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, 2005
                                  OR
|_|    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                   SECURITIES EXCHANGE ACT OF 1934
          FOR THE TRANSITION PERIOD FROM         TO
                                         -------    -------

                     COMMISSION FILE NUMBER: 000-50723

                   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             (I.R.S. Employer
                 Organization)             Identification No.)

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

                               (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 if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act.

                                    Yes [   ]            No  [X]

     Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Exchange Act.

                                    Yes [   ]            No  [X]

     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 a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the
Exchange Act.

Large accelerated filer [   ] Accelerated filer [   ] Non-accelerated filer  [X]

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

                                    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, 2005 held by non-affiliates was $987,699,515.

                    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......................................................1

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

ITEM 1A RISK FACTORS.................................................46

ITEM 2. PROPERTIES...................................................78

ITEM 3. LEGAL PROCEEDINGS............................................78

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..........78

                                  PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
        STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
        SECURITIES...................................................79

ITEM 6. SELECTED FINANCIAL DATA......................................80

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS..........................81

ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
        102.........................................................100

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.................104

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
        ACCOUNTING AND FINANCIAL DISCLOSURE.........................105

ITEM 9A.CONTROLS AND PROCEDURES.....................................105

                                  PART III

ITEM 10.DIRECTORS AND EXECUTIVE OFFICERS OF THE MANAGING MEMBER
        AND REGISTRANT..............................................105

ITEM 11 EXECUTIVE COMPENSATION......................................108

ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
        AND MANAGEMENT..............................................110

ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..............110

ITEM 14 PRINCIPAL ACCOUNTING FEES AND SERVICES......................113

                                  PART IV

ITEM 15 EXHIBITS AND FINANCIAL STATEMENT SCHEDULES..................114





<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, 2005, the Company had net assets of approximately $774.6
million.

     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 investors
averaging  over 50  investors  a month and had a maximum  of 104  investors
subscribing   to  the   Company  in  July  2003.   Moreover,   during  this
fifteen-month  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.  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, 2005.  For the period from October
1, 2004 through  December 31, 2005,  the Company had 314 new  investors and
$319.5 million of aggregate  subscriptions from existing and new investors.
The number 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. 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.  In January 2006, the Company satisfied  redemption
requests in the amount of approximately $347.5 million.

                             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
volatility  and  correlation  that are lower than those of the broad equity
markets.   To  achieve  this  objective,   the  Company  allocates  all  or
substantially  all of its assets among privately  placed  investment  funds
(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 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").  The assets of each Investment Fund are allocated to
Advisors,  directly or  indirectly,  by (i) investing in  investment  funds
managed  by  Advisors  ("Advisor  Funds"),  (ii)  investing  with  Advisors
pursuant to investment  management  agreements in respect of  discretionary
managed  accounts,  or  (iii)  investing  in a  separate  exempted  company
incorporated  with  limited  liability  in the Cayman  Islands  (as defined
below).  (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.  See also
the  Schedule  of  Investments   in  the  financial   statements  for  more
information  about  the  level of the  Company's  investments  through  the
Investment Funds with certain Advisors.

     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  "PERFORMANCE OF
THE COMPANY--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.  For example,  multi-strategy  Advisors  invest across a
range  of  strategies.  These  Advisors  tend to be more  opportunistic  in
targeting  specific  event  driven,  equity  long/short  or relative  value
strategies during differing market environments.

     The  Managing  Member,  in its sole  discretion,  may also  invest the
Company's  assets with  Advisors  outside of an investment in an Investment
Fund. See "PERFORMANCE OF THE COMPANY--Direct Allocations to Advisors."

     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 ITEM 1A. "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  investment
objective.  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.  An  adjustment  to weights  was  implemented  as of July 1, 2004 to
reflect the Managing  Member's updated  expectations  for return,  risk and
correlations  for the Investment  Funds. In addition,  on July 1, 2005, the
Managing  Member  made  a  tactical  adjustment  to the  weightings  of the
Investment Funds. This adjustment to the weights among the Investment Funds
reflects the Managing Member's judgment and was implemented by the Managing
Member  gradually  following July 1, 2005. The Managing  Member  utilizes a
strategic sector allocation and periodically  re-evaluates the contribution
to the risk and return of the Company from each  investment  sector and may
in its sole discretion  adjust the Company's  assets or weights as it deems
advisable.  Adjustments 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 adjust the  Company's  assets at
the time and in the manner that it would otherwise seek to do. See ITEM 1A.
"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,  Which Could Cause Dilution
or  Concentration  of  the  Company's   Investments  or  Negatively  Affect
Allocation  of  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,  2005,  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 table below as of December  31, 2005 also  provides  the
approximate  allocation among the Investment Funds of the adjusted members'
equity as of December  31,  2005.  The adjusted  members'  equity  excluded
Redemptions  payable of $347,523,596 at December 31, 2005,  $128,546,636 at
December 31, 2004 and $34,529,625 at December 31, 2003,  which is reflected
in the financial  statements as a liability under GAAP. The Managing Member
believes  this  ratio  more  accurately  reflects  the  percentage  of  the
Company's  equity invested in the Investment  Funds given the timing of the
payment for the redemption  payable.  The Managing  Member made a strategic
adjustment  among  the  Investment  Funds  starting  on  July 1,  2004  and
gradually  changed the weightings of the Investment  Funds over the ensuing
period until  completing  the adjustment on January 1, 2005. The adjustment
to the weights  implemented  as of January 1, 2005  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  ITEM  1A.  "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 Ultimately 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, 2005
     ----------------------------------------------------------------
                                                      FAIR VALUE OF
                                      FAIR VALUE OF     COMPANY'S
                                        COMPANY'S     INVESTMENT AS
                      FAIR VALUE OF   INVESTMENT AS      A % OF
                        COMPANY'S         A % OF        ADJUSTED
                     INVESTMENT IN $     MEMBERS'       MEMBERS'
     INVESTMENT FUND      AMOUNT        EQUITY (1)     EQUITY (2)
     ----------------------------------------------------------------
          GELS         $294,096,911         37.97%         26.21%
     ----------------------------------------------------------------
           GED         $301,443,254         38.91%         26.86%
     ----------------------------------------------------------------
           GRV         $317,728,892         41.02%         28.32%
     ----------------------------------------------------------------
           GTT         $211,060,876         27.25%         18.81%
     ----------------------------------------------------------------
          Total       $1,124,329,933       145.15%(3)     100.20%(3)
     ----------------------------------------------------------------

(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  $347,523,596
     that was payable at December 31, 2005.

(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 at December 31, 2005.



                             DECEMBER 31, 2004
      ----------------------------------------------------------------
     INVESTMENT FUND  FAIR VALUE OF   FAIR VALUE OF   FAIR VALUE OF
                                                        COMPANY'S
                                        COMPANY'S     INVESTMENT AS
                                      INVESTMENT AS      A % OF
                        COMPANY'S         A % OF        ADJUSTED
                     INVESTMENT IN $     MEMBERS'       MEMBERS'
                          AMOUNT        EQUITY (1)     EQUITY (2)
     ----------------------------------------------------------------
          GELS           $226,276,134       23.63%         20.84%
     ----------------------------------------------------------------
           GED           $268,186,702       28.01%         24.69%
     ----------------------------------------------------------------
           GRV           $350,409,379       36.60%         32.27%
     ----------------------------------------------------------------
           GTT           $248,081,137       25.91%         22.84%
     ----------------------------------------------------------------
          Total        $1,092,953,352     114.15%(3)      100.64% (3)
     ----------------------------------------------------------------

(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 was payable at 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 at December 31, 2004.

                           DECEMBER 31, 2003
     ----------------------------------------------------------------
     INVESTMENT FUND                                 FAIR VALUE OF
                                      FAIR VALUE OF     COMPANY'S
                                        COMPANY'S     INVESTMENT AS
                       FAIR VALUE OF  INVESTMENT AS      A % OF
                         COMPANY'S        A % OF        ADJUSTED
                       INVESTMENT IN     MEMBERS'       MEMBERS'
                         $ AMOUNT       EQUITY (1)     EQUITY (2)
     ----------------------------------------------------------------
           GELS        $140,117,348         15.01%         14.48%
     ----------------------------------------------------------------
           GED         $221,899,920         23.78%         22.93%
     ----------------------------------------------------------------
           GRV         $359,311,989         38.50%         37.12%
     ----------------------------------------------------------------
           GTT         $249,583,571         26.74%         25.79%
     ----------------------------------------------------------------
          Total        $970,912,828        104.03%(3)     100.32%(3)
     ----------------------------------------------------------------

(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
     was payable at 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 at December 31, 2003.

                           DECEMBER 31, 2002
     -------------------------------------------------------------
     INVESTMENT FUND       FAIR VALUE OF         FAIR VALUE OF
                             COMPANY'S             COMPANY'S
                      INVESTMENT IN $ AMOUNT   INVESTMENT AS A %
                                              OF MEMBERS' EQUITY
     -------------------------------------------------------------
           GELS               $53,355,947             13.92%
     -------------------------------------------------------------
           GED                $84,386,691             22.02%
     -------------------------------------------------------------
           GRV               $146,920,415             38.34%
     -------------------------------------------------------------
           GTT                $98,921,553             25.81%
     -------------------------------------------------------------
          Total              $383,584,606            100.09% (1)
     -------------------------------------------------------------

(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.


                         PERFORMANCE OF THE COMPANY

     For the years ended December 31, 2005, 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."

                    JANUARY 1, 2005 - DECEMBER 31, 2005
           -----------------------------------------------------
    SERIES OF UNITS(1)     MONTH OF      NET RETURN FOR
                         ISSUANCE OF        PERIOD
                            UNITS       OUTSTANDING (2)
    -----------------------------------------------------
     Class A Series 1        --              4.57%
    -----------------------------------------------------
     Class A Series 9      January           4.57%
    -----------------------------------------------------
    Class A Series 10     February           5.17%
    -----------------------------------------------------
    Class A Series 11       March            4.12%
    -----------------------------------------------------
    Class A Series 12       April            4.69%
    -----------------------------------------------------
    Class A Series 13        May             6.28%
    -----------------------------------------------------
    Class A Series 14       June             5.87%
    -----------------------------------------------------
    Class A Series 15       July             4.71%
    -----------------------------------------------------
    Class A Series 16      August            3.26%
    -----------------------------------------------------
    Class A Series 17     September          2.31%
    -----------------------------------------------------
    Class A Series 18      October           1.04%
    -----------------------------------------------------
    Class A Series 19     November           2.77%
    -----------------------------------------------------
    Class A Series 20     December           1.46%
    -----------------------------------------------------


(1)  As of December  31,  2005,  the Company had 13 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, 2006, Class A Series 9 through Class A Series 20
     Units  were  converted  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.

(2)  The net return is shown for the month of issuance through December 31,
     2005.

                   JANUARY 1, 2004 - DECEMBER 31, 2004

            -----------------------------------------------------
             SERIES OF UNITS       MONTH OF      NET RETURN FOR
                   (1)           ISSUANCE OF         PERIOD
                                    UNITS       OUTSTANDING (2)
            -----------------------------------------------------
             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%
            -----------------------------------------------------


(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.
     Effective  January 1, 2005,  Class A Series 2 through Class A Series 8
     units  were  converted  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.

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

                  JANUARY 1, 2003 - DECEMBER 31, 2003

        -----------------------------------------------------
         SERIES OF UNITS      MONTH OF      NET RETURN FOR
               (1)           ISSUANCE OF        PERIOD
                                UNITS       OUTSTANDING (2)
        -----------------------------------------------------
         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%
        -----------------------------------------------------


(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.

(2)  The net return is shown for the month of issuance through December 31,
     2003.


                    APRIL 1, 2002 - DECEMBER 31, 2002

        -----------------------------------------------------
         SERIES OF UNITS      MONTH OF      NET RETURN FOR
               (1)           ISSUANCE OF        PERIOD
                                UNITS       OUTSTANDING (2)
        -----------------------------------------------------
         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%
        -----------------------------------------------------

(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.

(2)  The net return is shown for the month of issuance through December 31,
     2002.


     The Company only has one class of units at present, Class A Units. 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 units.  Among the classes of units 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 SEI's (as defined below) 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 (London  Interbank  Offered  Rate),  the Lehman  Brothers
Aggregate  Index,  the MSCI World Index and the S&P 500 Index.  The 3 Month
LIBOR,  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 (or dissimilar) 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 these indices.

<TABLE>
<CAPTION>
------------------------------ ------------ ------------ -------------- ------------- -------------
      INVESTMENT PERIOD        COMPANY (1)    3 MONTH       LEHMAN       MSCI WORLD     S&P 500
                                               LIBOR       BROTHERS        INDEX         INDEX
                                                           AGGREGATE
                                                             INDEX
------------------------------ ------------ ------------ -------------- ------------- -------------
<S>                               <C>          <C>           <C>           <C>           <C>
     1/1/2005-12/31/2005          4.57%        3.32%         2.43%         9.49%         4.91%
------------------------------ ------------ ------------ -------------- ------------- -------------
     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  9-20,  Class A Series 2-8,  Class A Series
     2-10  and  Class  A  Series  2-9  for  2005,   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 EQUITY LONG/SHORT, LLC

     GELS'  investment  objective  is to  target  attractive  risk-adjusted
absolute  returns  with  volatility  lower than the broad  equity  markets,
primarily  through  long  and  short  investment   opportunities  available
principally in the global equity  markets.  As of December 31, 2005,  GELS'
managing  member  (currently,  the  Managing  Member) had  allocated  GELS'
assets,  directly or indirectly,  to 29 Advisors,  although this number may
change materially over time as determined by GELS' managing member.  Equity
long/short  strategies  involve  making long and short equity  investments,
generally  based on fundamental  evaluations,  although it is expected that
Advisors in this investment sector will employ a wide range of styles.  For
example,   such  Advisors  may  (i)  focus  on  companies  within  specific
industries;  (ii) focus on companies only in certain  countries or regions;
(iii) focus on companies with certain ranges of market  capitalization;  or
(iv) employ a more diversified approach, allocating assets to opportunities
across investing  styles,  industry  sectors,  market  capitalizations  and
geographic regions.  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  1% of GELS as of  December  31,  2005,
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, 2005,  it had net returns on invested  assets as described in the table
below.

-------------------------------------- -----------------------------------
          INVESTMENT PERIOD                   NET RETURN FOR PERIOD
-------------------------------------- -----------------------------------
      1/1/2005 - 12/31/2005 (1)                       9.93%
-------------------------------------- -----------------------------------
      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 for 2003 and 2004 are
     also net of the  payment of an  administration  fee to GS HFS by GELS.
     The return shown for 2005 is net of an administration fee paid by GELS
     to SEI who became  the  administrator  of GELS on January 1, 2005.  No
     administration fee was paid to GS HFS by GELS in 2005.

(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  paid or made to 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  the  returns of
     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 for Class C Series 1 units 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 EVENT DRIVEN, LLC

     GED's  investment  objective  is to  target  attractive  risk-adjusted
absolute  returns with volatility and  correlation  that are lower than the
broad  equity  markets  by  allocating  assets  to  Advisors  that  operate
primarily in the global event driven sector. As of December 31, 2005, GED's
managing  member  (currently,  the  Managing  Member) had  allocated  GED's
assets,  directly or indirectly,  to 16 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  and  credit   opportunities/distressed
securities,  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 Advisors.
Often these strategies are employed  alongside risk arbitrage or distressed
investing.  An  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.  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.  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,  2005,
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, 2005
GED had net returns on invested assets as described in the table below.

-------------------------------------- -------------------------------------
     INVESTMENT PERIOD                        NET RETURN FOR PERIOD
-------------------------------------- -------------------------------------
      1/1/2005 - 12/31/2005 (1)                        7.65%
-------------------------------------- -------------------------------------
      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 for 2002,  2003 and
     2004 are also net of the payment of an administration fee to GS HFS by
     GED. The return shown for 2005 is net of an administration fee paid by
     GED to SEI who became the  administrator of GED on January 1, 2005. No
     administration fee was paid to GS HFS by GED in 2005.

GOLDMAN SACHS GLOBAL RELATIVE VALUE, LLC

     GRV's  investment  objective  is to  target  attractive  risk-adjusted
absolute  returns with volatility and  correlation  that are lower than the
broad  equity  markets  by  allocating  assets  to  Advisors  that  operate
primarily in the global  relative  value  sector.  As of December 31, 2005,
GRV's managing member (currently,  the Managing Member) had allocated GRV's
assets,  directly or indirectly,  to 19 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  exposure is generally
held to a minimum or completely  hedged.  Hence,  relative value strategies
endeavor  to  have  low  correlation  and  beta  to  most  market  indices.
Strategies that may be utilized in the relative value sector include credit
relative value,  convertible  arbitrage,  equity market neutral,  and fixed
income relative value. Other strategies may be employed as well.

   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  mispricing  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.

   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.  Convertible arbitrage strategies are long volatility strategies
and primarily  profit from rapid changes in stock price. A second source of
potential profit is the cash flows generated from the bond's coupon payment
and the short sale interest rebate.

   Equity Market Neutral

     Equity  market  neutral  strategies  try  to  avoid  market  direction
influences  and seek to  generate  returns  purely  from  stock  selection.
Advisors construct long and short baskets of equity securities with similar
characteristics  but different current  valuations,  with the view that the
market will gradually  realize these  different  valuations and correct the
difference.  Portfolios are designed to exhibit zero or negligible  beta to
all or most markets.  In many instances,  Advisors also attempt to immunize
portfolios to industry, market capitalization, and country exposure.

   Fixed Income Relative Value

     Fixed-income   relative  value  strategies  seek  to  exploit  pricing
anomalies that might exist across fixed-income securities and their related
derivatives.    Some   fixed-income   strategies   are   based   on   macro
considerations,  and  others are  primarily  quantitative  in nature  where
financial  modeling is an integral  component.  Mispricing in  fixed-income
instruments or baskets of securities are found when securities deviate from
historical   relationships  or  fair  value.  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, developed  countries,  although some specialists employ
similar techniques in developing country fixed-income markets.

     GS  Group  owned  approximately  2% of GRV as of  December  31,  2005,
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,  2005,  GRV had net  returns  on  invested  assets  as
described in the table below.

-------------------------------------- -------------------------------------
          INVESTMENT PERIOD                   NET RETURN FOR PERIOD
-------------------------------------- -------------------------------------
      1/1/2005 - 12/31/2005 (1)                        4.09%
-------------------------------------- -------------------------------------
      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 for 2003 and 2004 are
     also net of the payment of an administration fee to GS HFS by GRV. The
     return shown for 2005 is net of an  administration  fee paid by GRV to
     SEI who  became  the  administrator  of GRV on  January  1,  2005.  No
     administration fee was paid to GS HFS by GRV in 2005.

(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 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,  which generally fall into
one  of  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.   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 by trading in securities, commodities, interest rates, currencies and
other instruments. Advisors use quantitative models or discretionary inputs
to  speculate on the  direction  of  individual  markets or  subsectors  of
markets.  Advisors  invest  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,  financial instruments, stock indices, and
other financial market indices,  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). Advisors also
engage in the speculative trading of securities, including, but not limited
to, equity and debt  securities,  high yield  securities,  emerging  market
securities and other security  interests,  and 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.   Advisors   generally   trade  futures  and   securities  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,  2005,  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  Advisor at
the time of allocation.

     GS  Group  owned  approximately  6% of GTT as of  December  31,  2005,
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, 2005, GTT
had net returns on invested assets as described in the table below.

---------------------------------- -------------------------------
     INVESTMENT PERIOD                  NET RETURN FOR PERIOD
---------------------------------- -------------------------------
    1/1/2005 - 12/31/2005 (1)                   4.03%
---------------------------------- -------------------------------
    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)  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 for 2003 and 2004 are
     also net of the payment of an administration fee to GS HFS by GTT. The
     return shown for 2005 is net of an  administration  fee paid by GTT to
     SEI who  became  the  administrator  of GTT on  January  1,  2005.  No
     administration fee was paid to GS HFS by GTT in 2005.

(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.


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, as well as their asset capacity limits and constraints. 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 each 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.

     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  an  Investment  Fund  or  a  Portfolio  Company  through  which  an
Investment Fund allocates assets to such Advisor,  or (ii) Advisor Funds in
which the Investment Fund invests. See "PORTFOLIO  COMPANIES." In addition,
any  references in this Annual Report to strategies or techniques  utilized
by Advisors on behalf of the  Investment  Funds may also be utilized by the
Advisors on behalf of the  Company,  should the Managing  Member  decide to
make  investments  with Advisors  outside of an investment in an Investment
Fund. See "--Direct  Allocations to Advisors" below.  References  herein to
Advisors include Advisor Funds managed by such Advisors.

DIRECT ALLOCATIONS TO ADVISORS

     The Managing  Member,  in its sole  discretion,  may from time to time
allocate some or all of the Company's  assets to Advisors  directly (rather
than through an investment in the  Investment  Funds).  In such cases,  the
Managing Member may allocate  Company assets to Advisors similar to the way
Investment  Funds  allocate their assets (i.e.,  by investing,  directly or
indirectly, in Advisor Funds, Managed Accounts or Portfolio Companies). Any
Advisor selection, portfolio design and monitoring will be conducted by the
Managing Member in the same manner as described above under  "--Overview of
the  Investment  Process  of the  Investment  Funds"  with  respect  to the
Investment Funds.

     The Managing  Member will assign each direct  allocation to an Advisor
to a particular hedge fund sector (and examine the risk  characteristics of
such  investments),  so that such  direct  allocations  will be taken  into
account by the Managing  Member for purposes of determining the appropriate
allocation of the Company's assets among the four Investment  Sectors.  See
"INVESTMENT   PROGRAM--Allocation   Among  the   Investment   Funds."   The
Administrator  (as defined below) will value such direct  allocations using
the same  policy  as the  Investment  Funds  apply to  valuations  of their
assets.

     As  described  below,  there is no  administration  fee payable at the
Company  level  with  respect  to assets  of the  Company  attributable  to
investments in the Investment Funds. Administration fees are charged at the
Investment Fund level.  However, to the extent the Company allocates assets
to Advisors other than through Investment Funds,  administration  fees will
be payable. See "FEES AND EXPENSES." In addition,  if the Company allocates
assets to Advisors other than through  Investment  Funds,  the Company will
bear its pro rata portion of the  offering,  organizational  and  operating
expenses  of  such  Advisor  Funds  and  Portfolio   Companies,   including
management and incentive fees of the Advisors.

     Should the Managing  Member invest the Company's  assets with Advisors
other than through an investment in an Investment Fund, the risks described
herein with respect to the Investment Funds will also apply to the Company.
See ITEM 1A. "RISK  FACTORS" and  "POTENTIAL  CONFLICTS  OF  INTEREST."  In
addition,  any references in this Annual Report to strategies or techniques
utilized by Advisors on behalf of the Investment Funds may also be utilized
by the Advisors on behalf of the Company.

CERTAIN  CONSIDERATIONS  RELATING TO LIMITED CAPACITY OF POTENTIAL ADVISORS
OF CERTAIN INVESTMENT FUNDS

     Goldman Sachs or accounts or other investment funds managed by Goldman
Sachs may invest in Investment Funds,  Advisor Funds or Portfolio Companies
or allocate  assets to the  Investment  Funds'  existing  Advisors  through
Managed  Accounts.  Such  entities or  accounts  may also seek to invest in
funds managed by, or enter into managed account agreements with, investment
managers  to which it would be  appropriate  for the  Company  to  allocate
assets. For example, GS HFS is currently the managing member of three other
Delaware  limited  liability  companies  (the  "HFP U.S.  Funds"),  and the
investment  manager  of three  Irish  public  limited  companies  (the "HFP
Ireland Funds" and together with the HFP U.S. Funds, the "HFP Funds"), each
of which has a similar investment objective and utilizes similar strategies
to those of the Company and the corresponding offshore fund, respectively.

     In  addition,  each of the HFP U.S.  Funds  generally  invests  all or
substantially  all of its assets among other investment funds managed by GS
HFS. These  investment  funds include the Investment  Funds and other funds
that have  investment  objectives and strategies  similar to the Investment
Funds. Similarly, the HFP Ireland Funds generally invest their assets among
investment  funds  managed by GS HFS that have  investment  objectives  and
strategies  similar  to the  Investment  Funds.  GS HFS  may in the  future
develop  and  manage  other   investment   vehicles  that  have  investment
objectives and strategies  that are similar to the Company,  the Investment
Funds and the funds in which the HFP Funds invest.

     Advisors may limit the amount of assets or the number of accounts that
they will manage. In determining how to allocate  investment  opportunities
among the Investment  Funds,  the other funds in which the HFP Funds invest
and any other  investment fund or account,  Goldman Sachs and/or GS HFS, as
applicable,  will take into account the investment  objectives of each such
entity or account and such other  considerations  as they deem  relevant in
their sole discretion.

     Such  allocations  may  present  conflicts.  In  particular,   certain
Advisors of the funds in which the HFP Funds invest are currently closed to
new investment.  Such Advisors  currently  manage a material portion of the
total  assets  of the  funds  in  which  the HFP  Funds  invest.  It is not
anticipated  that  the  Investment  Funds  or the  Company  will  generally
allocate  assets  to such  Advisors.  If at any  time in the  future  these
Advisors accept  additional  investments,  the funds in which the HFP Funds
invest may be given  priority over the  Investment  Funds or the Company in
the determination of how any available capacity is allocated.

HEDGING, LEVERAGE AND OTHER STRATEGIES

   Hedging

     From time to time in its sole  discretion,  the  Managing  Member  may
employ  various  hedging  techniques to reduce  certain actual or potential
risks to which  the  Company's  portfolio  may be  exposed.  These  hedging
techniques  generally  will  involve  the use of  derivative  transactions,
including  swaps,  futures  and  forward  contracts,   exchange-listed  and
over-the-counter  put and call options,  currency  contracts,  and interest
rate transactions.  The Managing Member may employ these hedging techniques
directly or by investing a portion of the  Company's  assets in one or more
entities managed by the Managing Member, an affiliate thereof or an Advisor
that engages in such techniques.

   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,
2005,  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 ITEM 1A. "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,  its  affiliates  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.  On November 24, 2004,  the
Company  entered into a credit facility with a financial  institution  (the
"Facility  Counterparty") to replace its then existing credit facility. The
Company made an initial  borrowing of $1,000,000  under this  facility.  On
January 3, 2006,  the Company  increased the maximum  borrowing  limit from
$40,000,000 to $76,000,000 under this credit facility. Effective January 3,
2006,  the Company may request to borrow up to $76,000,000 in the aggregate
at the discretion of the Facility Counterparty. Prior to September 1, 2005,
the company could request to borrow up to $45,000,000 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
$76,000,000.  The proceeds of the  borrowings  must be used  primarily  for
purposes of refinancing existing indebtedness, making further investment in
a pool of funds,  funding  liquidity of redemptions of Units in the Company
and  managing  the  cash  flow of the  Company.  There  were no  borrowings
outstanding  at December 31, 2005 and the amount of cash  borrowed  totaled
$3,000,000  at December  31,  2004.  As security  for its  borrowings,  the
Company  granted  the  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 Facility  Counterparty.  Each Investment Fund may
pledge its assets in order to secure any such borrowings.  The Advisors may
also  borrow  funds for similar  purposes or enter into other  transactions
similar to the Company and the Investment Funds (including from or with the
GS Group) as described above in this paragraph.  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 Types of Advisor 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 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 ITEM 1A. "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 40%-50% 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 ITEM 1A. "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
discretionary  account.  The managing member of the Investment  Funds or an
affiliate  thereof is the investment  manager of each Portfolio  Company to
which the Investment Funds allocate  assets,  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 their 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
or Irish 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  managing  member of the  applicable
Investment  Fund, in its capacity as 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 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. A
Portfolio Company may issue shares of various series or classes,  which may
bear fees or have terms that differ from the shares held by the  applicable
Investment  Fund  or  the  corresponding  offshore  investment  fund.  Each
Portfolio  Company  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.

     Each Portfolio Company is expected to be formed as an exempted company
incorporated  with limited  liability in the Cayman Islands.  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 investors of the Portfolio Company (which will be negotiated on a
case-by-case  basis with each investor,  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 under "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.

     Goldman  Sachs and certain of its  affiliates  will be issued the only
voting shares of each Portfolio Company,  and only those voting shares will
be  entitled  to vote on most  Portfolio  Company  matters,  including  the
election of the Portfolio Company's directors.  Accordingly, an investor in
a Portfolio  Company  (including the applicable  Investment Fund) generally
will have little or no control rights with respect to the activities of the
Portfolio  Company,  including  modifying  or  enforcing  the  terms of the
investment  management  agreement  between  the  Portfolio  Company and the
Advisor.  In addition,  the terms of a Portfolio  Company may be amended in
accordance  with the memorandum of association  and articles of association
of such  Portfolio  Company,  without  notification  to the  Members or the
investors in the applicable Investment Fund (including the Company).

     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 investors
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 investors of the Portfolio
Company do not  suffer any  material  adverse  economic  effect as a result
thereof  or (ii) the  investors  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 applicable month-end,  calculated
prior to any reduction in net assets due to Advisor fees. Effective January
1, 2005, an administration fee was 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  investor  in  a  Portfolio  Company  (including  the  applicable
Investment  Fund) shares in the appreciation and depreciation of the NAV of
the  Portfolio  Company  for any  accounting  period  pro rata based on the
relative  NAV of  the  investor's  interest  as of the  beginning  of  such
accounting   period   (adjusted   as   necessary   to  take  into   account
subscriptions,  redemptions  and  distributions,  any Advisor  fees and any
performance based Advisor compensation or allocations not borne in the same
proportions  by each  investor,  and  other  events  as  determined  by the
Portfolio Company's board of directors in its sole discretion).

     The  applicable   Investment  Fund  bears,   indirectly   through  its
investment in each Portfolio Company, a pro rata portion of the expenses of
each  Portfolio  Company in which it invests.  Such  expenses  include each
Portfolio Company's 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." For instance, each Portfolio Company is responsible for (and the
applicable  Investment  Fund and, in turn, the Company  indirectly  will be
affected by)  indemnifying  each of the managing  members of the applicable
Investment  Fund (in its capacity as  investment  manager of the  Portfolio
Company), Goldman Sachs, members of the board of directors, officers of the
Portfolio  Company,  persons  controlling,  controlled  by or under  common
control with any of the foregoing,  or any of their  respective  directors,
members, stockholders, partners, officers, employees or controlling persons
against any losses,  claims,  costs,  damages or  liabilities to which such
person may become  subject in connection  with any matter arising out of or
in connection with the business or affairs of the Portfolio Company, except
to the extent that any such loss, claim,  cost, damage or liability results
solely from the willful  misfeasance or gross  negligence  (as  interpreted
under the laws of the State of New York) of, or any criminal wrongdoing by,
such indemnified person. A Portfolio Company may agree to indemnify certain
of the Advisors and their respective  officers,  directors,  and affiliates
from liability,  damage,  cost, or expenses to which such person may become
subject in connection  with matters  arising out or in connection  with the
business or affairs of the Portfolio Company.

     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  in  respect  of each  series of Class A Units 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 in respect of each
series of Class A Units are not reduced to reflect  any  accrued  incentive
allocation (the "Incentive Allocation").  The Management Fee payable by any
other class of Units may be different  from the  Management  Fee payable by
the Class A Units.  The Management Fee with respect to each series of Units
will reduce the capital account of the series of units to which it relates,
as described  under  "--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 are not subject
to any management fees or incentive allocation, 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.









                         [Left Blank Intentionally]

<PAGE>


     Fees and Expenses for the Company for the year ended December 31, 2005
are as follows:

<TABLE>
<CAPTION>
                                Class A      Class A     Class A      Class A      Class A      Class A      Class A      Class A
                                Series 1    Series 9    Series 10    Series 11    Series 12    Series 13    Series 14    Series 15
                                ---------------------------------------------------------------------------------------------------
<S>                                 <C>         <C>          <C>          <C>          <C>           <C>          <C>         <C>
Ratios to average
net assets (annualized):
    Expenses                        1.36%       1.37%        1.37%        1.37%        1.36%         1.37%        1.36%       1.36%
                                ---------------------------------------------------------------------------------------------------
    Incentive allocation            0.22%       0.24%        0.27%        0.21%        0.24%         0.32%        0.30%       0.24%
                                ---------------------------------------------------------------------------------------------------
    Total expenses
      and incentive
      allocation                    1.58%       1.61%        1.64%        1.58%        1.60%         1.69%        1.66%       1.60%
                                ===================================================================================================

</TABLE>

<TABLE>
<CAPTION>
                                Class A      Class A     Class A      Class A      Class A
                               Series 16    Series 17   Series 18    Series 19    Series 20
                               ------------------------------------------------------------
Ratios to average
net assets (annualized):
<S>                                 <C>         <C>          <C>          <C>          <C>
    Expenses                        1.35%       1.33%        1.33%        1.33%        1.31%
                               ------------------------------------------------------------
    Incentive allocation            0.17%       0.12%        0.06%        0.14%        0.08%
                               ------------------------------------------------------------
    Total expenses
      and incentive
      allocation                    1.52%       1.45%        1.39%        1.47%        1.39%
                               ============================================================
</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
2005 and are based on a $1,000,000  investment  in Class A Series 1 made as
of January 1, 2005.

-------------------------------- ------------------------ ---------------------
       Fees and Expenses            Percentage Amount         Dollar Amount
-------------------------------- ------------------------ ---------------------
Management Fee                          1.25% (1)               $12,857 (4)
-------------------------------- ------------------------ ---------------------
Incentive Allocation                       5% (2)                $2,324 (4)
-------------------------------- ------------------------ ---------------------
Administration Fee                        N/A (3)                $1,031 (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 paid 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 an  administration  fee of 0.20% for services rendered
     to it as administrator.  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 as of January 1, 2005, SEI (as
     defined below) became the  administrator  of each  Investment Fund and
     certain Portfolio Companies, and currently serves as the administrator
     with respect to all of the Investment  Funds and Portfolio  Companies.
     Throughout 2005, the Administration Fee Rate (as defined below) was in
     the  range of 0.07%  to  0.10%,  but in the  future  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, 2005.

(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, among other things,  calculating the net
asset value ("NAV") for the Company;  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.  In  addition,  the  Administrator  provides  the
Company  with,  among  other  things,  office  space,  utilities,  computer
equipment and services, and secretarial,  clerical and other personnel. See
ITEM 1A. "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  Ultimately  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."

     Unless  the  Company   allocates  assets  directly  to  Advisors  (see
"PERFORMANCE OF THE COMPANY--Direct Allocations to Advisors"), the Managing
Member does not receive a fee directly  from the Company for its service as
the  Administrator.  However,  the  Administrator  receives a per  investor
servicing  charge  and will be  reimbursed  by the  Company  for all of its
reasonable out-of-pocket expenses. In 2004, the Managing Member also served
as the administrator of each Investment Fund and each Portfolio Company and
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  applicable  month-end,  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 as of January 1, 2005,  SEI Global  Services,  Inc.  ("SEI")
became the  administrator  of each  Investment  Fund and certain  Portfolio
Companies, and currently serves as the administrator with respect to all of
the Investment Funds and Portfolio Companies.  An administration fee is not
charged at the Portfolio Company level, and the  administration fee charged
at the  Investment  Fund level is currently  paid with respect to assets of
the Investment Funds invested in Portfolio  Companies.  The  administration
fee rate ( 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").  Throughout 2005, the Administration Fee Rate was in
the range of 0.07% to 0.10%, but in the future 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 Managing Member (in its capacity as  Administrator of the Company)
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 may assist in the  preparation  of the
Company's periodic and other reports including filing such reports with 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. In the future, the
Managing Member may cease to serve as the  administrator of the Company and
SEI may  perform  such duties  directly.  The  Managing  Member and SEI are
currently discussing implementing such changes.

     The Managing  Member,  the Company or any Investment  Fund 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  and  SEI   provides
administration   services  to  the  Investment  Funds,   including  without
limitation the compensation  arrangements and  indemnification  obligations
described above.

     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.

     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 LLC
Agreement or the Company's other  organizational  documents or subscription
agreement  or any  modification  or  supplement  to the  Private  Placement
Memorandum dated January 2006 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.

     Advisors are  compensated  by the  Investment  Funds on terms that may
include fixed and/or  performance-based  fees or  allocations.  Fixed fees,
generally calculated and paid to Advisors monthly based upon the NAV of the
allocation  to  such  Advisor  are  currently  expected  to  range  (on  an
annualized basis) from  approximately 0% to 4%.  Performance-based  fees or
allocations of Advisors are currently  expected to range from 15% 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  materially  exceed these ranges.  The Company
bears 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  ITEM  1A.   "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."

     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,  an Investment Fund's, an Advisor Fund's or a
Portfolio  Company's  expenses  described  above. The Company or applicable
Investment  Fund,  Advisor Fund or Portfolio  Company  will  reimburse  the
Managing Member, the Administrator or sub-administrator  for the payment of
any such expenses.

     The Managing  Member reserves the right,  in its sole  discretion,  to
partially or  completely  waive fees, or to charge no fees or fees that are
greater or less than or in other ways different from the fees being charged
to the Company and the  Members,  as described  in this Annual  Report,  in
respect of certain  Members  (including  without  limitation  affiliates or
personnel of Goldman Sachs), as may be agreed to by the Managing Member and
such Members, and the Managing Member may make appropriate amendments to or
supplement the LLC Agreement  (including in connection with the creation of
additional  classes or series of Units) if required to reflect any such fee
arrangements  without  notice  to or the  consent  of other  Members.  Such
Members may include investment vehicles formed or managed by Goldman Sachs,
or formed for purposes of  participation by Goldman Sachs or its affiliates
or personnel.

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 by such series'  allocable share of the appreciation
or depreciation of the net assets of the Company (as determined  below) for
each  accounting  period*,  and (iv) decreased by any Incentive  Allocation
(discussed below) and any Management Fee accrual in respect of such series.
For each  accounting  period,  the  appreciation or depreciation of the net
assets of the Company  (before  reduction for any Management  Fee) shall be
allocated  among  each  series of Units pro rata  based  upon the  relative
capital  accounts  of each  series  (determined  prior to any  year-to-date
accrued  Incentive  Allocation)  as of the  beginning  of  such  accounting
period, after adjustment for any capital  contributions,  distributions and
redemptions as of the beginning of such  accounting  period.  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 and for other events and items as determined by the Managing Member.

---------------------
*     An "accounting  period" refers to the following periods:  the
      initial  accounting  period  began upon the  commencement  of
      operations  of  the  Company.   Each  subsequent   accounting
      period  begins  immediately  after the close of the preceding
      accounting  period.  Each  accounting  period  closes  at the
      close of  business  on the first to occur of (i) the last day
      of each  calendar  month,  (ii) the  last day of each  fiscal
      year of the Company,  (iii) the date immediately prior to the
      effective  date of the  admission  of a new Member,  (iv) the
      date   immediately   prior  to  the  effective   date  of  an
      additional capital  contribution by a Member, or (v) the date
      immediately  prior to the effective date of any redemption or
      complete  withdrawal  by a  Member.  In  addition,  the final
      accounting   period   shall  end  on  the  date  the  Company
      dissolves.

     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  applicable
period),  the Managing  Member  receives an Incentive  Allocation  for each
series of Class A Units  equal to 5% of the amount by which the NAV of each
series  of  Class A 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) exceeds the Prior High NAV (as defined below)
of such  series of Class A Units.  The  Incentive  Allocation  of any other
class of Units may be different from the Incentive  Allocation of the Class
A Units.

     The "Prior High NAV" with respect to a series of Units  initially will
be  equal  to the NAV of such  series  immediately  following  the  initial
issuance  of such  series.  The Prior High NAV with  respect to a series of
Units  immediately  following  the end of any year for  which an  Incentive
Allocation  has been made with  respect to such  series  will be "reset" to
equal  the NAV of such  series  as of  such  time,  unless  the  series  is
exchanged  into  another  series,  in which case the Prior High NAV will be
"reset"  to equal the NAV of such other  series as of such time.  The Prior
High NAV for each  series  of Units  shall be  appropriately  ADJUSTED,  as
determined by the Managing  Member in its sole  discretion,  to account for
any  additional  contributions,  distributions  and  redemptions  made with
respect to such series of Units. Since each outstanding series of Units may
have a different Prior High NAV, the Managing Member will earn an Incentive
Allocation with respect to each series of Units the NAV of which, as of the
close of the applicable  measurement period, exceeds its Prior High NAV for
such  period,  even though it will not earn an  Incentive  Allocation  with
respect  to any  series of Units the NAV of which,  as of the close of such
measurement period, did not exceed its Prior High NAV for such period.

     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  accounts  of the Members who
hold Units in 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.
Appropriate  adjustments  will be made to the  calculation of the Incentive
Allocation for extraordinary circumstances,  including, for example, if the
Managing Member permits a contribution or redemption by a Member to be made
intra-month.

     GS HFS, as managing member of each Investment  Fund, is entitled to an
incentive  allocation,  which is  substantially  similar to the arrangement
described  above.  However,  the Company will invest in a class of units of
each of the  Investment  Funds that is not  subject  to any such  incentive
allocation.

     The Managing  Member reserves the right,  in its sole  discretion,  to
partially or completely waive any  performance-based  incentive allocations
or   performance   compensation   arrangements,   or  to   apply   no  such
performance-based   fees  or  allocations  or  performance-based   fees  or
allocations  that are greater or less than or in other ways  different from
the incentive  allocation  described in this Annual  Report,  in respect of
certain Members (including  without  limitation  affiliates or personnel of
Goldman  Sachs),  as may be  agreed  to by the  Managing  Member  and  such
Members,  and the Managing  Member may make  appropriate  amendments  to or
supplement the LLC Agreement  (including in connection with the creation of
additional  classes or series of Units) if  required  to  reflect  any such
arrangements  without  notice  to or the  consent  of other  Members.  Such
Members may include investment vehicles formed or managed by Goldman Sachs,
or formed for purposes of  participation by Goldman Sachs or its affiliates
or personnel.

                            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 Members,  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, 2005,  the Managing
Member  was  supported  by  approximately  108  employees  of the GS  Group
worldwide,  of which approximately 33 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 83 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 AND
THE INVESTMENT FUNDS

     The Goldman Sachs Group, Inc. is a worldwide,  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, proprietary trader, prime broker,
lender,  agent and principal,  and has other direct and indirect interests,
in the global fixed income, currency,  commodity,  equity and other markets
in which the Company  and the  Investment  Funds  directly  and  indirectly
invest.  As a result,  The Goldman Sachs Group,  Inc., the Managing Member,
GSAM (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.  Neither the
Company nor the Investment  Funds will be entitled to compensation  related
to such businesses. In addition, the Advisors, 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,  financial and other interests
in securities, instruments and companies that may be directly or indirectly
purchased or sold by the Company,  the Investment Funds, the Advisor Funds,
the  Portfolio   Companies  or  the  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 Company or the Investment Funds.

     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.adviserinfo.sec.gov).  A copy of Part 2
of  the  Managing  Member's  Form  ADV  will  be  provided  to  Members  or
prospective investors 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 INTERESTS AND THE ALLOCATION OF INVESTMENT OPPORTUNITIES

     GOLDMAN SACHS' OTHER ACTIVITIES MAY HAVE AN IMPACT ON THE SELECTION OF
     ADVISORS

     The Managing  Member,  as the managing member of each Investment Fund,
selects Advisors for the Investment Fund in accordance with its obligations
as the managing member of the Investment Fund.  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/or their Advisor Funds,  Portfolio  Companies and Managed
Accounts,  and provide a variety of  products  and  services  to them.  The
amount of such compensation,  commissions, payments, rebates or services to
Goldman Sachs may be greater if the managing member of the Investment Funds
selects  such  Advisors  than it would  have been had other  Advisors  been
selected which also might have been appropriate for the Investment Funds.

     As a result of the various  activities  and interests of Goldman Sachs
as  described  in  the  first  paragraph  under  "--General  Categories  of
Conflicts  Associated with the Company and the Investment  Funds" above, it
is likely  that the  Company and the  Investment  Funds will have  multiple
business  relationships  with,  and 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
undertake  transactions in securities in which Goldman Sachs makes a market
or otherwise has other direct or indirect interests. In addition, while the
Managing  Member,  as the  managing  member of the Company and the managing
member of the Investment Funds, will make decisions for the Company and the
Investment  Funds,  respectively,  in accordance  with its  obligations  to
manage  the  Company  and the  Investment  Funds  appropriately,  the fees,
compensation  and other  benefits  to  Goldman  Sachs  (including  benefits
relating to business  relationships  of Goldman  Sachs)  arising from those
decisions may be greater as a result of the  selection of certain  Advisors
than they would have been had other Advisors been selected which also might
have been appropriate for the Investment Funds.

     For example,  while the Managing Member, as the managing member of the
Investment  Funds,  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 (and indirectly the Company) 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 Company or the Investment
Funds,  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 UNITS AND INTERESTS
     IN THE INVESTMENT FUNDS

     Goldman  Sachs,  its  sales  personnel  and  other  financial  service
providers, have interests in promoting sales of the Company, 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,  the
Investment Funds or their respective  investors.  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  or the  Investment  Funds may be
greater  than the  remuneration  and  profitability  resulting  from  other
products.

     Goldman  Sachs may also have  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
consultants'   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 or the Investment Funds may
receive fees from Goldman  Sachs,  the Company or the  Investment  Funds in
connection  with the  distribution  of Units or interests in the Investment
Funds,  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 Fund
interests or engage in  transactions  for the Advisors and/or their Advisor
Funds,  Portfolio Companies and Managed Accounts.  Goldman Sachs, including
the Managing Member, may, when it considers it appropriate, make charitable
contributions to institutions, including those that have relationships with
clients or personnel of clients.  Personnel of Goldman  Sachs may also make
political  contributions in accordance with law. As a result, those persons
and institutions may have conflicts  associated with their promotion of the
Company or the Investment  Funds,  or other dealings with the Company,  the
Investment Funds or the Advisors,  that would create incentives for them to
promote the Company,  the  Investment  Funds or the Advisors or raise other
conflicts.

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

     Goldman  Sachs  has  potential   conflicts  in  connection   with  the
allocation of investments  or transaction  decisions for the Company or the
Investment  Funds,  including in  situations  in which Goldman Sachs or its
personnel (including personnel of the Managing Member) have interests.  For
example,  an Investment Fund may be competing for investment  opportunities
with  current  or future  accounts  or funds  managed or advised by Goldman
Sachs (including the Managing Member).  These accounts or funds may provide
greater fees or other compensation  (including  performance-based  fees) to
Goldman  Sachs  (including  the Managing  Member) or in which Goldman Sachs
(including  the  Managing   Member)  or  its  personnel  have  an  interest
(collectively, the "Client/GS Accounts").

     Goldman  Sachs  may  manage  or advise  Client/GS  Accounts  that have
investment  objectives  that are  similar  to those of the  Company  or the
Investment  Funds  and/or may seek to invest  with  Advisors  with which an
Investment  Fund invests or that would be an appropriate  investment for an
Investment  Fund.  This  will  create  potential  conflicts  and  potential
differences  among the Company,  the Investment  Funds and other  Client/GS
Accounts,  particularly  where  there is  limited  availability  or limited
liquidity  for those  investments  or where  Advisors  limit the  number of
investors  in or the size of their  Advisor  Funds or the  amount of assets
that they manage. The Managing Member has developed policies and procedures
that  provide  that it will  allocate  investment  opportunities  among the
Company, the Investment Funds and other Client/GS Accounts in a manner that
it considers,  in its sole  discretion  and  consistent  with its fiduciary
obligation to each Client/GS  Account,  to be reasonable and equitable over
time.

     The  Managing  Member  will  make  allocations  for the  Company,  the
Investment  Funds and other  Client/GS  Accounts with reference to numerous
factors that may include,  without limitation,  relative sizes and expected
future sizes of the applicable  accounts,  expected  future capacity of the
applicable Advisor,  investment objectives and guidelines,  risk tolerance,
availability  of other  investment  opportunities,  and available  cash for
investment.  Although  allocating  investment  opportunities  with Advisors
among  the  Investment  Funds  and  other  Client/GS  Accounts  may  create
potential  conflicts of interest  because of the interests of Goldman Sachs
or its  personnel  or because  Goldman  Sachs may receive  greater  fees or
compensation from one of the Client/GS Account's allocations,  the Managing
Member  will not make  allocation  decisions  based  on such  interests  or
greater fees or compensation.

     Allocation  decisions among accounts may be more or less  advantageous
to any one account or group of accounts.  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 the Company or an Investment Fund, as applicable, or
is appropriate  for, or available to, the Company or an Investment Fund, as
applicable, but in different sizes, terms or timing than is appropriate for
other Client/GS Accounts.  Therefore,  the amount,  timing,  structuring or
terms of an  investment  by the  Company or an  Investment  Fund may differ
from, and  performance  may be lower than,  investments  and performance of
other Client/GS Accounts.

     The Managing  Member is currently the managing  member of the HFP U.S.
Funds,  and  the  investment  manager  of the  HFP  Ireland  Funds  and HFP
Institutional.  The HFP Funds  generally  have  investment  objectives  and
strategies similar to those of the Company and the Company, except that HFP
Institutional  is currently  intended for  investment  by benefit plans and
other similar investors.

     Certain  of the  HFP  Funds  allocate  assets  to  Advisors  that  are
currently  not accepting  any new  investments.  Such Advisors may manage a
material  portion  of  the  total  assets  of  the  HFP  Funds.  It is  not
anticipated that the Company, indirectly through the Investment Funds, will
generally  allocate  assets to such Advisors.  If at any time in the future
these Advisors accept additional investments,  the HFP Funds that currently
allocate  assets to such Advisors may be given priority over the Investment
Funds in the determination of how any such available capacity is allocated.

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

     From time to time and subject to the  Managing  Member's  policies and
procedures  regarding  informational  barriers,  the  Managing  Member  may
consult  with  personnel in other areas of Goldman  Sachs,  or with persons
unaffiliated  with Goldman Sachs, or may form investment  policy committees
comprised of such personnel. The performance by such persons of obligations
related to their  consultation  with personnel of the Managing Member 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  Managing  Member's
proposed investment  activities of the Company or 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 the
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 makes decisions for the Company and the Investment
Funds based on their respective  investment  programs.  The Managing Member
from  time to time may have  access to  certain  fundamental  analysis  and
proprietary  technical models developed by Goldman Sachs and its personnel.
Goldman  Sachs  will  not be  under  any  obligation,  however,  to  effect
transactions on behalf of the Company or the Investment Funds in accordance
with such analysis and models. 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's  personnel 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
an Investment Fund to invest with certain  Advisors.  The Investment Fund's
and, in turn, the Company's investment  flexibility may be constrained as a
consequence.

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. The Managing Member will manage
the  Company,  the  Investment  Funds and the other  Client/GS  Accounts it
manages in  accordance  with their  respective  investment  objectives  and
guidelines.  However,  Goldman Sachs may give advice, and take action, with
respect to any  current or future  Client/GS  Accounts  that may compete or
conflict with the advice the Managing  Member may give to the Company or an
Investment Fund, or may involve a different timing or nature of action than
with respect to the Company or an Investment Fund.

     Transactions  undertaken  by Goldman  Sachs or Client/GS  Accounts may
adversely  impact the Company and the Investment  Funds.  Goldman Sachs and
one or more Client/GS  Accounts may buy or sell positions while the Company
or an Investment Fund,  Advisor Fund,  Portfolio Company or Managed Account
is undertaking  the same or a differing,  including  potentially  opposite,
strategy,  which could disadvantage the Advisor Fund,  Portfolio Company or
Managed Account and, in turn, the relevant Investment Fund and the Company.
For example,  the Company or an Investment  Fund,  Advisor Fund,  Portfolio
Company  or  Managed  Account  may buy a  security  and  Goldman  Sachs  or
Client/GS  Accounts may establish a short  position in that same  security.
The  subsequent  short  sale may result in  impairment  of the price of the
security  which the  Company,  Investment  Fund,  Advisor  Fund,  Portfolio
Company or Managed Account holds. Conversely,  the Company or an Investment
Fund,  Advisor Fund,  Portfolio  Company or Managed Account may establish a
short position in a security and Goldman Sachs or other Client/GS  Accounts
may buy that  same  security.  The  subsequent  purchase  may  result in an
increase of the price of the underlying position in the short sale exposure
of the Company, Investment Fund, Advisor Fund, Portfolio Company or Managed
Account and such increase in price would be to the detriment of the Advisor
Fund,  Portfolio  Company or Managed  Account  and, in turn,  the  relevant
Investment Fund and the Company.

     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 Advisor
Funds,  Portfolio  Companies  or Managed  Accounts,  particularly,  but not
limited  to,  in  small  capitalization,  emerging  market  or less  liquid
strategies.  For example,  an 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 Advisor Fund,  Portfolio  Company
or Managed  Account  and, in turn,  the  relevant  Investment  Fund and the
Company.

     Conflicts  may  also  arise  because  portfolio  decisions  made by an
Advisor may benefit other Client/GS  Accounts.  For example,  the sale of a
long position or establishment of a short position by an Advisor may impair
the  price of the same  security  sold  short  by (and  therefore  benefit)
Goldman Sachs or other Client/GS  Accounts,  and the purchase of a security
or  covering of a short  position in a security by an Advisor may  increase
the price of the same  security  held by (and  therefore  benefit)  Goldman
Sachs or other Client/GS Accounts.

     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 investment 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 as,  different  from or made at
different times than positions taken for the Company or an Investment Fund.
To reduce the possibility that the Company and the Investment Funds 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 and the Investment  Funds' portfolio  transactions.  The Managing
Member has adopted a code of ethics  restriction  required by the  Advisers
Act and  monitoring  procedures  relating  to certain  personal  securities
transactions  by the Managing  Member  personnel  which the Managing Member
deems to involve potential  conflicts  involving such personnel,  Client/GS
Accounts  managed by the Managing  Member and the Company or the Investment
Funds.  The code of ethics  requires  that the  Managing  Member  personnel
comply  with  all  applicable  U.S.  federal  securities  laws and with the
fiduciary  duties  and  anti-fraud  rules to which the  Managing  Member is
subject.

     Clients of Goldman Sachs (including Client/GS Accounts) may have, as a
result of receiving  client  reports or  otherwise,  access to  information
regarding the Managing Member's  transactions (and, when Goldman Sachs is a
client of an  Advisor,  transactions  of such  Advisor)  or views which may
affect such  clients'  transactions  outside of accounts  controlled by the
Managing  Member,   and  such   transactions  may  negatively   impact  the
performance of the Company,  the Investment  Funds or the assets managed by
the Advisors.  The Company,  the Investment Funds and the assets managed by
the  Advisors  may also be  adversely  affected  by cash  flows and  market
movements  arising  from  purchase  and  sales  transactions,  as  well  as
increases of capital in, and  withdrawals of capital from,  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. In addition, subject to applicable law, the
Advisors may engage in  investment  transactions  which may result in other
Client/GS Accounts being relieved of obligations or otherwise  divesting of
investments or cause an Advisor Fund,  Portfolio Company or Managed Account
to have to divest certain  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  Investment  Funds  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  the  Investment   Funds,  or  with  respect  to  which  the  underlying
securities,  currencies or instruments may be those in which the Company or
the  Investment  Funds  invest,  or  which  may be  otherwise  based on the
performance  of the  Company,  an  Investment  Fund,  an Advisor  Fund or a
Portfolio Company. The structure or other characteristics of the derivative
instruments  may have an adverse  effect on the  Company or the  Investment
Funds. For example,  the derivative  instruments could represent  leveraged
investments  in the  Company,  an  Investment  Fund,  an Advisor  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,  the
Investment  Fund,  the Advisor Fund or the  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, which may have an adverse effect on the investment
management, flexibility, and diversification strategies of the Company, the
Investment Fund, the Advisor Fund or the Portfolio Company,  as applicable,
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 invest in the Company,  the Investment  Funds, the Advisor Funds or the
Portfolio  Companies,  may  hedge  its  derivative  positions  by buying or
selling  interests in the Company,  the Investment Funds, the Advisor Funds
or the Portfolio Companies, and reserves the right to redeem some or all of
its investments at any time. These  investments and redemptions may be made
without notice to the Members or the investors in 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 and the Investment Funds based
on the amount of brokerage  commissions paid by the Company, the Investment
Funds 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, 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  and the
Investment  Funds  may  invest  all  or  some  of  their  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 advisory, administrative or 12b-1 fees applicable to the
investment and the fees from the Company and the Investment  Funds will not
be reduced  thereby (i.e.,  there could be "double fees" involved in making
any such investment, which would not arise in connection with an investor's
direct purchase of the underlying investments).  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 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 and the  Investment  Funds in its
administrative  or other  capacities.  Such  in-sourcing or outsourcing may
give rise to additional conflicts of interest.

POTENTIAL CONFLICTS RELATED TO THE VALUATION OF THE COMPANY'S INVESTMENTS

     The valuation of the Company's  investments  is ordinarily  determined
based on  valuations  provided  directly  or  indirectly  by the  Advisors.
Certain  securities in which the Company directly or indirectly invests may
not have a readily  ascertainable market price and will generally be valued
by the  Advisors.  In this  regard,  the  Advisors  may face a conflict  of
interest  in  valuing  the  securities,  as their  value  will  affect  the
Advisors' compensation.  Furthermore,  the Managing Member (in its capacity
as managing  member of the Company and of the Investment  Funds) may face a
conflict  of  interest  in  overseeing   the  valuation  of  the  Company's
investments,  as the value of the  Company's  investments  will  affect the
Managing  Member's  compensation.  In certain  circumstances,  the Managing
Member may  determine  that a valuation of Company  assets is inaccurate or
incomplete. In such event, the Managing Member may, in its sole discretion,
determine the fair value of such assets based on information  available to,
and factors  deemed  relevant by, the  Managing  Member at the time of such
valuation.  The  Managing  Member may face a conflict of interest in making
such determination.

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

     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 in which Goldman Sachs,  acting as
principal  or on a  proprietary  basis  for its  customers,  serves  as the
counterparty.  Except as permitted by  applicable  law,  Goldman Sachs will
not, acting as principal for its own account,  purchase securities or other
property  from,  or sell  securities  or other  property  to, the  Company.
However,  subject to applicable  law, the Company or an Investment Fund may
engage in transactions  with accounts which are affiliated with the Company
or such  Investment  Fund  because  they are  advised by  Goldman  Sachs or
because they have common officers, directors or managers. Such transactions
would be made in  circumstances  where the Managing  Member has  determined
that it would be  appropriate  for the Company or the  Investment  Fund, as
applicable,  to  purchase  and Goldman  Sachs or another  client of Goldman
Sachs to sell, or the Company or the  Investment  Fund, as  applicable,  to
sell and another client of Goldman Sachs to purchase,  the same security or
instrument on the same day. By virtue of having entered into a subscription
agreement,  an investor  consents to the Company and the  Investment  Funds
entering  into such  transactions  to the fullest  extent  permitted  under
applicable law. An Advisor Fund,  Portfolio  Company or Managed Account may
also enter into cross transactions in which Goldman Sachs acts on behalf of
such Advisor Fund, Portfolio Company or Managed Account, as applicable, and
for the other party to the transaction.

     Goldman  Sachs  may  have  a  potentially   conflicting   division  of
responsibilities  to both parties to a cross transaction.  For example,  to
the extent  permitted by applicable  law,  Goldman Sachs may represent both
the Company or an  Investment  Fund,  Advisor  Fund,  Portfolio  Company or
Managed  Account  and  another  Client/GS  Account in  connection  with the
purchase  of a security  by the Company or such  Investment  Fund,  Advisor
Fund,  Portfolio  Company or Managed  Account,  as applicable,  and Goldman
Sachs  may  receive  compensation  or other  payments  from  either or both
parties.

     Goldman Sachs may act as broker,  dealer,  agent, lender or advisor or
in other commercial capacities for the Company and 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.  The Company and
the Investment Funds 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 and the  Investment  Funds,  Advisor Funds,
Portfolio  Companies  or Managed  Accounts  and their  Advisors  as broker,
dealer,  agent,  lender,  advisor or in other commercial  capacities and no
accounting  to the  Company,  the  Investment  Funds  or  their  respective
investors will be required,  and no fees or other  compensation  payable by
the Company,  the Investment  Funds or their  respective  investors 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,  the relevant Investment Fund, and the Advisor Fund, Portfolio
Company or Managed Account, as applicable.  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 any Investment Fund's establishment of its business  relationships,  nor
is it expected that the Company's or any Investment  Fund's  counterparties
will rely on the credit of Goldman  Sachs in  evaluating  the  Company's or
such Investment Fund's creditworthiness.

POTENTIAL  CONFLICTS  RELATING  TO  THE  SELECTION  OF  INVESTMENTS  BY THE
ADVISORS

     AN ADVISOR'S OTHER ACTIVITIES MAY HAVE AN IMPACT ON THE ADVISOR FUNDS,
     PORTFOLIO COMPANIES AND MANAGED ACCOUNTS

     Each  Advisor  may act as an  investor,  investment  banker,  research
provider,  investment manager, financer, advisor, market maker, proprietary
trader, prime broker, lender, agent or principal, and may have other direct
and 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.

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

     Advisors have potential conflicts in connection with the allocation of
investments or transaction decisions for Advisor Funds, Portfolio Companies
and Managed  Accounts,  including in situations in which  Advisors or their
personnel have interests. For example, an Advisor Fund may be competing for
investment  opportunities  with current or future accounts or funds managed
or advised by the Advisor Fund's Advisor,  including accounts or funds that
may provide greater fees or other compensation, including performance-based
fees,  to the  Advisor  or in which the  Advisor or its  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.

     Allocation  decisions by Advisors  among  accounts may be more or less
advantageous  to any one  account  or group of  accounts.  An  Advisor  may
determine that an 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  other  Client/Advisor
Accounts.  Therefore,  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

     From time to time,  an  Advisor  may  consult  with  personnel  of the
Advisor or unaffiliated  firms, or may form  investment  policy  committees
comprised of such personnel.  In connection with their  activities with the
Advisor,  such  persons  may receive  information  regarding  the  proposed
investment  activities  of the Advisor Fund,  Portfolio  Company or Managed
Account  managed by such Advisor  which is not  generally  available to the
public.

     An Advisor  from time to time may have  access to certain  fundamental
analysis  and  proprietary   technical  models  developed  by  it  and  its
affiliates.  However, 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.  Even if the  Advisor is  permitted  to use such
analysis and models, the Advisor will not be under any obligation to effect
transactions  on behalf of an Advisor  Fund,  Portfolio  Company or Managed
Account that it manages in  accordance  with such  analysis and models.  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 the Advisor's  personnel 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 THE ADVISOR

     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  Client/Advisor  Accounts.  An Advisor is
expected  to manage  the  applicable  Advisor  Fund,  Portfolio  Company or
Managed  Account and its other  Client/Advisor  Accounts in accordance with
their respective investment objectives and guidelines. However, the Advisor
may give  advice,  and take  action,  with respect to any current or future
Client/Advisor  Accounts  that may compete or conflict  with the advice the
Advisor may give to an Advisor Fund,  Portfolio Company or Managed Account,
or may involve a different  timing or nature of action 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.  The  subsequent  short sale may result in
impairment  of the price of the  security  which the  Advisor  Fund  holds.
Conversely,  the Advisor Fund may establish a short  position in a security
and the Advisor or its Client/Advisor  Accounts may buy that same security.
The  subsequent  purchase  may  result in an  increase  of the price of the
underlying position in the short sale exposure of the Advisor Fund and such
increase in price would be to the Advisor Fund's detriment.

     In addition, transactions in investments by one or more Client/Advisor
Accounts  or the  Advisors  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  for 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 an 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 also arise because  portfolio  decisions for 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 other  Client/Advisor
Accounts, 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  other  Client/Advisor
Accounts.

     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  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.

     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  such
clients'  transactions  outside of  accounts  controlled  by the  personnel
providing advice to an Advisor Fund,  Portfolio  Company or Managed Account
managed by such Advisor,  and such  transactions may 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.  In  addition,  subject  to  applicable  law,  an  Advisor  Fund,
Portfolio Company or Managed Account may engage in investment  transactions
which  may  result  in other  Client/Advisor  Accounts  being  relieved  of
obligations or otherwise divesting of investments or cause an Advisor Fund,
Portfolio Company or Managed Account to have to divest certain investments.
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 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  managed by such  Advisor  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 otherwise  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 invest in an
Advisor  Fund,  may hedge its  derivative  positions  by buying or  selling
interests in the Advisor Fund,  and may reserve the right to redeem some or
all of its investments at any time.  These  investments and redemptions may
be made without  notice to the investors in such Advisor  Funds,  including
Investment Funds and indirectly the Company.

     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 Advisor Fund, Portfolio Company or
Managed  Account  will  pay all  advisory,  administrative  or  12b-1  fees
applicable to the investment  and the fees or allocations  from the Advisor
Fund,  Portfolio  Company or Managed Account  generally will not be reduced
thereby  (i.e.,  there could be "double  fees"  involved in making any such
investment,  which would not arise in connection with an investor's  direct
purchase of underlying investments).  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 will be required.

     An Advisor may act 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 by the Advisor
will  be  in  its  view  commercially  reasonable,  although  the  Advisor,
including its sales personnel,  will have an interest in obtaining fees and
other amounts that 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 Advisor
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 is not required or is inconsistent 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 the
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  may  select  brokers   (including,   without  limitation,
affiliates) that furnish the Advisor, an Advisor Fund, Portfolio Company or
Managed Account managed by the Advisor, or another Client/Advisor  Account,
directly or through  correspondent  relationships,  with  research or other
appropriate  services which  provide,  in the Advisor's  view,  appropriate
assistance  to  the  Advisor  in  the  investment  decision-making  process
(including   with   respect   to   futures,   fixed-price   offerings   and
over-the-counter  transactions).   Such  research  or  other  services  may
include,  to the extent  permitted by law,  research  reports on companies,
industries  and  securities;   economic  and  financial   data;   financial
publications; proxy analysis; trade industry seminars; computer data bases;
quotation equipment and services; and research-oriented  computer hardware,
software  and other  services  and  products.  Research  or other  services
obtained in this manner may be used in servicing  any or all of the Advisor
Funds,  Portfolio  Companies or Managed  Accounts and other  Client/Advisor
Accounts,  including in connection with Client/Advisor  Accounts other than
those that pay  commissions to the broker relating to the research or other
service  arrangements.  Such  products and services may  disproportionately
benefit  other  Client/Advisor  Accounts  relative  to  the  Advisor  Fund,
Portfolio  Company or  Managed  Account  based on the  amount of  brokerage
commissions paid by the 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.

     An  Advisor  may  endeavor  to execute  trades  through  brokers  who,
pursuant to such arrangements,  provide research or other services in order
to ensure the continued  receipt of research or other  services the Advisor
believes are useful in its investment decision-making process.

     An  Advisor  may from time to time  choose  not to engage in the above
described "soft dollar arrangements" to varying degrees.

     The Advisors may adopt  policies  and  procedures  designed to prevent
conflicts of interest from  influencing  proxy voting  decisions  that 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 other divisions or
units of Goldman  Sachs  and/or its  affiliates  provided  that the Advisor
believes  such voting  decisions  to be in  accordance  with its  fiduciary
obligations.

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  securities  or
instruments  that are  issued by such  companies  or are 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 its 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 may be 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, on
behalf of an  Advisor  Fund,  Portfolio  Company  or  Managed  Account,  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, on behalf of an Advisor Fund, Portfolio
Company or Managed Account, 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 from 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  and in the
Memorandum 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 was filed as an exhibit to the  Company's  Form 10-K
for December 31, 2004 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, 2005,  the Company had no employees,  however,  the
Company is managed by the  Managing  Member  which as of December 31, 2005,
was supported by  approximately  108 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
objective, including, among other things:

     o investment strategies and allocations of assets;

     o future performance; and

     o trends in the four hedge fund sectors.

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

     The  forward-looking  statements  included  herein  are  based  on the
Managing Member of the Company's current expectations, plans, estimates and
beliefs that involve numerous risks and uncertainties. Assumptions relating
to the  foregoing  involve  judgments  with respect to, among other things,
future  economic,  competitive  and market  conditions and future  business
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  ITEM 1A.  "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
objective  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 does 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 the  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 (or dissimilar) to that index.

ITEM 1A.  RISK FACTORS

                               GENERAL RISKS

     The  following  are certain risk factors that relate to the  operation
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 that
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 Advisors and 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. See "--SPECIAL RISKS OF THE COMPANY'S STRUCTURE--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" below.

A  SUBSTANTIAL  PORTION OF AN  INVESTMENT  FUND'S  ASSETS  MAY BE  INVESTED
UTILIZING  STRATEGIES  THAT 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 one of
the  four   specified   hedge  fund   sectors   described   under  ITEM  1.
"BUSINESS--PERFORMANCE  OF THE COMPANY--Description of the Investment Funds
and the Performance of the investment Funds," 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 of the Investment
Fund in its sole discretion.  Such classifications are based on information
previously  provided by the Advisors to the managing member of the relevant
Investment  Fund 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 may request  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 may request
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  the 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 an Investment
Fund's  assets will be allocated  to Advisors  whose  principal  investment
strategies are not within the Investment Fund's specified hedge fund sector
for extended periods of time.

     As is customary with 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  investment.  Also,
Advisors may not comply with their stated investment strategies. Members of
the Company assume the risk that the Advisors may not provide  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 among hedge fund sectors from a risk perspective. As
of  July  1,  2004,  the  Managing  Member  implemented  an  adjustment  to
weightings  among the Investment  Funds. In addition,  on July 1, 2005, the
Managing  Member  made  a  tactical  adjustment  to the  weightings  of the
Investment  Funds.  There  is  no  assurance  that  the  Managing  Member's
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  subscription  and  redemption  provisions  of the
Investment  Funds,  including  notice periods and limited  subscription and
redemption  dates,  the  ability of the  Investment  Funds to  suspend  and
postpone redemptions,  and a one-year lockup on redemptions imposed by GRV.
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. Generally,
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 ADVISORS'
PORTFOLIOS  AND  MEMBERS  ASSUME  THE  RISK  THAT  ADVISORS  MAY  KNOWINGLY
MISREPRESENT INFORMATION WHICH COULD HAVE A MATERIAL NEGATIVE IMPACT ON THE
COMPANY

     Generally,  the Managing  Member  invests assets of the Company in the
Investment  Funds,  which in turn will  invest  their  assets  through  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 their
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  and/or by the  Investment  Fund's
Advisors may cause the Company or the Investment Fund 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,
Investment Funds,  Portfolio  Companies,  Advisors or Advisor Funds, or the
terms of any investments made by the Company,  Investment Funds,  Portfolio
Companies, Advisors or Advisor Funds.

     While the  managing  member of an  Investment  Fund  will  select  and
monitor the Advisors to which the  Investment  Fund allocates  assets,  the
managing  member  of  an  Investment  Fund  relies  to a  great  extent  on
information provided by the Advisors and will generally have limited access
to other  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 fraudulent or
similar activities (the "Fraudulent Activities") 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  Fraudulent  Activities,  it will likely be too late for
such  Investment  Fund to  withdraw  its assets from such  Advisor  without
incurring  significant losses due to its investment with such Advisor.  The
proper  performance of monitoring  functions by the Managing  Member of the
Company or the managing member of the Investment  Funds would generally not
give the managing member the opportunity to discover such situations  prior
to the time the Advisor  discloses (or there is public  disclosure  of) the
presence or effects of any Fraudulent Activities. Accordingly, the managing
member of the Investment Funds can offer no assurances that an Advisor will
not engage in Fraudulent  Activities and cannot guarantee that it will have
the opportunity or ability to protect the Investment Fund, and consequently
the  Company,  from  suffering a loss  because of an  Advisor's  Fraudulent
Activities.

     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 COMPANY  DOES NOT INTEND TO  PARTICIPATE  IN NEW ISSUES WHICH MAY LIMIT
POTENTIAL GAINS

     The Company does not presently  intend to participate in "new issues,"
as such term is defined under National  Association of Securities  Dealers,
Inc. ("NASD") Rule 2790, as amended, supplemented and interpreted from time
to time  ("NASD  Rule  2790").  NASD Rule 2790  limits the  ability of NASD
member  firms to sell  securities  of new  issues  to  certain  classes  of
"restricted  persons."  Such  securities  sold in the past have on occasion
experienced initial,  sometimes rapid,  increases in market value following
such offerings. As a result of not participating in new issues, the Company
will not share in any such increases.

           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  and  certain  of the
Investment  Funds'  Advisors may not need to register.  As an investor with
Advisors that are not  registered as investment  advisers,  the  Investment
Funds  and the  Company  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 (a "CTA") and a commodity pool operator (a "CPO")
under the U.S.  Commodity  Exchange Act of 1974, as amended (the "Commodity
Exchange  Act") and all of the  Advisors 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  purchasers"  under  the
Investment Company Act, "accredited investors" under the Securities Act and
"qualified  eligible  persons" in accordance with Rule 4.13(a)(4) under the
Commodity  Exchange Act, the Memorandum has not been filed with or reviewed
by the SEC, the CFTC,  or 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.

     Although the  Managing  Member is  registered  with the CFTC under the
Commodity  Exchange  Act as a CPO  with  respect  to  other  pools  that it
operates, the Managing Member operates the Company as if it was exempt from
such registration  pursuant to Rule 4.13(a)(4) under the Commodity Exchange
Act because (i) the Units are exempt from registration under the Securities
Act and are being  offered and sold without  marketing to the public in the
United States,  and (ii) Units may be purchased only by natural persons who
are "qualified  eligible  persons" as defined in Rule  4.7(a)(2)  under the
Commodity Exchange Act and non-natural persons that are "qualified eligible
persons"  as  defined  in  Rule  4.7  under  the  Commodity  Exchange  Act.
Therefore,  the  Managing  Member is not  required  to  deliver  to Members
certified annual reports and a disclosure  document that are required to be
delivered  pursuant to the  Commodity  Exchange  Act,  which would  contain
certain disclosures  required thereby that may not be included herein or in
the reports to be provided to Members by the Company.

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

     Legal,  tax and regulatory  changes could occur during the term of the
Company and the Investment  Funds that may adversely affect the Company and
the  Investment  Funds  (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  or an  Investment  Fund 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.  Units will not be redeemable at the option of Members,
other than,  effective  January 1, 2006, on each January 1, April 1, July 1
or October 1 (occurring on or after the first  anniversary  of the purchase
of such Units by the  Member)  upon 91 days'  prior  written  notice to the
Managing Member (unless such notice is waived by the Managing Member in its
sole discretion),  and such Units will not be exchangeable for interests of
any other  funds.  See "--The  Company  has Limited  Liquidity  and Limited
Rights for Redemption" below.

THE COMPANY HAS LIMITED LIQUIDITY AND LIMITED RIGHTS FOR REDEMPTION

     The Company is a non-diversified  management  investment  company with
limited  liquidity  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.

     An  investment in the Company  provides  limited  liquidity  since the
Units are not freely transferable.  Generally a Member is only permitted to
redeem Units upon written notice  received by the Managing  Member at least
91 days prior to the Valuation  Date (as defined  below) in respect of such
redemption,  as of the time immediately prior to the opening of business on
each  January 1, April 1, July 1 and  October 1  occurring  on or after the
first  anniversary of the purchase of such Units by the Member,  but may be
limited or postponed under limited circumstances.  Additionally,  effective
January 1, 2006,  the Managing  Member may limit  redemptions to the extent
that aggregate redemption requests by Members exceed a specified threshold.
The same or similar  limitations will apply to the Company's  investment in
the  Investment  Funds or an  Investment  Fund's  investment  with  certain
Advisors.

     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,  may be 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  redemption  from such
Investment Fund may be limited, in such Investment Fund's managing member's
sole  discretion,  because of restrictions  imposed upon redemptions by the
Advisor Funds or under the terms of 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
redemption 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 A  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 may fluctuate  significantly in the 91-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.  Effective  January 1, 2006,  the Managing  Member may also limit
redemptions  to the extent that  aggregate  redemption  requests by Members
exceed a specified threshold. 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
membership 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. The Company
had redemptions in the amount of $128,546,636 in January 2005, $112,803,581
in July 2005 and  $347,523,596  in January  2006.  The  Company  funded the
redemptions  made in January  2005,  July 2005 and  January  2006 by making
redemptions  from the  Investment  Funds in  proportion to the then current
weightings  and through the use of uninvested  cash on hand and the Company
also  used its  credit  facility  to fund  January  2006  redemptions.  The
Managing Member expects the Company to fund future redemptions in a similar
manner.  However,  the Managing Member may in its sole discretion decide to
change the weightings and the manner in which the Company makes redemptions
from the  Investment  Funds to fund  these or any  other  redemptions.  The
redemptions  from the Investment  Funds made in January 2005, July 2005 and
January 2006 to fund the  redemptions  made in the Company in January 2005,
July 2005 and January 2006 did not result in any costs, fees or payments of
premiums for the Company. The Company does not believe that the redemptions
payable in January 2006 had a material  adverse  effect on the value of the
Units  or the  performance  of the  Company.  See  "--SPECIAL  RISKS OF THE
COMPANY'S   STRUCTURE--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." Further,  while
the  Company  did  not  borrow  under  the  credit  facility  to  fund  the
redemptions  in January  2005 and July 2005,  it did borrow from its credit
facility  to fund  redemptions  in January  2006.  The Company may elect to
borrow under the credit facility,  including  without  limitation,  to fund
redemptions,  from time to time in the  future.  For a  description  of the
credit  facility,  see ITEM 7.  "MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF
FINANCIAL  CONDITION  AND  RESULTS  OF  OPERATIONS--Liquidity  and  Capital
Resources" and Note 6 to the financial statements.

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 OF 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.  For
instance,  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, 2005.

     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 gains
exceed prior losses (i.e., the NAV of the interest must first exceed a high
watermark  attributable to a previously obtained NAV).  Appreciation in the
net assets  managed by an Advisor at any given time will be shared pro rata
by all of the members of such Investment  Fund at such time,  including the
Company,  not just those who were  members at the time  prior  losses  were
incurred.  The value  attributable  to the fact  that no  performance-based
compensation  will be paid to an Advisor  until its gains  exceed its prior
losses (the "Loss  Carryforward  Value")  will not be taken into account in
determining  the  NAV  of  an  Investment   Fund.   Therefore,   such  Loss
Carryforward Value to existing members of an Investment Fund, including the
Fund,  will be diluted by new  subscriptions  for Units of such  Investment
Fund's  membership  units because the new membership units will participate
in any positive performance by the Advisor until its gains exceed its prior
losses without the Advisor being paid any 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 that 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 that 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
weightings that will offer broad exposure to hedge fund returns.  Strategic
return,  risk and correlation  estimates inform the quantitative  analysis,
which balances  returns and  contribution  to portfolio  risk.  Judgment is
applied  to  both  estimates  and  weights  in  an  attempt  to  achieve  a
diversified   exposure   to  hedge   funds   while   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  adjust the  Company's
assets or  weights  of the  investment  sector as it deems  advisable.  The
Managing  Member  may at certain  times be unable to adjust  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 adjust 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 ULTIMATELY
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 or Advisor
Funds.  Although the  managing  member of the  Investment  Funds may obtain
information  provided by the Advisors about their NAVs, 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 and Advisor  Funds.  Most  Advisors  treat their
investment  positions as proprietary  information and many of them will not
provide such information to their investors. Furthermore, the NAVs 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 NAVs. In such cases, the valuations used to determine the NAVs
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 NAV 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 NAV 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  "--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 incorrect,  the Company will adjust such
Member's  Units by increasing or decreasing  them (by means of issuances of
additional  Units or compulsory  redemptions of Units, in each case without
additional consideration), 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 (including,  without limitation,  by compulsorily redeeming
without  consideration  a number of Units held by such Member  having a NAV
equal to the amount of such excess payment), 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.

THE OTHER BUSINESS  ACTIVITIES AND  RELATIONSHIPS  OF GOLDMAN SACHS AND THE
COMPANY'S ADVISORS MAY CREATE CONFLICTS OF INTEREST

     Goldman Sachs, including its affiliates and personnel, is a worldwide,
full-service  investment  banking,  broker-dealer,   asset  management  and
financial  securities  organization,  and a  major  participant  in  global
financial markets. As a result, Goldman Sachs is engaged in many businesses
and has interests in the global fixed income, currency,  commodity,  equity
and other markets in addition to those related to the Company, including as
an investor,  investment  banker,  research provider,  investment  manager,
financer,  advisor, market maker, proprietary trader, prime broker, lender,
agent and principal. Such additional businesses and interests may give rise
to potential  conflicts of interest.  In addition,  the  activities  of the
Advisors and their respective  affiliates,  and their directors,  trustees,
managers, members, partners, officers and employees, for their own accounts
and other accounts they manage, may give rise to conflicts of interest that
could disadvantage the Company and its Members. A description of certain of
such  potential  conflicts  of  interest  is  set  forth  under  "POTENTIAL
CONFLICTS OF INTEREST."

AFFILIATES OF GOLDMAN SACHS AND MEMBERS OF THE COMPANY MAY MARKET AND TRADE
DERIVATIVES  LINKED TO THE PERFORMANCE OF THE COMPANY,  WHICH MAY ADVERSELY
AFFECT THE NAV OF THE COMPANY

     Affiliates of Goldman  Sachs and certain  Members may market and sell,
from time to time,  directly  or  indirectly,  derivative  instruments  the
return on which  tracks or is related to the  economic  performance  of the
Company.  Sellers of such derivative  instruments,  including affiliates of
Goldman Sachs,  may seek to hedge the risk  associated  with their exposure
thereunder by purchasing or redeeming  Units from time to time,  the NAV of
which may  represent a  significant  percentage of the Company's NAV at any
given time.  Such trading may adversely  affect the NAV of the Company.  In
particular,  significant  purchases  and/or  redemptions  of  Units  over a
concentrated  period of time may result in high transaction costs and other
operating   inefficiencies  in  connection  with  the  direct  or  indirect
investment of the Company's assets. Similar consequences could occur in the
case of derivative  instruments that track the performance of an Investment
Fund.

     The Company will be managed in accordance with its investment  program
and objectives and wholly independent of considerations related to any such
derivative  instruments  that  are  sold by any  Member.  Accordingly,  the
identity of, and the relative  allocations of capital among, the Investment
Funds  and  Advisors,  as well as the  manner  of any  reallocation  of the
Company's  assets and other  investment  management  decisions  (including,
without  limitation,  in connection  with the  dissolution of the Company),
will not take into account, and may run counter to, the terms or objectives
of any such derivative instruments.

                SPECIAL RISKS OF THE FUND OF FUNDS STRUCTURE

     The  following  are certain risks related to the fact that the Company
allocates assets to Investment Funds and Advisors.

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  Advisors  of the
Investment  Funds may be limited or unavailable,  an investor who meets the
conditions  imposed by an Advisor may be able to invest  directly  with the
Advisor. By investing in Advisors  indirectly through the Company,  via the
Investment Funds, the investor bears asset-based and performance-based fees
at the Company or  Investment  Fund level,  in addition to any  asset-based
fees and  performance-based  fees and  allocations  at the  Advisor  level.
Moreover,  an investor in 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 and the  Advisors.  Thus, a Member of the Company will be
subject to higher  operating  expenses  than if he or she invested with the
Advisors  directly  or in a fund  that did not  utilize  a "fund of  funds"
structure. See "FEES AND EXPENSES."

     In  addition  to the  Incentive  Allocation  payable  to the  Managing
Member,  the  Investment  Funds are  subject to  performance-based  fees or
allocations from each Advisor to which they allocate  assets,  irrespective
of the performance of other Advisors,  the Investment Funds and the Company
generally.  Accordingly,  an Advisor with positive  performance may receive
performance-based compensation from an Investment Fund, and thus indirectly
from the Members,  even if such Investment  Fund's or the Company's overall
performance is negative.

     Fixed fees,  generally  calculated and paid to Advisors  monthly based
upon the NAV of the  allocation to such Advisor are  currently  expected to
range   (on   an   annualized   basis)   from   approximately   0%  to  4%.
Performance-based fees or allocations of Advisors are currently expected to
range from 15% 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  materially  exceed
these ranges. 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.   Because   the
performance-based  compensation  may in certain  circumstances  be based on
calculations  of realized and unrealized  gains as determined by the person
entitled  to receive  such  compensation,  certain  inherent  conflicts  of
interests and consequent risks can arise.

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

     Investment  decisions of the Advisors are generally made 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 and the Investment Funds 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 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 managing  member of the  Investment
Funds and 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.

TRANSACTIONS  BETWEEN AND AMONG  FUNDS MAY BE  UNDERVALUED  AND  NEGATIVELY
AFFECT THE COMPANY'S PERFORMANCE

     The managing  member of the Investment  Funds may determine that it is
advisable to reallocate  some or all of the  Investment  Funds' assets away
from one or more Advisor  Funds in order to achieve the  Investment  Funds'
investment  objectives.  In  certain  cases,  such  Advisor  Funds  may  be
appropriate  investments for one or more other investment funds or accounts
managed  by the  managing  member  of the  Investment  Funds.  Rather  than
redeeming  the  Investment  Funds'  direct or  indirect  interests  in such
Advisor Funds,  the managing member of the Investment  Funds may attempt to
transfer such interests to one or more investment funds or accounts managed
by the managing member of the Investment  Funds. Any such transfer would be
effected at a price equal to the redemption price that otherwise would have
been payable to the  Investment  Funds in respect of such Advisor Fund upon
redemption of such interests.  The transfer price may not take into account
any value associated with the transfer of the Investment  Funds' investment
holding period, if any, in a Advisor Fund, or the prior high NAV associated
with the transferred interests.

     The Investment Funds may allocate assets,  directly or indirectly,  to
Advisor  Funds that invest in assets that are  difficult  to value.  If the
Investment Funds transfer  interests in such Advisor Funds,  such interests
generally will be valued in accordance with the terms of the Advisor Fund's
governing  agreement,  as such  valuations  are reported to the  Investment
Funds. However,  given the nature of such investments,  such valuations may
not  represent the actual amount that would be realized by the Advisor Fund
upon a disposition of such investments.  If such difficult-to-value  assets
are  undervalued  by the Advisor  Fund,  any  transfer of interests in such
Advisor Fund may adversely  affect the Investment  Funds' and the Company's
performance.

       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 Advisors  and  securities  than other  investment
funds and, accordingly, its results are independent of the previous results
obtained by those funds. See ITEM 1.  "PERFORMANCE OF THE  COMPANY--Certain
Considerations  Relating  to Limited  Capacity  of  Potential  Advisors  of
Certain  Investment  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 Company,
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  generally invests its assets in Investment Funds,
which in turn  allocate  assets to Advisors,  a Member's  investment in the
Company will be affected by the  investment  policies and  decisions of the
Advisors in direct  proportion to the amount of an Investment Fund's assets
that are invested  with each  Advisor.  The NAV of the assets  allocated to
Advisors,  and as a result,  the NAV 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 their  assets that are 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"  above.  The NAVs 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 NAV 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 Activities,
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 Ultimately 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 Accounts.
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 Portfolio
Companies or 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.

ADVISOR REDEMPTION HOLDBACKS AND OTHER ADVISOR FUND LIQUIDITY  RESTRICTIONS
MAY ADVERSELY AFFECT REMAINING MEMBERS

     From time to time, the Managing  Member may be unable to liquidate the
Company's assets as it otherwise deems advisable in order to pay redemption
requests  for the  Company  due to a number of factors  including,  without
limitation, minimum holding periods and restrictions on redemptions imposed
by the Advisor Funds or Advisors.  As a result,  the Managing Member may be
required to redeem  interests  from more liquid  Advisor  Funds in order to
meet  redemption  requests,  which  could  have an  adverse  effect  on the
Company's portfolio mix and liquidity for remaining Members.

     The Company will  endeavor to pay  redemption  proceeds to a redeeming
Member within 45 days following the applicable Redemption Date. For various
reasons,  however,   including  the  suspension  or  delay  in  payment  of
redemption  proceeds by Advisor  Funds and the holdback of a portion of the
redemption  proceeds  otherwise  payable  to the  Company  until  after the
applicable Advisor Fund's financial records have been audited,  the Company
may not receive  redemption  proceeds otherwise expected by it prior to the
Fund's payout of proceeds to redeeming Members.  Therefore, at the time the
Company pays  redemption  proceeds to a redeeming  Member,  the Company may
hold  receivables  that may not be paid to the  Company  for a  significant
period of time, may not accrue any interest, and ultimately may not be paid
to the  Company  (as a  result  of  post-audit  adjustments  or  for  other
reasons).   During  the  time  that  the  Company's   assets  include  such
receivables,  that portion of the Company's assets cannot be used to pursue
the Company's investment objective.  In addition, in cases in which Advisor
Funds limit or reduce the  Company's  redemption  request,  the Company may
continue to have  investment  exposure to Advisor Funds or Advisors that it
would  otherwise  have  redeemed.  This could have an adverse effect on the
performance of the Company.

     The NAV used by the Company to determine the Redemption  Price payable
to a  redeeming  Member  generally  will  include  the  full  value  of any
receivables   due  the   Company   without  any   discount  or   reduction,
notwithstanding  the fact that such  receivables do not accrue interest and
may ultimately not be paid to the Company by an Advisor Fund. If an Advisor
Fund  later  determines  that a portion or all of such a  receivable  is no
longer  payable to the Company or the value of the  receivable is otherwise
impaired,  the  Company  and the  non-redeeming  Members  may be  adversely
affected  because the  Company may be unable,  or may elect not, to collect
the amount of any  over-payment  made to a redeeming  Member.  See "--Risks
Related to the Company's Structure--The Company's Financial Statements are,
and in the Future Will  Ultimately  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." Any corresponding  restatement of and reduction
in the NAV of the Company will be borne by the non-redeeming Members.

MANAGED  ACCOUNT  ALLOCATIONS  EXPOSE  THE  INVESTMENT  FUNDS TO  LIABILITY
EXCEEDING ALLOCATIONS

     The  Investment  Funds may place  assets  with a number of Advisors by
opening managed accounts (either directly or via Portfolio  Companies).  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
the Investment Funds to Portfolio Companies because of the possibility that
the limited liability provided by Portfolio Companies 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

     The managing member of an Investment  Fund may determine,  in its sole
discretion,  to limit the  Investment  Fund's  voting  interest  in certain
Advisor  Funds,  including,  without  limitation,  in order to allow  other
investment  vehicles  managed by the managing  member or its  affiliates 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 Fund, the  Investment  Fund
will  not be able to vote on  matters  that  require  the  approval  of the
interestholders  of the  Advisor  Fund,  including  matters  adverse to the
interests of the Investment Fund and its members, including the Company.

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,  an Investment  Fund 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 may receive  performance or incentive  compensation  in
respect of its portfolio for a period even though such Investment Fund's or
the  Company's  NAV 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,  WHICH COULD CAUSE DILUTION OR  CONCENTRATION OF THE COMPANY'S
INVESTMENTS OR NEGATIVELY AFFECT ALLOCATION OF 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 managing member of an 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 membership  units of such Investment
Fund and interests of Advisor Funds in which such  Investment  Fund invests
would  dilute  the  indirect  participation  of  existing  members  of such
Investment  Fund,  including the Company,  with such Advisors.  See ITEM 1.
"PERFORMANCE  OF THE  COMPANY--Certain  Considerations  Relating to Limited
Capacity of Potential Advisors of Certain Investment Funds."

     In determining capital allocations among Advisors, the managing member
of the Investment Funds may consider,  among other factors,  constraints on
an  Advisor's   capital   capacity.   See  ITEM  1.   "PERFORMANCE  OF  THE
COMPANY--Certain  Considerations  Relating to Limited Capacity of Potential
Advisors of Certain  Investment  Funds."  Advisors may in their  discretion
also limit the capacity  available to the Fund or other investment funds or
accounts  managed by the Managing Member or its affiliates after a specific
date. In these cases, the managing member of the Investment Funds, in order
to provide for long-term  management of the Investment Funds, may determine
to increase the Investment Funds' investments in an Advisor more than would
otherwise be the case. Such allocations may result in the Investment Funds'
portfolio  being more  concentrated  from time to time and for  substantial
periods  of time.  As a result of any such  concentration,  the  Investment
Funds'  portfolio  may be subject to more rapid changes in value than would
be the case if the Investment  Funds' portfolio were less  concentrated and
the economic  returns of the  Investment  Funds and the Fund may thereby be
materially adversely affected.

     In  determining  how to allocate  investment  opportunities  among the
Investment Funds and any other  investment funds or accounts,  the managing
member  will take  into  account  the  investment  objectives  of each such
investment fund or account, the capital capacity of the Advisors,  and such
other  considerations  as deemed relevant in its sole  discretion.  Certain
Advisors to which the Investment Funds have previously allocated assets may
be  closed to new  investments  or may  otherwise  limit  subscriptions  (a
"Closed  Advisor").  The  managing  member  of  the  Investment  Funds  may
determine, for various reasons, including without limitation, strategic fit
and other portfolio construction  considerations,  that a Closed Advisor is
more  appropriately  included  as part of the  portfolio  of another of its
investment  funds or accounts  rather than the  Investment  Funds.  In such
event, the managing member of the Investment Funds may cause the Investment
Funds to transfer  interests in such Closed  Advisor to another  investment
fund or account  managed by the managing  member of the  Investment  Funds,
notwithstanding  that such Closed Advisor may continue to be an appropriate
investment  for the  Investment  Funds.  Any such transfer may give rise to
potential conflicts of interest.

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 or in connection
with,  among other things,  (i) acts or omissions  relating to the offer or
sale of units by the  Investment  Funds and (ii)  services  provided by the
Advisors  directly or  indirectly  on behalf of the  Company.  In addition,
Advisor  Funds  and  Portfolio  Companies  in  which  the  Company  and the
Investment  Funds  invest may also agree to  indemnify  Advisors  and their
respective officers,  directors,  and affiliates.  Any such indemnification
obligations  incurred  directly  or  indirectly  by the Fund may  adversely
affect the Fund's  performance.  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 NAV 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.

ALLOCATION  OF THE  COMPANY'S  ASSETS  MAY NOT  PROTECT  THE  COMPANY  FROM
EXPOSURE TO ECONOMIC DOWNTURNS IN ANY INVESTMENT FUND OR HEDGE FUND SECTOR

     The Managing  Member  generally  will seek to allocate  the  Company's
assets in an  attempt to  mitigate  the  Company's  exposure  to  downturns
experienced by any one Investment  Fund or hedge fund sector.  The identity
of, and relative  investments of capital among, the hedge fund sectors will
be determined by the Managing Member,  in its sole  discretion,  based on a
number of factors deemed relevant to the Managing Member, which may include
the amount of the Company's  assets under  management,  the availability of
attractive opportunities,  and other portfolio construction considerations.
There is no assurance that the Managing Member's allocation  decisions will
be successful.  In addition,  the Managing Member's ability to make ongoing
changes to the  allocation of the  Company's  assets will be limited due to
the redemption  provisions of the  Investment  Funds in which the Company's
assets are invested,  including limited  redemption dates,  notice periods,
minimum holding periods, minimum holding amounts, and/or the possibility of
postponement  or  suspension of  redemptions.  Any such  limitation  may be
significant.  These factors could have an adverse  effect on the ability of
the  Company  to  successfully  and  efficiently   achieve  its  investment
objective or a market position appropriately reflecting its asset base.

                          INVESTMENT RELATED RISKS

     Following  is a  discussion  of  certain of the  investments  that are
expected to be made by the Advisors of the Investment  Funds and certain of
the principal risks associated with such  investments.  It is possible that
an Advisor 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,  THE INVESTMENT  FUNDS,  AND THE ADVISORS
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

     As  described  under  ITEM 1.  "PERFORMANCE  OF THE  COMPANY--Hedging,
Leverage and Other Strategies," it is expected that the Advisors will incur
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 Fund's investments.  The
use of leverage by the Investment Funds,  Portfolio Companies,  Advisors or
Advisor Funds can  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 the Investment  Funds,  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 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  Company,  an  Investment  Fund,
Portfolio  Companies  or Advisor  Funds to receive  payments of interest or
repayments  of  principal  will be  senior to those of the  Members  or the
investors in such  entities,  and the terms of any  borrowings  may contain
provisions that limit certain  activities of such entities or the Advisors,
including the ability to make distributions.

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

     Certain Advisors 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
that  allocates its assets to Advisors  who,  through  Managed  Accounts or
Portfolio Companies, trade in commodities on behalf of the Investment Fund,
could be  required to comply  with  position  limits as if it were a single
trader, absent obtaining exemptive relief therefrom. 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  who,  through  Managed
Accounts or  Portfolio  Companies,  trade in  commodities  on behalf of the
Investment Fund, 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.

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

     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 incurring 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 the  Advisors 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 the Advisor
or Advisor Funds 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 Advisor or Advisor
Funds.

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  Advisor  Funds  in which an
Investment  Fund has an interest may be exposed to credit risks with regard
to counterparties with whom the Advisors 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

     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. 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 Advisor  agrees to exchange
payments  in U.S.  Dollars  for  payments  in  foreign  currency,  the swap
agreement  would tend to decrease the Company'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 Advisor or Advisor Fund would
require the calculation of the obligations of the parties to the agreements
on a "net  basis."  Consequently,  an  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  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 Advisor or Advisor Fund contractually is entitled to receive. If a swap
agreement  calls for  payments by an  Investment  Fund,  an Advisor Fund or
Portfolio Company,  such entity 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, and therefore the NAVs
of the  Investment  Fund and the  Company,  can be highly  volatile.  Price
movements of forward  contracts,  futures  contracts  and other  derivative
contracts  in which an Advisor 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 INVESTMENT  FUNDS'  COUNTERPARTIES,  BROKERS,  AND EXCHANGES
EXPOSES INVESTMENT FUNDS TO CREDIT RISKS IN VARIOUS FORMS

     The  Investment  Funds  will  be  exposed  to the  credit  risk of the
counterparties  with which, or the brokers,  dealers and exchanges  through
which,  the  Advisors  deal,  whether  they  engage in  exchange-traded  or
off-exchange  transactions.  More than one of the  Investment  Funds at any
time  may be  subject  to the  credit  risk  of the  same  counterparty  or
broker-dealer.  An  Investment  Fund may be  subject to risk of loss of its
assets  placed on  deposit  with a broker by an Advisor 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. An
Investment Fund 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.  An Advisor may be required to post
margin  for its  foreign  exchange  transactions  either  with the  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, an Investment Fund may be subject to a risk of loss of
its funds placed 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,  the Advisors 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

     Advisors 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
Advisors  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,
there is a risk of the  exchanges  on which  positions  trade to fail or of
their  clearinghouses  or clearing  firms to fail 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
Advisors' 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  Advisor's  investment  in  non-U.S.  countries  may also be  subject to
withholding  or other taxes,  which may be  significant  and may reduce the
Advisor'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 Advisor 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,  the 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 less 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

     Advisors   may   invest  in  equity  and   equity-related   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 will,  however,  value  their  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 an  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 SECURITIES 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 and, in turn,  the  Company 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  (commonly  known as "junk  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

     Advisors may participate in, and there are risks  associated with, the
purchase  and sale 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  its  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

     Advisors may participate in, and there are risks  associated with, the
purchase and sale 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  its  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  RISKS  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, the
applicable Investment Fund and, in turn, the Company, may incur a loss.

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,  the  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 and, in turn, the applicable  Investment Fund, 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
Company  and 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 or the  Investment  Funds may be  prevented  from
achieving their objective  during any period in which the Company's and the
Investment Funds' 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 the net assets  managed by an Advisor 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.  An  investment  in the  Company  is  therefore
suitable  only  for  certain  sophisticated  investors  that  will  not  be
materially impacted by postponement of the Company's redemption dates.

                   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.  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 merger arbitrage  transactions
entered into by the Advisors will be profitable,  and any such  transaction
may result in substantial losses.

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

     Advisors may invest in  securities of small  capitalization  companies
and  recently  organized  companies  and,  conversely,   the  Advisors  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 Advisors 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 of the  Investment  Funds  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
from the Advisors to which such payments were made.

     The  Company  and 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.

INVESTMENTS IN CERTAIN MULTI-ADVISOR STRUCTURES

     From time to time, the managing member of an Investment Fund may cause
the Investment  Fund to allocate  assets to an Advisor Fund, the Advisor of
which allocates assets to investment funds that retain certain services and
support  from  service  providers  retained by, or  affiliated  with,  such
Advisor   ("Multi-Advisor   Structures").   As  described   under  ITEM  1.
"PERFORMANCE  OF THE  COMPANY--Overview  of the  Investment  Process of the
Investment  Funds," the Advisor  selection  process  generally  includes an
examination of 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,
where funds are allocated to a Multi-Advisor Structure, the managing member
of the Investment  Fund generally will have limited  ability to examine the
organizational infrastructure of the underlying managers and the investment
funds in which the Investment Fund (or the Company)  indirectly invests. In
addition,  the  managing  member  of the  Investment  Fund will not be able
control  the  selection  or  removal  of  underlying  managers.  The  risks
described  under  "--SPECIAL  RISKS OF THE COMPANY'S  STRUCTURE"  above are
particularly   applicable  to  investments  in  Multi-Advisor   Structures,
including,  without limitation, the payment of multiple levels of fees. Any
references in this Annual  Report to  strategies or techniques  utilized by
the Advisors include strategies or techniques  utilized by investment funds
and their managers in which Multi-Advisor Structures invest.

                         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. Should the Managing Member invest
the Company's  assets with Advisors  other than through an investment in an
Investment  Fund, the risks described herein with respect to the Investment
Funds will also  apply to 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
Company  or  the  Investment   Funds  will  provide  complete  or  accurate
information  to the Company or 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, 2005.



<PAGE>

                                  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,  pledge  or
otherwise  transfer its Units in the Company in whole or in part, except by
operation  of law  pursuant  to the death,  adjudication  of  incompetency,
insolvency  or  bankruptcy  of the Member,  or  pursuant  to the  corporate
reorganization or merger of the Member,  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.  Effective  January 1, 2006,  a Member is  permitted  to redeem
Units upon 91 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,
April 1, July 1, and October 1 occurring on or after the first  anniversary
of the  purchase  of  such  Units  by the  Member,  but may be  limited  or
postponed under limited  circumstances.  Prior to January 1, 2006, a Member
had the  right to  redeem  some or all of its  Units,  upon 61 days'  prior
written  notice  to  the  Managing  Member  on  each  January  1 or  July 1
(occurring on or after the first  anniversary of the purchase of such Units
by the Member).

     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 January 1, 2004
through December 31, 2005 are as follows:

----------------------------------------------------------------------
     QUARTER ENDED               HIGH                   LOW
----------------------------------------------------------------------
        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
----------------------------------------------------------------------
        3/31/05                $120.77                $119.53
----------------------------------------------------------------------
        6/30/05                $120.08                $118.22
----------------------------------------------------------------------
        9/30/05                $124.44                $121.77
----------------------------------------------------------------------
       12/31/05                $125.75                $122.35
----------------------------------------------------------------------

     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, 2005, 6,507,125 Units were held by 801 Members.

DISTRIBUTIONS

     The  Company  has not  made  distributions  from  January  1,  2005 to
December 31, 2005 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, 2005 to December 31,  2005,  aggregate  subscriptions
totaled $225,329,193. The Company previously reported sales of unregistered
Units  during the 2005 fiscal year in the  Company's  Quarterly  Reports on
Form 10-Q and Current Reports on Form 8-K. 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

     Effective January 1, 2006, pursuant to the Company's limited liability
company  agreement,  holders of Units may redeem  their Units upon 91 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, April 1,
July 1, or October 1  occurring  on or after the first  anniversary  of the
purchase of such Units by the Member (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 (the  "Valuation
Date")  immediately  preceding the applicable  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 (calculated as if
the  applicable  Valuation  Date was the last day of the  fiscal  year) 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 2005 in
the Company's  Quarterly Reports on Form 10-Q. There were no redemptions of
Units during the fourth  quarter ended  December 31, 2005.  Redemptions  of
$347,523,596  will be  effective  on January 1, 2006 and are  reflected  in
Redemptions  payable in the December 31, 2005 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  December  31,
2005,  2004, 2003 and 2002 and for the years ended December 31, 2005, 2004,
2003 and for the period from the commencement of operations (April 1, 2002)
to December 31, 2002. The selected historical  financial data as of and for
the years ended  December 31, 2005,  2004 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                                               (APRIL 1, 2002)
                         DECEMBER 31,        YEAR ENDED           YEAR ENDED       TO DECEMBER 31,
                         -------------                                             ---------------
OPERATIONS DATA               2005        DECEMBER 31, 2004   DECEMBER 31, 2003          2002
---------------               ----        -----------------   -----------------          ----
<S>                          <C>             <C>                 <C>                 <C>
  Net trading
  profit/(loss)              $66,816,581     $72,018,387         $81,854,395         $11,821,474
  Total expenses             $14,836,748     $14,457,852         $10,733,672          $2,459,020
  Net income/(loss)          $52,141,634     $58,055,729         $71,218,666          $9,395,178
  Less:  Incentive
  allocation to the
  managing member             $2,615,216      $2,902,854          $3,560,865            $469,759
  Net income/(loss)
  available for
  pro-rata allocation
  to members                 $49,526,418     $55,152,875         $67,657,801          $8,925,419

FINANCIAL CONDITION
--------------------          AS OF             AS OF               AS OF               AS OF
DATA                    DECEMBER 31, 2005  DECEMBER 31, 2004  DECEMBER 31, 2003    DECEMBER 31, 2002
----                    -----------------  -----------------  -----------------    -----------------

  Investments            $1,124,329,933    $1,092,953,352        $970,912,828        $383,584,606
  Total assets           $1,125,036,745    $1,093,172,149      $1,019,413,929        $384,184,813
  Total liabilities        $350,437,862      $135,716,916         $86,168,187            $958,552
  Members' equity          $774,598,883(1)   $957,455,233(2)     $933,245,742(3)     $383,226,261
  Ending NAV/Unit:
  Class A Series 1              $125.75           $120.25             $113.95             $103.97

<FN>
(1)  The  reduction  in members'  equity as of December  31, 2005  reflects
     Redemptions  payable in the amount of $347,523,596 that was payable at
     December 31, 2005.

(2)  The  reduction  in members'  equity as of December  31, 2004  reflects
     Redemptions  payable in the amount of $128,546,636 that was payable at
     December 31, 2004.

(3)  The  reduction  in members'  equity as of December  31, 2003  reflects
     Redemptions  payable in the amount of $34,529,625  that was payable at
     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, in ITEM 6. "SELECTED  FINANCIAL
DATA" above, and in ITEM 1A. "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  Ultimately 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,   2005,   the  Company  had  total   assets  of
$1,125,036,745  compared with total assets of $1,093,172,149 as of December
31, 2004.  Total  liabilities  of the Company  totaled  $350,437,862  as of
December  31,  2005  compared to  $135,716,916  as of  December  31,  2004.
Members'  equity of the Company was  $774,598,883  as of December  31, 2005
compared to $957,455,233 million as of December 31, 2004.

     The Company's  investment  objective is to target attractive long-term
risk-adjusted   returns  across  a  variety  of  market  environments  with
volatility  and  correlation  that are lower than those of the broad equity
markets.   To  achieve  this  objective,   the  Company  allocates  all  or
substantially  all of its assets among privately  placed  Investment  Funds
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: GELS, GED, GRV and GTT.

     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 year ended
December  31,  2005,  2004  and  2003,  and a  general  discussion  of each
Investment Fund's performance during those periods.

2005 PERFORMANCE

     The Company's net trading  profit/loss for the year ended December 31,
2005 was  $66,816,581,  compared  to the year ended  December  31,  2004 of
$72,018,387 and December 31, 2003 of $81,854,395.

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. As further  described under ITEM 7A.  "QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK--Risk  Management,"  quantitative analysis is
combined  with  judgment  to  determine  weightings  that will offer  broad
exposure to hedge fund  returns.  Strategic  return,  risk and  correlation
estimates  inform the  quantitative  analysis,  which balances  returns and
contribution to portfolio  risk.  Judgment is applied to both estimates and
weights  in an attempt to achieve a  diversified  exposure  to hedge  funds
while targeting  attractive risk adjusted returns. For 2005, all four hedge
fund  sectors  posted  positive  returns,  with the  strongest  performance
delivered  by the  equity  long/short  sector.  Strong  European  and Asian
markets, a lagging U.S. market, and a sharp decline and subsequent rally in
energy,  industrial,  and cyclical stocks were all  significant  drivers of
performance. The Managing Member utilizes a strategic sector allocation and
periodically  re-evaluates  the  contribution to the risk and return of the
Company from each investment  sector and may in its sole discretion  adjust
the Company's assets or weights as it deems advisable. On July 1, 2005, the
Managing  Member  made  a  tactical  adjustment  to the  weightings  of the
Investment Funds. This adjustment to the weights among the Investment Funds
reflects the Managing Member's judgment and was implemented by the Managing
Member  gradually  following July 1, 2005. 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, 2005, as well as each Investment  Fund's
net return for the year ended December 31, 2005.

       --------------------------------------------------------------
                                          PORTFOLIO
                          PORTFOLIO      WEIGHT AS A    YEAR ENDED
                            WEIGHT          % OF       DECEMBER 31,
                          AS A % OF       ADJUSTED         2005
                           MEMBERS'       MEMBERS'      NET RETURN
       INVESTMENT FUND    EQUITY (1)     EQUITY (2)         (3)
       --------------------------------------------------------------
             GELS           37.97%         26.21%          9.93%
       --------------------------------------------------------------
             GED            38.91%         26.86%          7.65%
       --------------------------------------------------------------
             GRV            41.02%         28.32%          4.09%
       --------------------------------------------------------------
              GTT           27.25%         18.81%          4.03%
       --------------------------------------------------------------

(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
     $347,523,596 that was payable at December 31, 2005.

(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.

     For the year ended December 31, 2005,  the Company's  Class A Series 1
Units returned 4.57% net of fees and incentive allocation.

THE INVESTMENT FUNDS

     Each of the four Investment Funds'  performance  during the year ended
December 31, 2005 is described in the following.

GOLDMAN SACHS GLOBAL EQUITY LONG/SHORT, LLC

     As of December 31, 2005,  GELS  represented  approximately  26% of the
Company's  adjusted  members' equity which excluded  redemptions paid after
December 31, 2005 and which  reflected the reweighting of the portfolio and
the  subsequent  increase in the weighting of GELS during the first half of
2005.  GELS  returned  9.93% for Class C Series 1 units for the year  ended
December 31, 2005.

     The annualized volatility of GELS' returns for the year ended December
31,  2005 was 7.54%.  In  comparison,  the S&P 500 Index had an  annualized
volatility of 7.92% and the MSCI World Index had an  annualized  volatility
of 8.20% for the same period.

     During the year ended  December  31,  2005,  GELS  Advisors  delivered
positive  performance in eight months (February,  May, June, July,  August,
September,  November, and December) and negative performance in four months
(January,  March,  April,  and October).  Notably,  the performance of GELS
Advisors in January and February  was mixed,  as U.S.  markets  lagged both
European and Asian markets. In addition,  March and April were particularly
difficult  months due to significant  sell-offs in several areas where GELS
Advisors  had  exposure,  particularly  energy,  industrial,  and  cyclical
stocks.

     GELS Advisors  performed  well from May 2005 through  September  2005,
with especially  strong  performance in June and July.  During this period,
GELS Advisors benefited from a rally in global equity markets, most notably
in the areas  that  negatively  impacted  performance  earlier  in the year
(e.g., energy,  industrial,  and cyclical stocks).  October was a difficult
month for GELS Advisors,  as global equity markets  declined  sharply.  The
decline was particularly  severe in energy-related  stocks,  which had been
among the best  performing  stocks  going into October  2005.  November and
December  were  positive  for  GELS  Advisors,  as  global  equity  markets
recovered from the decline in October 2005. Non-U.S. markets,  particularly
Japan,  were  especially  strong  during the last two months of the year in
2005.

     Thirty out of thirty-four GELS Advisors delivered positive performance
for the year ended December 31, 2005. GELS Advisors with exposure to Japan,
Europe,  and India performed  particularly  well during 2005. GELS Advisors
who posted losses  included those  Advisors with notional  (gross long plus
gross short) or beta-adjusted (adjusted to take into account the volatility
of underlying securities) net short exposures.

GOLDMAN SACHS GLOBAL EVENT DRIVEN, LLC

     As of December  31, 2005,  GED  represented  approximately  27% of the
Company's  adjusted  members' equity which excluded  redemptions paid after
December 31, 2005 and which  reflected the reweighting of the portfolio and
the  subsequent  increase in the  weighting of GED during the first half of
2005.  GED  returned  7.65% for  Class C Series 1 units for the year  ended
December 31, 2005.

     The annualized volatility of GED's returns for the year ended December
31, 2005 was 3.32%  compared  to the S&P 500 Index which had an  annualized
volatility  of 7.92% and to the MSCI World  Index  which had an  annualized
volatility of 8.20% for the same period.

     GED Advisors had particularly  strong performance in the third quarter
of 2005, with the majority of gains resulting from exposure to European and
Asian  situations,  specifically  merger-related  equity  transactions  and
distressed credit names. April and October of 2005 proved to be challenging
months,  due to a  widespread  sell-off in the credit  markets in April and
difficult  global  equity  and  credit  markets  in  October.  In  general,
European-focused  GED Advisors  generated strong returns in 2005, driven by
strength in the European  equity  markets and by a resurgence  in corporate
activity in Europe.

     Risk  arbitrage  Advisors  were able to profit from some of the larger
deals  such  as  Procter  &  Gamble-Gillete,  Sprint-Nextel,  and  Bank  of
America-MBNA.  Returns  were muted to some extent by  transactions  such as
Johnson &  Johnson-Guidant,  where there were multiple  periods of negative
news.  Mergers and acquisitions  activity continued to improve in 2005, and
the number of deals was up 32% from 2004 levels.  Leveraged buyout activity
soared to $259 billion, and was up 56% from $144 billion in 2004.

     Despite  strong  issuance  of $111  billion of debt in 2005,  the high
yield market had a mediocre year of  performance,  returning 2.74% in 2005,
following successive years of double digit returns in 2003 and 2004. Credit
spreads widened from 310 bps at the beginning of the year to 371 bps at the
end of the year  over  10-year  U.S.  Treasuries.  Defaults  remained  near
historical lows,  though the trailing  twelve-month  default rate jumped by
over one  percentage  point to 2.87% in the third quarter of 2005. The year
was also marked by over $295  billion of issuance of debt in the  leveraged
loans market and significant  outflows from high yield mutual funds,  which
reached over $11 billion.  While mutual fund  outflows and the downgrade of
General Motors were  responsible for significant  credit spread widening in
the  second  quarter  of 2005,  many GED  Advisors  chose to invest in more
senior parts of the capital structure, given the lack of incremental return
associated with investing in the lower parts of the capital structure.  The
airline sector continued to be one of the most negatively impacted sectors,
with negative  trends  continuing  in major  airlines.  The auto  suppliers
sector was also  negatively  impacted  by rising raw  materials  prices and
declining  sales for the major auto makers.  Delphi,  the largest U.S. auto
parts supplier,  filed for Chapter 11 bankruptcy  protection in October. In
general,  GED Advisors who were involved in  bankruptcy-related  situations
avoided  losses,  with  secured  assets  performing  better than  unsecured
assets.

     Credit   opportunities/distressed   strategies   returned  10.09%  and
contributed  3.44% to GED's gross  income for the year ended  December  31,
2005.  The  multi-strategy  component of the portfolio  returned  6.97% and
contributed  3.92% to GED's gross  income for the year ended  December  31,
2005.  Risk  arbitrage/special  situations  strategies  returned  6.07% and
contributed  0.50% to GED's gross  income for the year ended  December  31,
2005.

GOLDMAN SACHS GLOBAL RELATIVE VALUE, LLC

     As of December  31, 2005,  GRV  represented  approximately  28% of the
Company's  adjusted  members' equity which excluded  redemptions paid after
December 31, 2005 and which  reflected the reweighting of the portfolio and
the  subsequent  decrease  in the  weighting  of GRV  during the first nine
months of 2005.  GRV returned 4.09% for Class C Series 1 units for the year
ended December 31, 2005.

     GRV  Advisors  implementing  a  multi-strategy   approach  experienced
overall  positive results in 2005, but returns were widely  dispersed.  The
differences  in  performance  between   multi-strategy  GRV  Advisors  were
primarily  due  to  the  different  allocations  each  GRV  Advisor  had to
convertible  bond  trading,  correlation  trading,  and  equity  volatility
trading  strategies.  GRV  Advisors who  allocated in favor of  fundamental
credit,  equity  trading,  and  less  crowded  strategies,  such as  energy
volatility  trading  produced  better  results than those who  allocated to
convertible bond, correlation, and equity volatility trading strategies.

     Equity market  neutral GRV Advisors  experienced a strong year in 2005
despite  an  environment  characterized  by low equity  volatility  and low
single-stock return dispersion.  GRV Advisors typically benefit from strong
performance  by value  stocks and  stocks  that have  recently  experienced
strong price or earnings momentum;  both of these types of stocks performed
well in 2005.

     GRV Advisors focused on fixed income trading  strategies  collectively
experienced  a  slightly   positive  year  in  2005,   although  there  was
significant  variance among GRV Advisors'  returns.  Profits were primarily
due to a strong overall  market,  coupled with a successful  long and short
trading  of  securities  based  upon  fundamental  country  selection.  GRV
Advisors  focused  on  trading  different  points  along  the  yield  curve
experienced mixed results, while those whose fixed income trading was based
upon individual country selection performed better.

     GRV Advisors  implementing credit relative value strategies  delivered
positive results in 2005 despite some intra-month volatility.  While credit
relative  value GRV Advisors with a more  quantitatively  based  investment
processes  (especially  those exposed to structured credit trades) suffered
losses in the first half of 2005 but were able to gain the profits  back in
the second half of 2005.

     GRV Advisors implementing strategies based on emerging market relative
value posted strong results in 2005. Profits were primarily due to a strong
market,  coupled with successful long and short trading of securities based
upon fundamental country selection.

     Convertible bond arbitrage  strategies  generated  negative returns in
2005.  Realized and implied equity volatility remained low throughout 2005,
and the new issue market was weak.  For much of the period,  there was also
pressure on convertible  bond valuations as a result of technical  selling,
driven by hedge fund investor  redemptions.  GRV's  exposure to convertible
bond  arbitrage   strategies  is  only  through  Advisors   implementing  a
multi-strategy approach.

     Credit  relative value  strategies  returned  (0.56)% and  contributed
(0.05)%  to GRV's  gross  income  for the year  ended  December  31,  2005.
Convertible  bond arbitrage  strategies  returned  (6.39)% and  contributed
(0.21)% to GRV's gross income for the year ended December 31, 2005.  Equity
market neutral  strategies  returned 4.06% and  contributed  0.40% to GRV's
gross income for the year ended December 31, 2005.  Fixed income  arbitrage
strategies  returned 3.84% and contributed  0.51% to GRV's gross income for
the  year  ended  December  31,  2005.   Emerging  markets  relative  value
strategies  returned 5.90% and contributed  0.53% to GRV's gross income for
the year ended  December  31,  2005.  Multi-strategies  returned  7.84% and
contributed  3.63% to GRV's gross  income for the year ended  December  31,
2005.

GOLDMAN SACHS GLOBAL TACTICAL TRADING, LLC

     As of December  31, 2005,  GTT  represented  approximately  19% of the
Company's  adjusted  members' equity which excluded  redemptions paid after
December 31, 2005 and which  reflected the reweighting of the portfolio and
the  subsequent  decrease  in the  weighting  of GTT  during the first nine
months of 2005.  GTT returned 4.03% for Class C Series 1 units for the year
ended December 31, 2005.

     The first  quarter of 2005 brought  reversals of several  trends which
had been drivers of performance during the fourth quarter of 2004. The most
salient and difficult of these  reversals was the path of the U.S.  dollar.
The dollar  rallied  sharply  in early  January  2005 and then  traded in a
narrow  range,  leading to a  difficult  trading  environment  for most GTT
Advisors.  Global equity markets also  experienced a sharp reversal  during
the first  quarter of 2005,  causing GTT Advisors to give back a portion of
their 2004 fourth  quarter  profits.  Fixed income  trading was the largest
contributor to performance for the first quarter of 2005, with the majority
of returns made from short positions in short-term U.S. government debt, as
investors  priced in  additional  interest  rate  increases  by the Federal
Reserve  Board.  Commodity  trading was roughly flat for the first quarter.
Long energy  positions  performed  well as crude oil prices  reached record
highs and grain and gold positions sustained moderate losses.

     The second  quarter was  profitable for GTT Advisors with gains led by
fixed income positions.  Long positions in German Bunds (10-year government
bonds)  generated  gains during the second  quarter,  while falling  yields
reflected  slower growth in Germany.  Foreign  exchange trading also posted
gains during the second quarter of 2005.  Long dollar  positions  performed
well as investors  looked toward  strong growth and high interest  rates in
the U.S.  relative  to most other major  economies.  Equity  index  trading
contributed  small losses,  following a difficult April,  which saw a sharp
reversal in global equity  indices as markets  reacted to soft U.S.  retail
numbers,  GTT Advisors  recouped  most losses during May and June with long
positions  in most  regions,  with the  majority  of risk  taken in Europe.
Commodity  trading was the largest detractor from performance in the second
quarter.  After steep losses  suffered in April,  volatile energy and grain
markets proved to be difficult trading environments for most GTT Advisors.

     GTT Advisors  posted  modest  gains during the third  quarter of 2005.
Profits  were  driven by long equity  index  positioning  and major  global
indices  rallied  during  the third  quarter,  reflecting  an  increasingly
positive  outlook on the global  economy.  Commodity  trading was  strongly
positive in 2005 as energy prices rose following  Hurricane Katrina and the
resultant  supply  disruptions.  GTT Advisors were also profitable  trading
industrial  metals  during  the third  quarter.  Foreign  exchange  markets
continued to trade on growth and  interest  rate  differentials  during the
third  quarter.  Accordingly,  long  dollar  positions  against  most major
currencies  performed  well  during the  quarter.  Offsetting  losses  were
sustained  in long  dollar  position  against the  Australian  dollar as it
appreciated in response to growing commodity demand. Fixed income positions
declined  during  the  quarter.   GTT  Advisors  that  were  long  in  most
instruments suffered losses as yields rose globally in response to economic
optimism.  Losses  were  partially  recouped  in  September  via short U.S.
positions at all points on the yield curve.

     The fourth quarter was also  profitable for GTT Advisors.  Commodities
drove gains during the fourth  quarter,  with the highest  profits  derived
from the base and precious metal markets.  Gold traded above  $500/ounce as
investors bought the metal as an alternative to major currencies, given the
uncertainty surrounding future exchange rates. Moreover, higher prices were
supported  by investor  flows into gold's new exchange  traded fund,  which
allows  retail  investors to gain  exposure to gold.  Base metals were also
strongly  positive via long  positioning.  Long dollar positions  performed
exceptionally  well in the fourth quarter.  The dollar was supported by its
yield and growth advantages over most major currencies.  Equity trading was
solidly  profitable with gains  concentrated in Europe and Asia. Indices in
both regions ended the year near multi-year  highs.  Finally,  GTT Advisors
finished  the fourth  quarter of 2005  approximately  flat in fixed  income
trading.  Losses were  sustained in a number of markets  that  finished the
quarter nearly unchanged.

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

     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
tactical adjustment. As of July 1, 2004, the Managing Member implemented an
adjustment to the weightings among the Investment  Funds. The adjustment to
the weights  reflected  the  Managing  Member's  updated  expectations  for
return,  risk and correlations for the Investment Funds. 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.

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

(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 was payable at 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.

     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 EQUITY LONG/SHORT, LLC

     As of  December  31,  2004,  GELS  represented  approximately  21%  of
adjusted members' equity which excluded 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 EVENT DRIVEN, LLC

     As of December 31, 2004, GED represented approximately 25% of adjusted
members' equity which excluded 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 issuances were 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.

GOLDMAN SACHS GLOBAL RELATIVE VALUE, LLC

     As of December 31, 2004, GRV represented approximately 32% of adjusted
members' equity which excluded 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
(0.40)% to GRV's net income for the year ended  December 31,  2004.  Credit
relative value strategies returned 6.26% and contributed 0.42% to GRV's net
income for the year ended  December 31,  2004.  Emerging  markets  relative
value strategies  returned 8.26% and contributed  0.40% to GRV's net income
for the year ended  December 31, 2004.  Equity  market  neutral  strategies
returned 4.02% and contributed 0.63% to GRV's net income for the year ended
December 31, 2004.  Fixed income  arbitrage  strategies  returned 6.97% and
contributed 1.31% to GRV's net income for the year ended December 31, 2004.
Multi-strategies  returned 7.09% and contributed  2.50% to GRV's net income
for the year ended December 31, 2004.

GOLDMAN SACHS GLOBAL TACTICAL TRADING, LLC

     As of December 31, 2004, GTT represented approximately 23% of adjusted
members' equity which excluded 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.

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.



                         [Left Blank Intentionally]


<PAGE>

<TABLE>
<CAPTION>
----------------------- --------------------- -------------------- --------------------
                        Portfolio Weight        Portfolio Weight     Year Ended
                            as a % of         as a % of Adjusted   December 31, 2003
   Investment Fund      Members' Equity (1)    Members' Equity (2)   Net Return (3)
----------------------- --------------------- -------------------- --------------------
<S>                             <C>                   <C>                  <C>
        GELS                    15.01%                14.48%               13.73%
----------------------- --------------------- -------------------- --------------------
        GED                     23.78%                22.93%               18.09%
----------------------- --------------------- -------------------- --------------------
        GRV                     38.50%                37.12%                7.11%
----------------------- --------------------- -------------------- --------------------
        GTT                     26.74%                25.79%               11.61%
----------------------- --------------------- -------------------- --------------------

<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 was payable at 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 EQUITY LONG/SHORT, LLC

     As of  December  31,  2003,  GELS  represented  approximately  14%  of
adjusted members' equity which excluded 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 EVENT DRIVEN, LLC

     As of December 31, 2003, GED represented approximately 23% of adjusted
members' equity which excluded 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.

GOLDMAN SACHS GLOBAL RELATIVE VALUE, LLC

     As of December 31, 2003, GRV represented approximately 37% of adjusted
members' equity which excluded 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 2.67%
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
returned (0.73)% and a contributed (0.32)% to GRV's net income for the year
ended December 31, 2003. Fixed income arbitrage  strategies  returned 8.76%
and  contributed  1.34% to GRV's net income for the year ended December 31,
2003.  Multi-strategies  returned 12.76% and contributed 3.55% to GRV's net
income for the year ended December 31, 2003.

GOLDMAN SACHS GLOBAL TACTICAL TRADING, LLC

     As of December 31, 2003, GTT represented approximately 26% of adjusted
members' equity which excluded 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.

     COMPARISON OF SELECT FINANCIAL INFORMATION FROM 2005, 2004, AND 2003

     INTEREST INCOME

     Interest  income for the year ended  December  31, 2005 was  $161,801.
Interest  income for the year ended  December  31,  2004 was  $495,194  and
interest  income for the year ended  December  31,  2003 was  $97,943.  The
Company's  interest  income  fluctuates with its level of cash available to
invest.  The  decrease in interest  income for the year ended  December 31,
2005 as compared to the year ended December 31, 2004  primarily  relates to
the structure of the current credit  facility  which,  unlike the Company's
previous  credit  facility,  does not require the Company to redeposit cash
received from the credit  facility into a collateral  account,  but instead
allows the Company to borrow as requested.

     EXPENSES

     The   Management  Fee  for  the  year  ended  December  31,  2005  was
$13,560,772.  The  Management  Fee for the year ended December 31, 2004 was
$12,234,696 and the Management Fee for the year ended December 31, 2003 was
$9,666,257. Because the Management Fee is calculated as a percentage of the
Company's  member's  equity as of each month end (equal to  one-twelfth  of
1.25% of the net  assets  of the  Company  as of the end of the  applicable
month),  the increase in Management Fee expense for the year ended December
31,  2005 as  compared  to the year ended  December  31, 2004 was due to an
increase in the Company's members' equity,  excluding  Redemptions  payable
that were paid after the Balance Sheet date for the period,  resulting from
net subscriptions.  The increase in the management fee expense for the year
ended  December  31,  2004 as compared to the year ended 2003 was due to an
increase in the  Company's  net assets  during the year ended  December 31,
2004 compared to the year ended December 31, 2003.

     Interest  expense for the year ended  December  31, 2005 was  $37,747,
compared to the year ended  December  31, 2004 of $546,069  and compared to
the year ended December 31, 2003 of $0. The interest expense relates to the
old and new borrowing  facility that was outstanding  during the year ended
December  31,  2005.  The  change in  interest  expense  for the year ended
December 31, 2005 compared to December 31, 2004 was due to decreased levels
of short-term borrowing during the period. The increase in interest expense
for the year ended  December 31, 2004 compared to December 31, 2003 was due
to increased levels of short-term borrowing during the period.

     Professional   fees  for  the  year  ended   December  31,  2005  were
$1,237,030,  compared to the year ended December 31, 2004 of $1,641,442 and
the  year  ended  December  31,  2003  of   $1,053,505.   The  decrease  in
professional fees for the year ended December 31, 2005 compared to the year
ended December 31, 2004 was primarily due to additional  services  rendered
during 2004 by the Company's  legal  providers and auditors  related to the
ongoing  operations  of the  Company,  including  the  review  of  investor
subscription  documents  for the year and  registration  with the SEC.  The
increase in professional fees for the year ended December 31, 2004 compared
to the year  ended  December  31,  2003  was  primarily  due to  additional
services  rendered by the Company's legal providers and auditors 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, 2005 was
$2,615,216,  compared to the year ended December 31, 2004 of $2,902,854 and
the year ended  December  31, 2003 of  $3,560,865.  The change in Incentive
Allocation  for the year ended December 31, 2005 compared to the year ended
December  31, 2004 is due to a decrease in net income from  operations  for
the period. The change in Incentive  Allocation for the year ended December
31, 2004 compared to the year ended  December 31, 2003 is due to a decrease
in net income from operations for the period.

     Other than the management fee, the professional fees and miscellaneous
expenses and the  incentive  allocation,  there are no other fees  directly
borne by the Company.

     Through its investments in the Investment  Funds,  the Company bears a
pro rata portion of the  administration fee paid to the Managing Member for
services provided to the Investment Funds and Portfolio Companies. In 2004,
the Managing Member served as the administrator of the Investment Funds and
each of the Investment Funds paid its managing member an administration fee
of 0.20% for services rendered to it. The total  administration  fee (which
is approximate based on calculation),  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, 2005 and  January 1,
2004, was $1,031 and $2,073, respectively. Effective as of January 1, 2005,
SEI became the  administrator of each Investment Fund and certain Portfolio
Companies, and currently serves as the administrator with respect to all of
the  Investment  Funds  and  Portfolio  Companies.   Throughout  2005,  the
Administration  Fee Rate ranged from 0.07% to 0.10%, but in the future 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 than is
currently anticipated. See ITEM 1. "BUSINESS--FEES AND EXPENSES."

     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.  From  inception  through  December  2005,  the Company  could not
predict the level of redemptions in the Company for any semi-annual  period
until 61 days prior to the  redemption  date where  written  notice must be
given to the Managing Member.  Effective  January 1, 2006,  redemptions are
permitted on a quarterly basis rather than a semi-annual basis, and written
notices of  redemption  must be  delivered  to the Company at least 91 days
prior  to the  applicable  valuation  date  which  is the  day  immediately
preceding the  applicable  redemption  date,  rather than the 61 day notice
period  previously  required.  Accordingly,  effective January 1, 2006, the
Company  cannot  predict  the level of  redemptions  in the Company for any
quarterly  period until 91 days prior to the  redemption  date. 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.  From
inception through December 2005,  redemptions of the Company's  investments
in the Investment  Funds could be made on a semi-annual or quarterly  basis
depending on the Investment Fund, subject to certain limitations. Effective
January  1, 2006,  redemptions  can be made  quarterly,  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, 2005.  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
$225,329,193  during the year ended  December  31,  2005,  of  $126,385,622
during the year ended  December 31, 2004,  and of  $524,318,830  during the
year ended December 31, 2003.

     The Company paid out redemptions in the amount of $241,350,217  during
the year ended December 31, 2005.  The Company paid out  redemptions in the
amount  of  $66,214,849  during  the  year  ended  December  31,  2004  and
$10,988,390  during the year ended  December  31,  2003.  the  Company  had
Redemptions payable in the amount of $347,523,596 at December 31, 2005. The
Company had Redemptions  payable in the amount of  $128,546,636  payable at
December 31, 2004. The Company funded the redemptions  made in January 2005
and July 2005 by making redemptions from the Investment Funds in proportion
to the then current  weightings  and through the use of uninvested  cash on
hand and the Company also used its credit  facilities  to fund January 2006
redemptions.  The  Managing  Member  expects  the  Company  to fund  future
redemptions in a similar  manner and does not believe that the  redemptions
payable in January 2006 had a material  adverse  effect on the value of the
Units or the  performance of the Company.  While the Company did not borrow
under its credit  facility to fund the redemptions in January 2004 and July
2005, it did borrow from its credit facility to fund redemptions in January
2006. The Company may elect to borrow under its credit facility,  including
without limitation, to fund redemptions,  from time to time, in the future.
It currently  expects any such borrowing would not result in long term debt
of the Company and does not expect the Company's risk position to change as
a result thereof.

     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.  On November 24, 2004, the Company
entered into a credit facility with a financial  institution,  the Facility
Counterparty to replace its then existing credit facility. The Company made
an initial borrowing of $1,000,000 under this facility. On January 3, 2006,
the Company  increased  the maximum  borrowing  limit from  $40,000,000  to
$76,000,000  under this credit  facility.  Effective  January 3, 2006,  the
Company may request to borrow up to  $76,000,000  in the  aggregate  at the
discretion of the Facility  Counterparty.  Prior to September 1, 2005,  the
company could request to borrow up to $45,000,000 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  $76,000,000.
The  proceeds of the  borrowings  must be used  primarily  for  purposes of
refinancing existing  indebtedness,  making further investment in a pool of
funds,  funding  liquidity  of  redemptions  of  Units in the  Company  and
managing the cash flow of the Company. There were no borrowings outstanding
at December 31, 2005. As security for its  borrowings,  the Company granted
the  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 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  Facility   Counterparty   (which   consent  may  not  be
unreasonably  withheld)  or  (vi)  the  occurrence  of  events  of  default
customary  for  financing  transactions.   See  Note  6  to  the  financial
statements.  Each Investment Fund has entered into a similar  facility with
the Facility Counterparty.

     As of December 31, 2005, the Company had Cash and cash  equivalents on
hand of $706,812.  As of December  31, 2004,  the Company had Cash and cash
equivalents on hand of $218,797.

     Investments as of December 31, 2005 were $1,124,329,933 as compared to
$1,092,953,352 as of December 31, 2004. The increase from December 31, 2004
to December  31, 2005 was due to net  subscriptions  made by the Company to
the  Investment  Funds and net income earned during the year ended December
31, 2005.

     Due to  managing  member  represents  the  management  fees due to the
Managing  Member.  Due to  managing  member  as of  December  31,  2005 was
$2,321,114 as compared to  $3,247,774 as of December 31, 2004.  Because the
management fee is calculated as a percentage of the Company's net assets as
of each month end, the liability  related to management fees will fluctuate
based on the  fluctuation  of the month end net asset value of the Company.
The  decrease in Due to managing  member is due to the amount and timing of
the payment of the monthly management fee to the Managing Member.

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

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

     The  value  of  the   Company's   directly  held  cash  and  financial
instruments is not expected to be materially affected by inflation.  At the
Investment  Fund level,  given that GRV'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  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 the terms
and  conditions of the operating  agreements of the  respective  Investment
Funds.  These investments are carried at fair value, based on the Company's
attributable  share of the net assets of the  respective  Investment  Fund.
Fair values of interests in Investment  Funds 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
also 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. Assets of the Company invested directly in
Advisor Funds will generally be valued based on the value reported by or on
behalf of the applicable  Advisor,  and other assets of the Company will be
valued at fair value in a commercially  reasonable  manner.  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  generally are made based on
information  the Company or the Investment  Funds,  as applicable,  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.  If the Managing Member
determines  that any such  valuation may be inaccurate or  incomplete,  the
Managing  Member  may  determine  the  fair  value  of the  asset  based on
information  available  to, and factors  deemed  relevant  by, the Managing
Member  at the time of such  valuation.  Generally,  however,  neither  the
Company nor the Investment Funds will receive  independent  valuations with
respect to the assets  managed  by  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."

     The  valuation  provisions  of  the  LLC  Agreement  and  the  limited
liability  agreements  of the  Investment  Funds  have been  revised  as of
January 1, 2006 to provide the Managing Member with greater  flexibility to
more accurately value the Company's assets (for purposes of  subscriptions,
redemptions  and fees) in  circumstances  where  the  Managing  Member  has
information  available to it indicating  that a valuation may be inaccurate
or incomplete,  although generally, as described above, the Managing Member
will not have access to independent  valuations and will rely on valuations
provided by the Advisors.  However,  where such information does exist, the
Managing  Member will be entitled to apply its authority to more accurately
reflect the Company's value.  Accordingly,  to the extent that the Managing
Member determines that a valuation provided by an Advisor may be inaccurate
or  incomplete,  the  additional  flexibility  on the  Company's  valuation
practices is designed to make the Company's  valuations more accurate.  For
example,  to the extent an Advisor has allocated  assets to an Advisor Fund
that has provided the Company with a valuation report indicating a positive
valuation, but the Managing Member is aware that the Advisor Fund has filed
for bankruptcy, the Managing Member will now be able to take the bankruptcy
into account to attempt to more accurately determine the fair value of such
assets.

     To date there has been one situation  during the periods  presented in
the Company's  financial  statements  presented in this Annual Report where
the  Managing  Member has  determined  that the  valuation  provided  by an
Advisor or  independent  investment  manager in which one of the Investment
Funds had invested was not complete or was  inaccurate.  In this particular
situation,  the  managing  member  of  the  Investment  Fund  adjusted  the
valuation  provided by the Advisor to the  Investment  Fund upon receipt of
information  that the  investment was under distress to reflect more fairly
its belief as to the appropriate  value of the  investment.  As the Company
continues to ascribe a minor value to this investment,  the Managing Member
continues to evaluate this  investment on an on-going basis and may further
adjust its valuation in the future.

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

                         [Left Blank Intentionally]

<PAGE>

                                 YEAR ENDED

                                 % OF                    NET TRADING
                     % OF      ADJUSTED        FAIR        PROFIT
    INVESTMENT     MEMBERS'    MEMBERS'     VALUE/VALUE    (IN
       FUND         EQUITY      EQUITY(6)    AT RISK      MILLIONS)    LIQUIDITY
       ----         ------      ---------   -----------   ---------    ---------

   GELS                37.97%     26.21%   $294,096,911     $25.7         (1)

   GED                 38.91%     26.86%   $301,443,254     $20.9         (2)

   GRV                 41.02%     28.32%   $317,728,892     $12.3         (3)

   GTT                 27.25%     18.81%   $211,060,876      $7.9         (4)
                  ------------ ---------- --------------- -----------

   TOTAL          145.15% (5)  100.20%(5) $1,124,329,933    $66.8
                  ============ ========== =============== ===========

                                 YEAR ENDED
                             DECEMBER 31, 2004
 -------------------------------------------------------------------------------
                              % OF                         NET
                              ADJUSTED                     TRADING
                    % OF      MEMBERS'         FAIR        PROFIT
    INVESTMENT    MEMBERS'    EQUITY      VALUE/VALUE AT   (IN
       FUND        EQUITY        (6)           RISK        MILLIONS)   LIQUIDITY
       ----        ------        ---           ----        ---------   ---------

   GELS            23.63%      20.84%      $226,276,134       $17.7       (1)

   GED             28.01%      24.69%      $268,186,702       $27.9       (2)

   GRV             36.60%      32.27%      $350,409,379       $17.9       (3)

   GTT             25.91%      22.84%      $248,081,137        $8.5       (4)
                 ------------ ---------- ---------------- -----------
   TOTAL          114.15%(5)  100.64%(5) $1,092,953,352       $72.0
                 ============ ========== ================ ===========

(1)  Redemptions  can be made quarterly with 45 days' notice or at the sole
     discretion of the managing member.

(2)  Effective  January 1, 2006,  redemptions can be made quarterly with 91
     days' notice or at the sole discretion of the managing member,  rather
     than  semi-annually  with 45 days' notice as required prior to January
     1,  2006.

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

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

(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  $347,523,596
     that was  payable  at  December  31,  2005 and  $128,546,636  that was
     payable at December 31, 2004.

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 generally includes site visits
and monthly  conference  calls. The risks involved are described under ITEM
1A.  "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 That 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 1A. "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 That
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  provide  for  adequate   diversification.   Each
Investment Fund is a portfolio of approximately  20-30 underlying  Advisors
and the managing member of each of the Investment  Funds regularly  reviews
portfolio  statistics,  such as relative  contribution  to risk, to confirm
that risk is not concentrated in any single Advisor.

     Quantitative   analysis  is  combined   with   judgment  to  determine
weightings that will offer broad exposure to hedge fund returns.  Strategic
return,  risk and correlation  estimates inform the quantitative  analysis,
which balances  returns and  contribution  to portfolio  risk.  Judgment is
applied  to  both  estimates  and  weights  in  an  attempt  to  achieve  a
diversified   exposure   to  hedge  funds   while   delivering   attractive
risk-adjusted  returns.  Until June 30, 2004, the Company had allocated its
assets  on a  roughly  equivalent  risk-weighted  basis to each of the four
hedge fund  sectors.  In other  words,  each of the four  Investment  Funds
contributed  approximately 25% of the total risk of the Company  portfolio,
although the actual  allocations  that achieve the roughly  equivalent risk
weightings  were different for each sector.  The Managing Member utilizes a
strategic sector allocation and periodically  re-evaluates the contribution
to the risk and return of the Company from each  investment  sector and may
in its sole discretion  adjust the Company's  assets or weights as it deems
advisable.  Through  June 30, 2004,  the  Managing  Member had not made any
tactical  adjustments.  An adjustment to the weights was  implemented as of
July 1, 2004 to reflect the  Managing  Member's  updated  expectations  for
return,  risk  and  correlations  for the  Investment  Funds as well as the
Managing Member's judgment.  In addition,  the weights among the Investment
Funds no longer  reflect a strict equal risk  allocation (as they had prior
to July 1, 2004). As of July 1, 2004, the weights were set to 20% GELS, 24%
GED,  33% GRV , and 23% GTT. In  addition,  on July 1, 2005,  the  Managing
Member  made a tactical  adjustment  to the  weightings  of the  Investment
Funds.  As of July 1, 2005,  the weights were set to 30% GELS, 30% GED, 25%
GRV, and 15% GTT. This adjustment to the weights among the Investment Funds
reflects the Managing Member's judgment and was implemented by the Managing
Member  gradually  following July 1, 2005. The  approximate  weights of the
Investment Funds were 26% GELS, 27% GED, 28% GRV and 19% GTT as of December
31,  2005 as a  percentage  of  adjusted  members'  equity  which  excluded
redemptions  paid after  December 31,  2005.  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, 2004 to December
31, 2005.

<PAGE>

<TABLE>
<CAPTION>

                                                   FISCAL QUARTER ENDED
                                                   --------------------

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

<S>                              <C>          <C>                 <C>               <C>
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

                                  MAR. 31,       JUNE 30,          SEP. 30,          DEC. 31,
                                    2005           2005              2005              2005
                                    ----           ----              ----              ----
NET TRADING PROFIT/(LOSS)         $2,165,716    $4,068,802       $44,098,205        $16,483,858
TOTAL EXPENSES                    $3,281,121    $3,596,025        $3,693,226         $4,266,376
NET INCOME/(LOSS)                ($1,096,814)     $559,164       $40,446,627        $12,232,657
NET INCOME/(LOSS) AVAILABLE
    FOR PRO RATA ALLOCATION
        TO MEMBERS               ($1,109,981)     $518,802       $38,496,572        $11,621,025

</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, 2005 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.


           NAME           AGE             POSITION(S)
  ---------------------  ------ ------------------------------
  George H. Walker         36   Director, Managing Director
                                and Chief Executive Officer
  Tobin V. Levy            62   Director, Managing Director
                                and Chief Financial Officer
  Kent A. Clark            41   Director, Managing Director
                                and Chief Investment Officer
  Hugh J. Lawson           37   Director, Managing Director
                                and Global Head of Product
                                Management
  Jennifer Barbetta        33   Vice President and Chief Financial Officer*
  Thomas Dobler            40   Vice President and Head of GTT
  Omar Asali               36   Vice President and Head of GED
  Melanie Owen             29   Vice President and Head of GRV
  Peter Ort                35   Vice President and Head of GELS

                *  Chief Financial Officer effective April 1, 2006.

     Effective  September 23, 2005,  Omar Asali,  the current  co-portfolio
manager of the Global Event Driven Sector,  assumed leadership of the Event
Driven team as well as portfolio  management  responsibility  for all Event
Driven portfolios.  Melanie Owen, the current  co-portfolio  manager of the
Global Relative Value Sector, assumed leadership of the Relative Value team
as well as  portfolio  management  responsibility  for all  Relative  Value
portfolios.  Terrence O. Jones, former  co-portfolio  manager of the Global
Event  Driven team and the Global  Relative  Value team,  left the Managing
Member to pursue other interests in early 2006.

     On March 28, 2006,  Tobin V. Levy notified the Company that  effective
April 1,  2006,  he will no longer  serve as the  Managing  Member's  Chief
Financial Officer for the Company. Mr. Levy will remain a Managing Director
of the Managing  Member and will continue to support the Managing Member in
a variety of  capacities.  Jennifer  Barbetta will assume the role of Chief
Financial Officer for the Managing Member as of this date.

     Information about the directors and executive officers of the Managing
Member 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 Chief
Investment Officer of the Managing Member. Mr. Clark joined GSAM in 1992 as
a member of the  Quantitative  Equity team,  where he managed Global Equity
portfolios and equity market neutral trading strategies.  In this capacity,
he also  developed risk and return  models.  Mr. Clark's  research has been
published  in the Journal of  Financial  and  Quantitative  Analysis and in
Enhanced  Indexing.  Mr.  Clark  serves  on the Board of  Governors  of the
Graduate Faculty at the New School University,  on the board of the Managed
Funds Association, and he is a member of the Chicago Quantitative Alliance.
Formerly, he was president of the Society of the Quantitative Analysts. Mr.
Clark joined Goldman Sachs from the University of Chicago  Graduate  School
of Business where he completed all but  dissertation  in the Ph.D.  program
and  earned an M.B.A.  He holds a  Bachelor  of  Commerce  degree  from the
University of Calgary.

     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.

     JENNIFER BARBETTA is a Vice President in GSAM Alternative Investments.
In addition,  Ms. Barbetta is Chief Operating Officer and Head of Portfolio
Analytics and Reporting for the Private Equity Group, Hedge Fund Strategies
and the  Real  Estate  Alternative  Investments  businesses,  where  she is
responsible for client reporting,  portfolio monitoring and analytics, cash
management,  infrastructure  development and overall  administration of the
groups'  products.  Ms. Barbetta  joined Goldman Sachs Asset  Management in
1997 after spending two years in Goldman Sachs' Finance Division, where she
supported  the Real  Estate  Principal  Investment  Area,  focusing  on the
financial  and tax reporting of the  Whitehall  Street Real Estate  Limited
Partnerships.  Ms.  Barbetta  received  a B.S.  in Finance  from  Villanova
University

     THOMAS  DOBLER is a Vice  President of the Managing  Member and is the
Head of GTT,  where he has worked  since  2002,  and he is also the 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.

     OMAR ASALI is a Vice President of the Managing  Member and is the Head
of GED, and is Portfolio  Manager of West Street Partners,  a concentrated,
multi-manager  vehicle that invests in hedge funds that demand longer term,
stable capital.  Prior to joining  Goldman Sachs Asset  Management in 2003,
Omar worked in Goldman Sachs' Investment Banking Division providing M&A and
strategic  advisory services to clients in the High Technology Group. Prior
to joining the firm, Omar worked in private equity at Capital Guidance.  He
started his career as a C.P.A.  working for a public  accounting firm. Omar
has 12 years of industry experience.  He received a B.S. in Accounting from
Virginia Tech and an M.B.A. from Columbia University.

     MELANIE OWEN is a Vice  President  of the  Managing  Member and is the
Head of GRV . Prior to joining the Managing Member, Melanie was part of the
Manager Selection team in London,  researching  managers across all sectors
in the European and Asian regions.  She joined  Goldman  Sachs'  Investment
Management Division in 1998,  subsequently working in both the Global Fixed
Income and Global Equities  portfolio  management teams.  Melanie graduated
from  Warwick  University  with a first  class B.Sc.  (Hons) in  M.O.R.S.E.
(Maths,  Operational Research,  Statistics and Economics). In 2001, Melanie
attained her CFA Designation.

     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
was filed as an exhibit to the Company's Form 10-K for December 31 2004. 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.  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,  2005.  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."

<TABLE>
<CAPTION>
---------------------------------------------------------------------------- -----------
                                 FEE TYPE                                    FEE AMOUNT
---------------------------------------------------------------------------- -----------
<S>                                                                          <C>
Management Fee paid or payable by the Company                                $13,560,772
---------------------------------------------------------------------------- -----------
Incentive Allocation paid or payable by the Company                          $2,615,216
---------------------------------------------------------------------------- -----------
Placement Fee paid or payable by the Company to Goldman Sachs                $0
---------------------------------------------------------------------------- -----------

</TABLE>

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, 2005, with the return on the
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 these indices.

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

            CUMULATIVE PERFORMANCE (APRIL 2002 - DECEMBER 2005)

                             [GRAPHIC OMITTED]



 o   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.

 o   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.

 o   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.

 o   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.

 o   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.

 o   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, 2005 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, 2005.

        ---------------------------------------------------------
          NUMBER OF    NAME OF BENEFICIAL    PERCENTAGE OF ALL
            UNITS            OWNER         INVESTORS' INTERESTS
        ---------------------------------------------------------
              0       George H. Walker               -
        ---------------------------------------------------------
              0       Tobin V. Levy                  -
        ---------------------------------------------------------
              0       Kent A. Clark                  -
        ---------------------------------------------------------
              0       Hugh J. Lawson                 -
        ---------------------------------------------------------
              0       Jennifer Barbetta              -
        ---------------------------------------------------------
              0       Thomas Dobler                  -
        ---------------------------------------------------------
              0       Peter Ort                      -
        ---------------------------------------------------------
              0       Omar Asali                     -
        ---------------------------------------------------------
              0       Melanie Owen                   -
        ---------------------------------------------------------
              0       Directors and                  -
                      executive officers
                      as a group
        ---------------------------------------------------------

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. 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,
2005 and are proposed to provide such services in the current year.

     No directors  and  executive  officers of the Managing  Member,  their
spouses and  entities  owned or  controlled  by them  invested an amount in
excess of $60,000 in the Company  during the year ended  December 31, 2005.
Certain directors and executive officers of the Managing Member,  including
their spouses and entities  owned or  controlled by them,  may 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 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.

     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, 2005 and 2004 and fees billed for other
services rendered by E&Y during those periods.


                                        Year Ended December 31,
                                   2005                         2004
                         -------------------------    --------------------------
Audit Fees               $      120,000 (1)           $       185,000(2)

Audit-Related Fees (3)   $      280,000               $             -

Tax Fees (4)             $       50,000               $        60,000

All Other Fees           $            -               $             -
                         -------------------------    --------------------------
Total                    $      450,000               $       245,000
                         =========================    ==========================

(1)  Year ended  December 31, 2005 includes  $45,000 for the review of this
     annual report on Form 10-K and the Company's quarterly reports on Form
     10-Q.

(2)  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.

(3)  Year ended December 31, 2005 audit-related fees are for Sarbanes Oxley
     404 consultation, documentation and testing.

(4)  Tax services  primarily involve 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.



<PAGE>


                                  PART IV

ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

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

          1.   Financial Statements.

               DESCRIPTION OF FINANCIAL STATEMENTS                  PAGE
               -----------------------------------                 NUMBER
                                                                   ------
               Goldman Sachs Hedge Fund Partners, LLC Financial
               Statements

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

               Schedule of Investments as of December 31, 2005
               and 2004..........................................   F-3

               Balance Sheet as of December 31, 2005 and 2004....   F-5

               Statement of Operations for the years ended
               December 31, 2005, 2004 and 2003..................   F-6

               Statement of Changes in Members' Equity for the
               years ended December 31, 2005, 2004 and 2003......   F-7

               Statement of Cash Flows for the years ended
               December 31, 2005, 2004 and 2003..................   F-8

               Notes to Financial Statements.....................   F-9

          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 31, 2006


<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, 2006 (Note:  the LLC  Agreement  also defines the
               rights of the  holders  of Units of the  Company)  (filed as
               Exhibit  3 to the Form  8-K,  filed  January  6,  2006,  and
               incorporated herein by reference).

   10.1*       Copy of  Amended  and  Restated  Limited  Liability  Company
               Agreement of Goldman  Sachs Global  Tactical  Trading,  LLC,
               dated as of  January 1, 2006  (filed as Exhibit  10.1 to the
               Form 8-K, filed January 6, 2006, and incorporated  herein by
               reference).

   10.2*       Copy of  Amended  and  Restated  Limited  Liability  Company
               Agreement of Goldman  Sachs Global Equity  Long/Short,  LLC,
               dated as of  January 1, 2006  (filed as Exhibit  10.2 to the
               8-K,  filed  January 6,  2006,  and  incorporated  herein by
               reference).

   10.3*       Copy of  Amended  and  Restated  Limited  Liability  Company
               Agreement of Goldman Sachs Global Relative Value, LLC, dated
               as of  January 1, 2006  (filed as  Exhibit  10.3 to the Form
               8-K,  filed  January 6,  2006,  and  incorporated  herein by
               reference).

   10.4*       Copy of  Amended  and  Restated  Limited  Liability  Company
               Agreement of Goldman Sachs Global Event Driven,  LLC,  dated
               as of  January 1, 2006  (filed as  Exhibit  10.4 to the Form
               8-K,  filed  January 6,  2006,  and  incorporated  herein by
               reference).

   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
               (filed as  Exhibit  14.1 to the Form 10-K,  filed  March 29,
               2005, and incorporated herein by reference).

   14.2        Amended  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>

                       INDEX OF FINANCIAL STATEMENTS
                       -----------------------------


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

Goldman Sachs Hedge Fund Partners, LLC Financial Statements

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

Schedule of Investments as of December 31, 2005 and 2004........F-3

Balance Sheet as of December 31, 2005 and 2004..................F-5

Statement of Operations for the years ended December 31,
2005, 2004 and 2003.............................................F-6

Statement of Changes in Members' Equity for the years ended
December 31, 2005, 2004 and 2003................................F-7

Statement of Cash Flows for the years ended December 31,
2005, 2004 and 2003.............................................F-8

Notes to Financial Statements...................................F-9


<PAGE>


          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, 2005 and 2004,  and the related  statements of  operations,
changes in  members'  equity and cash flows for each of the three  years in
the period ended  December 31, 2005.  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,  2005 and 2004,  the  results of its
operations,  changes in its members'  equity and its cash flows for each of
the three years in the period ended  December 31, 2005, in conformity  with
U.S. generally accepted accounting principles.



                                                  ERNST & YOUNG LLP

New York, New York
March 28, 2006


<PAGE>


<TABLE>
                                            GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

                                                   SCHEDULE OF INVESTMENTS

                                                  DECEMBER 31, 2005 AND 2004


<CAPTION>
                                                 2005                                              2004
                            --------------------------------------------------  --------------------------------------------
                                                  % 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   $    294,096,911        37.97%           26.21%     $  226,276,134       23.63%            20.84%

Goldman Sachs Global
Event Driven, LLC             301,443,254        38.91%           26.86%        268,186,702       28.01%            24.69%

Goldman Sachs Global
Relative Value, LLC           317,728,892        41.02%           28.32%        350,409,379       36.60%            32.27%

Goldman Sachs Global
Tactical Trading, LLC         211,060,876        27.25%           18.81%        248,081,137       25.91%            22.84%
                          ----------------  -------------  ----------------  ---------------   ------------  ---------------
Total investments
(cost $949,298,808 and
$945,867,114,
respectively)            $  1,124,329,933       145.15%          100.20%    $ 1,092,953,352      114.15%           100.64%
                         ================  =============  ================  ===============   ============  ===============
<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 % of adjusted members' equity,  represents members' equity excluding
     Redemptions  payable in the amount of $347,523,596 that was payable at
     December  31,  2005  and  Redemptions  payable  in the  amount  of and
     $128,546,636 that was payable at December 31, 2004.

</FN>
</TABLE>

                          See accompanying notes


<PAGE>

                   GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

                          SCHEDULE OF INVESTMENTS

                   DECEMBER 31, 2005 AND 2004 (continued)


Underlying investment  information required to make a complete presentation
of  the  Company's   aggregate   proportionate   share  of  the  underlying
investments of the Investees is not available from certain Investees. Where
such information is available,  the Company's aggregate proportionate share
of any  underlying  investment  of the  Investees,  which exceeds 5% of the
Company's members' equity, would be disclosed.


The Company's  aggregate  proportionate  share of the following  underlying
investments of the Investees  represented  greater than 5% of the Company's
members' equity.

<TABLE>
<CAPTION>
                                                                             2005
------------------------------------------------------------------------------------------------------------------------
                                                                                                              % OF
                                                                         PROPORTIONATE                      ADJUSTED
                                                                            SHARE OF      % OF MEMBERS'     MEMBERS'
                     INVESTEE                   UNDERLYING INVESTMENT      FAIR VALUE          EQUITY       EQUITY(2)
-------------------------------------------- -------------------------- ---------------- --------------   --------------
<S>                                          <C>                           <C>                 <C>           <C>
Goldman Sachs Global Event Driven, LLC       OZ Domestic Partners, LP      23,653,904          3.04%         2.10%
Goldman Sachs Global Relative Value, LLC     OZ Domestic Partners, LP      18,712,511          2.41%         1.66%


<FN>
(1)  Members' equity used in the calculation of the underlying  investments
     held by the Investees 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 underlying
     investments held by the Investees as a percentage of adjusted members'
     equity,  represents  members' equity excluding  Redemptions payable in
     the amount of $347,523,596 that was payable at December 31, 2005.
</FN>

</TABLE>
                                                    See accompanying notes.


<PAGE>

<TABLE>

                                           GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

                                                        BALANCE SHEET

                                                  DECEMBER 31, 2005 AND 2004

<CAPTION>
                                                            ASSETS
                                                            ------
                                                                                    2005                      2004
                                                                           ---------------------      --------------------
<S>                                                                       <C>                        <C>
Assets:
      Investments (cost $949,298,808 and
              $945,867,114, respectively)                                  $      1,124,329,933       $     1,092,953,352
      Cash and cash equivalence                                                         706,812                   218,797
                                                                           ---------------------      --------------------
          Total assets                                                     $      1,125,036,745       $     1,093,172,149
                                                                           =====================      ====================

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

Liabilities:
      Redemptions payable                                                  $        347,523,596       $       128,546,636
      Due to managing member                                                          2,321,114                 3,247,774
      Due to bank                                                                        10,112                 3,000,000
      Accounts payable and accrued liabilities                                          583,040                   922,506
                                                                           ---------------------      --------------------
          Total liabilities                                                         350,437,862               135,716,916

Members' equity (units outstanding 6,507,125.18 and
       8,106,803.34, respectively)                                                  774,598,883               957,455,233
                                                                           ---------------------      --------------------

          Total liabilities and members' equity                            $      1,125,036,745       $     1,093,172,149
                                                                           =====================      ====================

Analysis of members' equity:
      Net capital contributions, accumulated net investment
           income/(loss) and realized profit/(loss)                        $        599,567,758       $       810,368,995
      Accumulated net unrealized profit/(loss)                             $        175,031,125       $       147,086,238
                                                                           =====================      ====================

</TABLE>

                                                   See accompanying notes.


<PAGE>


<TABLE>

                                            GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

                                                   STATEMENT OF OPERATIONS

                                     FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003


<CAPTION>
                                                          2005                   2004                     2003
                                                -----------------      -----------------       -----------------
<S>                                             <C>                    <C>                     <C>
Income from trading:
    Equity in earnings of investees:
       Realized profit/(loss)                   $     38,871,694       $     18,366,046        $        241,972
       Changed in unrealized profit/(loss)            27,944,887             53,652,341              81,612,423
                                                -----------------      -----------------       -----------------

        Net trading profit/(loss)                     66,816,581             72,018,387              81,854,395

Interest income                                          161,801                495,194                  97,943

Expenses:
    Management fee                                    13,560,772             12,234,696               9,666,257
    Professional fees                                  1,237,030              1,641,442               1,053,505
    Interest expense                                      37,747                546,069                      -
    Miscellaneous expenses                                 1,199                 35,645                  13,910
                                                -----------------      -----------------       -----------------
         Total expenses                               14,836,748             14,457,852              10,733,672
                                                -----------------      -----------------       -----------------
        Net investment income/(loss)                 (14,674,947)           (13,962,658)            (10,635,729)
                                                -----------------      -----------------       -----------------

Net income/(loss)                                     52,141,634             58,055,729              71,218,666

    Less:  Incentive allocation to the
           managing member                             2,615,216              2,902,854               3,560,865
                                                -----------------      -----------------       -----------------
Net income/(loss) available for pro-rata
    allocation to members                       $     49,526,418       $     55,152,875        $     67,657,801
                                                =================      =================       =================

</TABLE>

                                                   See accompanying notes.

<PAGE>


<TABLE>

                                            GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

                                           STATEMENT OF CHANGES IN MEMBERS' EQUITY

                                    FOR THE YEARS ENDED DECEMBER 31, 2005, 2004, AND 2003


<CAPTION>
                                           Managing                                                            Total
                                           member's               Members'              Members'              members'
                                           equity                  units                equity                equity
                                       ---------------     --------------------     -----------------     -----------------
<S>                                   <C>                         <C>               <C>                   <C>
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)
Share class conversion                               -               (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)
Share class conversion                               -              (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

Subscriptions                                        -             2,253,291.93           225,329,193           225,329,193
Redemptions                                 (2,615,216)           (3,708,281.88)         (457,711,961)         (460,327,177)
Share class conversion                               -              (144,688.21)                    -                     -
Allocations of net income/(loss):
   Incentive allocation                      2,615,216                        -                     -             2,615,216
   Pro-rata allocation                               -                        -            49,526,418            49,526,418
                                       ---------------     --------------------     -----------------     -----------------

Balance at December 31, 2005          $              -             6,507,125.18     $     774,598,883     $     774,598,883
                                       ===============     ====================     =================     =================

</TABLE>


                                                   See accompanying notes.


<PAGE>


<TABLE>

                                            GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

                                                   STATEMENT OF CASH FLOWS

                                    FOR THE YEARS ENDED DECEMBER 31, 2005, 2004, AND 2003



<CAPTION>
                                                                    2005                2004                 2003
                                                             ----------------    ----------------     ----------------
<S>                                                          <C>                 <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net income/(loss)                                       $    52,141,634     $    58,055,729      $    71,218,666

Adjustments to reconcile net income/(loss) to net
   cash from operating activities:
     Purchases of investments                                   (192,640,000)       (174,845,756)        (507,973,827)
     Proceeds from sales of investments                          228,080,000         124,823,619            2,500,000
     Realized profit/(loss) from sales of
        investments                                              (38,871,694)        (18,366,046)            (241,972)
     Change in unrealized profit/(loss)                          (27,944,887)        (53,652,341)         (81,612,423)

(Increase)/decrease in operating assets:
     Other assets                                                          -              77,464              (77,464)
Increase/(decrease) in operating liabilities:
     Due to managing member                                         (926,660)           (721,913)           3,211,779
     Accounts payable and accrued liabilities
                                                                    (339,466)            753,631              (31,769)
                                                             ----------------    ----------------     ----------------

Net cash from operating activities                                19,498,927         (63,875,613)        (513,007,010)
                                                             ----------------    ----------------     ----------------

CASH FLOWS FROM FINANCING ACTIVITIES

     Subscriptions                                               225,329,193         126,385,622          524,318,830
     Redemptions                                                (241,350,217)        (66,214,849)         (10,988,390)
     Increase (decrease) in Due to bank                           (2,989,888)        (44,500,000)          47,500,000
                                                             ----------------    ----------------     ----------------

Net cash from financing activities                               (19,010,912)         15,670,773          560,830,440
                                                             ----------------    ----------------     ----------------

     Net change in cash and cash equivalents                         488,015         (48,204,840)          47,823,430

Cash and cash equivalents at beginning of year                       218,797          48,423,637              600,207
                                                             ----------------    ----------------     ----------------

Cash and cash equivalents at end of year                     $       706,812     $       218,797      $    48,423,637
                                                             ================    ================     ================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid by the Company during the year for interest        $        27,635     $       546,069                    -
                                                             ================    ================     ================

</TABLE>


                          See accompanying notes.



<PAGE>


                   GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

                       NOTES TO FINANCIAL STATEMENTS

                             DECEMBER 31, 2005

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 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"), 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 years ended December 31, 2005 and 2004, the Company's  ownership
percentage of certain  Investees  exceeded 50%. This  ownership  percentage
will  fluctuate  as a  result  of the  Company's  investment  strategy  and
investor  subscriptions  and redemptions at the Company and Investee level.
The  Company  does not  consolidate  the  results of the  Investees  in its
financial  statements as the Company does not invest in such  Investees for
purposes  of  exercising  control;  ownership  in  excess  of  50%  may  be
temporary;  and the  consolidation  of these balances would not enhance the
usefulness or  understandability of information to the members. 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, 2005 and 2004:

<TABLE>
<CAPTION>
                                                  December 31, 2005
             ------------------------------------------------------------------------------------------
                                                     % owned by          Adjusted        Adjusted %
                 Company             Investee           the              Investee       owned by the
                investment          equity (1)       Company(1)         equity (2)       Company(2)
             ------------------ ------------------- ------------- ------------------- -----------------
<S>          <C>                 <C>                  <C>          <C>                     <C>
GELS         $     294,096,911   $    816,334,736     36.03%       $    971,851,587        30.26%
GED                301,443,254        971,795,729     31.02%          1,014,743,053        29.71%
GRV                317,728,892        397,729,785     79.89%            742,911,706        42.77%
GTT                211,060,876        316,096,988     66.77%            484,726,735        43.54%
             ------------------
   Total     $   1,124,329,933
             ==================

</TABLE>


                                     December 31, 2004
             ----------------------------------------------------
                 Company             Investee        % owned by
                investment            equity        the Company
             ----------------------------------------------------
GELS         $     226,276,134   $   694,878,944       32.56%
GED                268,186,702       860,469,969       31.17%
GRV                350,409,379       617,008,832       56.79%
GTT                248,081,137       635,662,057       39.03%
             ------------------
   Total     $   1,092,953,352
             ==================

(1)  The  Investees'  equity used in the  calculation of the % owned by the
     Company is reduced for member  redemptions from the Investees that are
     paid after the balance sheet date.

(2)  The Adjusted  Investees' Equity used in the calculation of the % owned
     by the Company represents Investees' equity excluding Redemptions that
     were paid after December 31, 2005.

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

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

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

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

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

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

Net  income/(loss)  is  allocated  monthly to the  capital  account of each
member in the ratio that the balance of each such member's  capital account
bears to the total balance of all members' capital  accounts.  The managing
member receives an annual 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  seek  capital  appreciation  over time by  investing in the
equity long/short,  event driven, relative value and tactical trading hedge
fund sectors.  The Company's  investments in Investees are subject to terms
and conditions of the respective operating agreements.  The investments are
carried at fair value as determined by the Company's  attributable share of
the net assets of the  respective  Investees.  Fair  values are  determined
utilizing net asset value information  supplied by each individual Investee
net of each  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
as  determined  by the  Advisors.  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 each of the 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 year ended December 31, 2005, 2004 and 2003:

<TABLE>
<CAPTION>
                                                                  Year Ended December 31,
--------------------------    ------------    -------------------------------------------------------------
Investee                       Liquidity            2005                  2004                 2003
--------------------------    ------------    ------------------    -----------------    ------------------
<S>                               <C>         <C>                   <C>                  <C>
GELS                              (1)         $       25,751,277    $      17,695,686    $     15,645,066
GED                               (2)                 20,855,652           27,901,912          28,258,987
GRV                               (3)                 12,266,713           17,918,978          19,361,520
GTT                               (4)                  7,942,939            8,501,811          18,588,822
                                              ------------------    -----------------    ------------------
           Total                              $       66,816,581    $      72,018,387    $     81,854,395
                                              ==================    =================    ==================
<FN>
(1)  Redemptions can be made quarterly with 45 days' notice, or at the sole
     discretion of the managing member.  Prior to July 2004, a twelve-month
     holding period was in effect.
(2)  Redemptions can be made  semi-annually with 45 days' notice, or at the
     sole  discretion  of the  managing  member.  Prior  to  July  2004,  a
     twelve-month holding period was in effect.  Effective January 1, 2006,
     redemptions can be made quarterly with 91 days' notice.
(3)  Redemptions can be made quarterly with 45 days' notice, or at the sole
     discretion  of the managing  member.  Prior to July 2004,  redemptions
     were  made  semi-annually  with  45  days'  notice,  or  at  the  sole
     discretion of the managing  member and a  twelve-month  holding period
     was in effect.  Effective  January 1,  2006,  redemptions  can be made
     quarterly with 91 days' notice.
(4)  Redemptions can be made  semi-annually with 60 days' notice, or at the
     sole  discretion of the managing  member.  Effective  January 1, 2006,
     redemptions can be made quarterly with 61 days' notice.
</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 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.

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.

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, 2005,  2004 and
2003. The weighted average is based on the period end market values of each
Advisor investment in proportion to the Investee's total  investments.  The
fee rates used are the actual rates charged by each Advisor.

<TABLE>
<CAPTION>
                                 2005                              2004                               2003
                 -------------------------------    ------------------------------    --------------------------------
Investee           Management        Incentive        Management       Incentive          Management       Incentive
                      fees              fee             fees              fee                fees             fee
-------------    ---------------    ------------    --------------    ------------    ----------------    ------------
<S>                  <C>               <C>              <C>             <C>                <C>               <C>
GELS                 1.50%             19.94%           1.42%           20.00%             1.27%             19.78%
GED                  1.47%             19.92%           1.43%           19.94%             1.44%             19.93%
GRV                  1.65%             20.88%           1.57%           20.76%             1.53%             20.60%
GTT                  2.02%             20.63%           2.05%           20.46%             1.96%             19.97%

</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, 2005 and 2004:

            Investee                      12/31/2005              12/31/2004
----------------------------------    --------------------    -----------------

GELS                                     $ 241,980,239           $ 193,714,595
GED                                        236,665,601             213,989,105
GRV                                        282,956,248             315,948,238
GTT                                        187,696,720             222,215,176
                                      -----------------     -------------------

     Total                               $ 949,298,808           $ 945,867,114
                                      =================     ===================

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

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

Effective January 1, 2005, the Company pays a monthly administration fee to
SEI Global Services,  Inc. ("SEI") in the range of 0.07% to 0.10% per annum
of the net  assets at the  Investee  level,  but such rate may be  exceeded
under certain  circumstances,  subject to a maximum of approximately 0.20%.
Prior to January 1, 2005, the Company paid a monthly  administration fee to
GS HFS equal to 0.20% per annum of the net  assets at the  Investee  level.
The  administration fee is charged at the Investee level and is included in
Equity in earnings of investees on the  Statement  of  Operations.  For the
year ended December 31, 2005, 2004 and 2003, the administration fee charged
at  the  Investee  level  totaled  $713,242,   $1,960,131  and  $1,539,364,
respectively.

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

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

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

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

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

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

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


NOTE 5 - RELATED PARTIES
------------------------

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

Included in the  Redemptions  payable on the Balance  Sheet at December 31,
2005 and 2004 were redemptions due to the managing member of $2,615,216 and
$2,902,854, respectively.

Goldman,  Sachs & Co.  ("GS&Co."),  an affiliate of the managing member, is
one of several  prime  brokers for the  Advisors.  GS&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, 2005, 2004 and 2003.


NOTE 6 - BORROWING FACILITY
---------------------------

On November 24, 2004, the Company  entered into a five year credit facility
with a  financial  institution.  The  Company  may  request to borrow up to
$45,000,000,  at the  discretion of the financial  institution.  Effective,
September 1, 2005,  the Company may request to borrow up to  $40,000,000 at
the discretion of the financial institution.  At the time of any borrowing,
the  aggregate  amounts  borrowed may not exceed 10% of the  Company's  net
asset value and at all other times the  aggregate  amount  borrowed may not
exceed 15% of the Company's net asset value. The effective interest rate on
borrowed  amounts is the London  Interbank  Offering Rate  ("LIBOR"),  plus
0.85%.  There were no  borrowings  outstanding  at  December  31,  2005 and
$3,000,000 was  outstanding at December 31, 2004,  which 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.  Effective January 3, 2006, the Company
may request to borrow up to $76,000,000.

Prior to November 24, 2004, 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  effective  interest  rate on
borrowed amounts represented by funds drawn from the collateral account was
LIBOR plus 0.875%. The Company also paid the equivalent of a commitment fee
of 0.25% on the undrawn funds. This facility expired in October 2004.


NOTE 7 - MEMBERS' EQUITY
------------------------

At December 31, 2005 and 2004,  the Company had Class A units  outstanding.
Each  series of Class A units is  identical  in every  regard  except  with
respect to its individualized  incentive allocation base. Effective January
1, 2005,  Class A Series 2 through  Class A Series 8 units  were  converted
into Class A Series 1 units and effective January 1, 2004, Class A Series 2
through Class A Series 10 units were converted into Class A Series 1 units.
Transactions in units for non-managing  members for the year ended December
31, 2005 and 2004 are as follows:

<TABLE>
<CAPTION>
                                       Year ended December 31, 2005                    Year ended December 31, 2004
                              ----------------------------------------------    -------------------------------------------
                                     Units                   Amount                   Units                  Amount
                              --------------------    ----------------------    -------------------    --------------------
Share Class Conversion
=============================
       <S>                            <C>               <C>                         <C>                  <C>
       Class A
           Series 1                    911,205.28       $       109,573,710           4,493,143.70       $     512,003,655
           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)
                              --------------------    ----------------------    -------------------    --------------------
Total                                 (144,688.21)      $                 -            (350,724.93)      $               -
                              ====================    === ==================    ===================    ====================

Subscriptions
       Class A
           Series 1                             -      $                  -             182,499.95       $      20,796,273
           Series 2                             -                         -                 687.41                  68,741
           Series 3                             -                         -              83,221.74               8,322,174
           Series 4                             -                         -              12,734.34               1,273,434
           Series 5                             -                         -              17,500.00               1,750,000
           Series 6                             -                         -             298,400.00              29,840,000
           Series 7                             -                         -             412,100.00              41,210,000
           Series 8                             -                         -             231,250.00              23,125,000
           Series 9                    244,566.36                24,456,636                      -                       -
           Series 10                   546,895.41                54,689,541                      -                       -
           Series 11                   313,250.00                31,325,000                      -                       -
           Series 12                   282,000.00                28,200,000                      -                       -
           Series 13                   305,217.66                30,521,766                      -                       -
           Series 14                   294,000.00                29,400,000                      -                       -
           Series 15                   128,500.00                12,850,000                      -                       -
           Series 16                    52,500.00                 5,250,000                      -                       -
           Series 17                    10,000.00                 1,000,000                      -                       -
           Series 18                    51,262.50                 5,126,250                      -                       -
           Series 19                    12,000.00                 1,200,000                      -                       -
           Series 20                    13,100.00                 1,310,000                      -                       -
                              --------------------    ----------------------    -------------------    --------------------
Total                                2,253,291.93      $        225,329,193           1,238,393.44       $     126,385,622
                              ====================    ======================    ===================    ====================

</TABLE>



<TABLE>
<CAPTION>
                                      Year Ended December 31, 2005                     Year Ended December 31, 2004
                              ----------------------------------------------    -------------------------------------------
                                     Units                   Amount                   Units                  Amount
                              --------------------    ----------------------    -------------------    --------------------
Redemptions
       <S>                           <C>               <C>                            <C>               <C>
       Class A
           Series 1                  3,549,600.61      $        441,034,885           1,321,377.58      $      157,329,006
           Series 9                     34,090.66                 3,553,991                      -                       -
           Series 10                    52,240.59                 5,492,810                      -                       -
           Series 11                    10,000.00                 1,041,174                      -                       -
           Series 12                    19,000.00                 1,989,089                      -                       -
           Series 13                    25,850.01                 2,747,295                      -                       -
           Series 14                    17,500.01                 1,852,717                      -                       -
                              --------------------    --- ------------------    -------------------    --- ----------------
       Total                         3,708,281.88      $        457,711,961           1,321,377.58      $      157,329,006
                              ====================    === ==================    ===================    === ================

</TABLE>

At December 31, 2005 and 2004, members' equity consists of the following:

<TABLE>
<CAPTION>
                                              December 31, 2005                             December 31, 2004
                                  -------------------------------------------    -----------------------------------------
                                       Units                    Net                    Units                  Net
                                    outstanding             asset value             outstanding           asset value
                                  -----------------     ---------------------    ------------------    -------------------
Non-managing members
       <S>                            <C>                <C>                          <C>               <C>
       Class A
           Series 1                   4,412,514.52       $       554,854,668          7,050,909.85      $     847,881,523
           Series 2                              -                         -                687.41                 71,818
           Series 3                              -                         -             83,221.74              8,734,155
           Series 4                              -                         -             12,734.34              1,346,355
           Series 5                              -                         -             17,500.00              1,850,110
           Series 6                              -                         -            298,400.00             31,325,187
           Series 7                              -                         -            412,100.00             42,863,013
           Series 8                              -                         -            231,250.00             23,383,072
           Series 9                     210,475.70                22,009,240                     -                      -
           Series 10                    494,654.82                52,022,308                     -                      -
           Series 11                    303,250.00                31,573,596                     -                      -
           Series 12                    263,000.00                27,533,177                     -                      -
           Series 13                    279,367.65                29,690,733                     -                      -
           Series 14                    276,499.99                29,272,927                     -                      -
           Series 15                    128,500.00                13,455,578                     -                      -
           Series 16                     52,500.00                 5,421,351                     -                      -
           Series 17                     10,000.00                 1,023,103                     -                      -
           Series 18                     51,262.50                 5,179,803                     -                      -
           Series 19                     12,000.00                 1,233,270                     -                      -
           Series 20                     13,100.00                 1,329,129                     -                      -
                                  -----------------     ---------------------    ------------------    -------------------
                Subtotal              6,507,125.18       $       774,598,883          8,106,803.34      $     957,455,233
                                  =================                              ==================
    Managing member                                                        -                                           -
                                                        ---------------------                          -------------------
    Total members' equity                                $       774,598,883                            $     957,455,233
                                                        =====================                          ===================

</TABLE>


Effective  January 1, 2003, Class A Series 2 through Class A Series 9 units
were  converted  into  Class A Series 1 units.  Transactions  in units  for
non-managing members for the year ended December 31, 2003 were as follows:

                                        Year Ended December 31, 2003
                                 -------------------------------------------
                                       Units                  Amount
                                 -------------------    --------------------
Share class conversion
       Class A
           Series 1                   3,260,399.10       $     338,995,791
           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)
                                 -------------------    --------------------
Total                                   (57,157.68)      $               -
                                 ===================    ====================

Subscriptions
       Class A
           Series 1                      361,728.64      $      37,610,130
           Series 2                      425,994.14             42,599,414
           Series 3                      752,365.57             75,236,557
           Series 4                      879,574.26             87,957,426
           Series 5                      654,391.41             65,439,141
           Series 6                      841,120.00             84,112,000
           Series 7                    1,217,902.52            121,790,252
           Series 8                       86,650.95              8,665,095
           Series 9                        8,313.51                831,351
           Series 10                         774.64                 77,464
                                 -------------------    --------------------
Total                                  5,228,815.64      $     524,318,830
                                 ===================    ====================

Redemptions
       Class A
           Series 1                      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                                    369,584.81      $       41,487,391
                                 ===================    ====================



At December 31, 2003, members' equity consists of the following:

                                                December 31, 2003
                                     -----------------------------------------
                                           Units                  Net
                                        outstanding           asset value
                                     ------------------    -------------------
Non-managing members
       Class A
           Series 1                       3,696,643.78      $     421,242,087
           Series 2                         415,994.14             44,920,761
           Series 3                         752,365.57             80,402,510
           Series 4                         879,574.26             94,683,681
           Series 5                         654,391.41             69,753,438
           Series 6                         836,120.00             86,760,878
           Series 7                       1,210,045.71            125,529,478
           Series 8                          86,289.39              9,029,305
           Series 9                           8,313.51                845,096
           Series 10                            774.64                 78,508
                                     ------------------    -------------------
                Subtotal                  8,540,512.41      $     933,245,742
                                     ==================

    Managing member                                                         -
                                                           -------------------

    Total members' equity                                   $     933,245,742
                                                           ===================


<PAGE>


NOTE 8 - FINANCIAL HIGHLIGHTS
-----------------------------

Financial highlights for the Company for the year ended December 31, 2005
are as follows:
<TABLE>
<CAPTION>
                                                              Class A    Class A     Class A     Class A     Class A
                                                             Series 1   Series 9    Series 10   Series 11   Series 12
                                                          ------------  ---------  -----------  ----------  ----------
  <S>                                                       <C>         <C>         <C>         <C>         <C>
  Per unit operating performance:
       Net asset value, beginning of period                 $ 120.25    $ 100.00    $ 100.00    $ 100.00    $ 100.00
  Income from operations:
       Net trading profit/(loss)                                7.44        6.17        6.73        5.49        5.99
       Net investment income/(loss)                            (1.94)      (1.60)      (1.56)      (1.37)      (1.30)
                                                          ------------  ---------  -----------  ----------  ----------
          Total income/(loss) from operations                   5.50        4.57        5.17        4.12        4.69
                                                          ------------  ---------  -----------  ----------  ----------
  Net asset value, end of period                            $ 125.75    $ 104.57    $ 105.17    $ 104.12    $ 104.69
                                                          ============  =========  ===========  ==========  ==========
  Ratios to average net assets (annualized):
       Expenses                                                1.36%       1.37%       1.37%       1.37%       1.36%
       Incentive allocation                                    0.22%       0.24%       0.27%       0.21%       0.24%
                                                          ------------  ---------  -----------  ----------  ----------
          Total expenses and incentive allocation              1.58%       1.61%       1.64%       1.58%       1.60%
                                                          ============  =========  ===========  ==========  ==========
          Net investment income/(loss)                        (1.57%)     (1.59%)     (1.62%)     (1.57%)     (1.59%)
                                                          ============  =========  ===========  ==========  ==========
  Total return (prior to incentive allocation)                 4.79%       4.81%       5.44%       4.33%       4.93%
  Incentive allocation                                        (0.22%)     (0.24%)     (0.27%)     (0.21%)     (0.24%)
                                                          ------------  ---------  -----------  ----------  ----------
          Total return                                         4.57%       4.57%       5.17%       4.12%       4.69%
                                                          ============  =========  ===========  ==========  ==========
<CAPTION>
                                                              Class A    Class A     Class A     Class A     Class A
                                                             Series 13  Series 14   Series 15   Series 16   Series 17
                                                          ------------  ---------  -----------  ----------  ----------
  <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)                                7.58        7.04        5.71        4.06        2.93
       Net investment income/(loss)                            (1.30)      (1.17)      (1.00)      (0.80)      (0.62)
                                                          ------------  ---------  -----------  ----------  ----------
          Total income/(loss) from operations                   6.28        5.87        4.71        3.26        2.31
                                                          ------------  ---------  -----------  ----------  ----------

  Net asset value, end of period                            $ 106.28    $ 105.87    $ 104.71    $ 103.26    $ 102.31
                                                          ============  =========  ===========  ==========  ==========

  Ratios to average net assets (annualized):
       Expenses                                                1.37%       1.36%       1.36%       1.35%       1.33%
       Incentive allocation                                    0.32%       0.30%       0.24%       0.17%       0.12%
                                                          ------------  ---------  -----------  ----------  ----------
          Total expenses and incentive allocation              1.69%       1.66%       1.60%       1.52%       1.45%
                                                          ============  =========  ===========  ==========  ==========

          Net investment income/(loss)                        (1.67%)     (1.64%)     (1.59%)     (1.52%)     (1.44%)
                                                          ============  =========  ===========  ==========  ==========

  Total return (prior to incentive allocation)                 6.60%       6.17%       4.95%       3.43%       2.43%
  Incentive allocation                                        (0.32%)     (0.30%)     (0.24%)     (0.17%)     (0.12%)
                                                          ------------  ---------  -----------  ----------  ----------
          Total return                                         6.28%       5.87%       4.71%       3.26%       2.31%
                                                          ============  =========  ===========  ==========  ==========

<CAPTION>
                                                              Class A    Class A     Class A
                                                             Series 18  Series 19   Series 20
                                                          ------------  ---------  -----------
  <S>                                                       <C>         <C>         <C>
  Per unit operating performance:
       Net asset value, beginning of period                 $ 100.00    $ 100.00    $ 100.00
  Income from operations:
       Net trading profit/(loss)                                1.48        3.20        1.70
       Net investment income/(loss)                            (0.44)      (0.43)      (0.24)
                                                          ------------  ---------  -----------
          Total income/(loss) from operations                   1.04        2.77        1.46
                                                          ------------  ---------  -----------

  Net asset value, end of period                            $ 101.04    $ 102.77    $ 101.46
                                                          ============  =========  ===========
  Ratios to average net assets (annualized):
       Expenses                                                1.33%       1.33%       1.31%
       Incentive allocation                                    0.06%       0.14%       0.08%
                                                          ------------  ---------  -----------
          Total expenses and incentive allocation              1.39%       1.47%       1.39%
                                                          ============  =========  ===========

          Net investment income/(loss)                        (1.38%)     (1.46%)     (1.38%)
                                                          ============  =========  ===========

  Total return (prior to incentive allocation)                 1.10%       2.92%       1.54%
  Incentive allocation                                        (0.06%)     (0.15%)     (0.08%)
                                                          ------------  ---------  -----------
          Total return                                         1.04%       2.77%       1.46%
                                                          ============  =========  ===========

</TABLE>


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%
                                                          ============  =========  ===========  ==========  ==========

<CAPTION>
                                                              Class A    Class A     Class A
                                                             Series 6   Series 7    Series 8
                                                          ------------  ---------  -----------
  <S>                                                       <C>         <C>         <C>
  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>


<PAGE>

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%
                                                          ============  =========  ===========  ==========  ==========

<CAPTION>
                                                          ------------  ---------  -----------  ----------  ----------
                                                            Class A     Class A     Class A     Class A      Class A
                                                           Series 6     Series 7    Series 8    Series 9    Series 10
                                                          ------------  ---------  -----------  ----------  ----------
  <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)                                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>

<PAGE>


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  ratios  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 9 - SUBSEQUENT EVENTS
--------------------------

Effective January 1, 2006, Class A Series 9 through Class A Series 20 units
were  collapsed  into Class A Series 1 units,  as provided in the Company's
private placement memorandum.

Effective  January  1,  2006,  redemptions  from  the  Company  can be made
quarterly with 91 days' notice,  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 amended limited liability company
agreement.