  significant  duration.  There have been periods
during which  certain  participants  in these markets have refused to quote
prices for certain  currencies or commodities or have quoted prices with an
unusually  wide spread between the price at which they were prepared to buy
and that at which they were prepared to sell.  Disruptions can occur in any
market traded by an Advisor due to unusually high trading volume, political
intervention or other factors.  Arrangements to trade forward contracts may
be made  with  only one or a few  counterparties,  and  liquidity  problems
therefore  might  be  greater  than if such  arrangements  were  made  with
numerous  counterparties.  Significant  risks and  uncertainties  exists in
dealing  with  counterparties  in  forward  contracts.  The  imposition  of
controls by  governmental  authorities  might also limit such  forward (and
futures)  trading  to less than that  which the  Advisors  would  otherwise
recommend,  to the  possible  detriment  of the Advisor and  therefore  the
applicable   Investment  Fund  and  the  Company.   Market  illiquidity  or
disruption  could  result  in major  losses to an  Investment  Fund and the
Company.  In addition,  Managed Accounts or entities in which an Investment
Fund has an  interest  may be  exposed  to  credit  risks  with  regard  to
counterparties with whom the Advisors of such Investment Fund trade as well
as risks  relating  to  settlement  default.  Such  risks  could  result in
substantial losses to the Investment Funds and the Company.

SWAP  AGREEMENTS  MAY  INCREASE OR DECREASE  THE OVERALL  VOLATILITY  OF AN
INVESTMENT FUND'S PORTFOLIO

     The Investment Funds, Portfolio Companies,  Advisors and Advisor Funds
may enter into equity,  interest rate,  index,  currency rate, total return
and other types of swap agreements. The transactions are entered into in an
attempt to obtain a particular return without the need to actually purchase
the reference  asset.  Swap agreements can be  individually  negotiated and
structured  to  include  exposure  to  a  variety  of  different  types  of
investments  or  market  factors.   Depending  on  their  structure,   swap
agreements  may  increase  or  decrease an  Investment  Fund's  exposure to
long-term or  short-term  interest  rates (in the United States or abroad),
foreign currency values, mortgage securities, corporate borrowing rates, or
other factors such as security prices, baskets of securities,  or inflation
rates. Swap agreements can take many different forms. The Investment Funds,
Portfolio  Companies,  Advisors  and  Advisor  Funds are not limited to any
particular form of swap agreement.

     Swap  agreements  are two-party  contracts  entered into  primarily by
institutional investors for periods ranging from a few weeks to more than a
year.  In a standard  swap  transaction,  two parties agree to exchange the
returns  (or  differentials  in rates of  return)  earned  or  realized  on
particular predetermined investments or instruments,  which may be adjusted
for an interest  factor.  The gross  returns to be  exchanged  or "swapped"
between the parties are  generally  calculated  with respect to a "notional
amount,"  i.e.,  the return on or  increase in value of a  particular  U.S.
dollar  amount  invested at a  particular  interest  rate,  in a particular
foreign currency, or in a "basket" of securities  representing a particular
index.

     Swap agreements will tend to shift  investment  exposure from one type
of investment  to another.  For example,  if an  Investment  Fund agrees to
exchange  payments in U.S.  dollars for payments in foreign  currency,  the
swap agreement  would tend to decrease such  Investment  Fund's exposure to
U.S.  interest  rates and  increase  its  exposure to foreign  currency and
interest  rates.  Depending  on how  they are  used,  swap  agreements  may
increase  or  decrease  the  overall  volatility  of an  Investment  Fund's
portfolio.

     Most swap  agreements  entered into by an Investment  Fund,  Portfolio
Company,  Advisor or Advisor  Fund would  require  the  calculation  of the
obligations   of  the  parties  to  the   agreements   on  a  "net  basis."
Consequently,  an Investment Fund,  Portfolio  Company,  Advisor or Advisor
Fund's current  obligations  (or rights) under a swap  agreement  generally
will be equal  only to the net  amount  to be paid or  received  under  the
agreement  based on the relative values of the positions held by each party
to the agreement (the "net amount"). The risk of loss with respect to swaps
is limited to the net amount of interest  payments that an Investment Fund,
Portfolio  Company,  Advisor or Advisor Fund is contractually  obligated to
make. If the other party to a swap defaults,  an Investment  Fund's risk of
loss  consists  of the net amount of  payments  that the  Investment  Fund,
Portfolio  Company,  Advisor or Advisor Fund  contractually  is entitled to
receive.  If a swap  agreement  calls for payments by an  Investment  Fund,
Portfolio  Company,  Advisor or Advisor  Fund,  it must be prepared to make
such payments when due. In addition, if the counterparty's creditworthiness
declined,  the  value of a swap  agreement  would  be  likely  to  decline,
potentially resulting in losses to the Investment Fund and the Company.

THE PRICES OF AN INVESTMENT  FUND'S  INVESTMENTS CAN BE HIGHLY VOLATILE AND
INFLUENCED BY EXTERNAL FACTORS OUTSIDE THE CONTROL OF SUCH INVESTMENT FUND

     The prices of an Investment Fund's investments can be highly volatile.
Price  movements  of  forward   contracts,   futures  contracts  and  other
derivative  contracts in which an Investment Fund may invest are influenced
by,  among  other  things,  interest  rates,  changing  supply  and  demand
relationships,  trade,  fiscal,  monetary and exchange control programs and
policies of  governments,  and national  and  international  political  and
economic events and policies.  In addition,  governments  from time to time
intervene,  directly and by regulation,  in certain  markets,  particularly
those  in  currencies,  financial  instruments  and  interest  rate-related
futures  and  options.  Such  intervention  often is  intended  directly to
influence  prices and may,  together with other factors,  cause all of such
markets to move  rapidly in the same  direction  because  of,  among  other
things, interest rate fluctuations.  Moreover,  since internationally there
may be less  government  supervision  and  regulation  of  worldwide  stock
exchanges and clearinghouses  than in the United States,  Advisors also are
subject  to the  risk  of the  failure  of the  exchanges  on  which  their
positions trade or of their clearinghouses,  and there may be a higher risk
of financial  irregularities and/or lack of appropriate risk monitoring and
controls.

FAILURE OF THE ADVISOR'S  COUNTERPARTIES,  BROKERS,  AND EXCHANGES  EXPOSES
ADVISORS TO CREDIT RISKS IN VARIOUS FORMS

     The Advisors will be exposed to the credit risk of the  counterparties
with which, or the brokers, dealers and exchanges through which, they deal,
whether they engage in exchange-traded or off-exchange  transactions.  More
than one of the  Advisors  at any time may be subject to the credit risk of
the same counterparty or  broker-dealer.  An Advisor may be subject to risk
of loss of its assets on deposit with a broker in the event of the broker's
bankruptcy,  the bankruptcy of any clearing broker through which the broker
executes  and  clears  transactions  on  behalf  of  the  Advisor,  or  the
bankruptcy of an exchange clearing house.  Although the Commodity  Exchange
Act requires a commodity broker to segregate the funds of its customers, if
a commodity broker fails to properly  segregate customer funds, the Advisor
may be subject to a risk of loss of its funds on deposit  with such  broker
in the event of such broker's bankruptcy or insolvency.  The Advisor may be
subject  to risk of loss of its  funds  on  deposit  with  foreign  brokers
because foreign regulatory bodies may not require such brokers to segregate
customer funds.  The Advisor may be required to post margin for its foreign
exchange  transactions  either with its investment manager or other foreign
exchange  dealers who are not required to segregate  funds  (although  such
funds are generally maintained in separate accounts on the foreign exchange
dealer's  books and  records  in the name of the  Advisor).  Under  certain
circumstances,  such as the inability of another  customer of the commodity
broker or  foreign  exchange  dealer  or the  commodity  broker or  foreign
exchange  dealer itself to satisfy  substantial  deficiencies in such other
customer's  account,  the  Advisor  may be subject to a risk of loss of its
funds on  deposit  with  such  broker  or  dealer,  even if such  funds are
properly  segregated.  In the case of any such bankruptcy or customer loss,
the  Advisor  might  recover,  even in  respect  of  property  specifically
traceable to the Advisor,  only a pro rata share of all property  available
for distribution to all of such broker's or dealer's customers, which could
result in significant losses to the Investment Fund.

     Many of the markets in which the Advisors  effect  their  transactions
are  "over-the-counter"  or  "interdealer"  markets.  Participants in these
markets are  typically  not  subject to credit  evaluation  and  regulatory
oversight  as are members of  "exchange  based"  markets.  To the extent an
Advisor invests in swaps,  derivatives or synthetic  instruments,  or other
over-the-counter  transactions  in these  markets,  the  Advisor may take a
credit risk with  regard to parties  with which it trades and also may bear
the risk of  settlement  default.  These risks may differ  materially  from
those  involved  in  exchange-traded  transactions,   which  generally  are
characterized by clearing organization guarantees,  daily marking-to-market
and settlement, and segregation and minimum capital requirements applicable
to   intermediaries.   Transactions   entered  into  directly  between  two
counterparties  generally do not benefit from these protections,  which, in
turn,  may  subject  an Advisor  to the risk that a  counterparty  will not
settle a transaction in accordance with agreed terms and conditions because
of a  dispute  over the terms of the  contract  or  because  of a credit or
liquidity problem. Such "counterparty risk" is increased for contracts with
longer  maturities  when events may  intervene to prevent  settlement.  The
ability of the Advisors to transact  business with any one or any number of
counterparties,   the   lack   of  any   independent   evaluation   of  the
counterparties  or  their  financial  capabilities,  and the  absence  of a
regulated market to facilitate  settlement,  may increase the potential for
losses to the Investment Funds and the Company.

     In addition,  the Advisors may engage in direct or indirect trading of
securities,  currencies,  forward contracts,  options, swaps and repurchase
agreements  on a principal  basis.  As such,  an Advisor as  transferee  or
counterparty  could  experience  both delays in liquidating  the underlying
security, future or other investment and losses, including: (a) the risk of
the  inability or refusal to perform with respect to such  transactions  on
the part of the  principals  with which the Advisor  trades;  (b)  possible
decline  in the  value of any  collateral  during  the  period in which the
Advisor  seeks to enforce its rights with respect to such  collateral;  (c)
possible  subnormal  levels of income  and lack of access to income  during
such  period;   (d)  expenses  of  enforcing  its  rights;  and  (e)  legal
uncertainty  concerning  the  enforceability  of certain  rights under swap
agreements and possible lack of priority  against  collateral  posted under
the  swap  agreements.   Any  such  failure  or  refusal,  whether  due  to
insolvency,  bankruptcy or other causes, could subject the Advisor, and, in
turn,  the Investment  Fund and the Company,  to  substantial  losses.  The
Advisor will not be excused from  performance on any such  transactions due
to the  default of third  parties in respect of other  trades  which in the
Advisor's  trading  strategies  were  to  have  substantially  offset  such
contracts.

                 RISKS RELATED TO INTERNATIONAL INVESTMENTS

TRADING  ON  FOREIGN   EXCHANGES  MAY  INVOLVE  HIGHER  RISK  OF  FINANCIAL
IRREGULARITIES AND/OR LACK OF APPROPRIATE RISK MONITORING AND CONTROLS

     The Investment  Funds may trade,  directly or indirectly,  futures and
securities on exchanges  located  outside the United  States.  Some foreign
exchanges, in contrast to domestic exchanges,  are "principals' markets" in
which  performance is solely the individual  member's  responsibility  with
whom the trader has entered  into a commodity  contract  and not that of an
exchange  or its  clearinghouse,  if any. In the case of trading on foreign
exchanges,  the  Investment  Funds  will  be  subject  to the  risk  of the
inability  of, or refusal by, the  counterparty  to perform with respect to
contracts.  Moreover,  since there is generally less government supervision
and regulation of foreign exchanges, clearinghouses and clearing firms than
in the United States,  the Investment Funds are also subject to the risk of
the failure of the  exchanges  on which their  positions  trade or of their
clearinghouses  or  clearing  firms  and  there  may be a  higher  risk  of
financial  irregularities  and/or lack of appropriate  risk  monitoring and
controls.

NON-U.S.  INVESTMENTS  INVOLVE  SPECIAL RISKS NOT USUALLY  ASSOCIATED  WITH
INVESTMENTS IN U.S. SECURITIES

     The  Advisors  may invest in  securities  of non-U.S.  issuers and the
governments of non-U.S.  countries. These investments involve special risks
not usually  associated  with investing in securities of U.S.  companies or
the U.S. government, including political and economic considerations,  such
as  greater  risks  of  expropriation  and  nationalization,   confiscatory
taxation,  the potential  difficulty of repatriating funds, general social,
political and economic instability and adverse diplomatic developments; the
possibility  of the  imposition of withholding or other taxes on dividends,
interest,  capital gain or other income;  the small size of the  securities
markets in such  countries  and the low  volume of  trading,  resulting  in
potential lack of liquidity and in price  volatility;  fluctuations  in the
rate of exchange  between  currencies  and costs  associated  with currency
conversion; and certain government policies that may restrict an Investment
Fund's and its Advisors'  investment  opportunities.  In addition,  because
non-U.S.  entities  are not subject to uniform  accounting,  auditing,  and
financial reporting standards,  practices and requirements  comparable with
those  applicable to U.S.  companies,  there may be different types of, and
lower quality,  information available about a non-U.S.  company than a U.S.
company.  There  is also  less  regulation,  generally,  of the  securities
markets in many foreign  countries than there is in the United States,  and
such markets may not provide the same  protections  available in the United
States.  With respect to certain  countries there may be the possibility of
political,  economic  or social  instability,  the  imposition  of  trading
controls,  import  duties or other  protectionist  measures,  various  laws
enacted for the protection of creditors,  greater risks of  nationalization
or diplomatic  developments  which could  materially  adversely  affect the
Investment Funds' investments in those countries.  Furthermore,  individual
economies may differ favorably or unfavorably from the U.S. economy in such
respects as growth of gross national  product,  rate of inflation,  capital
reinvestment, resource self-sufficiency,  and balance of payments position.
An Investment Fund's  investment in non-U.S.  countries may also be subject
to withholding or other taxes,  which may be significant and may reduce the
Investment Fund's returns.

     Brokerage commissions,  custodial services and other costs relating to
investment in international securities markets generally are more expensive
than in the United States. In addition, clearance and settlement procedures
may be  different  in  foreign  countries  and,  in certain  markets,  such
procedures  have been  unable to keep  pace with the  volume of  securities
transactions, thus making it difficult to conduct such transactions.

     Investment  in  sovereign  debt  obligations  of non-U.S.  governments
involve  additional  risks not  present in debt  obligations  of  corporate
issuers and the U.S. government. The issuer of the debt or the governmental
authorities  that  control  the  repayment  of the  debt may be  unable  or
unwilling to repay  principal or pay interest when due in  accordance  with
the terms of such debt, and an Investment Fund may have limited recourse to
compel payment in the event of a default. A sovereign debtor's  willingness
or ability to repay principal and to pay interest in a timely manner may be
affected by, among other factors,  its cash flow  situation,  the extent of
its foreign  currency  reserves,  the  availability  of sufficient  foreign
exchange  on the  date a  payment  is due,  the  relative  size of the debt
service  burden to the economy as a whole,  the sovereign  debtor's  policy
toward international  lenders,  and the political  constraints to which the
sovereign debtor may be subject. Periods of economic uncertainty may result
in the  volatility of market prices of sovereign  debt to a greater  extent
than the volatility inherent in debt obligations of other types of issues.

INVESTMENT  IN  EMERGING  MARKETS  INVOLVES  SIGNIFICANT  RISKS,  INCLUDING
INFLATION AND CURRENCY DEVALUATIONS

     The Advisors may invest in securities  of companies  based in emerging
markets or issued by the governments of such countries.  Securities  traded
in certain emerging markets may be subject to risks due to the inexperience
of financial  intermediaries,  a lack of modern  technology,  the lack of a
sufficient capital base to expand business operations,  and the possibility
of temporary or permanent  termination  of trading.  Political and economic
structures in many emerging markets may be undergoing significant evolution
and rapid development,  and emerging markets may lack the social, political
and economic stability  characteristics of more developed  countries.  As a
result, the risks relating to investments in foreign  securities  described
above,  including the possibility of nationalization or expropriation,  may
be  heightened.  In addition,  certain  countries  may restrict or prohibit
investment  opportunities  in issuers or  industries  deemed  important  to
national  interests.   Such  restrictions  may  affect  the  market  price,
liquidity  and rights of  securities  that may be  purchased  by  Advisors.
Settlement  mechanisms in emerging securities markets may be less efficient
and reliable than in more developed markets,  and placing securities with a
custodian  or  broker-dealer  in  an  emerging  country  may  also  present
considerable  risks. The small size of securities markets in such countries
and the low volume of  trading  may  result in a lack of  liquidity  and in
substantially greater price volatility. Many emerging market countries have
experienced  substantial,  and in some  periods  extremely  high,  rates of
inflation  for many years.  Inflation and rapid  fluctuations  in inflation
rates and corresponding  currency devaluations and fluctuations in the rate
of  exchange   between   currencies  and  costs  associated  with  currency
conversion  have  had and may  continue  to have  negative  effects  on the
economies and securities  markets of certain emerging market countries.  In
addition,  accounting  and financial  reporting  standards  that prevail in
certain of such countries are not equivalent to standards in more developed
countries and, consequently,  less information is available to investors in
companies located in such countries.

FOREIGN  CURRENCY  TRANSACTIONS  AND EXCHANGE  RATE RISK CREATE  ADDITIONAL
RISKS FOR ADVISORS INVESTING IN CERTAIN FINANCIAL INSTRUMENTS

     A portion of the Investment Funds' assets allocated to Advisors may be
invested in  securities  denominated  in non-U.S.  currencies  and in other
financial  instruments,  the price of which is determined with reference to
such currencies. Advisors may engage in foreign currency transactions for a
variety of purposes,  including  to "lock in" the U.S.  dollar price of the
security,  between  the  trade  and the  settlement  dates,  the value of a
security an Advisor has agreed to buy or sell, or to hedge the U.S.  dollar
value of securities the Advisor  already owns. The Advisors may also engage
in foreign  currency  transactions  for  non-hedging  purposes  to generate
returns.  The  Investment  Funds and the Company will,  however,  value its
investments and other assets in U.S. dollars.  To the extent unhedged,  the
value of each Investment  Fund's net assets will fluctuate with U.S. dollar
exchange  rates as well as with  price  changes of such  Investment  Fund's
Advisor's investments in the various local markets and currencies.  Forward
currency contracts and options may be utilized by Advisors to hedge against
currency  fluctuations,  but the  Advisors are not required to utilize such
techniques,  and there can be no assurance  that such hedging  transactions
will be available or, even if undertaken, effective.

NON-U.S.  FUTURES TRANSACTIONS AFFORD LESS PROTECTION AS RULES OF A FOREIGN
EXCHANGE MAY NOT BE ENFORCED BY A DOMESTIC REGULATOR

     Foreign futures  transactions involve executing and clearing trades on
a  foreign  exchange.  This is the case  even if the  foreign  exchange  is
formally "linked" to a domestic  exchange,  whereby a trade executed on one
exchange  liquidates or  establishes a position on the other  exchange.  No
domestic  organization  regulates  the  activities  of a foreign  exchange,
including the execution,  delivery, and clearing of transactions on such an
exchange,  and no domestic regulator has the power to compel enforcement of
the  rules of the  foreign  exchange  or the laws of the  foreign  country.
Moreover,  such laws or  regulations  will vary  depending  on the  foreign
country in which the transaction  occurs. For these reasons,  an Investment
Fund may not be afforded  certain of the protections that apply to domestic
transactions,  including  the  right to use  domestic  alternative  dispute
resolution  procedures.  In  particular,  funds  received from customers to
margin  foreign  futures   transactions   may  not  be  provided  the  same
protections  as funds  received to margin  futures  transaction on domestic
exchanges. In addition, the price of any foreign futures or option contract
and, therefore,  the potential profit and loss resulting therefrom,  may be
affected by any  fluctuation in the foreign  exchange rate between the time
the order is placed and the foreign  futures  contract is liquidated or the
foreign option contract is liquidated or exercised.

             RISKS RELATED TO SECURITIES AND OTHER INSTRUMENTS

INVESTING IN DERIVATIVE  INSTRUMENTS  INVOLVES RISK OF LOSS TO THE ADVISORS
THAT  COULD  MATERIALLY  ADVERSELY  AFFECT THE VALUE OF THE  COMPANY'S  NET
ASSETS

     Advisors  may  invest  in,  or  enter  into  transactions   involving,
derivative  instruments.  These are financial instruments that derive their
performance, at least in part, from the performance of an underlying asset,
index,  or interest  rate.  Examples of  derivatives  include,  but are not
limited to, futures contracts,  options  contracts,  and options on futures
contracts.  A futures contract is an exchange-traded  agreement between two
parties,  a buyer and a seller,  to  exchange  a  particular  commodity  or
financial  instrument at a specific price on a specific date in the future.
An option  transaction  generally involves a right, which may or may not be
exercised,  to buy  or  sell  a  commodity  or  financial  instrument  at a
particular price on a specified future date.

     An Advisor's use of  derivatives  involves  risks  different  from, or
possibly  greater than, the risks  associated  with  investing  directly in
securities   or  more   traditional   investments,   depending   upon   the
characteristics of the particular derivative and the Advisor's portfolio as
a whole. Derivatives permit an Advisor to increase or decrease the level of
risk of its  portfolio,  or change the  character  of the risk to which its
portfolio  is exposed,  in much the same way as the Advisor can increase or
decrease the level of risk,  or change the  character  of the risk,  of its
portfolio by making investments in specific securities.

     Derivatives  may entail  investment  exposures  that are greater  than
their cost would  suggest,  meaning that a small  investment in derivatives
could have a large  potential  impact on an  Advisor's  performance.  If an
Advisor  invests  in  derivatives  at  inopportune  times or judges  market
conditions incorrectly,  such investments may lower the Advisor's return or
result in a loss. An Advisor also could  experience  losses if  derivatives
are  poorly  correlated  with its other  investments,  or if an  Advisor is
unable to liquidate its position because of an illiquid  secondary  market.
The market for many  derivatives  is, or  suddenly  can  become,  illiquid.
Changes in liquidity may result in significant,  rapid,  and  unpredictable
changes in the prices for derivatives.

     Engaging in these  transactions  involves risk of loss to the Advisors
that  could  materially  adversely  affect the value of the  Company's  net
assets.  No assurance  can be given that a liquid market will exist for any
particular futures contract at any particular time.

     The  successful  use of  futures  also is  subject  to the  ability to
predict correctly  movements in the direction of the relevant market,  and,
to the extent the  transaction  is entered  into for hedging  purposes,  to
ascertain the appropriate  correlation between the transaction being hedged
and the price movements of the futures contract.

EQUITY AND EQUITY  RELATED  INSTRUMENTS  MAY BE SUBJECT TO VARIOUS TYPES OF
RISK,  INCLUDING  MARKET RISK,  LIQUIDITY RISK,  COUNTERPARTY  CREDIT RISK,
LEGAL RISK AND OPERATIONS RISK

     Some Advisors may invest long and short in equities and equity-related
instruments  in  their  investment  programs.  Stocks,  options  and  other
equity-related  instruments  may be  subject  to  various  types  of  risk,
including market risk, liquidity risk, counterparty credit risk, legal risk
and operations  risk. In addition,  equity-related  instruments can involve
significant  economic leverage and may, in some cases,  involve significant
risks of loss.  "Equity  securities"  may include common stocks,  preferred
stocks,  interests  in real  estate  investment  trusts,  convertible  debt
obligations,  convertible  preferred  stocks,  equity  interests in trusts,
partnerships,  joint  ventures or limited  liability  companies and similar
enterprises,  warrants and stock purchase rights. In general,  stock values
fluctuate in response to the  activities  of  individual  companies  and in
response to general market and economic conditions.  Accordingly, the value
of the stocks and other  securities  and  instruments  that the  Investment
Funds hold  directly  or  indirectly  may  decline  over short or  extended
periods.  The stock  markets tend to be  cyclical,  with periods when stock
prices  generally  rise and periods  when  prices  generally  decline.  The
volatility  of equity  securities  means that the value of an investment in
each of the Investment Funds may increase or decrease.

FIXED-INCOME SECURITIES ARE SUBJECT TO CREDIT RISK AND PRICE VOLATILITY

     Advisors may invest in  fixed-income  securities.  Investment in these
securities may offer opportunities for income and capital appreciation, and
may  also  be  used  for  temporary  defensive  purposes  and  to  maintain
liquidity.

     "Fixed-income  securities"  are  obligations  of the  issuer  to  make
payments of principal and/or interest on future dates,  and include,  among
other securities: bonds, notes, and debentures issued by corporations; debt
securities  issued  or  guaranteed  by the  U.S.  government  or one of its
agencies  or  instrumentalities  or  by  a  foreign  government;  municipal
securities;   and  mortgage-backed  and  asset-backed   securities.   These
securities may pay fixed,  variable, or floating rates of interest, and may
include zero coupon obligations. Fixed-income securities are subject to the
risk of the  issuer's or a  guarantor's  inability  to meet  principal  and
interest payments on its obligations (i.e., credit risk) and are subject to
price volatility due to such factors as interest rate  sensitivity,  market
perception  of the  creditworthiness  of the  issuer,  and  general  market
liquidity (i.e., market risk). In addition,  mortgage-backed securities and
asset-backed  securities  may also be  subject  to call risk and  extension
risk. For example,  homeowners  have the option to prepay their  mortgages.
Therefore,  the duration of a security  backed by home mortgages can either
shorten (i.e.,  call risk) or lengthen (i.e.,  extension risk). In general,
if  interest  rates on new  mortgage  loans  fall  sufficiently  below  the
interest  rates  on  existing  outstanding  mortgage  loans,  the  rate  of
prepayment  would be expected to  increase.  Conversely,  if mortgage  loan
interest  rates  rise  above the  interest  rates on  existing  outstanding
mortgage loans,  the rate of prepayment  would be expected to decrease.  In
either  case,  a change  in the  prepayment  rate can  result  in losses to
investors.  The same  would  be true of  asset-backed  securities,  such as
securities backed by car loans.

HIGH YIELD DEBT  INVESTMENTS  ARE SUBJECT TO SIGNIFICANT  RISKS OF DEFAULT,
ILLIQUIDITY AND VOLATILITY

     High  yield  bonds and other debt  securities  in which  Advisors  may
invest on behalf of  certain of the  Investment  Funds  will  typically  be
junior to the obligations of companies to senior creditors, trade creditors
and  employees.  The lower  rating of high  yield  debt  reflects a greater
possibility  that adverse changes in the financial  condition of the issuer
or  in  general  economic,  financial,  competitive,  regulatory  or  other
conditions may materially impair the ability of the issuer to make payments
of principal and interest.  High yield debt  securities  have  historically
experienced  greater default rates than investment  grade  securities.  The
ability of holders of high yield debt to  influence  a  company's  affairs,
especially during periods of financial distress or following an insolvency,
will be substantially less than that of senior creditors.

     As with other  investments,  there may not be a liquid market for high
yield debt,  which  could  result in an Advisor  being  unable to sell such
securities for an extended period of time, if at all. In addition,  as with
other  types of  Advisor  investments,  the  market for high yield debt has
historically  been  subject to  disruptions  that have  caused  significant
illiquidity  and substantial  volatility in the prices of such  securities.
Consolidation  in the  financial  services  industry  has resulted in there
being fewer market makers for high yield debt,  which may result in further
risk of  illiquidity  and  volatility  with respect to high yield debt, and
this trend may continue in the future.

STRUCTURED  SECURITIES  MAY PRESENT A GREATER DEGREE OF MARKET RISK AND MAY
BE MORE VOLATILE,  LESS LIQUID AND MORE DIFFICULT TO PRICE  ACCURATELY THAN
LESS COMPLEX SECURITIES

     Advisors may invest in structured  securities.  Structured  securities
are  securities  whose value is  determined  by reference to changes in the
value of specific currencies, interest rates, commodities, indexes or other
financial  indicators  (the  "Reference")  or the relative change in two or
more  References.  The interest rate or the principal  amount  payable upon
maturity or redemption may be increased or decreased depending upon changes
in the  applicable  Reference.  Structured  securities may be positively or
negatively  indexed,  so that  appreciation of the Reference may produce an
increase  or  decrease  in the  interest  rate or value of the  security at
maturity.  In addition,  changes in the interest  rates or the value of the
security  at  maturity  may be a  multiple  of  changes in the value of the
Reference. Consequently, structured securities may present a greater degree
of market risk than other  types of  securities  and may be more  volatile,
less  liquid  and more  difficult  to price  accurately  than less  complex
securities.

CALL OPTIONS INVOLVES SIGNIFICANT RISKS FOR BUYERS AND SELLERS

     There are risks associated with the sale and purchase of call options.
The seller  (writer) of a call option  which is covered  (e.g.,  the writer
holds the underlying  security) assumes the risk of a decline in the market
price of the underlying security below the purchase price of the underlying
security less the premium  received,  and gives up the opportunity for gain
on the  underlying  security  above the exercise  price of the option.  The
seller of an  uncovered  call option  assumes  the risk of a  theoretically
unlimited increase in the market price of the underlying security above the
exercise price of the option.

     The  buyer of a call  option  assumes  the risk of losing  his  entire
investment  in the call  option.  If the buyer of the call sells  short the
underlying  security,  the loss on the call  will be  offset in whole or in
part by any gain on the short sale of the underlying security.

PUT OPTIONS INVOLVES SIGNIFICANT RISKS FOR BUYERS AND SELLERS

     There are risks  associated with the sale and purchase of put options.
The seller (writer) of a put option which is covered (e.g.,  the writer has
a  short  position  in the  underlying  security)  assumes  the  risk of an
increase in the market  price of the  underlying  security  above the sales
price (in establishing the short position) of the underlying  security plus
the  premium  received,  and  gives  up the  opportunity  for  gain  on the
underlying  security below the exercise price of the option.  If the seller
of the put option owns a put option covering an equivalent number of shares
with an exercise  price equal to or greater than the exercise  price of the
put written,  the position is "fully hedged" if the option owned expires at
the same time or later than the option written.  The seller of an uncovered
put  option  assumes  the  risk of a  decline  in the  market  price of the
underlying security below the exercise price of the option.

     The  buyer of a put  option  assumes  the risk of  losing  his  entire
investment in the put option.  If the buyer of the put holds the underlying
security,  the  loss on the put will be  offset  in whole or in part by any
gain on the underlying security.

REVERSE REPURCHASE  AGREEMENTS MAY INCREASE THE VOLATILITY OF AN INVESTMENT
FUND'S AND THE COMPANY'S INVESTMENT PORTFOLIO

     The Investment Funds or the Advisors may enter into reverse repurchase
agreements. A reverse repurchase agreement typically involves the sale of a
security by a party to a bank or securities  dealer and the selling party's
simultaneous  agreement  to  repurchase  that  security  for a fixed  price
(reflecting a rate of interest) on a specific date, and may be considered a
form of borrowing for some purposes.  These transactions involve risks that
the value of portfolio  securities being relinquished may decline below the
price that must be paid when the transaction closes or that the other party
to a reverse  repurchase  agreement will be unable or unwilling to complete
the transaction as scheduled,  which may result in losses to the applicable
Investment Fund and the Company.  Reverse repurchase  agreements are a form
of leverage that may also increase the  volatility of an Investment  Fund's
and the Company's investment portfolio.

THERE  ARE  SIGNIFICANT   RISK  ASSOCIATED  WITH  WHEN-ISSUED  AND  FORWARD
COMMITMENT SECURITIES

     Advisors  may purchase  securities  on a  "when-issued"  basis and may
purchase or sell  securities  on a "forward  commitment"  basis in order to
hedge  against  anticipated  changes  in  interest  rates and prices or for
speculative purposes. These transactions involve a commitment by an Advisor
to purchase or sell securities at a future date (ordinarily at least one or
two  months  later).  The  price  of the  underlying  securities,  which is
generally  expressed in terms of yield, is fixed at the time the commitment
is made, but delivery and payment for the securities takes place at a later
date. No income accrues on securities that have been purchased  pursuant to
a forward  commitment  or on a  when-issued  basis prior to delivery to the
Advisor.  When-issued  securities and forward commitments may be sold prior
to the  settlement  date. If an Advisor  disposes of the right to acquire a
when-issued  security prior to its  acquisition or disposes of its right to
deliver or  receive  against a forward  commitment,  it may incur a gain or
loss. There is a risk that securities  purchased on a when-issued basis may
not be delivered and that the purchaser of securities sold by an Advisor on
a forward basis will not honor its purchase  obligation.  In such cases, an
Advisor may incur a loss potentially  resulting in losses to the Investment
Fund and the Company.

DERIVATIVES  WITH  RESPECT  TO HIGH  YIELD  AND OTHER  INDEBTEDNESS  EXPOSE
ADVISORS TO COUNTERPARTY AND ISSUER RISK

     In addition to the credit  risks  associated  with  holding high yield
debt securities, with respect to derivatives involving high yield and other
debt, an Advisor will usually have a contractual relationship only with the
counterparty   of  the   derivative,   and  not  with  the  issuer  of  the
indebtedness.  An Advisor  generally will have no right to directly enforce
compliance by the issuer with the terms of the derivative nor any rights of
set-off against the issuer,  nor have any voting rights with respect to the
indebtedness.  An Advisor  will not directly  benefit  from the  collateral
supporting the underlying indebtedness and will not have the benefit of the
remedies that would normally be available to a holder of the  indebtedness.
In addition,  in the event of the  insolvency  of the  counterparty  to the
derivative,  such  Advisor  will be treated as a general  creditor  of such
counterparty,  and will not have any claim with  respect to the  underlying
indebtedness.  Consequently, the Advisor will be subject to the credit risk
of the counterparty as well as that of the issuer of the indebtedness. As a
result,  concentrations of such derivatives in any one counterparty subject
the  Advisor to an  additional  degree of risk with  respect to defaults by
such counterparty as well as by the issuer of the underlying indebtedness.


THE COMPANY MAY BE PREVENTED FROM ACHIEVING ITS OBJECTIVE DURING ANY PERIOD
IN WHICH ASSETS ARE NOT SUBSTANTIALLY INVESTED IN ACCORDANCE WITH PRINCIPAL
INVESTMENT STRATEGIES

     Advisors may invest, for defensive purposes or otherwise,  some or all
of their assets in fixed-income securities,  money market instruments,  and
money market mutual funds, or hold cash or cash equivalents in such amounts
as  the  Advisors  deem  appropriate  under  the   circumstances.   Pending
allocation of the offering proceeds and thereafter,  from time to time, the
Investment  Funds  also may  invest  in  these  instruments.  Money  market
instruments are short-term fixed-income  obligations,  which generally have
remaining  maturities of one year or less, and may include U.S.  government
securities, commercial paper, certificates of deposit, bankers' acceptances
issued by domestic  branches of U.S.  banks that are members of the Federal
Deposit Insurance Corporation,  and repurchase agreements.  The Company and
the Investment Funds may be prevented from achieving their objective during
any period in which the Company's and the Investment  Fund's assets are not
substantially  invested  in  accordance  with  their  principal  investment
strategies.

RESTRICTED  AND ILLIQUID  INVESTMENTS  MAY PREVENT  PROMPT  LIQUIDATION  OF
UNFAVORABLE POSITIONS RESULTING IN SUBSTANTIAL LOSS

     Advisors  may invest a portion or all of the value of their  assets in
restricted  securities and other investments that are illiquid.  Restricted
securities  are  securities  that may not be sold to the public  without an
effective  registration  statement under the Securities Act or, if they are
unregistered,  may be sold only in a privately  negotiated  transaction  or
pursuant to an exemption from  registration.  These may include  restricted
securities  that can be offered and sold only to  "qualified  institutional
buyers"  under Rule 144A of the  Securities  Act.  There is no limit to the
percentage  of an  Advisor's  net assets  that may be  invested in illiquid
securities.

     Positions in restricted or non-publicly traded securities,  securities
on foreign  exchanges and certain futures contracts may be illiquid because
certain  exchanges  limit  fluctuations  in certain  securities and futures
contract  prices during a single day by  regulations  referred to as "daily
price  fluctuation  limits" or "daily  limits."  Under  such daily  limits,
during a single  trading day no trades may be executed at prices beyond the
daily limits.  Once the price of a particular  security or futures contract
has increased or decreased by an amount equal to the daily limit, positions
in that  security or contract  can neither be taken nor  liquidated  unless
traders  are  willing  to  effect  trades  at or  within  the  limit.  This
constraint could prevent the Advisors from promptly liquidating unfavorable
positions  and subject the  Investment  Funds and, in turn,  the Company to
substantial  losses. This could also impair the Company's ability to redeem
its membership  units from an Investment  Fund in order to redeem  Members'
Units in a timely manner.

                   RISKS RELATED TO ISSUERS OF SECURITIES

THE ISSUERS OF SECURITIES  ACQUIRED BY ADVISORS WILL  SOMETIMES FACE A HIGH
DEGREE OF BUSINESS AND FINANCIAL RISK

     The issuers of securities  acquired by Advisors will sometimes involve
a high degree of business and financial risk.  These companies may be in an
early stage of development, may not have a proven operating history, may be
operating at a loss or have  significant  variations in operating  results,
may be engaged in a rapidly  changing  business with products  subject to a
substantial  risk  of  obsolescence,  may  require  substantial  additional
capital to support their  operations,  to finance  expansion or to maintain
their  competitive  position,  or  may  otherwise  have  a  weak  financial
condition.

     Issuers of  securities  acquired by Advisors may be highly  leveraged.
Leverage may have important  adverse  consequences to these companies,  and
the Advisor as an investor.  These  companies may be subject to restrictive
financial and operating covenants. The leverage may impair these companies'
ability to finance their future  operations and capital needs. As a result,
these companies'  flexibility to respond to changing  business and economic
conditions  and to  business  opportunities  may be  limited.  A  leveraged
company's  income and net assets  will tend to  increase  or  decrease at a
greater rate than if borrowed money were not used.

     In addition,  such companies may face intense  competition,  including
competition from companies with greater financial resources, more extensive
development, manufacturing, marketing, and other capabilities, and a larger
number of qualified managerial and technical personnel.

EXPECTED  TRANSACTIONS  MAY NOT TAKE  PLACE OR MAY  RESULT  IN  SUBSTANTIAL
LOSSES

     The Advisors of the Investment Funds,  particularly  those of GED, may
engage in merger arbitrage  transactions.  Substantial  transaction failure
risks are  involved  with  respect  to  companies  that are the  subject of
publicly disclosed mergers,  takeover bids, exchange offers, tender offers,
spin-offs,   liquidations,   corporate  restructuring,  and  other  similar
transactions. Thus, there can be no assurance that any expected transaction
will take place.  Certain transactions are dependent on one or more factors
in order to become  effective,  such as market conditions which may lead to
unexpected  positive or negative changes in a company profile,  shareholder
approval,  regulatory  and various other third party  consents,  changes in
earnings or business  lines or  shareholder  activism as well as many other
factors. No assurance can be given that the transactions  entered into will
result in profitable  investments for the Advisors or that any such Advisor
and,  in turn,  the  Investment  Funds  and the  Company,  will  not  incur
substantial losses.

INVESTMENTS IN SMALL  CAPITALIZATION  COMPANIES ARE  SPECULATIVE AND MAY BE
DIFFICULT TO VALUE

     From  time  to  time,  a  significant  portion  of the  assets  of the
Investment  Funds may be invested  in  securities  of small  capitalization
companies and recently organized companies and, conversely, the Advisors of
the  Investment  Funds may establish  significant  short  positions in such
securities.  Historically, such securities have been more volatile in price
than  those  of  larger  capitalized,   more  established  companies.   The
securities of small  capitalization and recently  organized  companies pose
greater  investment  risks because such companies may have limited  product
lines,  distribution  channels and financial and managerial  resources.  In
particular,  small  capitalization  companies may be operating at a loss or
have  significant  variations  in  operating  results;  may be engaged in a
rapidly  changing  business with products  subject to  substantial  risk of
obsolescence;  may require substantial  additional capital to support their
operations, to finance expansion or to maintain their competitive position;
and may have substantial  borrowings or may otherwise have a weak financial
condition.  In addition,  these  companies  may face  intense  competition,
including competition from companies with greater financial resources, more
extensive development,  manufacturing,  marketing,  and other capabilities,
and a larger  number  of  qualified  managerial  and  technical  personnel.
Further, there is often less publicly available information concerning such
companies  than  for  larger,  more  established  businesses.   The  equity
securities   of   small   capitalization   companies   are   often   traded
over-the-counter  or on  regional  exchanges  and may not be  traded in the
volumes  typical  on a  national  securities  exchange.  Consequently,  the
Investment  Funds or entities in which the  Investment  Funds invest may be
required to dispose of such  securities  or cover a short  position  over a
longer (and potentially less favorable)  period of time than is required to
dispose of or cover a short  position  with  respect to the  securities  of
larger,  more established  companies.  Investments in small  capitalization
companies  may  also be  more  difficult  to  value  than  other  types  of
securities because of the foregoing considerations as well as lower trading
volumes. Investments in companies with limited operating histories are more
speculative  and entail  greater risk than do investments in companies with
an established operating record. Additionally,  transaction costs for these
types of investments  are often higher than those of larger  capitalization
companies.

INVESTMENTS  IN ISSUERS OF  INDEBTEDNESS  MAY BE ADVERSELY  AFFECTED IN THE
EVENT OF AN ISSUER'S INSOLVENCY

     Various laws  enacted for the  protection  of  creditors  may apply to
indebtedness in which the Advisors invest.  The information in this and the
following  paragraph is applicable with respect to U.S.  issuers subject to
United States federal bankruptcy law. Insolvency  considerations may differ
with respect to other issuers. If a court in a lawsuit brought by an unpaid
creditor or representative of creditors of an issuer of indebtedness,  such
as a trustee in  bankruptcy,  were to find that the issuer did not  receive
fair  consideration  or  reasonably  equivalent  value  for  incurring  the
indebtedness and after giving effect to such  indebtedness,  the issuer (i)
was  insolvent,  (ii) was  engaged  in a business  for which the  remaining
assets of such  issuer  constituted  unreasonably  small  capital  or (iii)
intended  to incur,  or  believed  that it would  incur,  debts  beyond its
ability to pay such debts as they  mature,  such court could  determine  to
invalidate,  in  whole  or  in  part,  such  indebtedness  as a  fraudulent
conveyance,   to  subordinate  such  indebtedness  to  existing  or  future
creditors of such issuer,  or to recover  amounts  previously  paid by such
issuer in satisfaction of such indebtedness.  The measure of insolvency for
purposes  of the  foregoing  will  vary.  Generally,  an  issuer  would  be
considered  insolvent at a particular time if the sum of its debts was then
greater  than all of its  property at a fair  valuation,  or if the present
fair saleable  value of its assets was then less than the amount that would
be required to pay its probable  liabilities  on its existing debts as they
became absolute and matured.  There can be no assurance as to what standard
a  court  would  apply  in  order  to  determine  whether  the  issuer  was
"insolvent"  after giving effect to the incurrence of the  indebtedness  in
which an Advisor invested or that, regardless of the method of valuation, a
court  would not  determine  that the issuer was  "insolvent"  upon  giving
effect to such incurrence.  In addition,  in the event of the insolvency of
an issuer of  indebtedness  in which an Advisor  invests,  payments made on
such  indebtedness  could be subject to avoidance as a "preference" if made
within a certain  period of time (which may be as long as one year)  before
insolvency. In general, if payments on indebtedness are avoidable,  whether
as fraudulent conveyances or preferences, such payments can be recaptured.

     The  Company  or the  Investment  Funds  do not  anticipate  that  the
Advisors  will engage in conduct that would form the basis for a successful
cause of action based upon fraudulent  conveyance,  preference or equitable
subordination.  There  can be no  assurance,  however,  as to  whether  any
lending  institution or other party from which the Advisor may acquire such
indebtedness  engaged in any such conduct (or any other  conduct that would
subject such indebtedness and any Investment Fund, the assets of which such
Advisor used to purchase such indebtedness,  to insolvency laws) and, if it
did, as to whether such creditor  claims could be asserted in a U.S.  court
(or in the courts of any other country) against such Investment Fund.

     Indebtedness  consisting  of  obligations  of non-U.S.  issuers or U.S
issuers with respect to their foreign obligations may be subject to various
laws enacted in the  countries  of their  issuance  for the  protection  of
creditors.  These  insolvency  considerations  will differ depending on the
country  in which  each  issuer is  located  or  domiciled  and may  differ
depending on whether the issuer is a non-sovereign or a sovereign entity.

PURCHASES OF SECURITIES AND OTHER  OBLIGATIONS  OF  FINANCIALLY  DISTRESSED
COMPANIES  CREATE AN ENHANCED  RISK OF  SUBSTANTIAL  LOSS OR LOSS OF ENTIRE
INVESTMENT

     The  Advisors  may  purchase   securities  and  other  obligations  of
companies that are experiencing significant financial or business distress,
including  companies  involved in  bankruptcy or other  reorganization  and
liquidation proceedings.  Although such purchases may result in significant
returns,  they  involve a  substantial  degree of risk and may not show any
return  for  a  considerable  period  of  time.  In  fact,  many  of  these
instruments   ordinarily   remain  unpaid  unless  and  until  the  company
reorganizes and/or emerges from bankruptcy proceedings, and as a result may
have to be held for an  extended  period of time.  The level of  analytical
sophistication,   both  financial  and  legal,   necessary  for  successful
investment  in companies  experiencing  significant  business and financial
distress is unusually  high.  There is no assurance  that the Advisors will
correctly  evaluate the nature and  magnitude  of the various  factors that
could  affect the  prospects  for a  successful  reorganization  or similar
action.  In any  reorganization  or  liquidation  proceeding  relating to a
company  in  which an  Advisor  invests,  an  Advisor  may lose its  entire
investment  or may be required to accept  cash or  securities  with a value
less than its original  investment.  Under such circumstances,  the returns
generated  from  an  Advisor's  investments  may not  compensate  investors
adequately for the risks assumed.

                         LIMITS OF RISK DISCLOSURE

THE COMPANY  SHOULD BE  CONSIDERED  A  SPECULATIVE  INVESTMENT  AND MEMBERS
SHOULD RETAIN THEIR  INVESTMENT ONLY IF THEY CAN SUSTAIN A COMPLETE LOSS OF
THEIR INVESTMENT

     The above  discussions  relating to various risks  associated with the
Company,  the Units, the Investment Funds and the Advisors are not, and are
not  intended to be, a complete  enumeration  or  explanation  of the risks
involved in an investment in the Company.  Members  should read this entire
Annual  Report  and the LLC  Agreement  and should  consult  with their own
advisers before deciding whether to retain their investment in the Company.
In  addition,  as the  Company's  investment  program or market  conditions
change or develop over time, an investment in the Company may be subject to
risk factors not currently contemplated or described in this Annual Report.

     In view of the risks noted above,  the Company  should be considered a
speculative  investment and Members  should retain their  investment in the
Company only if they can sustain a complete loss of their investment.

     No guarantee or representation is made that the investment  program of
the Company,  the Investment Funds or any Advisor will be successful,  that
the  Investment  Funds or the various  Advisors  selected by the Investment
Funds will produce positive  returns,  or that the Advisors selected by the
Investment  Funds will  provide  complete  or accurate  information  to the
Investment Funds, or that the Company, the Investment Funds or the Advisors
will achieve their investment objectives.

ITEM 2.  PROPERTIES

     The Company does not own or lease any physical properties. The Company
is  operating at the Managing  Member's  facility and is not being  charged
rent except indirectly through the monthly Management Fee.

ITEM 3.  LEGAL PROCEEDINGS

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

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

     No matters  were  submitted  to a vote of holders of Units  during the
fiscal year ended December 31, 2004.

                                  PART II

ITEM 5.  MARKET  FOR  THE  REGISTRANT'S   COMMON  EQUITY  AND  RELATED
         STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

MARKET INFORMATION

     Currently,  there is no  established  public  trading  market  for the
Units.  Other than  transfers  to the Company in  redemption,  transfers of
Units are expressly  prohibited by the LLC Agreement without the consent of
the Managing Member.

     Without the prior written consent of the Managing Member, which may be
withheld  in its sole  discretion,  a Member  may not  assign or  otherwise
transfer its Units in the Company in whole or in part,  except by operation
of law pursuant to the death,  bankruptcy or  dissolution  of a Member,  or
pursuant to a corporate  reorganization or merger, nor substitute any other
person as a Member.  No transferee or assignee will be admitted as a Member
without the prior consent of the Managing Member,  which may be withheld in
its sole  discretion.  A Member has the right to redeem  some or all of its
Units,  upon 60 days' prior written  notice to the Managing  Member on each
January 1 or July 1.

     There  are  no  outstanding  options  or  warrants  to  purchase,   or
securities convertible into, Units of the Company.

     The high and low NAV per Unit of the initial series of Units for Class
A  Series  1  of  the  Company  during  each  quarterly   period  from  the
commencement of the Company's  operations on April 1, 2002 through December
31, 2004 are as follows:

  -----------------------   ----------------------  ----------------------
      QUARTER ENDED                  HIGH                     LOW
  -----------------------   ----------------------  ----------------------
         6/30/02                    $101.60                 $100.09
  -----------------------   ----------------------  ----------------------
         9/30/02                    $103.20                 $101.42
  -----------------------   ----------------------  ----------------------
        12/31/02                    $103.97                 $101.59
  -----------------------   ----------------------  ----------------------
         3/31/03                    $106.62                 $105.52
  -----------------------   ----------------------  ----------------------
         6/30/03                    $109.83                 $106.89
  -----------------------   ----------------------  ----------------------
         9/30/03                    $110.35                 $108.87
  -----------------------   ----------------------  ----------------------
        12/31/03                    $113.95                 $112.09
  -----------------------   ----------------------  ----------------------
         3/31/04                    $117.05                 $115.10
  -----------------------   ----------------------  ----------------------
         6/30/04                    $115.92                 $114.58
  -----------------------   ----------------------  ----------------------
         9/30/04                    $114.55                 $113.73
  -----------------------   ----------------------  ----------------------
        12/31/04                    $120.25                 $115.61
  -----------------------   ----------------------  ----------------------

     The  Units  have  not  been  and  will  not be  registered  under  the
Securities  Act  and  may not be  resold  unless  an  exemption  from  such
registration is available. Members have no right to require registration of
the Units and the Company  does not intend to register  the Units under the
Securities Act or take any action to cause an exemption  (whether  pursuant
to Rule 144 of the Securities Act or otherwise) to be available.

RECORD HOLDERS OF UNITS OF THE COMPANY

     As of December 31, 2004,  approximately  8,106,803  Units were held by
approximately 725 Members.

DISTRIBUTIONS

     The  Company  has not  made  distributions  from  January  1,  2004 to
December 31, 2004 other than  distributions  to facilitate  redemptions  of
individual  Members.   The  Company  does  not  presently  intend  to  make
distributions  to Members  other than in  connection  with  redemptions  of
Units.

RECENT SALES OF UNREGISTERED UNITS AND USE OF PROCEEDS

     From  January 1, 2004 to December 31,  2004,  aggregate  subscriptions
totaled  $126.4  million.   The  Company   previously   reported  sales  of
unregistered  Units during the 2004 fiscal year in the Company's  Quarterly
Reports  on Form 10-Q and  Current  Reports on Form 8-K.  Information  with
respect to the first  quarter of the 2004  fiscal  year can be found in the
Registration  Statement.  In connection  with each funding,  the Units were
privately offered and sold to accredited  investors pursuant to Rule 506 of
Regulation  D and  the  sales  were  exempt  from  registration  under  the
Securities  Act. The Company has used the proceeds to make  investments  in
the Investment Funds.

PURCHASES OF UNITS BY THE COMPANY AND AFFILIATED PURCHASERS

     Pursuant to the Company's limited liability company agreement, holders
of Units may redeem their Units upon 60 days' prior  written  notice to the
Managing Member (unless such notice is waived by the Managing Member in its
sole  discretion),  on each  January 1 or July 1 occurring  on or after the
first  anniversary  of the  purchase  of such Units by the  holder  (each a
"Redemption Date").  Units of a particular series will be redeemed at a per
Unit price based upon the NAV of such series as of the close of business on
the day immediately  preceding the Redemption Date (taking into account the
allocation of any net appreciation or depreciation in the net assets of the
Company for the  accounting  period then ending),  after  reduction for any
Management  Fee and  Incentive  Allocation  and  other  liabilities  of the
Company to the extent accrued or otherwise  attributable to the Units being
redeemed.

     The Company previously reported  redemptions of Units during the third
quarter ended September 30, 2004 in the Company's  Quarterly Report on Form
10-Q.  There were no  redemptions  of Units during the fourth quarter ended
December 31, 2004. Redemptions of $128,546,636 will be effective on January
1, 2005 and are reflected in  Redemptions  payable in the December 31, 2004
balance sheet. See ITEM 15. "EXHIBITS AND FINANCIAL STATEMENT SCHEDULES."

ITEM 6.  SELECTED FINANCIAL DATA

     The Company commenced its operations on April 1, 2002. Set forth below
is certain selected historical data for the Company as of and for the years
ended  December  31,  2004  and  2003  and as of and  for the  period  from
commencement  of  operations  (April 1, 2002) to  December  31,  2002.  The
selected  historical  financial data as of and for the years ended December
31,  2004  and  2003  and as of and for the  period  from  commencement  of
operations  (April 1, 2002) to  December  31,  2002 were  derived  from the
financial  statements  of the Company,  which were audited by Ernst & Young
LLP ("E&Y").  The information set forth below should be read in conjunction
with the financial statements and notes thereto contained elsewhere in this
Annual Report.

<TABLE>
<CAPTION>

                                                                                                      COMMENCEMENT OF
                                                                                                         OPERATIONS
                                           YEAR ENDED                     YEAR ENDED                  (APRIL 1, 2002)
OPERATIONS DATA                         DECEMBER 31, 2004             DECEMBER 31, 2003            TO DECEMBER 31, 2002
---------------                         -----------------             -----------------            --------------------
<S>                                        <C>                           <C>                            <C>
Net trading profit/(loss)                  $72,018,387                   $81,854,395                    $11,821,474

Total expenses                             $14,457,852                   $10,733,672                     $2,459,020

Net income/(loss)                          $58,055,729                   $71,218,666                     $9,395,178

Less:  Incentive allocation to
the managing member                         $2,902,854                    $3,560,865                       $469,759

Net income/(loss) available for
pro-rata allocation to members             $55,152,875                   $67,657,801                     $8,925,419


                                              AS OF                         AS OF                          AS OF
FINANCIAL CONDITION DATA                DECEMBER 31, 2004             DECEMBER 31, 2003              DECEMBER 31, 2002
------------------------                -----------------             -----------------              -----------------

Investments                             $1,092,953,352                  $970,912,828                   $383,584,606

Total assets                            $1,093,172,149                $1,019,413,929                   $384,184,813

Total liabilities                         $135,716,916                   $86,168,187                       $958,552

Members' equity                           $957,455,233 (1)              $933,245,742 (2)               $383,226,261

Ending NAV/Unit:  Class A
Series 1                                       $120.25                       $113.95                        $103.97

<FN>
(1)  The  reduction  in members'  equity as of December  31, 2004  reflects
     Redemptions  payable in the amount of  $128,546,636  that are  payable
     after December 31, 2004.

(2)  The  reduction  in members'  equity as of December  31, 2003  reflects
     Redemptions  payable in the amount of  $34,529,625  that were  payable
     after December 31, 2003.
</FN>
</TABLE>

ITEM 7.  MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION AND
         RESULTS OF OPERATIONS

MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS


OVERVIEW

     The  following  discussion  should  be read in  conjunction  with  the
audited  financial  statements  of the Company and  related  notes  thereto
appearing  elsewhere in this Annual  Report,  ITEM 6.  "SELECTED  FINANCIAL
DATA" and, ITEM 1.  "BUSINESS--CERTAIN  RISK FACTORS--SPECIAL  RISKS OF THE
COMPANY'S   STRUCTURE--Risks   Related  to  the  Company's   Structure--The
Company's  Financial  Statements  are,  and in the Future will be, Based on
Estimates of Valuations  Provided by Third Party  Advisors Which May not be
Accurate or May Need to Be Adjusted in the Future."

     The Company is a Delaware limited liability company organized in March
2002 to operate as an investment fund. It commenced  operations on April 1,
2002. GS HFS, a Delaware limited liability company, serves as the Company's
Managing Member.

     As of December  31,  2004,  the  Company had total  assets of $1,093.2
million  compared with total assets of $1,019.4  million as of December 31,
2003 and $384.2 million as of December 31, 2002.  Total  liabilities of the
Company  totaled $135.7 million as of December 31, 2004 compared with $86.2
million as of December  31, 2003 and $1.0  million as of December 31, 2002.
Members'  equity of the Company was $957.4  million as of December 31, 2004
compared with $933.2  million as of December 31, 2003 and $383.2 million as
of December 31, 2002.

     The Company's  investment  objective is to target attractive long-term
risk-adjusted  returns across a variety of market  environments  with lower
volatility than, and minimal correlations,  to the broad equity markets. To
achieve this objective,  the Company  allocates all or substantially all of
its assets among privately placed  Investment Funds managed by the Managing
Member,  each of which  allocates  its assets  to, or  invests in  entities
managed by the Advisors that employ a broad range of investment  strategies
primarily within one of the following four hedge fund sectors: the tactical
trading sector,  the equity long/short  sector,  the relative value sector,
and the event driven sector. Currently,  substantially all of the Company's
assets are invested in the four Investment Funds: GTT, GELS, GRV and GED.

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

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

RESULTS OF OPERATIONS

     The following presents a summary of the operations for the years ended
December  31,  2004  and  2003  and for the  period  from  commencement  of
operations  (April 1, 2002) to December 31, 2002, and a general  discussion
of each Investment Fund's performance during those periods.

     2004 PERFORMANCE

     The Company's net trading  profit/loss for the year ended December 31,
2004 was  $72,018,387,  compared  to the year ended  December  31,  2003 of
$81,854,395,  and compared to the period from  commencement  of  operations
(April 1, 2002) to December 31, 2002 of $11,821,474.

     OVERVIEW

     The Company is designed to be broadly exposed to the hedge fund market
by  allocating  its assets to the  Investment  Funds in the four hedge fund
sectors:  tactical  trading,  equity  long/short,  relative value and event
driven.  During the first six months of 2004,  the  Company  allocated  its
assets  on a roughly  equivalent  risk  weighted  basis to each of the four
hedge fund sectors. Through June 30, 2004, the Managing Member had not made
any  strategic  allocations.  As of  July  1,  2004,  the  Managing  Member
implemented  an adjustment to the weightings  among the  Investment  Funds.
This  adjustment  to the weights  reflected the Managing  Member's  updated
expectations for return,  risk and  correlations for the Investment  Funds.
The Managing Member periodically  re-evaluates the contribution to the risk
and return of the Company from each  investment  sector and may in its sole
discretion  re-allocate  the Company's  assets or weights of the investment
sector  as  it  deems  advisable.  As  further  described  under  ITEM  7A.
"QUANTITATIVE   AND  QUALITATIVE   DISCLOSURES   ABOUT  MARKET   RISK--Risk
Management,"  quantitative  analysis is combined with judgment to determine
strategic allocations that will offer broad exposure to hedge fund returns.
Strategic  return,  risk and correlation  estimates inform the quantitative
analysis,  which  balances  returns and  contribution  to  portfolio  risk.
Judgment is applied to both  estimates and weights in an attempt to achieve
a  diversified  exposure  to hedge funds while  targeting  attractive  risk
adjusted  returns.  The Company  cannot predict which hedge fund sector and
accordingly  which  Investment  Fund will perform  best in the future.  The
table below illustrates the portfolio  weighting of each Investment Fund as
of December 31, 2004, as well as each Investment  Fund's net return for the
year ended December 31, 2004.

<TABLE>
<CAPTION>

------------------ ---------------------- ------------------------- ----------------------
                       PORTFOLIO WEIGHT     PORTFOLIO WEIGHT AS A         YEAR ENDED
                          AS A % OF             % OF ADJUSTED         DECEMBER 31, 2004
 INVESTMENT FUND     MEMBERS' EQUITY (1)     MEMBERS' EQUITY (2)         NET RETURN (3)
------------------ ---------------------- ------------------------- ----------------------
       <S>                  <C>                    <C>                      <C>
       GTT                  25.91%                 22.84%                   3.88%
       GELS                 23.63%                 20.84%                   9.27%
       GRV                  36.60%                 32.27%                   5.38%
       GED                  28.01%                 24.69%                  12.70%

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

(2)  As a % of the  Company's  adjusted  members'  equity which  represents
     members'  equity  excluding  Redemptions  payable  in  the  amount  of
     $128,546,636 that are payable after December 31, 2004.

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


     For the year ended December 31, 2004,  the Company's  Class A Series 1
Units returned 5.53% net of fees and incentive allocation.

THE INVESTMENT FUNDS

     Each of the four Investment Funds'  performance  during the year ended
December 31, 2004 is described in the following.

GOLDMAN SACHS GLOBAL TACTICAL TRADING, LLC

     As of December 31, 2004, GTT represented approximately 23% of adjusted
members' equity which excludes redemptions paid after December 31, 2004 and
which  was  generally  consistent  with  the  strategic  weight  set by the
Managing  Member for GTT as of July 1, 2004. GTT returned 3.88% for Class C
Series 1 units for the year ended December 31, 2004.

     Volatile  markets  resulted  in a  difficult  year  in  2004  for  the
Company's GTT Advisors,  in particular during the second and third quarters
of 2004.

     In the first  quarter of 2004,  profits were made in  commodities  and
interest rates. In commodities, the agricultural markets,  specifically the
soy complex,  proved to be the largest driver of returns. GTT Advisors were
also profitable in base and precious metals.  The majority of first quarter
losses was  experienced in currencies as GTT Advisors  suffered losses as a
result of the strengthening of the U.S. dollar.

     The second  quarter  of 2004  proved to be more  challenging  as fixed
income and  non-energy  commodity  markets,  both of which had provided the
bulk of the returns in the first quarter,  reversed sharply in early April.
Positions  in these  sectors  contributed  to the  largest  losses  for GTT
Advisors for the second quarter of 2004.  Indications of a strong  economic
recovery and rising  inflation led to market  expectations  of  accelerated
rate increases by the Federal  Reserve Board and a sell-off in fixed income
markets.  Long equity and short dollar positions,  particularly against the
Japanese yen and the euro,  also suffered by the  anticipation  of a higher
rate environment.

     Difficult markets  persisted in the third quarter of 2004.  Trading in
fixed income and commodities was slightly  positive for the quarter,  while
GTT Advisors  experienced losses in currencies and equity indices.  Despite
record trade deficit numbers,  the U.S. dollar did not weaken significantly
which  contributed  to losses for GTT Advisors in short  dollar  positions.
Equity markets  experienced  several sharp  reversals  throughout the third
quarter of 2004 as the market  digested  rising oil prices and a  potential
global slowdown. A series of  weaker-than-expected  economic data releases,
higher oil prices and the Federal Reserve  Board's  assurance that fears of
inflation were largely  unfounded  combined to drive bond yields lower over
the course of the quarter.  Some GTT Advisors  profited  because  crude oil
rallied and short  positions  were  successful as a result of grain markets
experiencing sharp declines.

     The fourth quarter of 2004 experienced  positive  performance  overall
across the different  asset classes,  with the largest  profits coming from
currencies.  The  dominating  theme was the  weakening of the U.S.  dollar,
specifically against the Japanese yen and several European currencies.  The
sell-offs were  attributed to the massive  current  account deficit and the
perceived lack of fiscal  discipline in the U.S.,  leaving the U.S.  dollar
vulnerable to reduced  investments in dollar assets and possible  shifts by
central  banks in  reserves  from  dollars to other  currencies.  As market
concerns of a slowing  economy in China spread,  there was a sharp sell-off
in basic metals,  causing losses on long positions.  U.S. treasuries traded
lower on  stronger-than-expected  growth and payroll numbers and on news of
reduced  foreign  investment in U.S.  assets,  while  European  bonds rose.
Equity markets rose on positive economic news and falling crude oil prices,
which made them top contributors to performance, with long positions in the
U.S., Europe, and Asia generating profits.

GOLDMAN SACHS GLOBAL EQUITY LONG/SHORT, LLC

     As of  December  31,  2004,  GELS  represented  approximately  21%  of
adjusted members' equity which excludes redemptions paid after December 31,
2004 and which was generally  consistent  with the strategic  weight set by
the Managing  Member for GELS as of July 1, 2004.  GELS returned  9.27% for
Class C Series 1 units for the year ended December 31, 2004.

     The annualized volatility of GELS' returns for the year ended December
31,  2004 was 5.65%.  In  comparison,  the S&P 500 Index had an  annualized
volatility of 7.30% and the MSCI World Index had an  annualized  volatility
of 8.16% for the period.

     The year ended December 31, 2004 was a solid year for GELS, with eight
positive and four negative months of performance. GELS started the year off
strongly  in January and  February  because  many trends that drove  strong
fourth quarter 2003 performance  continued into 2004. The period from March
through  May 2004 was  difficult  for many of  GELS'  Advisors  because  of
significant sell-offs in several areas where they had exposures,  namely in
small capitalization,  basic materials and emerging market stocks. June was
a positive  month for GELS as GELS Advisors  rebounded;  however,  July was
another difficult month and represented the low point of GELS for the year,
as the global technology and healthcare sectors sold-off.

     The last five months of 2004 were positive,  with particularly  strong
performance  in September,  November and December.  The year-end  rally for
GELS experienced  additional  momentum following the U.S. election in early
November,  which brought a global  equity rally,  most notably in the areas
that  negatively  impacted  performance  in the spring of 2004 (e.g.  small
capitalization, basic materials and emerging markets).

     Almost  all GELS  Advisors  posted  positive  returns  for the  fourth
quarter of 2004. GELS Advisors with exposures in Europe  emerging  markets,
energy,  and basic  materials  posted  particularly  strong  returns.  GELS
Advisors that posted losses  included  those with  significant  exposure to
Japan  and  those  with   notional   (gross  long  plus  gross   short)  or
beta-adjusted (for volatility of the overall market) net short exposures.

GOLDMAN SACHS GLOBAL RELATIVE VALUE, LLC

     As of December 31, 2004, GRV represented approximately 32% of adjusted
members' equity which excludes redemptions paid after December 31, 2004 and
which  was  generally  consistent  with  the  strategic  weight  set by the
Managing  Member for GRV as of July 1, 2004. GRV returned 5.38% for Class C
Series 1 units for the year ended December 31, 2004.

     The  annualized  volatility  of GRV's  returns  was 2.00% for the year
ended  December 31, 2004 compared to the Lehman  Aggregate Bond Index which
had an  annualized  volatility  of 4.04%  for the same  period.  The  asset
classes in which GRV Advisors  traded spent the majority of 2004 trading in
a  narrow  range,  resulting  in very  low  levels  of  volatility.  Equity
volatility  remained  close to 9-year lows  throughout  2004,  despite many
significant  world  events.  The  difference  between  the best  and  worst
performing  stocks in the equity  markets was  minimal,  resulting in lower
profits from security  selection.  Government bond markets experienced more
activity  because the Federal  Reserve Board began to increase rates in the
summer of 2004.  Overall,  the premium that investors  require to take risk
has contracted,  demonstrated by low bond yields,  tight credit spreads and
negligible equity volatility.

     Credit  trading  arbitrage  strategies  performed well as GRV Advisors
were able to profit from  technical and  fundamental  trade  opportunities,
including  arbitraging  credit  indices versus their  constituent  credits,
capital structure (credit vs. equity) and long/short credit trades.

     Fixed income arbitrage  strategies  performed  moderately for the year
and  although  there were a number of sharp moves in the  markets,  overall
volatility  remained  subdued at 4-year  lows.  The summer of 2004  brought
difficult  trading  conditions  as 10 year bond  yields  fell  despite  the
Federal Reserve Board increasing  short-term  interest rates,  resulting in
modest losses by GRV Advisors.  Following a difficult  third  quarter,  GRV
Advisors experienced a recovery in the fourth quarter of 2004.

     Equity arbitrage strategies  experienced a positive year. Returns were
strong  throughout  2004,  with a modest summer  slowdown as equity returns
were dominated by macro drivers rather than stock-specific characteristics.
Profitable  model stock  selection  factors  included  valuation,  earnings
momentum and quality.  International  markets were particularly  successful
for GRV Advisors.

     The decline in equity  volatility  led to  negligible  returns for GRV
Advisors  in  convertible  bond  arbitrage  strategies.  The  amount of new
issuances  declined  and prices  were high,  exacerbating  the  challenging
environment. GRV Advisors shifted exposure into Asian markets, and selected
short positions and special situations to improve their returns.

     Multi-strategy  arbitrage,  which covers all of GRV's  sub-strategies,
benefited in 2004 from additional  opportunities in special  situations and
credit/high yield trades.

     Convertible  arbitrage strategies returned 2.27% and contributed 0.76%
to GRV's net income for the year ended December 31, 2004.  Credit  relative
value strategies  returned 6.26% and contributed  0.39% to GRV's net income
for the year ended  December  31, 2004.  Emerging  markets  relative  value
strategies returned 8.26% and contributed 0.42% to GRV's net income for the
year ended  December 31, 2004.  Equity market neutral  strategies  returned
4.02% and contributed 0.62% to GRV's net income for the year ended December
31, 2004. Fixed income arbitrage  strategies returned 6.97% and contributed
1.52%  to  GRV's  net  income  for  the  year  ended   December  31,  2004.
Multi-strategies  returned 7.09% and contributed  2.13% to GRV's net income
for the year ended December 31, 2004.

GOLDMAN SACHS GLOBAL EVENT DRIVEN, LLC

     As of December 31, 2004, GED represented approximately 25% of adjusted
members' equity which excludes redemptions paid after December 31, 2004 and
which  was  generally  consistent  with  the  strategic  weight  set by the
Managing Member for GED as of July 1, 2004. GED returned 12.70% for Class C
Series 1 units for the year ended December 31, 2004.

     The annualized volatility of GED's returns for the year ended December
31, 2004 was 3.38%  compared  to the S&P 500 Index which had an  annualized
volatility  of 7.30% and to the MSCI World  Index  which had an  annualized
volatility of 8.16% for the same period.

     The year ended December 31, 2004 produced varied market  results.  The
MSCI World Index  experienced low returns in the first half of 2004. In the
third quarter of 2004,  the equity  markets had negative  performance  as a
result of the Federal  Reserve  Board's  interest  rate  increases  and the
reduction in equity implied volatility.  However,  equity markets rebounded
in the fourth quarter of 2004, following the U.S. presidential election.

     Risk  arbitrage  Advisors had a difficult  year because of narrow deal
spreads,  which,  in part,  resulted  from  many  deals  facing  regulatory
scrutiny and other deal specific issues,  especially in the summer of 2004.
Global mergers and acquisitions  activity increased  significantly in 2004,
but still remained below the historical  highs of 1999 and 2000.  Despite a
small  decrease in deal  momentum  during the second  quarter of 2004,  GED
Advisors focusing on mergers and acquisitions were successful.  Mergers and
acquisitions  volume  totaled a little  under $2 trillion  for 2004,  which
easily  surpassed  2003's  volume of $1.3  trillion.  December was the most
active month for mergers and acquisitions since August 2000, with over $300
billion in global activity.

     Default  rates fell to record lows of 1.3% in 2004.  High yield credit
spreads tightened to historically  narrow levels from 418 basis points over
treasuries  at the  beginning  of the year to 310 basis points at year-end.
The high yield  market  experienced  a record year of new  issuance at $153
billion,  which  surpassed  the prior record of $144  billion in 1998.  GED
Advisors  were  rewarded for strong  credit  selection on both the long and
short side.  Several of GED's  credit-focused  Advisors gradually built the
short side of their  portfolios given their concerns on valuation levels in
the credit  markets.  The majority of new high yield issuance was driven by
refinancing activity.  Financial sponsors contributed  significantly to new
issuance  activity  by  refinancing   their  portfolio   companies  to  pay
themselves  special  dividends.  The technology,  media and telecom sectors
experienced the largest volume of new issuance ($39.4 billion), followed by
the  energy  sector  ($24.1  billion)  and the  industrials  sector  ($19.7
billion).

     Credit   opportunities/distressed   strategies   returned  17.26%  and
contributed 3.09% to GED's net income for the year ended December 31, 2004.
The   multi-strategy   component  of  the  portfolio  returned  12.43%  and
contributed 1.38% to GED's net income for the year ended December 31, 2004.
Risk arbitrage/special situations strategies returned 8.36% and contributed
2.15% to GED's net income for the year ended December 31, 2004.

     2003 PERFORMANCE

     The Company's net trading  profit for the year ended December 31, 2003
was  $81,854,395  compared to the period from  commencement  of  operations
(April 1, 2002) to December 31, 2002 of $11,821,474.

     OVERVIEW

     During 2003, the Company allocated its assets on a roughly  equivalent
risk-weighted basis to each of the four hedge fund sectors.  This diversity
of return drivers was particularly  important to the Company's  performance
in 2003 given the wide  dispersion of returns within the various sectors of
the hedge fund market.  For  example,  equity  long/short  and event driven
strategies  rebounded from a difficult 2002 to post strong absolute returns
in 2003. By contrast, certain price based and quantitative equity arbitrage
Advisors in the  relative  value sector had a difficult  year in 2003.  The
Company  cannot  predict  which  hedge fund  sector and  accordingly  which
Investment  Fund  will  perform  best  in  the  future.   The  table  below
illustrates the portfolio  weighting of each Investment Fund as of December
31, 2003, as well as each  Investment  Fund's net return for the year ended
December 31, 2003.

<TABLE>
<CAPTION>

------------------ ---------------------- ------------------------- ----------------------
                       PORTFOLIO WEIGHT     PORTFOLIO WEIGHT AS A         YEAR ENDED
                          AS A % OF             % OF ADJUSTED         DECEMBER 31, 2003
 INVESTMENT FUND     MEMBERS' EQUITY (1)     MEMBERS' EQUITY (2)         NET RETURN (3)
------------------ ---------------------- ------------------------- ----------------------
       <S>                  <C>                    <C>                      <C>
        GTT                 26.74%                 25.79%                   11.61%
       GELS                 15.01%                 14.48%                   13.73%
        GRV                 38.50%                 37.12%                    7.11%
        GED                 23.78%                 22.93%                   18.09%

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

(2)  As a % of the  Company's  adjusted  members'  equity which  represents
     members'  equity  excluding  Redemptions  payable  in  the  amount  of
     $34,529,625 that were payable after December 31, 2003.

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


     For the year ended December 31, 2003,  the Company  returned 9.60% net
of fees and incentive allocation for Class A Series 1 Units with a standard
deviation  of 3.63%  for the  year.  Standard  deviation  is a  statistical
measure of return dispersion around an arithmetic mean return.  The Company
would expect roughly two-thirds of the monthly returns to be within a range
equal to the  arithmetic  mean of the  monthly  returns  plus or minus  one
standard deviation.

     THE INVESTMENT FUNDS

     Each of the four Investment Funds' performance during the year 2003 is
described in the following.

     GOLDMAN SACHS GLOBAL TACTICAL TRADING, LLC

     As of December 31, 2003, GTT represented approximately 26% of adjusted
members' equity which excludes redemptions paid after December 31, 2003 and
which was  generally  consistent  with the  weighting of GTT as part of the
Company  throughout the year ended  December 31, 2003. GTT returned  11.61%
for Class C Series 1 units for the year ended  December 31, 2003.  Over the
course of the year,  GTT made  profits  in each of the four  asset  classes
which the GTT Advisors trade. The approximate  profit  contribution  coming
from Managed Accounts was 60% from currencies,  20% from  commodities,  15%
from  equities  and 5% from  interest  rates.  For  2003,  managed  futures
Advisors,  whose trading was based upon systematic models, proved to be, in
general,  more  successful  than  discretionary  managed  futures and macro
Advisers,  whose  investments  were driven by their views on broad economic
themes.  GTT attributes  this to  discretionary  managed  futures and macro
Advisors'  decreasing  risk in periods of  uncertainty,  such as the period
leading up to the war in Iraq,  or in late December  2003,  when there were
concerns about market liquidity.

     Over the course of 2003, GTT Advisors were  challenged by considerable
market  volatility,  the end of the bond bull  market  and by  geopolitical
uncertainty.  While  much of the  behavior  in 2002 could be  explained  by
simple motivations such as a movement toward safer,  higher-quality  assets
associated with bond rallies, equity sell-offs, rising gold and oil prices,
2003 proved to be more  complex.  Only during the first quarter of 2003 did
GTT Advisors  profit from  exploiting  the themes  dominating  2002, all of
which came to a peak in the weeks leading up to the war in Iraq.

     One important  trend of 2002 that carried  through all of 2003 was the
weakening  of the U.S.  dollar.  With the  current  United  States  account
deficit  widening,  and investor  interest in U.S. assets waning,  the U.S.
dollar dropped  throughout the period,  particularly  against the euro. The
value of the  Japanese yen remained  stable  against the U.S.  dollar until
July 2003, after which it rose steadily,  despite  intervention by the Bank
of  Japan.  Short  U.S.  dollar  positions  against  major  currencies,  in
particular the euro, were profitable for most of the year.

     GOLDMAN SACHS GLOBAL EQUITY LONG/SHORT, LLC

     As of  December  31,  2003,  GELS  represented  approximately  14%  of
adjusted members' equity which excludes redemptions paid after December 31,
2003 and which was generally  consistent with the weighting of GELS as part
of the Company  throughout the year ended December 31, 2003.  GELS returned
13.73% for Class C Series 1 units for the year ended December 31, 2003.

     The annualized volatility of GELS' returns for the year ended December
31,  2003 was 5.85%.  In  comparison,  the S&P 500 Index had an  annualized
volatility of 11.39% and the MSCI World Index had an annualized  volatility
of 12.31% for the period.

     The  end  of the  first  quarter  of  2003  represented  a  period  of
significant  change for equity markets.  The first quarter was dominated by
macroeconomic  fears  stemming  from the SARS virus and the  buildup to the
coalition's  invasion of Iraq. These  macroeconomic  fears resulted in many
global equity markets giving back gains made in the fourth quarter of 2002,
with new  multi-year  lows  being  reached  in March  2003 in many  markets
(notably France, Germany, and the U.K.). The end of large-scale hostilities
in Iraq and stronger-than-expected  first quarter earnings created positive
momentum  during the second  quarter of 2003,  driving stock prices sharply
higher. The rally was broad based across market  capitalizations,  sectors,
styles,  and  geographical  regions (with the notable  exception of Japan).
Equity  markets  moved up and down  frequently  though  were  directionally
positive  on an  overall  basis in the  third  quarter  of 2003,  which saw
continued  positive  macroeconomic  and  company-specific  news. The fourth
quarter of 2003 saw additional  improvement in the equity  markets,  as the
pattern of positive news continued;  for the quarter, the S&P 500 Index was
up  12.18%  and the MSCI  Europe  hedged  to U.S.  dollars  was up  11.11%,
representing 42.46% and 75.78% of their respective returns for the year. In
addition,  the improving  corporate earnings  environment brought increased
corporate confidence and activity in the mergers and acquisitions area.

     Equity  long/short  Advisors  performed  well in 2003,  but on average
lagged the equity indexes (which finished the year with positive, mid-teens
performance),  as many Advisors were caught with significant short exposure
when the equity markets reversed in the spring.  Equity long/short Advisors
that   performed   particularly   well  in  2003  were  those   focused  on
small-capitalization  stocks,  those with  significant  net long  exposure,
those focused on high-beta  sectors (i.e.,  those with  volatility  greater
than the overall market) such as biotechnology and information  technology,
and   those   with   significant    exposure   to   emerging   markets   or
commodity-related  equities.  Advisors  that lagged in 2003 were those with
significant high-beta short exposure,  dedicated short sellers,  those with
market-neutral  portfolios,  and those with significant value biases (i.e.,
seeking  undervalued  stocks  at low  prices).  Those  Advisors  that  were
disappointed   with  their  2003   results   generally   attributed   their
underperformance  to the fact that their cash flow positive long  positions
did not  increase  in value as much as their  short  positions,  which,  on
average, were trading at higher multiples than the long positions,  despite
the fact that many were cash flow negative.

     GOLDMAN SACHS GLOBAL RELATIVE VALUE, LLC

     As of December 31, 2003, GRV represented approximately 37% of adjusted
members' equity which excludes redemptions paid after December 31, 2003 and
which was  generally  consistent  with the  weighting of GRV as part of the
Company throughout the year ended December 31, 2003. GRV returned 7.11% for
Class C Series 1 units for the year ended December 31, 2003.

     While the  environment  throughout the year was very  challenging  for
relative value  investing,  GRV delivered  positive  returns in 9 out of 12
months.  The annualized  volatility of GRV's returns was 2.36% for the year
ended  December  31,  2003  which was less than half of that of the  Lehman
Aggregate  Bond Index which had an  annualized  volatility  of 5.3% for the
period.

     Convertible  arbitrage  strategies  generated  positive but lackluster
returns due to the large swings in credit spreads (i.e.,  the difference in
yield  between a high yield  bond and the  corresponding  government  bond)
throughout the period and the sporadic  nature of the new issuance  market.
Successful  Advisors  focused  on  credit  quality  and took  advantage  of
tightening credit spreads between treasury rates and the high yield credits
over the course of the year.

     Fixed income arbitrage  strategies also generated  positive returns in
2003,  which saw interest  rates near all-time lows with  substantial  bond
market volatility during the year. However,  for the beginning of 2004, GRV
remains  cautious  in  GRV's  fixed  income  arbitrage  exposure,  avoiding
significant  positions in dedicated  mortgage-backed  and other  strategies
which GRV perceived to carry a higher level of risk.

     Equity  arbitrage  strategies  faced a challenging  2003. Early in the
year,  prices of stocks of companies  with low valuations  increased  while
prices of stocks of companies  with high  valuations  declined and remained
low for an extended period of time.  Consequently,  investors gravitated to
lower  quality  stocks,  and stocks  with the least  attractive  valuations
outperformed  others. As a result,  value-driven  Advisors looking for high
valuation stocks at a low price did not realize favorable returns.

     In price-based statistical arbitrage strategies Advisors saw a decline
in the  profitability of trading  strategies  based upon models  predicting
reversion  of stock prices of U.S.  companies  to their mean.  As a result,
many Advisors began moving capital to  international  markets such as Japan
or the U.K., where these models still performed well.

     Convertible arbitrage strategies returned 13.13% and contributed 2.99%
to GRV's net income for the year ended December 31, 2003.  Credit  relative
value strategies  returned 15.48% and contributed 0.30% to GRV's net income
for the year ended December 31, 2003. Equity market neutral  strategies had
a negative  return of (0.73)%  and a  negative  contribution  of (0.32)% to
GRV's net  income  for the year  ended  December  31,  2003.  Fixed  income
arbitrage  strategies  returned  8.76% and  contributed  1.32% to GRV's net
income for the year ended  December  31,  2003.  Multi-strategies  returned
12.76%  and  contributed  3.22%  to GRV's  net  income  for the year  ended
December 31, 2003.

     GOLDMAN SACHS GLOBAL EVENT DRIVEN, LLC

     As of December 31, 2003, GED represented approximately 23% of adjusted
members' equity which excludes redemptions paid after December 31, 2003 and
which was  generally  consistent  with the  weighting of GED as part of the
Company  throughout the year ended  December 31, 2003. GED returned  18.09%
for Class C Series 1 units for the year ended December 31, 2003.

     The annualized volatility of GED's returns for the year ended December
31, 2003 was 2.19%  compared  to the S&P 500 Index which had an  annualized
volatility  of 11.39% and to the MSCI World Index  which had an  annualized
volatility of 12.31% for the period.

     GED positions its  investments  with  Advisors that  primarily  employ
"hedged" trades (i.e., with positions on both the long and the short sides)
to generate attractive  risk-adjusted returns.  During 2003, GED maintained
its practice of generally not investing in Advisors who invest in long-only
distressed  credits  hoping to effect a  corporate  reorganization.  During
2003,  GED had positive  returns every month,  and all of GED's  underlying
Advisors were positive for the year.

     In  2003,  the  biggest   contributor  to  returns  for  GED  was  the
distressed/high  yield  sector.  GED  started  the  year  with  a  sizeable
allocation  to distressed  Advisors with the intent of taking  advantage of
the large amounts of defaulted and distressed debt in the marketplace.  The
opportunity  was created by record  company  default  rates of 12.8% in the
high yield market in 2002 coupled with the prospects for economic  recovery
in 2003. As the year  progressed  and credit  markets  showed  improvement,
GED's  allocation  shifted  toward  special  situations  Advisors.   Merger
arbitrage allocations remained steady,  generally comprising between 5% and
15% of the portfolio during the period.

     The strong  improvement in credit that began in October 2002 continued
as high yield credit spreads (the  difference in yield between a high yield
bond and the  corresponding  government  bond)  decreased by more than 4.5%
during 2003 to finish the year at approximately  4.2%. The credit rally was
broad-based,  with the  lowest  rated  debt  securities  being the  biggest
beneficiary.  The Merrill Lynch High Yield Master II Index  returned  28.2%
and was up in 11 months of the  year.  New  issuances  of high  yield  debt
securities  were also  very  robust as a record  $140  billion  of debt was
issued  globally  compared  to only $58  billion  of high  yield new global
issuances in 2002.

     Merger arbitrage got off to a slow start in 2003 as the combination of
economic  and  geopolitical   uncertainty  continued  to  lessen  corporate
enthusiasm  for  mergers and  acquisitions.  As the year  progressed,  U.S.
mergers and acquisitions activity started to increase and ended the year up
6.7% from its 2002  levels.  Global  mergers and  acquisitions  deal volume
ended the year at $1.3  trillion,  up about 9% from its 2002  levels.  U.S.
activity represented about 44% of global volume, while European mergers and
acquisitions activity represented 38%.

     Credit   opportunities/distressed   strategies   returned  26.77%  and
contributed  10.45% to GED's net  income for the year  ended  December  31,
2003. The  multi-strategy  component of the portfolio  returned  17.80% and
contributed 3.26% to GED's net income for the year ended December 31, 2003.
Risk arbitrage/special situations strategies returned 8.71% and contributed
5.04% to GED's net income for the year ended December 31, 2003.

2002 PERFORMANCE

     For the period  from  commencement  of  operations  (April 1, 2002) to
December 31, 2002, the Company's net trading profit was $11,821,474.

OVERVIEW

     During 2002, the Company allocated its assets on a roughly  equivalent
risk-weighted basis to each of the four hedge fund sectors.  The year ended
December 31, 2002 was one of the most difficult years for equity markets in
recent years, as evidenced by the performance of the MSCI World Index which
was down 19.89% over the twelve months of 2002. The table below illustrates
the portfolio weighting of each Investment Fund as of December 31, 2002, as
well as each Investment  Fund's net return for the period from commencement
of the Company's operations on April 1, 2002 through December 31, 2002.

------------------  -----------------------  ------------------------
                                                2002 NET RETURN (2)
 INVESTMENT FUND     PORTFOLIO WEIGHT (1)       (4/1/02 - 12/31/02)
------------------  -----------------------  ------------------------
       GTT                  25.81%                    16.85%
      GELS                  13.92%                   (1.70)%
       GRV                  38.34%                     4.15%
       GED                  22.02%                   (0.66)%

(1)  As a % of the Company's members' equity.

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

     For the period ended December 31, 2002, the Company returned 3.97% net
of fees and  incentive  allocation  since its  commencement  of  operations
(April 1, 2002) which compared  favorably to the MSCI World Index which was
down 20.16% for the period from  commencement of operations (April 1, 2002)
through December 31, 2002.

     THE INVESTMENT FUNDS

     Each of the four Investment Funds'  performance during the period from
commencement  of  operations  (April 1,  2002) to  December  31,  2002,  is
described in the following.

     GOLDMAN SACHS GLOBAL TACTICAL TRADING, LLC

     As of December 31, 2002, GTT represented 26% of members' equity.  This
weighting was generally consistent with the weighting of GTT throughout the
period from commencement of operations (April 1, 2002) to December 31, 2002
but at the end of certain  months the  weighting of GTT ranged from as much
as 24.7% to 28.2% of the Company.  GTT returned 16.85% for Class C Series 1
units for the period from  commencement  of  operations  (April 1, 2002) to
December  31,  2002.  Over  the  course  of the  year,  GTT  Advisors  were
profitable  in three of the four major  asset  classes in which they trade.
The approximate  profit  contribution  coming from Managed Accounts was 75%
from interest rates, 35% from currencies,  10% from equities and a negative
contribution  of  (20)%  from  commodities.  16 of the 19  Advisors  in GTT
delivered positive  performance in 2002.  Overall,  Advisors took a bearish
stand,  capitalizing on falling interest rates, a dropping U.S. dollar, and
rising  energy  prices.   Given  this   background,   GTT  showed  negative
correlation with equity markets and positive correlation with interest rate
markets. Over the year, the largest profits came not only from positions in
global interest rate markets,  but also from investments in equity indices,
currencies,  gold, and soybeans.  Comparatively  small losses resulted from
positions in the Canadian dollar, metals, coffee, cotton, and wheat.

     GOLDMAN SACHS GLOBAL EQUITY LONG/SHORT, LLC

     As of December 31, 2002, GELS represented 14% of members' equity which
was generally  consistent with the weighting of GELS as part of the Company
throughout the period from  commencement  of operations  (April 1, 2002) to
December 31, 2002. GELS returned (1.70)% for Class C Series 1 units for the
period from  commencement  of  operations  (April 1, 2002) to December  31,
2002.

     The  annualized  volatility  of  GELS'  returns  for the  period  from
commencement  of operations  (April 1, 2002) to December 31, 2002 was 5.5%.
The S&P 500 Index had an annualized  volatility of 23.1% and the MSCI World
Index had an annualized volatility of 21.2% for the same period.

     Extreme market  volatility  made 2002 a difficult  environment for the
equity  long/short  sector, as most Advisors  maintained  greater long than
short  exposure to the markets.  As a result of the volatility and downward
trend in the equity  markets  during  the  period,  many of GELS'  Advisors
sought to reduce risk by holding overall lower gross and net exposures.

     Throughout  most of 2002,  it  appeared  that  equity  markets did not
generally  trade  based  on  factors  important  to  the  understanding  of
particular  businesses,  but rather on mass  sentiment,  fear, and momentum
created by  geopolitical  uncertainty,  corporate  malfeasance,  and a weak
macroeconomic  background.  Because  GELS favors  those  equity  long/short
Advisors that pick stocks based on fundamental research, GELS generally did
not  participate in the two sharp market rallies of 2002  (July/August  and
October/November) that were not supported by improving fundamentals.

     GOLDMAN SACHS GLOBAL RELATIVE VALUE, LLC

     As of December 31, 2002, GRV  represented 38% of members' equity which
was generally  consistent  with the weighting of GRV as part of the Company
throughout the period from  commencement  of operations  (April 1, 2002) to
December  31, 2002.  GRV returned  4.15% for Class C Series 1 units for the
period from  commencement  of  operations  (April 1, 2002) to December  31,
2002.  The  annualized  volatility of GRV's returns for the period from the
Company's  commencement of operations  (April 1, 2002) to December 31, 2002
was 2.0% compared to an annualized  volatility of the Lehman Aggregate Bond
Index of 3.0% for the same period.  GRV registered good performance in both
equity market neutral and statistical  arbitrage  strategies,  as the value
stocks  relatively  outperformed  growth stocks which  enabled  Advisors to
obtain improved  returns.  The end of the year was  characterized by strong
stock  market  volatility,   creating  a  difficult  environment  for  most
Advisors.  This market  volatility  reinforced  the importance of portfolio
diversification  of investment  styles across strategies within the sector.
By  seeking  to select  Advisors  with  different  styles,  GRV was able to
construct a portfolio that did not rely upon a particular  investment style
to generate returns.

     Convertible bond arbitrage  strategies benefited from good performance
in U.S.  and European  convertible  bond  markets,  as well as stock market
volatility.   The  performance  of  fixed  income   arbitrage   investments
fluctuated  throughout the year, as strategies  based upon credit  exposure
and  asset-backed  securities  each faced  opportunities  and challenges at
different points in the year. Although the portfolio reflected a relatively
smaller allocation to fixed income strategies  compared to other strategies
for the period,  GRV  generally  benefited  from  improved  returns in long
treasury  positions  and wide  credit  spreads,  as money  fled  into  U.S.
treasury securities.

     Convertible  arbitrage strategies returned 3.56% and contributed 0.98%
to GRV's net income for the period from  commencement of operations  (April
1, 2002) to December 31, 2002.  Credit relative value  strategies  returned
8.34%  and  contributed  0.15% to GRV's  net  income  for the  period  from
commencement  of  operations  (April 1, 2002) to December 31, 2002.  Equity
market neutral strategies returned 3.78% and contributed 1.42% to GRV's net
income for the period from  commencement  of operations  (April 1, 2002) to
December 31, 2002.  Fixed income arbitrage  strategies  returned 13.80% and
contributed  0.83% to GRV's net income for the period from  commencement of
operations (April 1, 2002) to December 31, 2002.  Multi-strategies returned
5.40%  and  contributed  1.28% to GRV's  net  income  for the  period  from
commencement of operations (April 1, 2002) to December 31, 2002.

     GOLDMAN SACHS GLOBAL EVENT DRIVEN, LLC

     As of December 31, 2002, GED  represented 22% of members' equity which
was generally  consistent  with the weighting of GED as part of the Company
throughout the period from  commencement  of operations  (April 1, 2002) to
December 31, 2002. GED returned  (0.66)% for Class C Series 1 units for the
period from  commencement  of  operations  (April 1, 2002) to December  31,
2002.  The  annualized  volatility of GED's returns for the period from the
Company's  commencement of operations  (April 1, 2002) to December 31, 2002
was 4.1% compared to the S&P 500 Index which had an  annualized  volatility
of 23.1% and to the MSCI World Index which had an annualized  volatility of
21.2% for the same period. During 2002, event driven Advisors experienced a
shift in opportunity,  as U.S. mergers and acquisitions volume continued to
decrease,  and the  amount  of  distressed  debt  increased  substantially.
Accordingly,  allocations  to U.S.  merger  arbitrage  Advisors  dropped to
approximately 5%, while European merger arbitrage Advisors increased to 15%
of the portfolio.

     The imbalance  between the supply and demand for  distressed  paper in
the marketplace allowed distressed  situations and credits to offer greater
opportunity  which  GED  believed   warranted  a  sizeable   allocation  to
distressed-focused   Advisors.   During  the  period  GED   positioned  its
investments  with  Advisors  that  primarily  employed  "hedged"  trades as
opposed to Advisors who invest in long-only  distressed  credits  hoping to
effect a corporate reorganization.

     Credit  opportunities/distressed  strategies had a negative  return of
(0.31)% and a negative  contribution of (0.52)% to GED's net income for the
period from  commencement  of  operations  (April 1, 2002) to December  31,
2002.  Multi-strategies  returned 0.53% and contributed  0.29% to GED's net
income for the period from  commencement  of operations  (April 1, 2002) to
December 31,  2002.  Risk  arbitrage/special  situations  strategies  had a
negative return of (2.79)% and a negative  contribution of (0.22)% to GED's
net income for the period from  commencement of operations  (April 1, 2002)
to December 31, 2002.


     COMPARISON OF SELECT FINANCIAL INFORMATION FROM 2004, 2003 AND 2002

     INTEREST INCOME

     Interest  income for the year ended  December  31, 2004 was  $495,194,
interest  income for the year  ended  December  31,  2003 was  $97,943  and
interest income from commencement of operations (April 1, 2002) to December
31, 2002 was $32,724. The Company's interest income will fluctuate with its
level of cash not invested in the Investment Funds.

     EXPENSES

     The   Management  Fee  for  the  year  ended  December  31,  2004  was
$12,234,696,  the  Management  Fee for the year ended December 31, 2003 was
$9,666,257 and the Management Fee from commencement of operations (April 1,
2002) to December 31, 2002 was  $2,000,377.  Because the  Management Fee is
calculated  as a percentage  of the  Company's  net assets as of each month
end,  the  increases in the expense in  Management  Fee for the years ended
December  31,  2004  and  2003  and for the  period  from  commencement  of
operations  (April 1, 2002) to December 31, 2002 were due to the  increases
in the  Company's  net  assets  during  the year ended  December  31,  2004
compared  to the year  ended  December  31,  2003  and for the  year  ended
December 31, 2003  compared to the period from  commencement  of operations
(April 1, 2002) to December 31, 2002.

     Interest  expense for the year ended  December  31, 2004 was  $546,069
compared to $0 for the year ended December 31, 2003 and for the period from
commencement  of  operations  (April 1, 2002) to  December  31,  2002.  The
interest  expense  relates to the old and new  borrowing  facility that was
outstanding during the year ended December 31, 2004.

     Professional  fees  and  miscellaneous  expenses  for the  year  ended
December 31, 2004 were  $1,677,087  compared to the year ended December 31,
2003 of $1,067,415.  Professional fees and  miscellaneous  expenses for the
period from commencement of operations (April 1, 2002) to December 31, 2002
were  $458,643.  The  increases  in  professional  fees  and  miscellaneous
expenses for the year ended  December 31, 2004 and the year ended  December
31,  2003  were  primarily  due  to  additional  services  rendered  by the
Company's legal providers related to the ongoing operations of the Company,
including  the review of investor  subscription  documents for the year and
registration with the SEC.

     INCENTIVE ALLOCATION

     The  Incentive  Allocation  for the year ended  December  31, 2004 was
$2,902,854, compared to the year ended December 31, 2003 of $3,560,865. The
Incentive  Allocation for the period from commencement of operations (April
1,  2002) to  December  31,  2002 was  $469,759.  The  change in  Incentive
Allocation is due to the  increase/decrease  in new  appreciation for those
periods.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's  liquidity  requirements  consist of cash needed to fund
investments  in the  Investment  Funds in  accordance  with  the  Company's
investment  strategy and to fund  semi-annual  redemptions and to pay costs
and expenses. The Company periodically  re-allocates its investments in the
Investment Funds based on the performance of the Investment Funds and other
factors. The Company cannot predict the level of redemptions in the Company
for any semi-annual period until 60 days prior to the redemption date where
written notice must be given to the Managing Member.  The Company endeavors
to pay redemption  proceeds  within 45 days following the redemption  date,
without interest. If the Company faces a liquidity problem, the redemptions
may be  limited or  postponed  under  certain  limited  circumstances.  The
Managing Member's ability to limit or postpone  redemptions in the Company,
enables  the  Company  to  control  and to some  extent  avoid a  liquidity
problem.  However,  substantial  redemptions  of Units in the Company could
require  the  Company  to  liquidate  certain  of  its  investments  in the
Investment Funds in order to raise cash to fund the redemptions which could
have a material  adverse effect on the NAV of the Units and the performance
of the Company.

     The  Company  can  fund  its  liquidity  requirements  by  liquidation
(through  redemption,  or as otherwise  permitted in the limited  liability
agreements of the  Investment  Funds) of its  investments in the Investment
Funds and from new investments from existing and new investors. Redemptions
of the  Company's  investments  in the  Investment  Funds  can be made on a
semi-annual or quarterly basis depending on the Investment Fund, subject to
certain  limitations.  From July 2003 through  September  2004, the Company
only took in investments from existing investors and limited  subscriptions
from new  qualified  investors,  however,  starting  in October  2004,  the
Company began accepting  additional amounts of new subscriptions  again and
the Company  continued to do so through  December 31, 2004. The Company may
close  again at any time  without  notice  at the  sole  discretion  of the
Managing Member. The acceptance of future  subscriptions in the Company and
the  continued  growth of the Company  will be  determined  by the Managing
Member  in its sole  discretion.  Although  the  Managing  Member  began to
receive new  subscriptions  to the Company in October  2004,  any liquidity
requirements  in the near term may need to be funded through the redemption
of  existing  investments  in  the  Investment  Funds  to  the  extent  new
investments are not received in sufficient amounts to cover redemptions. If
the Company seeks to redeem all or a portion of its investment positions in
any of the Investment Funds, the Investment Fund, to the extent it does not
have cash on hand to fund such  redemption,  will need to liquidate some of
its  investments.   Substantial  redemptions  of  membership  units  in  an
Investment  Fund,  including by the Company,  could require the  Investment
Fund to liquidate  certain of its  investments  more rapidly than otherwise
desirable  in order to raise  cash to fund the  redemptions  and  achieve a
market position  appropriately  reflecting a smaller asset base. This could
have a  material  adverse  effect  on the  value  of the  membership  units
redeemed  and the  membership  units  that  remain  outstanding  and on the
performance   of   the   Investment   Fund.   Under   certain   exceptional
circumstances,  such as force majeure, the managing member of an Investment
Fund (currently, the Managing Member) may find it necessary (a) to postpone
redemptions  if it determines  that the  liquidation  of investments in the
Investment Fund to fund  redemptions  would adversely  affect the net asset
value per membership unit of the Investment Fund or (b) to set up a reserve
for  undetermined or contingent  liabilities and withhold a certain portion
of redemption  proceeds.  In such circumstances,  the Investment Fund would
likely postpone any redemptions it could not fund.

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

     The Company received  investments  from new and existing  investors of
$126,385,622  during the year ended  December  31,  2004,  of  $524,318,830
during the year ended December 31, 2003, and of  $373,831,083 in the period
from commencement of operations (April 1, 2002) to December 31, 2002.

     The Company  paid out  redemptions  of  $66,214,849  during year ended
December 31, 2004,  $10,988,390 during the year ended December 31, 2003 and
had no redemptions during the period from commencement of operations (April
1, 2002) to December 31, 2002. The Company had  Redemptions  payable in the
amount of $128,546,636 payable after December 31, 2004.

     The Company and each  Investment  Fund may,  but are not  required to,
borrow  from  (including  through  direct  borrowings,  borrowings  through
derivative  instruments,  or otherwise) the GS Group or other parties, when
deemed  appropriate by its managing  member,  including to make investments
and  distributions in respect of redemptions of Units or membership  units,
to pay expenses, or for other purposes.  During the year ended December 31,
2003,  the Company  entered  into a borrowing  facility  with the  Facility
Counterparty.  The facility was structured as a call spread option that had
been issued by the Company to the Facility Counterparty. Under the terms of
the facility, the Company received cash and redeposited the amount with the
Facility Counterparty in a collateral account. The Company had the right to
draw funds from the collateral account to use for liquidity purposes. Under
the  facility,  the  Company was able to draw,  at any given time,  up to a
total amount of the collateral account at the time of withdrawal.  However,
in no event  could the  Company  have  drawn an amount  under the  facility
exceeding 5% of the Company's net asset value. The effective  interest rate
on funds drawn from the collateral  account was LIBOR + 0.875%. The Company
also paid the equivalent of a commitment fee of 0.25% on the undrawn funds.
As of  December  31,  2003,  the  Company  had  received an amount of $47.5
million under the facility, all of which had been redeposited as collateral
and  remained  undrawn.  In February  2004,  the size of the  facility  was
reduced to $20.0  million  and in October  2004 the  facility  expired.  On
November 24, 2004,  the Company  entered into a credit  facility with a new
financial institution,  the New Facility Counterparty.  The Company made an
initial  borrowing of $1 million under this facility.  Subject to rejection
by the New Facility  Counterparty,  the Company may request to borrow up to
$45.0 million in the aggregate. At the time of any borrowing, the aggregate
amounts borrowed may not exceed 10% of the Company's net asset value and at
all other times the  aggregate  amount  borrowed  may not exceed 15% of the
Company's  net asset value.  The  effective  interest  rate on the borrowed
amounts  equals LIBOR plus 0.85% per annum  compounded  daily.  The Company
also pays an  administration  and  structuring  fee calculated as 0.10% per
annum  on the  aggregate  amount  of $45.0  million.  The  proceeds  of the
borrowings  must be used  primarily  for purposes of  refinancing  existing
indebtedness,  making  further  investment  in a  pool  of  funds,  funding
liquidity of redemptions of Units in the Company and managing the cash flow
of the  Company.  The  amount of cash  borrowed  totaled  $3.0  million  at
December 31, 2004. As security for its borrowings,  the Company granted the
New  Facility  Counterparty  a  security  interest  in the  Company's  cash
accounts and any other  account that  contains  other  investment  property
(other than to the extent that it comprises  shares of funds in the pool of
funds in which the Company has  invested) of the Company.  The terms of the
facility include various restrictive  covenants,  including restrictions on
additional  indebtedness,  liens and  fundamental  changes to the Company's
business.  The New  Facility  Counterparty  may  demand  payment  upon  the
occurrence of certain  events,  including:  (i)  specified  declines in the
Company's  aggregate  net  asset  value per Unit,  (ii) the  incurrence  of
indebtedness  or liens by the Company,  (iii) the failure by the Company to
maintain  prescribed  diversification  of  its  investments,  (iv)  if  the
investment  manager (which currently is GS HFS) resigns or is terminated by
the  Company,  (v)  if  the  administrator  (which  currently  is GS  HFS),
custodian  or  auditor  resigns or is  terminated  by the  Company  and the
replacement is not approved by the New Facility Counterparty (which consent
may not be  unreasonably  withheld)  or (vi) the  occurrence  of  events of
default customary for financing  transactions.  See Note 7 to the financial
statements.  Each Investment Fund has entered into a similar  facility with
the New Facility Counterparty.

     As of December 31, 2004, the Company had Cash and cash  equivalents on
hand of $218,797.  As of December  31, 2003,  the Company had Cash and cash
equivalents  on  hand  of  $48,423,637.  The  decrease  in  Cash  and  cash
equivalents  on hand as of December  31, 2004 as compared to as of December
31, 2003 primarily relates to the structure of the credit facility with the
New Facility  Counterparty  which,  unlike the  Company's  previous  credit
facility,  does not require the Company to redeposit cash received from the
credit facility into a collateral  account,  but instead allows the Company
to borrow as requested.

     Investments as of December 31, 2004 were $1,092,953,352 as compared to
$970,912,828  as of December 31, 2003.  The increase was due to net profits
earned by the  Company  from the  Investment  Funds  during  the year ended
December  31,  2004,  and  net  subscriptions  made by the  Company  to the
Investment Funds during the year ended December 31, 2004.

     Due to  managing  member  represents  the  management  fees due to the
Managing  Member.  Due to  managing  member  as of  December  31,  2004 was
$3,247,774 as compared to  $3,969,687 as of December 31, 2003.  Because the
management fee is calculated as a percentage of the Company's net assets as
of each month end, the liability  related to management fees will fluctuate
based on the  fluctuation  of the month end net asset value of the Company.
The decrease in Due to managing  member is due to the timing of the payment
of the monthly management fee to the Managing Member.

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

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

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

RECENT ACCOUNTING PRONOUNCEMENTS

     FASB INTERPRETATION NO. 46(R)

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

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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

     The Company's investments in Investment Funds are subject to terms and
conditions of their respective  operating  agreements.  The investments are
carried at fair value as determined by the Company's  attributable share of
the  net  assets  of  the  respective  Investment  Fund.  Fair  values  are
determined   utilizing  net  asset  value  information   supplied  by  each
individual  Investment  Fund that are net of the Advisors'  management  and
incentive fees charged to the Investment Funds. The underlying  investments
of each Investment Fund are accounted for at fair value. For investments of
the  underlying  Advisor  Funds,  market value  normally is based on quoted
market prices or  broker-dealer  price  quotations  provided to the Advisor
Fund.  In the  absence  of  quoted  market  prices or  broker-dealer  price
quotations, underlying Advisor Fund investments are valued at fair value as
determined by the Advisors or their administrator.  Because of the inherent
uncertainty  of  valuation,  estimated  fair  values may  differ,  at times
significantly, from the values that would have been used had a ready market
existed.  In particular,  the valuations are made based on information  the
Investment  Funds receive from the Advisors.  This information is generally
not audited,  except at year-end,  and could prove to be inaccurate  due to
inadvertent  mistakes,  negligence,  recklessness or fraud by the Advisors.
Neither  the  Company  nor the  Investment  Funds  generally  will  receive
independent  valuations from third party  administrators or from any of the
Advisors  and will not in many  cases be able to  conduct  any  independent
valuations  on their own or to cause any third  parties to  undertake  such
valuations.  In  addition,  valuations  of  illiquid  securities  and other
investments  are  inherently  uncertain  and may prove to be  inaccurate in
hindsight.  These risks are described under ITEM 1. "BUSINESS--CERTAIN RISK
FACTORS--GENERAL  RISKS--Risks  Related to the Company  and the  Investment
Funds' Performance and Operation--Dependence on the Managing Member and the
Advisors;  the Managing Member  Generally has Limited Access to Information
on or Control over  Advisor's  Portfolios  and Members Assume the Risk that
Advisors May Knowingly Misrepresent Information Which Could Have a Material
Negative  Impact  on  the  Company,"  "--SPECIAL  RISKS  OF  THE  COMPANY'S
STRUCTURE--Risks   Related  to  the  Company's   Structure--The   Company's
Financial  Statements are, and in the Future will be, Based on Estimates of
Valuations  Provided by Third Party  Advisors  Which May not be Accurate or
May  Need to be  Adjusted  in the  Future,"  and  "--SPECIAL  RISKS  OF THE
COMPANY'S  STRUCTURE--Risks  Associated with the Company Investing in Other
Entities--Valuation of the Investment Funds' Investments Will be Based upon
Valuations  Provided  by the  Advisors  Which are  Generally  not  Audited;
Uncertainties  in Valuations  Could Have a Material  Adverse  Effect on the
Company's Net Assets."

OFF BALANCE SHEET RISK

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

CONTRACTUAL OBLIGATIONS

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

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The  following  table  lists the  significant  market  risk  sensitive
instruments  held by the  Company,  through  the  Investment  Funds,  as of
December  31, 2004 and as of December  31,  2003,  as indicated by the Fair
Value/Value  at Risk  column,  and the net income  from  January 1, 2004 to
December 31, 2004 and from January 1, 2003 to December 31, 2003. Because of
the  speculative  nature of the  investments  that the  Company  engages in
through the  Investment  Funds,  the  Managing  Member  believes the entire
portfolio value of the Company is at risk.

<TABLE>
<CAPTION>
                                 YEAR ENDED
                             DECEMBER 31, 2004
---------------------------------------------------------------------------
                         % OF
               % OF     ADJUSTED         FAIR
INVESTMENT   MEMBERS'   MEMBERS'      VALUE/VALUE   NET INCOME
   FUND       EQUITY   EQUITY (6)       AT RISK   (IN MILLIONS)  LIQUIDITY
   ----       ------   ----------       -------   -------------  ---------
<S>           <C>        <C>          <C>              <C>          <C>
GTT           25.91%     22.84%       $248,081,137     $8.5         (3)

GELS          23.63%     20.84%       $226,276,134    $17.7         (2)

GRV           36.60%     32.27%       $350,409,379    $17.9         (4)

GED           28.01%     24.69%       $268,186,702    $27.9         (1)
            ---------   ----------  --------------    -----
TOTAL       114.15%(5)  100.64%(5)  $1,092,953,352    $72.0
            =========   ==========  ==============    =====


<CAPTION>

                                 YEAR ENDED
                             DECEMBER 31, 2003
---------------------------------------------------------------------------
                          % OF
              % OF       ADJUSTED       FAIR
INVESTMENT   MEMBERS'    MEMBERS'    VALUE/VALUE    NET INCOME
   FUND      EQUITY     EQUITY (7)     AT RISK     (IN MILLIONS)  LIQUIDITY
   ----      ------     ----------     -------     -------------  ---------
<S>           <C>         <C>        <C>               <C>           <C>
GTT           26.74%      25.79%     $249,583,571      $18.6         (3)

GELS          15.01%      14.48%     $140,117,348      $15.6         (2)

GRV           38.50%      37.12%     $359,311,989      $19.4         (4)

GED           23.78%      22.93%     $221,899,920      $28.3         (1)
             ---------   ---------   ------------      -----
TOTAL        104.03%(5)  100.32%(5)  $970,912,828      $81.9
             =========   =========   ============      =====

<FN>
(1)  Redemptions could be made  semi-annually  with 45 days' notice after a
     twelve-month holding period, or at the sole discretion of the managing
     member.  Effective  July 2004,  a  twelve-month  holding  period is no
     longer required.

(2)  Redemptions  could  be made  quarterly  with 45 days'  notice  after a
     twelve-month holding period, or at the sole discretion of the managing
     member.  Effective  July 2004,  a  twelve-month  holding  period is no
     longer required.

(3)  Redemptions can be made  semi-annually with 60 days' notice, or at the
     sole discretion of the Managing Member.

(4)  Redemptions could be made  semi-annually  with 45 days' notice after a
     twelve-month holding period, or at the sole discretion of the managing
     member. Effective July 2004, redemptions can be made quarterly with 45
     days' notice,  or at the sole  discretion of the managing member and a
     twelve-month holding period is no longer required.

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

(6)  Adjusted  members' equity,  used in the calculation of the investments
     as a  percentage  of adjusted  members'  equity,  represents  members'
     equity  excluding  Redemptions  payable in the amount of  $128,546,636
     that are payable after December 31, 2004.

(7)  Adjusted  members' equity,  used in the calculation of the investments
     as a  percentage  of adjusted  members'  equity,  represents  members'
     equity excluding Redemptions payable in the amount of $34,529,625 that
     were payable after December 31, 2003.
</FN>
</TABLE>

RISK MANAGEMENT

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

     Market risk is the risk of potential  significant  adverse  changes to
the value of financial  instruments because of changes in market conditions
such as interest  rates,  foreign  exchange  rates,  equity prices,  credit
spreads,  liquidity  and  volatility in commodity or security  prices.  The
Managing  Member  including  in its  capacity  as  managing  member  of the
Investment  Funds  monitors its exposure to market risk at both the Advisor
and portfolio level through various analytical  techniques.  At the Advisor
level,  market risk is monitored on a regular  basis.  Where position level
detail is  available,  the  Managing  Member  including  in its capacity as
managing  member of the  Investment  Funds  monitors its exposure to market
risk through a variety of analytical  techniques,  including  Value-at-Risk
("VaR") and scenario  analysis  (stress  testing).  VaR is  calculated by a
Monte Carlo  simulation  using a 99.9%  confidence level and a 240-day look
back period. Where position level detail is unavailable, an Investment Fund
relies on risk  reports  provided by the  Advisors as well as through  open
communication  channels  with  Advisors,  which  includes  site  visits and
monthly  conference  calls.  The risks involved are described under ITEM 1.
"BUSINESS--CERTAIN  RISK  FACTORS--GENERAL   RISKS--Risks  Related  to  the
Company and the Investment Funds' Performance and Operation--A  Substantial
Portion of an Investment Fund's Assets May be Invested Utilizing Strategies
Which are not Within its Hedge Fund  Sector;  Most  Advisors do not Provide
Detailed Position Information Regarding their Portfolios" and "--Dependence
on the Managing Member and the Advisors;  the Managing Member Generally has
Limited Access to  Information on or Control over Advisor's  Portfolios and
Members   Assume  the  Risk  that  Advisors  May   Knowingly   Misrepresent
Information Which Could Have a Material Negative Impact on the Company."

     The  managing  member of the  Investment  Funds  monitors  Advisors to
prevent style drift.  "Style drift" is defined as Advisors  changing  their
investment style from the Investment  Fund's  expectations.  Where position
level detail is  available,  the managing  member of the  Investment  Funds
monitors leverage against predetermined limits. Positions sizing limits are
also  monitored  to  ensure  Advisors  are  properly  diversified  and risk
normally is not  concentrated  in one or relatively few positions.  In some
cases,  the managing member of the Investment Funds also has the ability to
monitor  approved  trading  instruments to ensure  Advisors are not trading
securities  outside  their  mandate.  Where  position  level  detail is not
available,  the  managing  member of the  Investment  Funds  relies on both
written and oral Advisor  communications.  The risks involved are described
under ITEM 1. "BUSINESS--CERTAIN RISK FACTORS--GENERAL RISKS--Risks Related
to the Company  and the  Investment  Funds'  Performance  and  Operation--A
Substantial  Portion  of  an  Investment  Fund's  Assets  May  be  Invested
Utilizing  Strategies  Which are not  Within its Hedge  Fund  Sector;  Most
Advisors do not  Provide  Detailed  Position  Information  Regarding  their
Portfolios" and "--Dependence on the Managing Member and the Advisors;  the
Managing  Member  Generally has Limited Access to Information on or Control
over  Advisor's  Portfolios  and Members  Assume the Risk that Advisors May
Knowingly  Misrepresent  Information  Which Could Have a Material  Negative
Impact on the Company."

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

     Quantitative analysis is combined with judgment to determine strategic
allocations that will offer broad exposure to hedge fund returns. Strategic
return,  risk and correlation  estimates inform the quantitative  analysis,
which balances  returns and  contribution  to portfolio  risk.  Judgment is
applied  to  both  estimates  and  weights  in  an  attempt  to  achieve  a
diversified  exposure  to hedge  funds  while  delivering  attractive  risk
adjusted returns. Until June 30, 2004, the Company had allocated its assets
on a roughly equivalent  risk-weighted basis to each of the four hedge fund
sectors.  In other words,  each of the four  Investment  Funds  contributed
approximately 25% of the total risk of the Company portfolio,  although the
actual allocations that achieve the roughly equivalent risk weightings were
different for each sector.  The Managing Member utilizes a strategic sector
allocation and  periodically  re-evaluates the contribution to the risk and
return of the  Company  from  each  investment  sector  and may in its sole
discretion  re-allocate  the  Company's  assets  or  weights  as  it  deems
advisable.  Through  June 30, 2004,  the  Managing  Member had not made any
strategic allocations. The adjustment to the weights implemented as of July
1, 2004 reflected the Managing  Member's  updated  expectations for return,
risk and  correlations  for the  Investment  Funds as well as the  Managing
Member's judgment.  In addition,  the weights among the Investment Funds no
longer reflect a strict equal risk allocation (as they had prior to July 1,
2004).  As of July 1, 2004, the strategic  weights were set to 23% GTT, 20%
GELS, 33% GRV, and 24% GED. As of December 31, 2004, the strategic  weights
for the  Investment  Funds were  generally  consistent  with the  strategic
weights  set by the  Managing  Member as of July 1, 2004.  The  approximate
weights of the Investment  Funds are 23% GTT, 21% GELS, 32% GRV and 25% GED
as of December 31, 2004 as a percentage of adjusted  members'  equity which
excludes   redemptions   paid  after  December  31,  2004.  This  portfolio
construction  process  is  designed  to  create a  diversified  hedge  fund
portfolio  with  attractive  return and risk  characteristics.  See ITEM 1.
"BUSINESS--INVESTMENT PROGRAM--Allocation Among the Investment Funds."

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

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

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

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     For the Company's financial  statements,  see the Financial Statements
beginning on page F-1 of this Annual Report.

     The  following  is  a  summary  of  unaudited   quarterly  results  of
operations  of the Company for the period from  January 1, 2003 to December
31, 2004.

<TABLE>
<CAPTION>
                            FISCAL QUARTER ENDED
                            --------------------

                                       MAR. 31,        JUNE 30,         SEP. 30,          DEC. 31,
                                         2003           2003              2003              2003
                                         ----           ----              ----              ----

<S>                                   <C>             <C>               <C>              <C>
NET TRADING PROFIT/(LOSS)             $9,156,269      $29,716,678       $7,636,941       $35,344,507
TOTAL EXPENSES                        $1,628,401       $2,775,692       $3,060,275        $3,269,304
NET INCOME/(LOSS)                     $7,553,120      $26,993,805       $4,596,539       $32,075,202
NET INCOME/(LOSS) AVAILABLE
  FOR PRO RATA ALLOCATION
  TO MEMBERS                          $7,146,847      $25,672,732       $4,366,728       $30,471,494

                                       MAR. 31,       JUNE 30,          SEP. 30,         DEC. 31,
                                         2004           2004              2004             2004
                                         ----           ----              ----             ----

NET TRADING PROFIT/(LOSS)             $30,827,165    ($18,185,504)      $3,283,040       $56,093,686
TOTAL EXPENSES                         $3,798,808      $3,708,542       $3,625,497        $3,325,005
NET INCOME/(LOSS)                     $27,314,711    ($21,804,167)       ($228,045)      $52,773,230
NET INCOME/(LOSS) AVAILABLE
  FOR PRO RATA ALLOCATION
  TO MEMBERS                          $25,948,975    ($20,714,043)       ($216,748)      $50,134,691

</TABLE>

ITEM 9.  CHANGES IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

     There have been no changes in, or disagreements  with,  accountants on
accounting and financial disclosure.

ITEM 9A.  CONTROLS AND PROCEDURES

     As of the end of the period covered by this report,  an evaluation was
carried out by the Managing Member's management,  with the participation of
its  Chief  Executive   Officer  and  Chief  Financial   Officer,   of  the
effectiveness  of the  design and  operation  of the  Company's  disclosure
controls and procedures  (as defined in Rule  13a-15(e)  under the Exchange
Act). Based on that evaluation,  the Company's Chief Executive  Officer and
Chief Financial  Officer concluded that the Company's  disclosure  controls
and  procedures  were effective as of the end of the period covered by this
report.  In  addition,  no change in the  Company's  internal  control over
financial  reporting (as defined in Rule 13a-15(f)  under the Exchange Act)
occurred  during the  fourth  quarter of the  Company's  fiscal  year ended
December 31, 2004 that has materially affected,  or is reasonably likely to
materially affect, the Company's internal control over financial reporting.

                                  PART III

ITEM 10.  DIRECTORS  AND  EXECUTIVE  OFFICERS  OF THE  MANAGING  MEMBER AND
          REGISTRANT

     The Company has no  directors  or  executive  officers.  The  Managing
Member is  responsible  for the  management  and operations of the Company.
Information  about the Managing  Member and the GS Group appears in Item 1.
See ITEM 1. "BUSINESS--THE MANAGING MEMBER." The following table sets forth
the directors and executive officers of the Managing Member as of March 21,
2005.

      NAME                  AGE                  POSITION(S)
------------------------- ------- -----------------------------------------
George H. Walker             35    Director, Managing Director and Chief
                                   Executive Officer
Tobin V. Levy                61    Director, Managing Director and Chief
                                   Financial Officer
Kent A. Clark                40    Director, Managing Director and Chief
                                   Investment Officer
Hugh J. Lawson               36    Director, Managing Director and Global
                                   Head of Product Management
Sebastiano F. Calabro, Jr.   37    Managing Director and Head of GTT
Thomas Dobler                39    Vice President and Head of GTT
Terrence O. Jones            41    Managing Director and Head of GED and GRV
Peter Ort                    34    Vice President and Head of GELS

     On March 16, 2005,  Sebastiano F. Calabro, Jr. notified the Company of
his  resignation as Managing  Director from the Managing Member and Head of
GTT.  His  resignation  is expected to be  effective  in June 2005.  Thomas
Dobler will assume leadership of GTT effective April 1, 2005.

     Information about the directors and executive officers of the Managing
Member as well as Mr. Dobler is provided below.

     GEORGE H. WALKER  is a Managing  Director  of  Goldman  Sachs and is a
Director,  Managing  Director,  and Chief Executive Officer of the Managing
Member. He joined Goldman Sachs as a summer associate in Capital Markets in
1991 and  joined  the  Managing  Member in June  2001.  Previously,  he was
co-head of  gs.com/Goldman  Sachs  Wealth  Management,  the firm's  e-based
wealth management business, and he led GSAM's U.S. Institutional effort and
its high-net-worth  businesses. Mr. Walker has also served in GSAM Division
Management in New York, and in Mergers & Acquisitions in Frankfurt, London,
and New York.  He  received  an M.B.A.  in 1992 from the  Wharton  Graduate
School of Business and  bachelors  degrees in 1991 from the  University  of
Pennsylvania.

     TOBIN V. LEVY  is  a  Managing  Director  of  Goldman  Sachs  and is a
Director,  Managing  Director and Chief  Financial  Officer of the Managing
Member.  Mr. Levy managed the Global Client Financing  business for Private
Wealth  Management  from  February  2001 to May 2002,  when he  returned to
Princeton  to resume his role as Chief  Financial  Officer of the  Managing
Member.  Mr. Levy  joined  Commodities  Corporation  Limited  ("CCL"),  the
predecessor  of the  Managing  Member,  in January  1995 and  became  Chief
Financial  Officer of the Managing Member in June 1997. The Managing Member
acquired  the  assets of CCL in June  1997.  Mr.  Levy  graduated  from the
University of  Pennsylvania  in 1967 with a B.S. in Economics.  In 1972, he
received his M.B.A. from the Wharton Graduate School of Business.

     KENT A. CLARK is a Managing  Director  of Goldman  Sachs and the Chief
Investment  Officer of the Managing  Member.  Prior to joining the Managing
Member, he managed portfolios of U.S. and Global equities for GSAM where he
also helped develop stock  selection  models for these markets using linear
and nonlinear techniques.  Mr. Clark received a Bachelor of Commerce degree
from the University of Calgary in 1986 and an M.B.A. from the University of
Chicago  Graduate  School of Business in 1990,  where he has also completed
all but his  dissertation  in the Ph.D.  program.  In 2002,  Mr.  Clark was
elected  as a  member  of the  Board  of  Directors  of the  Managed  Funds
Association.  A member of the International  Investment Forum, Mr. Clark is
past President of the New York Society of Quantitative Analysts.

     HUGH J. LAWSON  is a Managing  Director  of  Goldman  Sachs and is the
Global Head of Product  Management for the Managing Member,  where he leads
the group's distribution,  client relationship,  business development,  and
product  launch efforts  globally.  Prior to assuming this role, Mr. Lawson
was co-head of the Managing Member's European and Asian businesses.  Before
joining the Managing  Member,  Mr. Lawson was head of Products and Services
for Goldman Sachs' Investment Management Division for Europe, together with
responsibility  for  Business  Strategy   Development  for  Private  Wealth
Management  Europe. Mr. Lawson joined Goldman Sachs in 1997. He spent three
years in the  Investment  Banking  Division  in both  London and Hong Kong,
executing a range of financing and merger  assignments  in Europe and Asia.
He then transferred to the Investment Management Division in 2000. Prior to
joining Goldman Sachs, Mr. Lawson worked at the Boston  Consulting Group in
New York and, previously,  at the Rockefeller Brothers Fund in New York. He
graduated from Columbia University and Yale Law School.

     SEBASTIANO F. CALABRO, JR.  is  a  Managing  Director of the  Managing
Member  and is  currently  the Head of GTT and the  Chair  of the  Managing
Member's Risk  Committee.  Effective  June 2005, Mr. Calabro will resign as
Managing  Director  from the  Managing  Member  and  Head of GTT.  Prior to
assuming this role, he served as head of the  Quantitative  Research & Risk
Management  Group  for  the  Managing   Member.   Mr.  Calabro  joined  the
predecessor  of  the  Managing  Member  as  the  Controls  Manager  in  the
Operations Services Group in 1991. He helped form the Quantitative Research
& Risk  Management  Group in 1993,  and he became head of the department in
1998. Mr. Calabro received his B.S. and M.S.  degrees in Computer  Science,
and an M.B.A. from Rensselaer Polytechnic Institute.

     THOMAS  DOBLER is a Vice  President of the Managing  Member and is the
lead  Portfolio  Manager  focused on GTT,  where he has worked  since 2002.
Effective  April 1, 2005, Mr. Dobler will become Head of GTT. Before coming
to GS HFS, he led the Client  Research  and  Investment  Strategy  Group at
Goldman Sachs in London,  and was  responsible  for advising high net worth
clients on asset  allocation  and  overall  investment  strategy.  Prior to
London, Mr. Dobler spent two years in New York assisting in the development
of the Client  Research and Strategy  Group at Goldman  Sachs where he also
worked with high net worth clients and their  advisors.  He joined  Goldman
Sachs in 1998 from Salomon Brothers Asset Management, where he was a senior
member of their  Quantitative  Research  Group.  Mr.  Dobler holds a PhD in
Mathematics  from  Columbia  University  and a BS in  Mathematics  from the
University of Vienna.

     TERRENCE O. JONES is a Managing Director of the Managing Member and is
the Head of the GED & GRV sectors.  Mr. Jones joined the Managing Member in
2001 from Arden Asset Management, a $2 billion fund-of-funds company, where
he was Managing  Director and Director of Research.  In this capacity,  Mr.
Jones worked on the  investment  committee of the firm and was  responsible
for manager selection,  portfolio construction, and due diligence. Prior to
joining Arden Asset Management,  Mr. Jones was head of research and manager
selection for Morgan Stanley's  Fiduciary Group, which managed in excess of
$22 billion for pension plans, endowments,  foundations, and high net worth
individuals.   Mr.  Jones  received  a  B.A.  in  Economics  from  Columbia
University and a M.B.A. from Columbia University.

     PETER ORT is a Vice  President of the Managing  Member and is the Head
of GELS.  Prior to joining the Managing  Member in 2001, Mr. Ort was a Vice
President with  Smartleaf,  Inc. a portfolio  management  software  company
based in Cambridge,  Massachusetts.  He was  previously  with Goldman Sachs
from  1996-2000,  where he worked in the Investment  Management  Division's
Private  Equity Group,  evaluating  private equity fund managers and direct
investment  opportunities.  He  first  joined  the  firm in the  Investment
Banking Division's  Financial  Institutions  Group, where he focused on M&A
transactions in New York and Tokyo. Mr. Ort received a J.D./M.B.A. from New
York  University in 1995 and a B.A. from Duke  University in 1991. He was a
Fulbright Scholar in Japan from 1991-1992.

AUDIT COMMITTEE FINANCIAL EXPERT

     The Company has no directors or executive officers. The Company is not
a "listed issuer" as defined under Section 10A-3 of the Exchange Act and is
therefore not required to have an audit committee  comprised of independent
directors.  The Company  currently does not have an audit committee and the
Board of Directors of the Managing  Member which  performs the functions of
an audit  committee on behalf of the Company  believes  that the  directors
collectively  have the  requisite  financial  background,  experience,  and
knowledge  to fulfill the duties and  obligations  that an audit  committee
would have  including  overseeing  the Company's  accounting  and financial
reporting  practices.  Therefore,  the Board of  Directors  of the Managing
Member does not believe  that it is  necessary at this time to search for a
person  who  would  qualify  as  an  audit  committee   financial   expert.
Furthermore, the Board of Directors of the Managing Member has the power to
engage  experts or  consultants  as it deems  appropriate  to carry out its
responsibilities.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

     Section  16(a) of the 1934 Act requires the officers and  directors of
the  Managing  Member  and  persons  who own more than ten  percent  of the
Company's Units to file forms reporting their  affiliation with the Company
and reports of ownership  and changes in ownership of the  Company's  Units
with the SEC. These persons and entities are required by SEC regulations to
furnish the Company  with copies of all Section  16(a) forms they file.  To
the best of the Company's knowledge, based solely on a review of the copies
of such reports  furnished to the Company,  during the year ended  December
31, 2004 all Section 16(a) filing  requirements  applicable to such persons
and entities were complied with for such year.

CODE OF ETHICS

     The Company has no  directors  or  executive  officers.  The  Managing
Member has  adopted a Code of Ethics for the  Company  that  applies to the
persons acting as chief executive officer and chief financial officer/chief
accounting  officer of the Company.  A copy of the Company's Code of Ethics
is filed as an exhibit to this  Annual  Report.  If the  Company  makes any
substantive  amendments  to the  Code  of  Ethics  or  grants  any  waiver,
including  an implicit  waiver,  from a provision  of the Code of Ethics as
applicable  to the  persons  acting as chief  executive  officer  and chief
financial officer/chief accounting officer of the Company, the Company will
disclose the nature of such amendment or waiver in a report on Form 8-K. In
addition, the Managing Member has adopted a Code of Ethics for the Managing
Member that applies to, among others, the chief executive officer and chief
financial  officer/chief  accounting officer of the Managing Member. A copy
of the Managing Member's Code of Ethics is also filed as an exhibit to this
Annual Report.

ITEM 11.  EXECUTIVE COMPENSATION

     The Company has no directors or executive officers.

     In  addition,  the  Company  does  not bear  the  costs of the  annual
compensation  of the  executive  officers or the  directors of the Managing
Member.  The Managing Member and its affiliates  receive  compensation from
the Company for  services  provided to the Company.  Moreover,  the Company
bears a pro  rata  portion  of the  administration  fee  for  the  Managing
Member's  services as  administrator  of each Investment Fund and Portfolio
Companies  through its investment in the Investment  Funds. Set forth below
are the  amounts  of the  different  types of fees paid or  payable  by, or
allocable to, the Company to the Managing Member and its affiliates  during
the  year  ended  December  31,  2004.  Information  about  the  terms  and
conditions of the  Management  Fee and the Incentive  Allocation  and other
fees  and  expenses  appear  in Item 1.  See  ITEM 1.  "BUSINESS--FEES  AND
EXPENSES."

                           FEE TYPE                         FEE AMOUNT
------------------------------------------------------- -----------------
Management Fee paid or payable by the Company              $12,234,696

Incentive Allocation paid or payable by the Company         $2,902,854

Placement Fee paid or payable by the Company to
Goldman Sachs                                                       $0

Pro rata portion of administration fee to the
Managing Member for services provided to the
Investment Funds and Portfolio Companies
Investment Funds                                            $1,960,131

PERFORMANCE GRAPH

     The line graph  below  compares  the  cumulative  total  return on the
Company's  Units during the period from April 1, 2002, the date the Company
commenced its operations,  through  December 31, 2004, with the return on 3
Month LIBOR, the Lehman Brothers  Aggregate Index, the MSCI World Index and
the S&P 500 Index.  These indices are  unmanaged,  the figures for an index
reflect the  reinvestment  of dividends but do not reflect the deduction of
any fees or expenses which would reduce returns.  The Members cannot invest
directly in indices.

     The Company has not paid any cash  dividends  in the past and does not
expect to pay any in the foreseeable future.

[GRAPH]

(1)  The  performance  of the  Company is based on net  returns for Class A
     Series 1 Units. The performance of the Units shown in the graph is not
     necessarily indicative of future performance.

(2)  General:  References  to market or composite  indices,  benchmarks  or
     other measures of relative market  performance over a specified period
     of time (for purposes of this  section,  each an "index") are provided
     for your information  only.  Reference to an index does not imply that
     the  portfolio  will  achieve  returns,  volatility  or other  results
     similar to the index.  The composition of an index may not reflect the
     manner in which a portfolio is  constructed in relation to expected or
     achieved  returns,   portfolio  guidelines,   restrictions,   sectors,
     correlations,  concentrations,  volatility or tracking  error targets,
     all of which are subject to change over time.

(3)  MSCI World  Index:  The Morgan  Stanley  Capital  International  World
     Equities  Index is a price index of the total  return  with  dividends
     reinvested monthly net of dividend withholding tax of a representative
     group of listed companies for each region,  with each component market
     weighted on the basis of market  capitalization  relative to the total
     market  capitalization  of the market being  measured and adjusted for
     changes in capital within the component firms.

(4)  S&P 500 Index:  The  Standard & Poor's S&P 500 Index is an index based
     on the prices of the  securities  of 500  different  companies.  Total
     returns  are  calculated  by  adding  the  dividend  income  and price
     appreciation for a given time period.

(5)  Lehman Brothers  Aggregate Index: The Lehman Brothers  Aggregate Index
     represents  securities  that are U.S.  domestic,  taxable,  and dollar
     denominated.  The index  covers the U.S.  investment  grade fixed rate
     bond  market,  with index  components  for  government  and  corporate
     securities,   mortgage  pass-through   securities,   and  asset-backed
     securities.  These major  sectors are  subdivided  into more  specific
     indices that are calculated and reported on a regular basis.

(6)  Index Sources: Bloomberg.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

     To the knowledge of the Company, no person beneficially owns more than
five percent of the Units.

SECURITY OWNERSHIP OF MANAGEMENT

     The Company has no directors or executive officers.

     GS HFS, the Managing Member of the Company,  did not have a beneficial
interest in the Company as of  December  31, 2004 other than the  Incentive
Allocation and other fees payable to it by the Company.

     The  following  table  sets  forth (i) the  individual  directors  and
executive officers of the Managing Member and (ii) all of the directors and
executive  officers as a group who beneficially  owned Units of the Company
as of December 31, 2004.

<TABLE>
<CAPTION>
                                                                PERCENTAGE OF ALL INVESTORS'
    NUMBER OF UNITS          NAME OF BENEFICIAL OWNER                     INTERESTS
----------------------- ------------------------------------ -----------------------------------
         <S>            <C>                                                  <C>
          0             George H. Walker                                     *
          0             Tobin V. Levy                                        *
          0             Kent A. Clark                                        *
          0             Hugh J. Lawson                                       *
          0             Sebastiano F. Calabro, Jr.                           *
          0             Thomas Dobler                                        *
        2,276           Terrence O. Jones                                    *
   Class A Series 1
          0             Peter Ort                                            *
        2,276           Directors and executive officers                     *
                        as a group
</TABLE>
*    Less than 1.0%

     On March 16, 2005,  Sebastiano F. Calabro, Jr. notified the Company of
his  resignation as Managing  Director from the Managing Member and Head of
GTT.  His  resignation  is expected to be  effective  in June 2005.  Thomas
Dobler will assume leadership of GTT effective April 1, 2005.

CHANGES IN CONTROL

     There are no arrangements, including pledges by any person of Units of
the Company,  the  operation of which may at a subsequent  date result in a
change of control of the Company.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The  Managing  Member is an advisory  affiliate  of Goldman  Sachs and
GSAM. Each of the Managing Member, Goldman Sachs and GSAM is a wholly owned
subsidiary   of   The   Goldman    Sachs   Group,    Inc.   See   ITEM   1.
"BUSINESS--POTENTIAL CONFLICTS OF INTEREST."

     The Managing  Member also manages a number of other  investment  funds
that have investment programs that are similar to those of the Company. See
ITEM 1. " BUSINESS--POTENTIAL CONFLICTS OF INTEREST."

     From time to time certain  qualified  officers and employees of the GS
Group may invest in the Company. Neither the Investment Funds' Advisors nor
any of their respective principals are presently expected to purchase Units
or   membership   units   in   the   Investment    Funds.   See   ITEM   1.
"BUSINESS--POTENTIAL CONFLICTS OF INTEREST."

     The  Company  may from  time to time,  in the sole  discretion  of the
Managing  Member,  invest in money market funds  sponsored by the GS Group,
and the  Company  will  not be  reimbursed  for any  fees  accruing  to any
affiliate  of the GS Group in respect of any such  investment.  See ITEM 1.
"BUSINESS--INVESTMENT PROGRAM--Investment Objective and Approach."

     The Company  pays the Managing  Member a Management  Fee. In addition,
the  Managing  Member  receives an  administration  fee for its services as
Administrator  of each  Investment  Fund and each  Portfolio  Company.  The
Company  will  bear  its  pro  rata  portion  of  these  fees  through  its
investments  in the  Investment  Funds.  See  ITEM 1.  "BUSINESS--FEES  AND
EXPENSES."

     Some of the directors and  executive  officers of the Managing  Member
also are or may become  directors and  executive  officers of Goldman Sachs
and Goldman  Sachs  affiliates  which  entities  provided  services for the
Company,  other than as an underwriter,  during the year ended December 31,
2004 and are proposed to provide such services in the current year.

     Certain  directors  and  executive  officers of the  Managing  Member,
including their spouses and entities owned or controlled by them, from time
to time invest in the Company.  In addition,  certain of the  directors and
executive  officers from time to time invest their  personal funds directly
in other funds managed by the GS Group on the same terms and  conditions as
the  other  investors  in these  funds,  who are not  directors,  executive
officers or employees.

BROKERAGE

     The Advisors  (including  employees and affiliates of the GS Group) of
the  Investment  Funds managing their assets  directly  (including  through
Advisor Funds) or through Portfolio  Companies have the authority to select
brokers and dealers  from a list  approved  by the  managing  member of the
Investment  Funds,  through  which to effect  transactions  on the basis of
various factors.  The managing member of the Investment Funds requires such
Advisors to select executing brokers on a best execution basis, considering
price,  commissions and commission  equivalents,  other transaction  costs,
quality of brokerage services, financing arrangements, creditworthiness and
financial stability,  financial  responsibility and strength, and clearance
and settlement capability.  The Company does not have oversight over broker
and dealer selection by Investment Funds.

     To the extent permitted under applicable law, the Advisors  (including
through  Advisor Funds) of each  Investment  Fund or Portfolio  Company are
authorized to execute agency transactions for such Investment Fund, Advisor
Fund or  Portfolio  Company  with or  through  GS Group and its  affiliates
(including in  circumstances  where  transactions on behalf of GS Group and
its  affiliates  are  executed  together  with  those  on  behalf  of  such
Investment  Fund,  Advisor Fund or Portfolio  Company) as the Advisors,  in
their sole discretion,  shall determine. The Advisors may also use GS Group
or its affiliates for prime brokerage services.

     Additionally,  in  selecting  brokers  and  dealers,  certain  of  the
Advisors  may have  authority  to and may  consider  products  or  services
provided,  or expenses  paid,  by such brokers and dealers to, or on behalf
of, such Advisors.  Products and services generally include research items.
In some circumstances, the commissions paid on transactions with brokers or
dealers  providing such services may exceed the amount another broker would
have charged for effecting  that  transaction.  "Soft  dollar"  payments or
rebates  of  amounts   paid  to  brokers   and   dealers   may  arise  from
over-the-counter principal transactions,  as well as exchange traded agency
transactions.  In addition, such payments or rebates may be made by futures
brokers in connection with futures transactions.

     The Managing Member,  either in its capacity as the managing member of
the Company or the Investment  Funds,  may also receive research items from
brokers  and  dealers  that  provide  brokerage  services  to  its  clients
(including the  Investment  Funds and the Portfolio  Companies).  The total
amount of commissions  directed to a particular broker may be made pursuant
to an agreement that would bind the managing member of the Investment Funds
to compensate the selected  broker for the services  provided.  Research or
other services  obtained in this manner may be used in servicing any or all
advisory clients of the managing member of the Investment Funds,  including
each of the Investment Funds and the Portfolio  Companies,  and are used in
connection with advisory  accounts other than those that pay commissions to
the broker relating to the research or other service arrangements.

     Research  products and services made available to the Managing Member,
either  in its  capacity  as the  managing  member  of the  Company  or the
Investment Funds,  through brokers and dealers  executing  transactions for
its clients,  including the Investment  Funds and the Portfolio  Companies,
involving  brokerage   commissions  may  include:   performance  and  other
qualitative  and  quantitative  data  relating  to  Advisors in general and
certain Advisors in particular;  data relating to the historic  performance
of categories of securities  associated with particular  investment styles;
quotation  equipment;  and related computer  hardware and software,  all of
which research products and services are used by the managing member of the
Investment  Funds  in  connection  with its  selection  and  monitoring  of
Advisors, the portfolio design of a mix of investment styles appropriate to
investment   objectives  of  clients,  and  the  determination  of  overall
portfolio strategies including asset allocation models.

     If the managing  member of the Investment  Funds receives  products or
services  from brokers or dealers that are used both for research  purposes
and for administrative or other non-research  purposes, it will make a good
faith effort to  determine  the relative  proportions  of such  products or
services which may be considered as investment research, based primarily on
anticipated  usage,  and  will  pay  for  the  costs  attributable  to  the
non-research usage in cash.

     To the extent  permitted  by  applicable  law,  Advisors  may  execute
transactions  with or through  Goldman Sachs.  The Advisors may also use GS
Group and its affiliates for prime brokerage and other services.

PLACEMENT AGENT

     Goldman Sachs acts as placement  agent for the Company (the "Placement
Agent").  The Placement Agent is entitled to a fee (the "Placement Fee") of
up to a  specified  amount  of each  Member's  subscription.  Historically,
Goldman  Sachs has not charged a Placement  Fee,  however,  there can be no
assurance that Goldman Sachs will not charge a Placement Fee in the future.
Amounts paid in respect of the Placement Fee will not constitute  assets of
the Company.  The Placement  Agent may also receive  compensation  from the
Managing  Member  that  represents  a portion of the  Management  Fee.  The
Placement Agent may enter into sub-placement agreements with affiliates and
unaffiliated  third parties.  At the discretion of the Placement Agent, all
or a portion of the  Placement  Fee may be allocated to such  sub-placement
agents.  The  Company  may  waive or impose  different  sales  charges,  or
otherwise  modify its  distribution  arrangements,  in connection  with the
offering  of Units.  Pursuant  to an  agreement  entered  into  between the
Placement  Agent and the Company (the  "Placement  Agent  Agreement"),  the
Company has agreed to indemnify and hold harmless the Placement  Agent, its
affiliates and any agent against any losses, claims, damages or liabilities
(or actions in respect thereof),  joint or several (the "Covered  Claims"),
to which the Placement Agent may become subject, to the extent such Covered
Claims  arise out of or are based upon (i) an untrue  statement  or alleged
untrue  statement of a material fact contained in the  Memorandum,  or (ii)
the omission or alleged  omission to state therein a material fact required
to be  stated  therein  or  necessary  to make the  statement  therein  not
misleading.  The Placement Agent  Agreement  provides that the Company will
reimburse the Placement  Agent for any legal or other  expenses  reasonably
incurred  by the  Placement  Agent  in  connection  with  investigating  or
defending any such Covered Claims; provided, however, that the Company will
not be liable to  indemnify or reimburse  the  Placement  Agent in any such
case to the extent that any such Covered  Claims  arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in the  Memorandum  in reliance  upon and in conformity  with
written  information  furnished  to  the  Company  by the  Placement  Agent
expressly for use therein.

     In addition, to the extent the indemnification provisions described in
the preceding paragraph are unavailable or insufficient to hold harmless an
indemnified  party with respect to any Covered Claims,  the Placement Agent
Agreement  specifies that the Company will contribute to the amount paid or
payable by such  indemnified  party as a result of such  Covered  Claims in
such proportion as is appropriate to reflect the relative benefits received
by the  Company  and the  Placement  Agent from the  offering of the Units,
unless  otherwise  provided  by  applicable  law  or  the  Placement  Agent
Agreement.

     Goldman  Sachs  also  acts as the  placement  agent on  behalf  of the
Investment  Funds. The Company will not be charged any placement fee by the
Investment Funds.

ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES

     The following table presents fees for the professional  audit services
rendered by E&Y for the audit of the Company's annual financial  statements
for the years  ended  December  31, 2004 and 2003 and fees billed for other
services rendered by E&Y during those periods.

                                  YEAR ENDED DECEMBER 31,
                                 2004                2003
                           ----------------    ---------------
Audit Fees (1)                 $185,000            $32,500

Audit-Related Fees                    -                  -

Tax Fees (2)                     60,000            $35,500

All Other Fees                        -                  -
                           ----------------    ---------------
TOTAL                           245,000            $68,000
                           ================    ===============

(1)  Year ended  December 31, 2004 includes  $115,000 for the review of the
     Company's Registration Statement,  this annual report on Form 10-K and
     the  Company's  quarterly  reports  on Form  10-Q.
(2)  Tax services primarily involves assistance with the preparation of tax
     returns and K-1s.

     The board of directors  of the Managing  Member does not have an audit
committee   which  is  responsible  for  the  oversight  of  the  Company's
accounting and financial reporting practices.  As the Company does not have
a formal audit committee, the services described above were not approved by
the  audit  committee  and  the  Company  does  not  have  audit  committee
pre-approval  policies  and  procedures.  The  board  of  directors  of the
Managing  Member  as a  whole  is  responsible  for  the  oversight  of the
Company's  accounting  and financial  reporting  practices and the board is
responsible  for  approving  every  engagement  of E&Y to perform  audit or
non-audit  services for the Company  before E&Y is engaged to provide those
services.  The board of directors  considers  whether the  provision of any
non-audit provisions is compatible with maintaining E&Y's independence.

                                  PART IV

ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

     (a)  Documents Filed as Part of this Annual Report:

          1. Financial Statements.
<TABLE>
<CAPTION>
                                                                                                       PAGE
             DESCRIPTION OF FINANCIAL STATEMENTS                                                      NUMBER
             -----------------------------------                                                      ------

             <S>                                                                                        <C>
             Goldman Sachs Hedge Fund Partners, LLC Financial Statements

             Report of Independent Registered Public Accounting Firm...............................     F-2

             Schedule of Investments as of December 31, 2004 and 2003..............................     F-3

             Balance Sheet as of December 31, 2004 and 2003........................................     F-4

             Statement of Operations for the years ended December 31, 2004, 2003 and for the
             period from commencement of operations (April 1, 2002) to December 31, 2002...........     F-5

             Statement of Changes in Members' Equity for the years ended December 31, 2004, 2003
             and for the period from commencement of operations (April 1, 2002) to December 31,
             2002..................................................................................     F-6

             Statement of Cash Flows for the years ended December 31, 2004, 2003 and for the
             period from commencement of operations (April 1, 2002) to December 31, 2002...........     F-7

             Notes to Financial Statements.........................................................     F-8
</TABLE>

          2. Financial Statement Schedules.

             Certain  schedules are omitted because they are not applicable
             or  the  required   information  is  shown  in  the  financial
             statements or notes thereto.

          3. List of Exhibits.

             See Index of Exhibits included on page E-1.

<PAGE>

                                 SIGNATURES

     Pursuant to the  requirements of Section 13 or 15(d) of the Securities
Exchange  Act of 1934,  as  amended,  the  Registrant  has duly caused this
report to be  signed  on its  behalf  by the  undersigned,  thereunto  duly
authorized.

                                GOLDMAN SACHS HEDGE FUND PARTNERS, LLC
                                (Registrant)


                                By:  Goldman Sachs Hedge Fund Strategies LLC
                                Managing Member


                                By: /s/ Tobin V. Levy
                                   -------------------------------------
                                   Name:   Tobin V. Levy
                                   Title:  Managing Director and Chief
                                           Financial Officer

Date:  March 29, 2005


<PAGE>

                             INDEX OF EXHIBITS

EXHIBIT NO.                           DESCRIPTION
-----------                           -----------

    3*        Copy  of  Amended  and  Restated  Limited  Liability  Company
              Agreement  of Goldman  Sachs Hedge Fund  Partners,  LLC dated
              January 1, 2004 (Note:  the LLC  Agreement  also  defines the
              rights  of the  holders  of Units of the  Company)  (filed as
              Exhibit  3  to  the  Form  10,  filed  April  29,  2004,  and
              incorporated herein by reference).

   10.1       Copy  of  Amended  and  Restated  Limited  Liability  Company
              Agreement of Goldman Sachs Global Tactical Trading, LLC dated
              January 1, 2003.

   10.2       Copy  of  Amended  and  Restated  Limited  Liability  Company
              Agreement of Goldman  Sachs  Global  Equity  Long/Short,  LLC
              dated July 1, 2004.

   10.3       Copy  of  Amended  and  Restated  Limited  Liability  Company
              Agreement of Goldman Sachs Global Relative  Value,  LLC dated
              July 1, 2004.

   10.4       Copy  of  Amended  and  Restated  Limited  Liability  Company
              Agreement of Goldman  Sachs Global  Event  Driven,  LLC dated
              July 1, 2004.

   10.5*      Distribution  Agreement  between  Goldman  Sachs  Hedge  Fund
              Partners,  LLC and  Goldman,  Sachs & Co. dated March 1, 2002
              (filed as Exhibit  10.5 to the Form 10, filed April 29, 2004,
              and incorporated herein by reference).

   10.6*      Administration  Agreement  between  Goldman  Sachs Hedge Fund
              Partners,  LLC and Goldman  Sachs Hedge Fund  Strategies  LLC
              (formerly  Goldman Sachs  Princeton  LLC) dated March 1, 2002
              (filed as Exhibit  10.6 to the Form 10, filed April 29, 2004,
              and incorporated herein by reference).

   14.1       Code of Ethics for Goldman Sachs Hedge Fund Partners, LLC

   14.2       Code of Ethics for Goldman Sachs Hedge Fund Strategies LLC

   31.1       Certification   of  Chief  Executive   Officer  in  the  form
              prescribed   by  Rule   13a-14(a)  or  15d-14(a)   under  the
              Securities Exchange Act of 1934.

   31.2       Certification   of  Chief  Financial   Officer  in  the  form
              prescribed   by  Rule   13a-14(a)  or  15d-14(a)   under  the
              Securities Exchange Act of 1934.

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

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


   *Previously filed.


<PAGE>

<TABLE>
<CAPTION>

                       INDEX OF FINANCIAL STATEMENTS

                                                                                                              PAGE
DESCRIPTION OF FINANCIAL STATEMENTS                                                                          NUMBER
-----------------------------------                                                                          ------

<S>                                                                                                            <C>
Goldman Sachs Hedge Fund Partners, LLC Financial Statements

Report of Independent Registered Public Accounting Firm.....................................................   F-2

Schedule of Investments as of December 31, 2004 and 2003....................................................   F-3

Balance Sheet as of December 31, 2004 and 2003..............................................................   F-4

Statement of Operations for the years ended December 31, 2004, 2003 and for the period from commencement
of operations (April 1, 2002) to December 31, 2002..........................................................   F-5

Statement of Changes in Members' Equity for the years ended December 31, 2004, 2003 and for the period
from commencement of operations (April 1, 2002) to December 31, 2002........................................   F-6

Statement of Cash Flows for the years ended December 31, 2004, 2003 and for the period from commencement
of operations (April 1, 2002) to December 31, 2002..........................................................   F-7

Notes to Financial Statements...............................................................................   F-8
</TABLE>


<PAGE>


                  GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

                            FINANCIAL STATEMENTS


          REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Managing Member and Members
Goldman Sachs Hedge Fund Partners, LLC

We have audited the accompanying  balance sheet,  including the schedule of
investments,  of Goldman Sachs Hedge Fund Partners, LLC (the "Company"), as
of December 31, 2004 and 2003,  and the related  statements of  operations,
changes in members'  equity and cash flows for the two years then ended and
for the period from  commencement of operation  (April 1, 2002) to December
31, 2002. These financial statements are the responsibility of the managing
member.  Our  responsibility  is to express  an opinion on these  financial
statements based on our audits.

We  conducted  our audits in  accordance  with the  standards of the Public
Company Accounting Oversight Board (United States). Those standards require
that we plan and perform  the audit to obtain  reasonable  assurance  about
whether the financial statements are free of material misstatement. We were
not  engaged to perform an audit of the  Company's  internal  control  over
financial reporting.  Our audit included  consideration of internal control
over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances,  but not for the purpose of expressing an
opinion  on  the  effectiveness  of the  Company's  internal  control  over
financial reporting.  Accordingly we express no such opinion. An audit also
includes  examining,  on a test basis,  evidence supporting the amounts and
disclosures   in  the  financial   statements,   assessing  the  accounting
principles  used  and  significant   estimates  made  by  management,   and
evaluating the overall financial  statement  presentation.  We believe that
our audits provide a reasonable basis for our opinion.

In our opinion,  the financial statements referred to above present fairly,
in all material  respects,  the  financial  position of Goldman Sachs Hedge
Fund  Partners,  LLC at  December  31,  2004 and 2003,  the  results of its
operations, changes in members' equity and its cash flows for the two years
then ended and for the period  from  commencement  of  operation  (April 1,
2002) to  December  31, 2002 in  conformity  with U.S.  generally  accepted
accounting principles.






                                                      /s/ ERNST & YOUNG LLP


New York, New York
March 15, 2005

<PAGE>
<TABLE>
<CAPTION>

                   GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

                          SCHEDULE OF INVESTMENTS

                         DECEMBER 31, 2004 AND 2003

                                                        2004                                           2003
                                 ----------------------------------------------- ----------------------------------------------
                                                        % of      % of adjusted                        % of       % of adjusted
                                          Fair         members'       members'           Fair         members'       members'
           Investee                       value       equity(1)      equity(2)           value        equity(1)     equity(2)
-------------------------------  ------------------  -----------  -------------- -----------------  ------------  -------------

<S>                               <C>                  <C>             <C>        <C>                   <C>            <C>
Goldman Sachs Global Equity
Long/Short, LLC                   $    226,276,134     23.63%          20.84%     $  140,117,348        15.01%         14.48%

Goldman Sachs Global Event
Driven, LLC                            268,186,702     28.01%          24.69%        221,899,920        23.78%         22.93%

Goldman Sachs Global Tactical
Trading, LLC                           248,081,137     25.91%          22.84%        249,583,571        26.74%         25.79%

Goldman Sachs Global Relative
Value, LLC                             350,409,379     36.60%          32.27%        359,311,989        38.50%         37.12%
                                  ----------------   --------        --------     --------------      --------       --------
Total investments
(cost $945,867,114 and
$877,478,931, respectively)       $  1,092,953,352    114.15%         100.64%     $  970,912,828       104.03%        100.32%
                                  ================   ========        ========     ==============      ========       ========
<FN>

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

(2)  Adjusted  members' equity,  used in the calculation of the investments
     as a  percentage  of adjusted  members'  equity,  represents  members'
     equity  excluding  Redemptions  payable in the amount of  $128,546,636
     that are payable after  December 31, 2004 and  Redemptions  payable in
     the amount of $34,529,625 that were payable after December 31, 2003.
</FN>
</TABLE>

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

                          See accompanying notes.

<PAGE>

<TABLE>

                   GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

                               BALANCE SHEET

                         DECEMBER 31, 2004 AND 2003

                                   ASSETS
                                   ------

<CAPTION>
                                                                      2004                       2003
                                                           --------------------------  ------------------------
<S>                                                        <C>                         <C>
Assets:

      Cash and cash equivalents                            $                 218,797   $            48,423,637

      Investments (cost $945,867,114                                   1,092,953,352               970,912,828
           and $877,478,931, respectively)

      Other assets                                                                 -                    77,464
                                                           --------------------------  ------------------------
          Total assets                                     $           1,093,172,149   $         1,019,413,929
                                                           ==========================  ========================

                      LIABILITIES AND MEMBERS' EQUITY
                      -------------------------------

Liabilities:

      Due to bank                                          $               3,000,000   $            47,500,000

      Redemptions payable                                                128,546,636                34,529,625

      Accounts payable and accrued liabilities                               922,506                   168,875

      Due to managing member                                               3,247,774                 3,969,687
                                                           --------------------------  ------------------------
          Total liabilities                                              135,716,916                86,168,187

Members' equity (units outstanding 8,106,803.34 and
8,540,512.41, respectively)                                              957,455,233               933,245,742
                                                           --------------------------  ------------------------

          Total liabilities and members' equity            $           1,093,172,149   $         1,019,413,929
                                                           ==========================  ========================
Analysis of members' equity:

      Net capital contributions, accumulated net
        investment income/(loss) and realized
        profit/(loss)                                      $             810,368,995   $           839,811,845

      Accumulated net unrealized profit/(loss)
                                                           $             147,086,238   $            93,433,897
                                                           ==========================  ========================
</TABLE>

                          See accompanying notes.


<PAGE>

<TABLE>
                                   GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

                                           STATEMENT OF OPERATIONS

                       FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND FOR THE PERIOD
                    FROM COMMENCEMENT OF OPERATIONS (APRIL 1, 2002) TO DECEMBER 31, 2002

<CAPTION>

                                                          2004               2003                2002
                                                   -----------------  ------------------  ------------------
<S>                                                <C>                 <C>                  <C>
Income from trading:
    Equity in earnings of investees:
       Realized profit/(loss)                      $   18,366,046       $     241,972       $            -
       Changed in unrealized profit/(loss)             53,652,341          81,612,423           11,821,474
                                                   --------------       -------------       --------------

        Net trading profit/(loss)                      72,018,387          81,854,395           11,821,474

Interest income                                           495,194              97,943               32,724

Expenses:
    Management fee                                     12,234,696           9,666,257            2,000,377
    Interest expense                                      546,069                   -                    -
    Professional fees                                   1,641,442           1,053,505              222,717
    Miscellaneous expenses                                 35,645              13,910              235,926
                                                   --------------       -------------       --------------

    Total expenses                                     14,457,852          10,733,672            2,459,020
                                                   --------------       -------------       --------------

        Net investment income/(loss)                  (13,962,658)        (10,635,729)          (2,426,296)
                                                   --------------       -------------       --------------

Net income/(loss)                                      58,055,729          71,218,666            9,395,178

    Less:  Incentive allocation to the
    managing member                                     2,902,854           3,560,865              469,759
                                                   --------------       -------------       --------------

Net income/(loss) available for pro-rata
    allocation to members                          $   55,152,875       $  67,657,801       $    8,925,419
                                                   ==============       =============       ==============
</TABLE>

                          See accompanying notes.


<PAGE>

<TABLE>
                                      GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

                                      STATEMENT OF CHANGES IN MEMBERS' EQUITY

                          FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND FOR THE PERIOD
                       FROM COMMENCEMENT OF OPERATIONS (APRIL 1, 2002) TO DECEMBER 31, 2002


<CAPTION>
                                                                                                            Total
                                                    Managing          Members'          Members'           members'
                                                member's equity        units             equity             equity
                                                ---------------- ----------------- ----------------- -------------------
<S>                                             <C>                  <C>              <C>              <C>
Subscriptions                                   $            -       3,738,439.26     $373,831,083     $  373,831,083
Allocations of net income/(loss):
   Incentive allocation                                469,759                  -                -            469,759
   Pro-rata allocation                                       -                  -        8,925,419          8,925,419
                                                --------------      -------------     ------------     --------------

Balance at December 31, 2002                           469,759       3,738,439.26      382,756,502        383,226,261

Subscriptions                                                -       5,228,815.64      524,318,830        524,318,830
Redemptions                                         (4,030,624)       (369,584.81)     (41,487,391)       (45,518,015)
Series collapse                                              -         (57,157.68)               -                  -
Allocations of net income/(loss):
   Incentive allocation                              3,560,865                  -                -          3,560,865
   Pro-rata allocation                                       -                  -       67,657,801         67,657,801
                                                --------------      -------------     ------------     --------------

Balance at December 31, 2003                                 -       8,540,512.41      933,245,742        933,245,742

Subscriptions                                                -       1,238,393.44      126,385,622        126,385,622
Redemptions                                         (2,902,854)     (1,321,377.58)    (157,329,006)      (160,231,860)
Series collapse                                              -        (350,724.93)               -                  -
Allocations of net income/(loss):
   Incentive allocation                              2,902,854                  -                -          2,902,854
   Pro-rata allocation                                       -                  -       55,152,875         55,152,875
                                                --------------      -------------     ------------     --------------

Balance at December 31, 2004                    $            -       8,106,803.34     $957,455,233      $ 957,455,233
                                                ==============      =============     ============      =============

</TABLE>

                          See accompanying notes.

<PAGE>

<TABLE>
                                      GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

                                              STATEMENT OF CASH FLOWS

                          FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND FOR THE PERIOD
                       FROM COMMENCEMENT OF OPERATIONS (APRIL 1, 2002) TO DECEMBER 31, 2002

<CAPTION>
                                                                 2004                   2003                   2002
                                                            ---------------        ---------------        -------------
<S>                                                         <C>                    <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income/(loss)                                       $    58,055,729        $    71,218,666        $   9,395,178

Adjustments to reconcile net income/(loss) to net
cash from operating activities:
    Purchases of investments                                   (174,845,756)          (507,973,827)        (371,763,132)
    Proceeds from sales of investments                          124,823,619              2,500,000                    -
    Realized profit/(loss) from sales of investments            (18,366,046)              (241,972)                   -
    Change in unrealized profit/(loss)                          (53,652,341)           (81,612,423)         (11,821,474)

(Increase) decrease in operating assets:
    Other assets                                                     77,464                (77,464)                   -
Increase (decrease) in operating liabilities:
    Accounts payable and accrued liabilities                        753,631                (31,769)             200,644
    Due to managing member                                         (721,913)             3,211,779              757,908
                                                            ---------------        ---------------        -------------

Net cash from operating activities                              (63,875,613)          (513,007,010)        (373,230,876)
                                                            ---------------        ---------------        -------------

CASH FLOWS FROM FINANCING ACTIVITIES

    Subscriptions                                               126,385,622            524,318,830          373,831,083
    Redemptions                                                (160,231,860)           (45,518,015)                   -
    Increase/decrease in Due to bank                            (44,500,000)            47,500,000                    -
    Increase in Redemptions payable                              94,017,011             34,529,625                    -
                                                            ---------------        ---------------        -------------

Net cash from financing activities                               15,670,773            560,830,440          373,831,083
                                                            ---------------        ---------------        -------------

    Net change in cash and cash equivalents                     (48,204,840)            47,823,430              600,207

Cash and cash equivalents at beginning of period                 48,423,637                600,207                    -
                                                            ---------------        ---------------        -------------
Cash and cash equivalents at end of period                  $       218,797        $    48,423,637        $     600,207
                                                            ===============        ===============        =============


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid by the Company during the year for interest       $       546,069        $             -        $           -
                                                            ===============        ===============        =============
</TABLE>

                          See accompanying notes.

<PAGE>

                  GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

                       NOTES TO FINANCIAL STATEMENTS

                     DECEMBER 31, 2004, 2003 AND 2002

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

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

Goldman Sachs Hedge Fund Partners,  LLC (the  "Company") was organized as a
limited  liability  company,  pursuant to the laws of the State of Delaware
and  commenced  operations  on April 1, 2002 for the  principal  purpose of
investing in the equity  long/short,  event  driven,  relative  value,  and
tactical trading hedge fund sectors through  investments in each of Goldman
Sachs Global Equity  Long/Short,  LLC ("GELS"),  Goldman Sachs Global Event
Driven,  LLC ("GED"),  Goldman Sachs Global Relative Value, LLC ("GRV") and
Goldman  Sachs Global  Tactical  Trading,  LLC ("GTT")  (collectively,  the
"Investees").  Each of these  Investees  invests  directly  through trading
advisors, or indirectly through investment vehicles managed by such trading
advisors  (together,  the "Advisors").  Goldman Sachs Hedge Fund Strategies
LLC ("GS  HFS"),  formerly  Goldman  Sachs  Princeton  LLC, a  wholly-owned
subsidiary  of The Goldman  Sachs  Group,  Inc.,  is the  managing  member,
administrator and commodity pool operator of the Company.

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

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

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

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

The following table summarizes the Company's  ownership in the Investees at
December 31, 2004 and 2003:


                                     12/31/2004
           --------------------------------------------------------------
                                      Company             % owned by
             Investee equity         investment           the Company
           --------------------------------------------------------------

GELS          $ 694,878,944        $  226,276,134            32.56%
GED             860,469,969           268,186,702            31.17
GTT             635,662,057           248,081,137            39.03
GRV             617,008,832           350,409,379            56.79
                                  ---------------
       Total                       $1,092,953,352
                                  ===============


                                      12/31/2003
           --------------------------------------------------------------
                                      Company             % owned by
             Investee equity         investment           the Company
           --------------------------------------------------------------

GELS          $ 425,735,121        $  140,117,348            32.91%
GED             530,245,182           221,899,920            41.85
GTT             657,712,862           249,583,571            37.95
GRV             621,463,189           359,311,989            57.82
                                  ---------------
       Total                       $  970,912,828
                                  ===============

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

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

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

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

The Company considers all highly liquid investments with a maturity of less
than 90 days at the time of  purchase  and not held for  resale  to be cash
equivalents.  Cash  equivalents are carried at cost plus accrued  interest,
which approximates  market.  Cash and cash equivalents at December 31, 2004
is restricted. See Note 7 - Borrowing facility for further information.

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

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

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

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

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

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

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

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

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

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

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

The  following  table  summarizes  the  Company's  Equity  in  earnings  of
investees  for the years ended  December 31, 2004,  2003 and for the period
from commencement of operations (April 1, 2002) to December 31, 2002:

<TABLE>
<CAPTION>
                                                Year or Period Ended December 31,
--------------    -------------     --------------------------------------------------------
   Investee         Liquidity             2004               2003                 2002
--------------    -------------     ---------------    ----------------    -----------------

<S>                    <C>            <C>                <C>                 <C>
GELS                   (1)            $17,695,686        $15,645,066         $  (226,472)
GED                    (2)             27,901,912         28,258,987             839,462
GTT                    (3)              8,501,811         18,588,822           7,135,919

GRV                    (4)             17,918,978         19,361,520           4,072,565
                                     ---------------    ----------------    -----------------
    Total                             $72,018,387        $81,854,395         $11,821,474
                                     ===============    ================    =================
<FN>

(1)  Redemptions  could  be made  quarterly  with 45 days'  notice  after a
     twelve-month holding period, or at the sole discretion of the managing
     member.  Effective  July 2004,  a  twelve-month  holding  period is no
     longer required.
(2)  Redemptions could be made  semi-annually  with 45 days' notice after a
     twelve-month holding period, or at the sole discretion of the managing
     member.  Effective  July 2004,  a  twelve-month  holding  period is no
     longer required.
(3)  Redemptions can be made  semi-annually with 60 days' notice, or at the
     sole discretion of the managing member.
(4)  Redemptions could be made  semi-annually  with 45 days' notice after a
     twelve-month holding period, or at the sole discretion of the managing
     member. Effective July 2004, redemptions can be made quarterly with 45
     days' notice,  or at the sole  discretion of the managing member and a
     twelve-month holding period is no longer required.
</FN>
</TABLE>

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

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

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

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

Information  regarding the actual  management and incentive fees charged by
the  Advisors  for the  period  was not  available  for all  Advisors.  The
following table reflects the weighted average Advisors'  management fee and
incentive  fee rates at the Investee  level at December 31, 2004,  2003 and
2002.  The weighted  average is based on the period ended market  values of
each Advisor  investment in proportion to the Company's total  investments.
The fee rates used in the weighted average calculation are the actual rates
charged by each Advisor.

<TABLE>
<CAPTION>
                                     2004                              2003                              2002
                       -------------------------------   ------------------------------   -------------------------------
                          Management       Incentive       Management      Incentive         Management       Incentive
     Investee                fees             fee             fees            fee               fees             fee
-------------------    --------------   --------------   --------------   -------------   ---------------   -------------
<S>                         <C>             <C>               <C>            <C>               <C>             <C>
       GELS                 1.42%           20.00%            1.27%          19.78%            1.15%           19.81%

       GED                  1.43%           19.94%            1.44%          19.93%            1.36%           19.65%

       GTT                  2.05%           20.46%            1.96%          19.97%            1.94%           19.98%

       GRV                  1.57%           20.76%            1.53%          20.60%            1.48%           20.30%

</TABLE>

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

The following table summarizes the cost of the Company's investments in the
Investees at December 31, 2004 and 2003:

        Investee             12/31/2004              12/31/2003
--------------------    -------------------     -------------------

GELS                         $ 193,714,595           $ 124,698,754
GED                            213,989,105             193,043,444
GTT                            222,215,176             223,858,829
GRV                            315,948,238             335,877,904
                        -------------------     -------------------
    Total                    $ 945,867,114           $ 877,478,931
                        ===================     ===================

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

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

The Company pays a monthly  administration fee to GS HFS equal to 0.20% per
annum of the net assets at the Investee level.  The  administration  fee is
charged at the  Investee  level and is  included  in Equity in  earnings of
investees on the Statement of Operations.  For the years ended December 31,
2004 and 2003 and for the period from  commencement of operations (April 1,
2002) to December 31, 2002, the  administration fee charged at the Investee
level by GS HFS totaled $1,960,131, $1,539,364 and $319,588, respectively.

GS HFS and the  Company  have  entered  into an  agreement  with SEI Global
Services,  Inc.  ("SEI") to serve as the  sub-administrator  of the Company
effective March 1, 2004.  Pursuant to the agreement,  GS HFS is responsible
for paying the fees of SEI. GS HFS (in its capacity as the administrator of
each Investee) and each Investee have entered into a similar agreement with
SEI. See also Note 10 - Subsequent events.

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

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

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

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

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

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

NOTE 5 - DERIVATIVE CONTRACTS
-----------------------------

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

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

The Due to  managing  member  liability  on the  Balance  Sheet  represents
management fees due to GS HFS at December 31, 2004 and 2003.

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

Directors and Executive Officers of the managing member own less than 1% of
the Company's equity at December 31, 2004, 2003 and 2002.

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

During the year  ended  December  31,  2003,  the  Company  entered  into a
borrowing  facility with a major  financial  institution.  The facility was
structured  as a call spread  option that had been issued by the Company to
the financial  institution.  Under the terms of the  facility,  the Company
received cash and redeposited the amount with the financial  institution in
a  collateral  account.  The  Company  had the right to draw funds from the
collateral  account to use for liquidity  purposes.  The amount of the cash
received totaled $47.5 million at December 31, 2003 and is included in Cash
and cash equivalents on the Balance Sheet.  The effective  interest rate on
borrowed amounts represented by funds drawn from the collateral account was
LIBOR plus 0.875%. The Company also paid the equivalent of a commitment fee
of 0.25% on the undrawn  funds.  At December 31, 2003,  the Company had not
drawn any of the cash  collateral  balance.  Included in Due to bank on the
Balance  Sheet is $47.5 million at December 31, 2003 which  represents  the
borrowing. This facility expired in October 2004.

On November 24, 2004, the Company entered into a credit facility with a new
financial   institution.   Subject  to  rejection  by  the  new   financial
institution,  the Company may request to borrow up to $45.0 million. At the
time of any borrowing, the aggregate amounts borrowed may not exceed 10% of
the Company's  net asset value and at all other times the aggregate  amount
borrowed may not exceed 15% of the Company's net asset value. The effective
interest  rate on borrowed  amounts is LIBOR plus 0.85%.  The amount of the
cash borrowed  totaled $3.0 million at December 31, 2004 and is included in
Due to bank on the Balance Sheet.  The Company granted a security  interest
in the  Company's  cash  accounts and any other  accounts  that contain any
other investment property of the Company.

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

At  December  31,  2004,  the  Company  had  eight  series of Class A units
outstanding.  Each  series of Class A units is  identical  in every  regard
except  with  respect  to its  individualized  incentive  allocation  base.
Effective January 1, 2004, Class A Series 2 through Class A Series 10 units
were collapsed  into Class A Series 1 units and effective  January 1, 2003,
Class A Series 2 through Class A Series 9 units were collapsed into Class A
Series 1 units.  Transactions in units for  non-managing  members for years
ended December 31, 2004, and 2003 are as follows:

<TABLE>
<CAPTION>
                                                   2004                                            2003
                              ----------------------------------------------    -------------------------------------------
                                     Units                   Amount                   Units                  Amount
                              --------------------    ----------------------    -------------------    --------------------
<S>                                 <C>                       <C>                    <C>                     <C>
Series collapse
       Class A
           Series 1                 4,493,143.70              $512,003,655           3,260,399.10            $338,995,791
           Series 2                  (415,994.14)              (44,920,761)           (243,082.49)            (25,250,693)
           Series 3                  (752,365.57)              (80,402,510)           (666,920.13)            (68,821,429)
           Series 4                  (879,574.26)              (94,683,681)           (453,500.00)            (46,408,355)
           Series 5                  (654,391.41)              (69,753,438)           (284,000.00)            (29,115,024)
           Series 6                  (836,120.00)              (86,760,878)           (374,618.85)            (38,028,035)
           Series 7                (1,210,045.71)             (125,529,478)           (622,822.97)            (62,750,159)
           Series 8                   (86,289.39)               (9,029,305)           (377,062.34)            (38,374,169)
           Series 9                    (8,313.51)                 (845,096)           (295,550.00)            (30,247,927)
           Series 10                     (774.64)                  (78,508)                     -
                              --------------------    ----------------------    -------------------    --------------------
Total                                (350,724.93)             $          -             (57,157.68)           $          -
                              ====================    ======================    ===================    ====================

Subscriptions
       Class A
           Series 1                    182,499.95              $ 20,796,273             361,728.64            $37,610,130
           Series 2                        687.41                    68,741             425,994.14             42,599,414
           Series 3                     83,221.74                 8,322,174             752,365.57             75,236,557
           Series 4                     12,734.34                 1,273,434             879,574.26             87,957,426
           Series 5                     17,500.00                 1,750,000             654,391.41             65,439,141
           Series 6                    298,400.00                29,840,000             841,120.00             84,112,000
           Series 7                    412,100.00                41,210,000           1,217,902.52            121,790,252
           Series 8                    231,250.00                23,125,000              86,650.95              8,665,095
           Series 9                             -                         -               8,313.51                831,351
           Series 10                            -                         -                 774.64                 77,464
                              --------------------    ----------------------    -------------------    --------------------
Total                                1,238,393.44             $ 126,385,622           5,228,815.64           $524,318,830
                              ====================    ======================    ===================    ====================
<CAPTION>
                                                   2004                                            2003
                              ----------------------------------------------    -------------------------------------------
                                     Units                   Amount                   Units                  Amount
                              --------------------    ----------------------    -------------------    --------------------
<S>                                  <C>                       <C>                      <C>                   <C>
Redemptions
       Class A
           Series 1                  1,321,377.58              $157,329,006             346,366.44            $ 39,035,825
           Series 2                             -                         -              10,000.00               1,079,841
           Series 6                             -                         -               5,000.00                 518,829
           Series 7                             -                         -               7,856.81                 815,062
           Series 8                             -                         -                 361.56                  37,834
                              --------------------    ----------------------    -------------------    --------------------
       Total                         1,321,377.58              $157,329,006             369,584.81            $ 41,487,391
                              ====================    ======================    ===================    ====================

</TABLE>

At December 31, 2004 and 2003, members' equity consists of the following:

<TABLE>
<CAPTION>
                                                     2004                                          2003
                                  -------------------------------------------    -----------------------------------------
                                       Units                    Net                    Units                  Net
                                    outstanding             asset value             outstanding           asset value
                                  -----------------     ---------------------    ------------------    -------------------
<S>                                   <C>                      <C>                    <C>                   <C>
Non-managing members
       Class A
           Series 1                   7,050,909.85             $ 847,881,523          3,696,643.78          $ 421,242,087
           Series 2                         687.41                    71,818            415,994.14             44,920,761
           Series 3                      83,221.74                 8,734,155            752,365.57             80,402,510
           Series 4                      12,734.34                 1,346,355            879,574.26             94,683,681
           Series 5                      17,500.00                 1,850,110            654,391.41             69,753,438
           Series 6                     298,400.00                31,325,187            836,120.00             86,760,878
           Series 7                     412,100.00                42,863,013          1,210,045.71            125,529,478
           Series 8                     231,250.00                23,383,072             86,289.39              9,029,305
           Series 9                              -                         -              8,313.51                845,096
           Series 10                             -                         -                774.64                 78,508
                                  -----------------     ---------------------    ------------------    -------------------
                Subtotal              8,106,803.34             $ 957,455,233          8,540,512.41          $ 933,245,742
                                  =================                              ==================

    Managing member                                                        -                                           -
                                                        ---------------------                          -------------------
    Total members' equity                                      $ 957,455,233                                $ 933,245,742
                                                        =====================                          ===================
</TABLE>

Transactions  in  units  for  non-managing  members  for  the  period  from
commencement  of  operations  (April 1, 2002) to  December  31, 2002 are as
follows:

                                                2002
                              ------------------------------------------
Subscriptions
       Class A
           Series 1                  420,882.48            $ 42,088,436
           Series 2                  243,082.49              24,308,249
           Series 3                  666,920.13              66,692,013
           Series 4                  453,500.00              45,350,000
           Series 5                  284,000.00              28,400,000
           Series 6                  374,618.85              37,461,885
           Series 7                  622,822.97              62,269,724
           Series 8                  377,062.34              37,705,776
           Series 9                  295,550.00              29,555,000
                              ------------------    --------------------
Total                              3,738,439.26            $373,831,083
                              ==================    ====================

At December 31, 2002, members' equity consists of the following:

                                                          2002
                               -----------------------------------------
                                    Units                   Net
                                 outstanding            asset value
                               -----------------     -------------------
Non-managing members
       Class A
           Series 1                  420,882.48            $ 43,760,711
           Series 2                  243,082.49              25,250,693
           Series 3                  666,920.13              68,821,429
           Series 4                  453,500.00              46,408,355
           Series 5                  284,000.00              29,115,024
           Series 6                  374,618.85              38,028,035
           Series 7                  622,822.97              62,750,159
           Series 8                  377,062.34              38,374,169
           Series 9                  295,550.00              30,247,927
                               -----------------     -------------------
                Subtotal           3,738,439.26             382,756,502
                               =================

Managing member                                                 469,759
                                                     -------------------

Total members' equity                                     $ 383,226,261
                                                     ===================

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

Financial  highlights  for the Company for the year ended December 31, 2004
are as follows:

<TABLE>
<CAPTION>
                                                         Class A     Class A     Class A     Class A      Class A
                                                         Series 1    Series 2    Series 3    Series 4    Series 5
                                                        ----------- ----------- ----------- ----------- ------------
<S>                                                       <C>         <C>         <C>         <C>         <C>
Per unit operating performance:
     Net asset value, beginning of period                 $ 113.95    $ 100.00    $ 100.00    $ 100.00    $ 100.00
Income from operations:
     Net trading profit/(loss)                                8.30        6.05        5.92        6.62        6.49
     Net investment income/(loss)                            (2.00)      (1.57)      (0.97)      (0.89)      (0.77)
                                                        ----------- ----------- ----------- ----------- ------------
        Total income/(loss) from operations                   6.30        4.48        4.95        5.73        5.72
                                                        ----------- ----------- ----------- ----------- ------------

Net asset value, end of period                            $ 120.25    $ 104.48    $ 104.95    $ 105.73    $ 105.72
                                                        =========== =========== =========== =========== ============

Ratios to average net assets (annualized):
     Expenses                                                1.48%       1.48%       1.35%       1.32%       1.31%
     Incentive allocation                                    0.28%       0.23%       0.26%       0.29%       0.29%
                                                        ----------- ----------- ----------- ----------- ------------
        Total expenses and incentive allocation              1.76%       1.71%       1.61%       1.61%       1.60%
                                                        =========== =========== =========== =========== ============

        Net investment income/(loss)                        (1.71%)     (1.66%)     (1.58%)     (1.60%)     (1.58%)
                                                        =========== =========== =========== =========== ============

Total return (prior to incentive allocation)                 5.83%       4.72%       5.21%       6.03%       6.02%
Incentive allocation                                        (0.30%)     (0.24%)     (0.26%)     (0.30%)     (0.30%)
                                                        ----------- ----------- ----------- ----------- ------------
        Total return                                         5.53%       4.48%       4.95%       5.73%       5.72%
                                                        =========== =========== =========== =========== ============

                                                          Class A    Class A     Class A
                                                         Series 6    Series 7    Series 8
                                                        ----------- ----------- ------------
Per unit operating performance:
     Net asset value, beginning of period                 $ 100.00    $ 100.00    $ 100.00
Income from operations:

     Net trading profit/(loss)                                5.58        4.43        1.28

     Net investment income/(loss)                            (0.60)      (0.42)      (0.16)
                                                        ----------- ----------- ------------
        Total income/(loss) from operations
                                                              4.98        4.01        1.12
                                                        ----------- ----------- ------------

Net asset value, end of period                            $ 104.98    $ 104.01    $ 101.12
                                                        =========== =========== ============

Ratios to average net assets (annualized):
     Expenses                                                1.28%       1.29%       1.27%
     Incentive allocation                                    0.25%       0.20%       0.06%
                                                        ----------- ----------- ------------
        Total expenses and incentive allocation              1.53%       1.49%       1.33%
                                                        =========== =========== ============

        Net investment income/(loss)                        (1.54%)     (1.49%)     (1.32%)
                                                        =========== =========== ============

Total return (prior to incentive allocation)                 5.24%       4.22%       1.18%
Incentive allocation                                        (0.26%)     (0.21%)     (0.06%)
                                                        ----------- ----------- ------------
        Total return                                         4.98%       4.01%       1.12%
                                                        =========== =========== ============
</TABLE>

Financial  highlights  for the Company for the year ended December 31, 2003
are as follows:

<TABLE>
<CAPTION>
                                                           Class A     Class A     Class A     Class A     Class A
                                                           Series 1   Series 2    Series 3    Series 4     Series 5
                                                          ----------- ----------- ----------- ----------- ------------
  <S>                                                       <C>         <C>         <C>         <C>         <C>
  Per unit operating performance:
       Net asset value, beginning of period                 $ 103.97    $ 100.00    $ 100.00    $ 100.00    $ 100.00
  Income from operations:
       Net trading profit/(loss)                               12.00        9.70        8.43        9.13        7.89
       Net investment income/(loss)                            (2.02)      (1.72)      (1.56)      (1.48)      (1.30)
                                                          ----------- ----------- ----------- ----------- ------------
          Total income/(loss) from operations                   9.98        7.98        6.87        7.65        6.59
                                                          ----------- ----------- ----------- ----------- ------------

  Net asset value, end of period                            $ 113.95    $ 107.98    $ 106.87    $ 107.65    $ 106.59
                                                          =========== =========== =========== =========== ============

  Ratios to average net assets (annualized):
       Expenses                                                1.39%       1.39%       1.38%       1.37%       1.35%
       Incentive allocation                                    0.48%       0.40%       0.35%       0.39%       0.33%
                                                          ----------- ----------- ----------- ----------- ------------
          Total expenses and incentive allocation              1.87%       1.79%       1.73%       1.76%       1.68%
                                                          =========== =========== =========== =========== ============

          Net investment income/(loss)                        (1.86%)     (1.78%)     (1.72%)     (1.74%)     (1.67%)
                                                          =========== =========== =========== =========== ============

  Total return (prior to incentive allocation)                10.11%       8.40%       7.23%       8.05%       6.94%
  Incentive allocation                                        (0.51%)     (0.42%)     (0.36%)     (0.40%)     (0.35%)
                                                          ----------- ----------- ----------- ----------- ------------
          Total return                                         9.60%       7.98%       6.87%       7.65%       6.59%
                                                          =========== =========== =========== =========== ============

                                                           Class A     Class A     Class A     Class A     Class A
                                                           Series 6   Series 7    Series 8    Series 9    Series 10
                                                          ----------- ----------- ----------- ----------- ------------
  Per unit operating performance:
       Net asset value, beginning of period                 $ 100.00    $ 100.00    $ 100.00    $ 100.00    $ 100.00
  Income from operations:
       Net trading profit/(loss)                                4.79        4.61        5.47        1.98        1.55
       Net investment income/(loss)                            (1.02)      (0.87)      (0.83)      (0.33)      (0.20)
                                                          ----------- ----------- ----------- ----------- ------------
          Total income/(loss) from operations                   3.77        3.74        4.64        1.65        1.35
                                                          ----------- ----------- ----------- ----------- ------------

  Net asset value, end of period                            $ 103.77    $ 103.74    $ 104.64    $ 101.65    $ 101.35
                                                          =========== =========== =========== =========== ============

  Ratios to average net assets (annualized):
       Expenses                                                1.34%       1.30%       1.30%       1.28%       1.27%
       Incentive allocation                                    0.20%       0.19%       0.24%       0.09%       0.07%
                                                          ----------- ----------- ----------- ----------- ------------
          Total expenses and incentive allocation              1.54%       1.49%       1.54%       1.37%       1.34%
                                                          =========== =========== =========== =========== ============

          Net investment income/(loss)                        (1.53%)     (1.49%)     (1.54%)     (1.37%)     (1.34%)
                                                          =========== =========== =========== =========== ============

  Total return (prior to incentive allocation)                 3.97%       3.94%       4.88%       1.74%       1.42%
  Incentive allocation                                        (0.20%)     (0.20%)     (0.24%)     (0.09%)     (0.07%)
                                                          ----------- ----------- ----------- ----------- ------------
          Total return                                         3.77%       3.74%       4.64%       1.65%       1.35%
                                                          =========== =========== =========== =========== ============

</TABLE>

Financial  highlights for the Company for the period from  commencement  of
operations (April 1, 2002) to December 31, 2002 are as follows:

<TABLE>
<CAPTION>
                                                           Class A     Class A     Class A     Class A     Class A
                                                           Series 1   Series 2    Series 3    Series 4     Series 5
                                                          ----------- ----------- ----------- ----------- ------------
  <S>                                                       <C>         <C>         <C>         <C>         <C>
  Per unit operating performance:
       Net asset value, beginning of period                 $ 100.00    $ 100.00    $ 100.00    $ 100.00    $ 100.00
  Income from operations:
       Net trading profit/(loss)                                5.43        5.08        4.25        3.22        3.32
       Net investment income/(loss)                            (1.46)      (1.20)      (1.06)      (0.89)      (0.80)
                                                          ----------- ----------- ----------- ----------- ------------
          Total income/(loss) from operations                   3.97        3.88        3.19        2.33        2.52
                                                          ----------- ----------- ----------- ----------- ------------

  Net asset value, end of period                            $ 103.97    $ 103.88    $ 103.19    $ 102.33    $ 102.52
                                                          =========== =========== =========== =========== ============

  Ratios to average net assets (annualized):
       Expenses                                                1.63%       1.45%       1.47%       1.48%       1.51%
       Incentive allocation                                    0.21%       0.20%       0.17%       0.12%       0.13%
                                                          ----------- ----------- ----------- ----------- ------------
          Total expenses and incentive allocation              1.84%       1.65%       1.64%       1.60%       1.64%
                                                          =========== =========== =========== =========== ============

          Net investment income/(loss)                        (1.82%)     (1.63%)     (1.61%)     (1.58%)     (1.62%)
                                                          =========== =========== =========== =========== ============

  Total return (prior to incentive allocation)                 4.18%       4.08%       3.36%       2.45%       2.65%
  Incentive allocation                                        (0.21%)     (0.20%)     (0.17%)     (0.12%)     (0.13%)
                                                          ----------- ----------- ----------- ----------- ------------
          Total return                                         3.97%       3.88%       3.19%       2.33%       2.52%
                                                          =========== =========== =========== =========== ============

                                                           Class A     Class A     Class A     Class A
                                                           Series 6   Series 7    Series 8    Series 9
                                                          ----------- ----------- ----------- -----------
  Per unit operating performance:
       Net asset value, beginning of period                 $ 100.00    $ 100.00    $ 100.00    $ 100.00
  Income from operations:
       Net trading profit/(loss)                                2.05        1.14        2.12        2.59
       Net investment income/(loss)                            (0.54)      (0.39)      (0.35)      (0.25)
                                                          ----------- ----------- ----------- -----------
          Total income/(loss) from operations                   1.51        0.75        1.77        2.34
                                                          ----------- ----------- ----------- -----------

  Net asset value, end of period                            $ 101.51    $ 100.75    $ 101.77    $ 102.34
                                                          =========== =========== =========== ===========

  Ratios to average net assets (annualized):
       Expenses                                                1.31%       1.30%       1.30%       1.27%
       Incentive allocation                                    0.08%       0.04%       0.09%       0.12%
                                                          ----------- ----------- ----------- -----------
          Total expenses and incentive allocation              1.39%       1.34%       1.39%       1.39%
                                                          =========== =========== =========== ===========

          Net investment income/(loss)                        (1.36%)     (1.31%)     (1.39%)     (1.38%)
                                                          =========== =========== =========== ===========

  Total return (prior to incentive allocation)                 1.59%       0.79%       1.86%       2.46%
  Incentive allocation                                        (0.08%)     (0.04%)     (0.09%)     (0.12%)
                                                          ----------- ----------- ----------- -----------
          Total return                                         1.51%       0.75%       1.77%       2.34%
                                                          =========== =========== =========== ===========
</TABLE>

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

NOTE 10 - SUBSEQUENT EVENTS
---------------------------

Effective  January 1, 2005, Class A Series 2 through Class A Series 8 units
were  collapsed  into Class A Series 1 units,  as provided in the Company's
private placement memorandum.

Effective January 1, 2005, GS HFS agreed to change the  administration  fee
rate  charged at the  Investee  level from 0.20% to the fee rate charged to
each Investee by SEI (the  "Administration  Fee Rate"). It is expected that
initially  the  Administration  Fee Rate will  generally be in the range of
0.08% to 0.10%,  but such rate may be  exceeded  in certain  circumstances,
subject to a maximum of approximately 0.20%.

In the  future,  GS HFS may  cease  to serve  as the  administrator  of the
Company and one or more of the  Investees  and SEI may perform  such duties
directly.  GS HFS  and  SEI  are  currently  discussing  implementing  such
changes.