Hedge Fund Managers 10-Q 2012 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2012

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 incorporation)	04-3638229 (I.R.S. Employer Identification No.)
200 West Street New York, New York (Address of principal executive offices)	10282 (Zip Code)

Registrant’s telephone number, including area code: (212) 902-1000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No    ¨

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

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x	Smaller reporting company	¨

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

The Registrant’s Units of Limited Liability Company Interests are not traded on any market and, accordingly, have no aggregate market value. The Registrant had 3,205,904.20 Units of Limited Liability Company Interests outstanding as of November 13, 2012.

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

QUARTERLY REPORT ON FORM 10-Q

INDEX

PART I — FINANCIAL INFORMATION

Item 1.       Financial Statements	1
Schedule of Investments as of September 30, 2012 (Unaudited) and December  31, 2011 (Audited)	1
Balance Sheet as of September 30, 2012 (Unaudited) and December 31, 2011 (Audited)	2
Statement of Operations (Unaudited) for the three and nine months ended September 30, 2012 and September 30, 2011	3
Statement of Changes in Members’ Equity for the nine months ended September 30, 2012 (Unaudited) and the year ended December 31, 2011 (Audited)	4
Statement of Cash Flows (Unaudited) for the nine months ended September 30, 2012 and September 30, 2011	5
Notes to Financial Statements (Unaudited) September 30, 2012	6
Item 2.       Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.       Quantitative and Qualitative Disclosures About Market Risk	47
Item 4.       Controls and Procedures	50
PART II — OTHER INFORMATION
Item 1.       Legal Proceedings	51
Item 1A.    Risk Factors	51
Item 2.       Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 3.       Defaults Upon Senior Securities	51
Item 4.       Reserved	51
Item 5.       Other Information	52
Item 6.       Exhibits	53
SIGNATURES	54
INDEX TO EXHIBITS	55
EX-31.1: CERTIFICATION
EX-31.2: CERTIFICATION
EX-32.1: CERTIFICATION

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

Schedule of Investments

September 30, 2012 and December 31, 2011

	(Unaudited) September 30, 2012					(Audited) December 31, 2011
Affiliated Investee	Fair value		% of members’ equity(1)			Fair value		% of members’ equity(1)
Goldman Sachs Global Equity Long/Short, LLC	$	174,094,338		43.50	%	$	210,487,878		40.30	%
Goldman Sachs Global Fundamental Strategies, LLC		106,979,719		26.73			127,322,190		24.38
Goldman Sachs Global Fundamental Strategies Asset Trust		10,939,031		2.73			13,856,921		2.65
Goldman Sachs Global Relative Value, LLC		1,244,222		0.31			1,125,167		0.22
Goldman Sachs Global Tactical Trading, LLC		136,341,383		34.06			164,808,737		31.56
Goldman Sachs HFP Opportunistic Fund, LLC		368,552		0.09			691,659		0.13
Total investments (cost $385,621,868 and $472,904,432, respectively)	$	429,967,245		107.42	%	$	518,292,552		99.24	%

The Company’s aggregate proportionate share of the following underlying investments of the Investees represented greater than 5% of the Company’s members’ equity at September 30, 2012 and December 31, 2011.

	September 30, 2012 (Unaudited)
Investee	Underlying investment	Strategy	Proportionate share of fair value		% of members’ equity(1)
Goldman Sachs Global Tactical Trading, LLC	GS Global Trading Advisors, LLC(2)	Managed Futures	$	26,869,324		6.71	%

	December 31, 2011 (Audited)
Investee	Underlying investment	Strategy	Proportionate share of fair value		% of members’ equity(1)
Goldman Sachs Global Tactical Trading, LLC	GS Global Trading Advisors, LLC(2)	Managed Futures	$	34,288,005		6.57	%

(1) Members’ equity used in the calculation of the fair value of each of the Investees and the underlying investment as a percentage of members’ equity, is reduced for member redemptions that are paid after the balance sheet date according to Statement of Financial Accounting Standards ASC 480, “Distinguishing Liabilities from Equity.” Member redemptions are included in redemptions payable in the Balance Sheet. Excluding redemptions payable, total investments would represent 95.21% and 94.72% of members’ equity at September 30, 2012 and December 31, 2011, respectively.

(2) Affiliated investment fund with a monthly liquidity term.

See accompanying notes

1

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

BALANCE SHEET

September 30, 2012 and December 31, 2011

	(Unaudited) September 30, 2012		(Audited) December 31, 2011
ASSETS:
Assets:
Investments in affiliated Investees, at fair value (cost $385,621,868 and $472,904,432, respectively)	$	429,967,245	$	518,292,552
Cash and cash equivalents		23,887,540		30,701,757
Total assets	$	453,854,785	$	548,994,309
LIABILITIES AND MEMBERS’ EQUITY
Liabilities:
Redemptions payable	$	51,357,366	$	24,922,213
Management fee payable		1,407,032		1,143,333
Accrued expenses and other liabilities		835,356		649,992
Total liabilities		53,599,754		26,715,538
Members’ equity:
Members’ equity (units outstanding 3,205,904.20 and 4,330,758.94, respectively)		400,255,031		522,278,771
Total liabilities and members’ equity	$	453,854,785	$	548,994,309
Analysis of members’ equity:
Net capital contributions, accumulated net investment income/(loss) and realized gain/(loss) on investments	$	355,909,654	$	476,890,651
Accumulated net unrealized gain/(loss) on investments		44,345,377		45,388,120
Total members’ equity(1)	$	400,255,031	$	522,278,771

(1) Refer to Note 8 for units outstanding and NAV per unit amounts by series.

See accompanying notes

2

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

STATEMENT OF OPERATIONS

(Unaudited)

For the three and nine months ended September 30, 2012 and September 30, 2011

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Dividend income	$	3,185		$	684		$	8,785		$	6,037
Expenses:
Management fee		1,407,032			1,808,099			4,719,687			5,709,730
Professional fees		343,803			366,246			982,650			631,271
Administration fee		29,388			35,805			96,142			111,983
Miscellaneous expenses		38,217			45,773			153,757			139,281
Total expenses		1,818,440			2,255,923			5,952,236			6,592,265
Net investment income/(loss)		(1,815,255	)		(2,255,239	)		(5,943,451	)		(6,586,228	)
Realized and unrealized gain/(loss) on investments in affiliated Investees:
Net realized gain/(loss)		15,527,219			5,265,038			24,452,918			18,363,541
Net change in unrealized gain/(loss)		(6,466,331	)		(25,273,027	)		(1,042,743	)		(37,121,814	)
Net realized and unrealized gain/(loss)		9,060,888			(20,007,989	)		23,410,175			(18,758,273	)
Net income/(loss)	$	7,245,633		$	(22,263,228	)	$	17,466,724		$	(25,344,501	)

See accompanying notes

3

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

STATEMENT OF CHANGES IN MEMBERS’ EQUITY

For the nine months ended September 30, 2012 (Unaudited)

and the year ended December 31, 2011 (Audited)

	Managing member’s equity			Members’ equity			Total members’ equity
Members’ equity at December 31, 2010	$	—		$	621,793,993		$	621,793,993
Subscriptions		—			28,220,000			28,220,000
Redemptions		(6,026	)		(104,264,112	)		(104,270,138	)
Allocations of net income/(loss):
Incentive allocation		6,026			(6,026	)		—
Pro-rata allocation		—			(23,465,084	)		(23,465,084	)
Members’ equity at December 31, 2011		—			522,278,771			522,278,771
Subscriptions		—			6,491,936			6,491,936
Redemptions		—			(145,982,400	)		(145,982,400	)
Allocations of net income/(loss):
Incentive allocation		16,208			(16,208	)		—
Pro-rata allocation		—			17,466,724			17,466,724
Members’ equity at September 30, 2012	$	16,208		$	400,238,823		$	400,255,031

See accompanying notes

4

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

STATEMENT OF CASH FLOWS

(Unaudited)

For the nine months ended September 30, 2012 and September 30, 2011

	2012			2011
Cash flows from operating activities
Net income/(loss)	$	17,466,724		$	(25,344,501	)
Adjustments to reconcile net income/(loss) to net cash provided by (used in) operating activities:
Purchases of investments in affiliated Investees		—			(9,602,658	)
Proceeds from sales of investments in affiliated Investees		111,735,482			65,881,934
Net realized (gain)/loss on investments in affiliated Investees		(24,452,918	)		(18,363,541	)
Net change in unrealized (gain)/loss on investments in affiliated Investees		1,042,743			37,121,814
Increase/(decrease) in operating liabilities:
Management fee payable		263,699			485,882
Accrued expenses and other liabilities		185,364			201,118
Net cash from operating activities		106,241,094			50,380,048
Cash flows from financing activities
Subscriptions		6,491,936			22,970,000
Redemptions		(119,547,247	)		(70,058,148	)
Net cash from financing activities		(113,055,311	)		(47,088,148	)
Net change in cash and cash equivalents		(6,814,217	)		3,291,900
Cash and cash equivalents at beginning of period		30,701,757			29,949,410
Cash and cash equivalents at end of period	$	23,887,540		$	33,241,310

See accompanying notes

5

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2012

Note 1 - Organization

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 (the “Investment Sectors”). Currently, substantially all of the Company’s assets are allocated to Goldman Sachs Global Equity Long/Short, LLC (“GELS”), Goldman Sachs Global Fundamental Strategies, LLC (“GFS”), and Goldman Sachs Global Tactical Trading, LLC (“GTT”) (collectively, the “Investment Funds”). The balance of the Company’s assets are invested in Goldman Sachs Global Fundamental Strategies Asset Trust (the “GFS Trust”), Goldman Sachs Global Relative Value, LLC (“GRV”) and Goldman Sachs HFP Opportunistic Fund, LLC (“HFPO” and, together with the GFS Trust, GRV and the Investment Funds, the “Investees”). Each of these Investees invests indirectly through investment vehicles (“Advisor Funds”) managed by such trading advisors (the “Advisors”). In addition, the Company may, directly or indirectly, allocate assets to Advisors whose principal investment strategies are not within one of the Investment Sectors. Goldman Sachs Hedge Fund Strategies LLC (“HFS”), a wholly-owned subsidiary of The Goldman Sachs Group, Inc., is the managing member (the “Managing Member”) and commodity pool operator of the Company and a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended. SEI Global Services, Inc. (“SEI”) serves as administrator of the Company.

Note 2 - Significant accounting policies

Basis of presentation

The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and are expressed in United States dollars.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates.

Fair value of investments

The Company is an investment company for financial reporting purposes and accordingly carries its investments at fair value.

Realized and unrealized gain/(loss) on investments in affiliated Investees

Realized and unrealized gain/(loss) on investments in affiliated Investees includes the change in fair value of each Investee. Fair values are determined utilizing net asset value (“NAV”) information supplied by each individual Investee, which includes realized and unrealized gains/(losses) on underlying investments of the Investees as well as management fees and incentive fees charged by the Advisors, administration fees and all other income/expenses of the Investees. See “Note 3 — Investments in affiliated Investees” for further information.

6

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2012

Note 2 - Significant accounting policies (continued)

Cash and cash equivalents

Cash and cash equivalents consist of deposits held at banks or money market funds. Cash equivalents, consisting of investments in money market funds, are held at financial institutions to which the Company is exposed to credit risk. Money market funds are valued at net asset value per share.

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 member’s capital account bears to the total balance of all members’ capital accounts. The Managing Member earns an annual incentive allocation equal to 5.0% of any new net appreciation in the NAV of each series. Any net depreciation in the NAV of a series for a fiscal year must be recouped prior to the Managing Member earning an incentive allocation in future years.

Subscriptions and redemptions

Subscriptions to the Company can be made as of the first day of each calendar month or at the sole discretion of the Managing Member. Redemptions from the Company can be made at the end of each calendar quarter, upon 91 days’ prior written 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 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 U.S. federal income tax liability or expense has been recorded in the financial statements of the Company.

The Managing Member has reviewed the Company’s tax positions for the open tax years by major jurisdictions and has concluded that no provision for taxes is required in the Company’s financial statements. Such open tax years vary by jurisdiction and remain subject to examination by the foreign taxing authorities. The tax liability is also subject to ongoing interpretation of laws by taxing authorities.

Recent accounting pronouncements

Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (“IFRS”) (FASB ASC 820). In May 2011, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2011-04, “Fair Value Measurements and Disclosures (Topic 820) — Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS.” ASU No. 2011-04 clarifies the application of existing fair value measurement and disclosure requirements, changes certain principles related to measuring fair value, and requires additional disclosures about fair value measurements. ASU No. 2011-04 is effective for periods beginning after December 15, 2011. The adoption of ASU No. 2011-04 did not materially affect the Company’s financial condition, results of operations, or cash flows.

7

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2012

Note 3 - Investments in affiliated Investees

The Investees seek capital appreciation over time by investing primarily within one of the following Investment Sectors: the equity long/short sector, the event driven sector, the relative value sector and the tactical trading sector. The Company’s investments in affiliated Investees are subject to the terms and conditions of the operating agreements of the respective affiliated Investees. The investments in affiliated Investees are carried at fair value. Fair values are determined utilizing NAV information supplied by each individual affiliated Investee. HFS is the managing member of each of the affiliated Investees. HFS does not charge the Company any management fee or incentive allocation at the Investee level. Realized gains/(losses) on the redemption of investments in affiliated Investees are calculated using the specific identification cost method.

Performance of the Company in any period will be dependent upon the performance in the relevant period by the affiliated Investees and the weighted average percentage of the Company’s assets in each of the affiliated Investees during the period. In addition, performance is determined by the Investment Funds’ asset allocation with the various Advisors and the performance of each of their Advisor Funds and interests held by the GFS Trust, GRV and HFPO. NAVs received by the Investees from, or on behalf of, the Advisor Funds are based on the fair value of the Advisor Funds’ underlying investments in accordance with policies established by each Advisor Fund. HFS, in its capacity as managing member of the Company, performs additional procedures including Advisor due diligence reviews and analytical procedures with respect to the NAV provided by the Advisors to ensure conformity with U.S. GAAP. The Managing Member has assessed factors including, but not limited to, Advisors’ compliance with U.S. GAAP applicable to fair value measurements and disclosures, price transparency and valuation procedures in place. NAV provided by the Advisors may differ from the audited values received subsequent to the date of the Company’s NAV determination. In such cases, the Company will evaluate the materiality of any such differences.

The following table summarizes the cost of the Company’s investments in the affiliated Investees at September 30, 2012 and December 31, 2011:

Investee	September 30, 2012		December 31, 2011
GELS	$	159,156,193	$	197,315,455
GFS		98,270,910		122,378,546
GFS Trust		11,056,180		13,627,595
GRV		1,471,822		1,471,822
GTT		114,957,635		137,401,886
HFPO		709,128		709,128
Total	$	385,621,868	$	472,904,432

8

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2012

Note 3 - Investments in affiliated Investees (continued)

The following table summarizes the Company’s realized and unrealized gain/(loss) on investments in affiliated Investees for the three and nine months ended September 30, 2012 and September 30, 2011:

				Three Months Ended September 30,						Nine Months Ended September 30,
Investee	Liquidity			2012			2011			2012			2011
GELS		(1	)	$	3,803,449		$	(15,544,898	)	$	12,606,460		$	(15,371,002	)
GFS		(2	)		2,067,581			(6,445,643	)		6,863,975			(5,102,866	)
GFS Trust		(3	)		52,838			(548,857	)		(388,853	)		(849,983	)
GRV		(4	)		(775	)		(55,540	)		119,055			(192,404	)
GTT		(5	)		3,225,445			2,596,234			4,532,645			2,786,371
HFPO		(6	)		(87,650	)		(9,285	)		(323,107	)		(28,389	)
Total				$	9,060,888		$	(20,007,989	)	$	23,410,175		$	(18,758,273	)

(1) Redemptions can be made quarterly with 61 days’ notice, or at the sole discretion of the Managing Member.

(2) Redemptions can be made quarterly on or after the first anniversary of the initial purchase of the units with at least 91 days’ notice, or at the sole discretion of the Managing Member.

(3) The GFS Trust does not provide investors with a voluntary redemption right. Pursuant to the terms of the trust agreement for the GFS Trust, distributions will be made to holders of interests in the GFS Trust as the GFS Trust receives proceeds in respect of its Advisors. The estimated remaining holding periods of its remaining underlying investments range from one to five years.

(4) GRV ceased its trading activities effective on July 1, 2009, and will dissolve at the time all assets are liquidated, liabilities are satisfied and liquidation proceeds are distributed through payment of a liquidating distribution. GRV suspended redemptions pending the completion of the liquidation proceedings. The estimated remaining holding periods of its remaining underlying investments range from one to five years.

(5) Redemptions can be made quarterly with 60 days’ notice, or at the sole discretion of the Managing Member.

(6) HFPO’s current holdings consist solely of one illiquid investment in an Advisor Fund, which cannot be redeemed until the relevant Advisor liquidates such investment. The estimated remaining holding period of the illiquid investment is approximately five years.

The investment strategy for each Investee is as follows:

Goldman Sachs Global Equity Long/Short, LLC

GELS 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. Strategies that may be utilized in the equity long/short sector include catalyst-activist, consumer, diversified, energy, growth, long-bias, real estate, multi-strategy, short-term trading and value. Other strategies may be employed as well.

Goldman Sachs Global Fundamental Strategies, LLC

GFS 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,

9

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2012

Note 3 - Investments in affiliated Investees (continued)

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 catalyst-activist, merger arbitrage/special situations, credit opportunities/distressed securities and multi-strategy investing. Other strategies may be employed as well.

Goldman Sachs Global Fundamental Strategies Asset Trust

HFS, the managing member of GFS, created the GFS Trust, a Delaware statutory trust, for the benefit of its investors, including the Company. Goldman Sachs Trust Company, a Delaware Corporation, is the trustee of the GFS Trust (the “Trustee”). The Trustee appointed HFS as the “Special Assets Direction Advisor,” responsible for, among other duties, disposition of GFS Trust assets. On March 31, 2009, GFS transferred to the GFS Trust its interest in certain illiquid investments, including illiquid investments made by Advisor Funds, as well as liquidating vehicles that the Advisors formed as liquidity decreased for previously liquid investments, such as certain credit instruments. GFS transferred to the GFS Trust the economic risks and benefits of its interests in such assets. In connection with such transfer, each investor in GFS, including the Company, was issued its pro-rata share of GFS Trust interests based on its ownership in GFS as of the transfer date. Distributions from the GFS Trust in respect of GFS Trust interests will be made to holders of GFS Trust interests, including the Company, as amounts in respect of the assets transferred to the GFS Trust are received from the Advisors. However, the actual timing of these distributions will be dependent on the Advisors’ ability to liquidate positions as market conditions allow, and it could be a significant period of time before such positions are realized or disposed of.

Goldman Sachs Global Relative Value, LLC

GRV ceased its trading activities effective July 1, 2009 and will dissolve at the time all assets are liquidated, liabilities are satisfied and liquidation proceeds are distributed through payment of a liquidating distribution. Investors in GRV (including the Company) will receive proceeds from the liquidation over time as GRV receives redemption proceeds from Advisor Funds.

Goldman Sachs Global Tactical Trading, LLC

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

Goldman Sachs HFP Opportunistic Fund, LLC

HFPO’s investment objective is to make opportunistic investments in underlying Advisor Funds in order to (a) increase the weighting of a particular Advisor Fund which had a low weighting in the Company due to a lower target weight in one of the other Investees or (b) add an Advisor Fund that is not currently represented in any of the other Investees.

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GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2012

Note 3 - Investments in affiliated Investees (continued)

Management fees and incentive allocation/fees

HFS does not charge the Company any management fee or incentive allocation at the Investee level. The underlying Advisor Funds held by the Investees charge management and incentive allocation/fees to the Investees. The following table reflects the contractual weighted average Advisors’ management fee and incentive allocation/fee rates at the Investee level for the nine months ended September 30, 2012 and September 30, 2011. The weighted average is based on the period-end fair values of each investment in the Advisor Fund in proportion to the Investee’s total investments. The fee rates used are the contractual rates charged by each Advisor. The Advisors’ management fee and incentive allocation/fee are not paid to the Managing Member.

	September 30,  2012						September 30,  2011
Investee	Management fees			Incentive allocation/fees			Management fees			Incentive allocation/fees
GELS		1.61	%		19.52	%		1.65	%		20.26	%
GFS		1.70	%		19.01	%		1.66	%		18.50	%
GFS Trust		1.48	%		17.36	%		1.52	%		17.74	%
GRV		1.79	%		13.88	%		1.61	%		12.44	%
GTT		2.07	%		21.09	%		2.12	%		21.51	%
HFPO		—	%(1)		—	%(1)		—	%(1)		—	%(1)

(1) The sole Advisor Fund within HFPO is illiquid and the Advisor has elected to forego the management and incentive fees.

Note 4 - Fair Value Measurements

The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The Company uses NAV as its measure of fair value for investments in Investees when (i) the fund investment does not have a readily determinable fair value and (ii) the NAV of the investment fund is calculated in a manner consistent with the measurement principles of investment company accounting, including measurement of the underlying investments at fair value. In evaluating the level at which the fair value measurements of the Company’s investments have been classified, the Company has assessed factors including, but not limited to, price transparency, the ability to redeem at NAV at the measurement date and the existence or absence of certain restrictions at the measurement date. The three levels of the fair value hierarchy are described below:

• Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

• Level 2 — Quoted prices in markets that are not active or financial instruments for which significant inputs are observable (including investments in Investees that can be redeemed at the measurement date or in the near-term at NAV), either directly or indirectly; and

• Level 3 — Prices or valuations that require significant unobservable inputs (including investments in Investees that will never have the ability to be voluntarily redeemed or are restricted from redemption for an uncertain or extended period of time from the measurement date).

11

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2012

Note 4 - Fair Value Measurements (continued)

The following tables set forth by level within the fair value hierarchy the Company’s assets and liabilities by investment strategy at fair value measured at September 30, 2012 and December 31, 2011:

	September 30, 2012 (Unaudited)
Assets	Level 1		Level 2		Level 3		Total
Investees by investment strategy:
Equity Long/Short	$	—	$	174,094,338	$	—	$	174,094,338
Event Driven		—		106,979,719		10,939,031		117,918,750
Tactical Trading		—		136,341,383		—		136,341,383
Multi-Sector		—		—		368,552		368,552
Relative Value		—		—		1,244,222		1,244,222
Total	$	—	$	417,415,440	$	12,551,805	$	429,967,245

	December 31, 2011 (Audited)
Assets	Level 1		Level 2		Level 3		Total
Investees by investment strategy:
Equity Long/Short	$	—	$	210,487,878	$	—	$	210,487,878
Event Driven		—		127,322,190		13,856,921		141,179,111
Tactical Trading		—		164,808,737		—		164,808,737
Multi-Sector		—		—		691,659		691,659
Relative Value		—		—		1,125,167		1,125,167
Total	$	—	$	502,618,805	$	15,673,747	$	518,292,552

Included in cash and cash equivalents on the Balance Sheet are investments in money market funds with a fair value of $22,803,200 and $28,339,424, which were classified as Level 1 assets as of September 30, 2012 and December 31, 2011, respectively.

The following tables summarize the changes in fair value of the Company’s Level 3 investments for the quarter ended September 30, 2012 and September 30, 2011, respectively:

	Event Driven			Multi-Sector			Relative Value			Total
Balance at July 1, 2012	$	11,954,009		$	456,202		$	1,244,997		$	13,655,208
Net realized gain/(loss) on investments in affiliated investees		1,980			—			—			1,980
Net change in unrealized gain/(loss) on investments in affiliated investees held at September 30, 2012		50,858			(87,650	)		(775	)		(37,567	)
Sales		(1,067,816	)		—			—			(1,067,816	)
Balance at September 30, 2012	$	10,939,031		$	368,552		$	1,244,222		$	12,551,805

12

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2012

Note 4 - Fair Value Measurements (continued)

	Event Driven			Multi-Sector			Relative Value			Total
Balance at July 1, 2011	$	18,784,632		$	716,582		$	1,300,769		$	20,801,983
Net realized gain/(loss) on investments in affiliated investees		(1,195	)		—			—			(1,195	)
Net change in unrealized gain/(loss) on investments in affiliated investees held at September 30, 2011		(547,662	)		(9,285	)		(55,540	)		(612,487	)
Sales		(1,067,815	)		—			—			(1,067,815	)
Balance at September 30, 2011	$	17,167,960		$	707,297		$	1,245,229		$	19,120,486

The following tables summarize the changes in fair value of the Company’s Level 3 investments for the nine months ended September 30, 2012 and September 30, 2011, respectively:

	Event Driven			Multi-Sector			Relative Value		Total
Balance at January 1, 2012	$	13,856,921		$	691,659		$	1,125,167	$	15,673,747
Net realized gain/(loss) on investments in affiliated investees		(85,650	)		—			—		(85,650	)
Net change in unrealized gain/(loss) on investments in affiliated investees held at September 30, 2012		(303,203	)		(323,107	)		119,055		(507,255	)
Sales		(2,529,037	)		—			—		(2,529,037	)
Balance at September 30, 2012	$	10,939,031		$	368,552		$	1,244,222	$	12,551,805

	Event Driven			Multi-Sector			Relative Value			Total
Balance at January 1, 2011	$	23,188,415		$	735,686		$	1,649,094		$	25,573,195
Net realized gain/(loss) on investments in affiliated investees		(51,546	)		—			1,759			(49,787	)
Net change in unrealized gain/(loss) on investments in affiliated investees held at September 30, 2011		(798,437	)		(28,389	)		(194,163	)		(1,020,989	)
Sales		(5,170,472	)		—			(211,461	)		(5,381,933	)
Balance at September 30, 2011	$	17,167,960		$	707,297		$	1,245,229		$	19,120,486

Note 5 - Fees

The Company incurs a monthly management fee paid in arrears to HFS equal to 1.25% per annum of the net assets of the Company as of each month-end.

The Company incurs a monthly administration fee payable to SEI equal to one twelfth of 0.02% of the net assets of the Company as of each month end which is included in administration fee in the Statement of Operations. The Company also incurs an indirect monthly administration fee to SEI at the Investee level which is included in realized and unrealized gain/(loss) on investments in affiliated Investees in the Statement of Operations. For the three months ended September 30, 2012 and September 30, 2011, the Company’s pro-rata indirect share of the administration fee charged at the Investee level totaled $53,075 and $65,367, respectively. For the nine months ended September 30, 2012 and September 30, 2011, the Company’s pro-rata indirect share of the administration fee charged at the Investee level totaled $176,148 and $206,333, respectively.

13

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2012

Note 6 - Risk Management

The Investees’ investing activities and those of the Advisor Funds in which they invest expose the Company to various types of risks that are associated with the financial investments and markets in which the Investees and such Advisor Funds invest. In the ordinary course of business, HFS, in its capacity as Managing Member of the Company and the Investees, attempts to manage a variety of risks, including market, operational, liquidity and credit risk and attempts to identify, measure and monitor risk through various mechanisms including risk management strategies and credit policies. HFS monitors risk guidelines and diversifies exposures across a variety of instruments, markets and counterparties.

Item 1A of Part I of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 provides details of these and other types of risks, some of which are additional to the information provided in these financial statements.

Asset allocation is determined by the Company’s Managing Member who manages the allocation of assets to achieve the investment objectives. Achievement of the investment objectives involves taking risks. The Managing Member exercises judgment based on analysis, research and risk management techniques when making investment decisions. Divergence from target asset allocations and the composition of the Company’s investments is monitored by the Company’s Managing Member.

Market risk

The potential for changes in the fair value of the Company’s investment portfolio is referred to as market risk. Commonly used categories of market risk include currency risk, interest rate risk and price risk.

(i) Currency risk

The Advisor Funds may invest in financial investments and enter into transactions denominated in currencies other than its functional currency. Consequently, the Company, its Investees and their Advisor Funds may be exposed to risks that the exchange rate of its functional currency relative to other foreign currencies may change in a manner that has an adverse effect on the value of that portion of the Company’s or Investees’ assets or liabilities denominated in currencies other than the functional currency.

(ii) Interest rate risk

The Advisor Funds may invest in fixed income securities and derivatives. Any change to market interest rates relevant for particular securities may result in the Advisors being unable to secure similar returns on the expiration of contracts or the sale of securities. In addition, changes to prevailing interest rates or changes in expectations of future rates may result in an increase or decrease in the value of the securities held. In general, if interest rates rise, the value of the fixed income securities and derivatives will decline. A decline in interest rates will in general have the opposite effect.

(iii) Price risk

Price risk is the risk that the value of the Investees’ and Advisor Funds’ financial investments will fluctuate as a result of changes in market prices, other than those arising from currency risk or interest rate risk whether caused by factors specific to an individual investment, its issuer or any factor affecting financial investments traded in the market.

14

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2012

Note 6 - Risk Management (continued)

As all of the Company’s investments in Investees and the Investees’ investments in Advisor Funds are carried at fair value with changes in fair value recognized in the Statement of Operations, all changes in market conditions will directly affect net assets. The Company’s maximum risk of loss is limited to the Company’s investment in the Investees. The Investees’ maximum risk of loss is limited to the Investees’ investment in the Advisor Funds.

The fair value of the Investees’ investments in the Advisor Funds is determined utilizing NAVs supplied by, or on behalf of, the Advisors of each Advisor Fund. Furthermore, NAVs received from the administrator of the Advisor Funds may be estimates and such values will be used to calculate the NAV of the Investees for purposes of determining amounts payable on redemptions and reported performance of the Investees. Such estimates provided by the administrators of the Advisor Funds may be subject to subsequent revisions which may not be reflected in the Investees’ final month-end NAV.

Operational risk

Operational risk is the potential for loss caused by a deficiency in information, communications, transaction processing and settlement and accounting systems. The Company’s service providers maintain controls and procedures for the purpose of mitigating operational risk. Reviews of the service levels of service providers are performed on a regular basis. No assurance is given that these measures will be 100% effective. Operational risk also exists at the Investee and Advisor Fund level.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. The Company provides for the subscription and redemption of units and it is therefore exposed to the liquidity risk of meeting member redemptions.

In order to meet its obligations associated with financial liabilities, the Company primarily redeems from the investments in the Investees. However, the Company’s investments in the Investees may only be redeemed on a limited basis. As detailed in “Note 3 — Investments in affiliated Investees”, neither the GFS Trust nor GRV provide investors with a voluntary redemption right and HFPO’s current holdings consist solely of one illiquid investment in an Advisor Fund, which cannot be redeemed until the relevant Advisor liquidates such investment. As a result, the Company may not be able to quickly liquidate some of its investments in order to meet liquidity requirements.

Certain of the Advisor Funds held by the Investees may have liquidity exposure related to the Advisors’ estimates of the recovery value of these claims against Lehman Brothers Holdings, Inc. and for certain of its subsidiaries and affiliates (“Lehman”), including cash claims involving amounts owed to the Advisors by Lehman and/or proprietary claims involving the recovery of Advisor Funds’ assets held by Lehman at the time of its insolvency. These estimates are based on information received from the majority, but not all, of the Advisor Funds, and the Company has no way of independently verifying or otherwise confirming the accuracy of the information provided. As a result, there can be no guarantee that such estimates are accurate. There is significant uncertainty with respect to the ultimate outcome of the Lehman insolvency proceedings, and therefore the amounts ultimately recovered in respect of the Advisors’ claims against Lehman could be materially different than such estimates. Based on the information received, the gross indirect exposure to Lehman did not materially affect the Company’s net assets.

15

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2012

Note 6 - Risk Management (continued)

Certain of the Advisor Funds held by the Investees are subject to various lock-up provisions. Additionally, an Advisor may, at its discretion, transfer a portion of an Investee’s investment in the Advisor Fund into share classes where liquidity terms are directed by the Advisor in accordance with the Advisor’s operating agreement, commonly referred to as side pocket share classes (“side pockets”). These side pockets may have restricted liquidity and prohibit the Investees from fully liquidating their investments without delay. The managing member of the Investees attempts to determine each Advisor’s strategy on side pockets through its due diligence process prior to making an allocation to the Advisor. However, no assurance can be given on whether or not the Advisor will implement side pockets during the investment period. The Advisors may also, at their discretion, suspend redemptions or implement other restrictions on liquidity which could impact the Investees’ ability to meet redemptions submitted by the Company. As of September 30, 2012 and December 31, 2011, approximately 2% of the Company’s investments in the Investees were considered illiquid due to restrictions implemented by the Advisors of the investments held by Investees, excluding contractual restrictions imposed by the Advisors at the time of purchase, such as lock-ups. In addition, as of September 30, 2012 and December 31, 2011, approximately 3% of the Company’s members’ equity was considered illiquid due to restrictions implemented by the Investees, including the lack of a voluntary redemption right for the GFS Trust and GRV. The sum of these amounts represents the total amount of the Company’s members’ equity which was considered illiquid as of September 30, 2012 and December 31, 2011.

To mitigate some of the liquidity risks above, the Company has the ability to suspend redemptions prior to the effectiveness of redemption requests at the Managing Member’s sole discretion should conditions warrant.

Credit risk

Credit risk is the risk that one party to a contract will cause a financial loss for the other party by failing to discharge an obligation.

The Managing Member has adopted procedures to reduce credit risk related to the Company’s dealings with counterparties and Advisor Funds. Before transacting with any counterparty or Advisor Fund, the Managing Member or its affiliates evaluate both creditworthiness and reputation by conducting a credit analysis of the party, their business and reputation. The credit risk of approved counterparties and Advisor Funds are then monitored on an ongoing basis, including periodic reviews of financial statements and interim financial reports as needed.

Some of the Investees’ investments in Advisor Funds may have had credit exposure related to the bankruptcy of Lehman. See “Liquidity risk” for further information related to Lehman exposure.

Investment in Investees risk

The Managing Member generally has limited access, if at all, to specific information regarding the Advisors’ portfolios held by the Investees and relies on valuations provided by, or on behalf of, the Advisors. The Company will be affected by the Advisors’ investment policies and decisions in direct proportion to the amount of the Company’s assets that are invested with each Investee. The NAV of the Advisors’ assets will fluctuate in response to, among other things, various market and economic prospects of investments that the Advisors make, and as a result, the NAV of the Investees and the Company will be impacted. Generally, the NAVs provided by, or on behalf of, 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.

16

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2012

Note 6 - Risk Management (continued)

In the normal course of business, the Advisor Funds may trade various financial instruments and enter into various investment transactions with off-balance sheet risk, which include, but are not limited to, securities sold short, futures, forwards, swaps and written options. The Managing Member generally will have limited ability to monitor such investments, to obtain full and current information and to exercise control rights over such investments. This could have an adverse effect on the performance of such investments and, therefore, on the performance of the Investees and the Company. In order to manage this risk, the Managing Member performs due diligence reviews with respect to the Advisors’ valuation policies and procedures and performs certain analytical procedures with respect to the NAV information received. The review and procedures performed by the Managing Member support its ability to rely on the NAVs supplied by, or on behalf of, the Advisors.

Note 7 - Related parties

The management fee payable in the Balance Sheet represents management fees due to HFS at September 30, 2012 and December 31, 2011, respectively.

Included in the redemptions payable on the Balance Sheet at September 30, 2012 and December 31, 2011 were redemptions due to the Managing Member of $0 and $6,026, respectively.

For the nine months ended September 30, 2012, the Company earned dividends of $8,785 from an investment in Goldman Sachs Financial Square Government Fund, a money market fund managed by Goldman Sachs Asset Management, L.P., an affiliate of HFS. For the nine months ended September 30, 2011, the Company earned dividends of $6,037 from an investment in Goldman Sachs Financial Square Government Fund, a money market fund managed by Goldman Sachs Asset Management, L.P., an affiliate of HFS. At September 30, 2012 and December 31, 2011, the fair values of such money market investments were $22,803,200 and $28,339,424, respectively. The Company will bear its proportionate share of all fees, including investment advisory fees, paid by the money market funds.

The Advisor Funds may have executed investment transactions with various affiliates of the Managing Member.

Directors and executive officers of the Company and the Managing Member owned less than 1% of the Company’s equity at September 30, 2012 and December 31, 2011. Employees of Goldman, Sachs & Co. owned less than 1% and approximately 2% of the Company’s equity at September 30, 2012 and December 31, 2011, respectively.

Note 8 - Members’ equity

At September 30, 2012 and December 31, 2011, 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, 2011, Class A Series 48, Class A Series 53, Class A Series 54, Class A Series 77 through Series 81 and Class A Series 84 through Series 90 units were converted into Class A Series 46 units. The Managing Member does not own any units in the Company.

17

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2012

Note 8 - Members’ equity (continued)

The Company’s unit activity for the nine month period ended September 30, 2012 is as follows:

	December 31, 2011		Unit Conversion		Subscriptions		Redemptions			September 30, 2012
Class A:
Series 1		2,156,278.06		—		—		(556,081.57	)		1,600,196.49
Series 45		34,296.08		—		—		—			34,296.08
Series 46		1,258,581.48		—		—		(399,735.49	)		858,845.99
Series 47		47,000.00		—		—		(27,000.00	)		20,000.00
Series 49		105,022.73		—		—		(22,000.01	)		83,022.72
Series 50		142,659.41		—		—		(43,361.55	)		99,297.86
Series 51		58,800.00		—		—		—			58,800.00
Series 52		86,750.00		—		—		(26,926.23	)		59,823.77
Series 66		67,947.61		—		—		(48,345.70	)		19,601.91
Series 68		55,653.46		—		—		(39,951.17	)		15,702.29
Series 69		20,861.87		—		—		(10,979.93	)		9,881.94
Series 70		6,848.67		—		—		—			6,848.67
Series 72		6,915.70		—		—		—			6,915.70
Series 73		1,335.83		—		—		—			1,335.83
Series 82		6,147.24		—		—		—			6,147.24
Series 83		5,460.80		—		—		—			5,460.80
Series 91		27,500.00		—		—		—			27,500.00
Series 92		26,500.00		—		—		(10,500.00	)		16,000.00
Series 93		18,250.00		—		—		—			18,250.00
Series 94		39,200.00		—		—		—			39,200.00
Series 95		46,500.00		—		—		—			46,500.00
Series 96		21,000.00		—		—		—			21,000.00
Series 97		17,000.00		—		—		—			17,000.00
Series 98		11,250.00		—		—		—			11,250.00
Series 99		10,500.00		—		—		(1,999.99	)		8,500.01
Series 100		40,500.00		—		—		(2,892.46	)		37,607.54
Series 101		9,500.00		—		—		—			9,500.00
Series 102		2,500.00		—		—		—			2,500.00
Series 103		—		—		23,243.86		—			23,243.86
Series 104		—		—		12,500.00		—			12,500.00
Series 105		—		—		7,675.50		—			7,675.50
Series 106		—		—		4,500.00		—			4,500.00
Series 107		—		—		9,000.00		—			9,000.00
Series 108		—		—		5,500.00		—			5,500.00
Series 109		—				2,500.00		—			2,500.00
Total		4,330,758.94		—		64,919.36		(1,189,774.10	)		3,205,904.20

18

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2012

Note 8 - Members’ equity (continued)

The Company’s unit activity for the year ended December 31, 2011 is as follows:

	December 31, 2010		Unit Conversion			Subscriptions		Redemptions			December 31, 2011
Class A:
Series 1		2,560,820.36		—			—		(404,542.30	)		2,156,278.06
Series 45		45,322.13		—			—		(11,026.05	)		34,296.08
Series 46		89,711.22		1,435,142.41			—		(266,272.15	)		1,258,581.48
Series 47		55,000.00		—			—		(8,000.00	)		47,000.00
Series 48		101,345.88		(101,345.88	)		—		—			—
Series 49		140,800.00		—			—		(35,777.27	)		105,022.73
Series 50		194,430.21		—			—		(51,770.80	)		142,659.41
Series 51		101,300.00		—			—		(42,500.00	)		58,800.00
Series 52		86,750.00		—			—		—			86,750.00
Series 53		55,451.17		(55,451.17	)		—		—			—
Series 54		589,036.01		(589,036.01	)		—		—			—
Series 66		84,244.41		—			—		(16,296.80	)		67,947.61
Series 67		1,367.32		—			—		(1,367.32	)		—
Series 68		57,080.94		—			—		(1,427.48	)		55,653.46
Series 69		20,861.87		—			—		—			20,861.87
Series 70		6,848.67		—			—		—			6,848.67
Series 71		1,403.93		—			—		(1,403.93	)		—
Series 72		6,915.70		—			—		—			6,915.70
Series 73		1,335.83		—			—		—			1,335.83
Series 77		76,950.00		(76,950.00	)		—		—			—
Series 78		62,345.96		(62,345.96	)		—		—			—
Series 79		71,456.60		(71,456.60	)		—		—			—
Series 80		56,950.00		(56,950.00	)		—		—			—
Series 81		201,150.00		(201,150.00	)		—		—			—
Series 82		12,294.48		—			—		(6,147.24	)		6,147.24
Series 83		5,460.80		—			—		—			5,460.80
Series 84		34,000.00		(34,000.00	)		—		—			—
Series 85		16,500.00		(16,500.00	)		—		—			—
Series 86		21,942.57		(21,942.57	)		—		—			—
Series 87		33,930.00		(33,930.00	)		—		—			—
Series 88		1,000.00		(1,000.00	)		—		—			—
Series 89		43,250.00		(43,250.00	)		—		—			—
Series 90		11,950.00		(11,950.00	)		—		—			—
Series 91		—		—			39,500.00		(12,000.00	)		27,500.00
Series 92		—		—			26,500.00		—			26,500.00
Series 93		—		—			18,250.00		—			18,250.00
Series 94		—		—			39,200.00		—			39,200.00
Series 95		—		—			46,500.00		—			46,500.00
Series 96		—		—			21,000.00		—			21,000.00
Series 97		—		—			17,000.00		—			17,000.00
Series 98		—		—			11,250.00		—			11,250.00
Series 99		—		—			10,500.00		—			10,500.00
Series 100		—		—			40,500.00		—			40,500.00
Series 101		—		—			9,500.00		—			9,500.00
Series 102		—		—			2,500.00		—			2,500.00
Total		4,849,206.06		57,884.22			282,200.00		(858,531.34	)		4,330,758.94

19

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2012

Note 8 - Members’ equity (continued)

The Company’s members’ capital activity for the nine months ended September 30, 2012 is as follows:

	December 31, 2011		Equity Conversion		Subscriptions		Redemptions			Net income/ (loss)		September 30, 2012		NAV per unit
Managing Member	$	—	$	—	$	—	$	—		$	16,208	$	16,208
Class A:
Series 1		312,385,129		—		—		(82,672,902	)		10,353,163		240,065,390	$	150.02
Series 45		3,249,938		—		—		—			115,532		3,365,470		98.13
Series 46		121,333,140		—		—		(39,657,035	)		4,063,999		85,740,104		99.83
Series 47		4,438,832		—		—		(2,632,770	)		149,950		1,956,012		97.80
Series 49		10,002,350		—		—		(2,169,410	)		355,221		8,188,161		98.63
Series 50		13,340,457		—		—		(4,174,393	)		449,634		9,615,698		96.84
Series 51		5,495,311		—		—		—			195,353		5,690,664		96.78
Series 52		8,327,318		—		—		(2,637,218	)		256,655		5,946,755		99.40
Series 66		7,034,216		—		—		(5,113,415	)		180,608		2,101,409		107.20
Series 68		5,761,475		—		—		(4,214,221	)		136,099		1,683,353		107.20
Series 69		2,159,706		—		—		(1,177,096	)		76,776		1,059,386		107.20
Series 70		709,003		—		—		—			25,204		734,207		107.20
Series 72		715,941		—		—		—			25,451		741,392		107.20
Series 73		138,291		—		—		—			4,916		143,207		107.20
Series 82		611,491		—		—		—			21,738		633,229		103.01
Series 83		543,208		—		—		—			19,310		562,518		103.01
Series 91		2,641,570		—		—		—			93,904		2,735,474		99.47
Series 92		2,541,028		—		—		(1,030,133	)		77,851		1,588,746		99.30
Series 93		1,732,320		—		—		—			61,582		1,793,902		98.30
Series 94		3,728,165		—		—		—			132,532		3,860,697		98.49
Series 95		4,374,368		—		—		—			155,505		4,529,873		97.42
Series 96		1,997,849		—		—		—			71,022		2,068,871		98.52
Series 97		1,641,523		—		—		—			58,354		1,699,877		99.99
Series 98		1,087,165		—		—		—			38,607		1,125,772		100.07
Series 99		1,034,273		—		—		(203,807	)		35,716		866,182		101.90
Series 100		4,063,351		—		—		(300,000	)		137,225		3,900,576		103.72
Series 101		942,406		—		—		—			32,206		974,612		102.59
Series 102		248,947		—		—		—			8,460		257,407		102.96
Series 103		—		—		2,324,386		—			78,498		2,402,884		103.38
Series 104		—		—		1,250,000		—			22,904		1,272,904		101.83
Series 105		—		—		767,550		—			5,057		772,607		100.66
Series 106		—		—		450,000		—			765		450,765		100.17
Series 107		—		—		900,000		—			1,133		901,133		100.13
Series 108		—		—		550,000		—			5,713		555,713		101.04
Series 109		—		—		250,000		—			3,873		253,873		101.55
Subtotal:		522,278,771		—		6,491,936		(145,982,400	)		17,450,516		400,238,823
Total	$	522,278,771	$	—	$	6,491,936	$	(145,982,400	)	$	17,466,724	$	400,255,031

20

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2012

Note 8 - Members’ equity (continued)

The Company’s members’ capital activity for the year ended December 31, 2011 is as follows:

	December 31, 2010		Equity Conversion			Subscriptions		Redemptions			Net income/ (loss)			December 31, 2011		NAV per unit
Managing Member	$	—	$	—		$	—	$	(6,026	)	$	6,026		$	—
Class A:
Series 1		386,220,632		—			—		(59,632,321	)		(14,203,182	)		312,385,129	$	144.87
Series 45		4,471,072		—			—		(1,082,062	)		(139,072	)		3,249,938		94.76
Series 46		9,003,589		144,033,620			—		(26,356,023	)		(5,348,046	)		121,333,140		96.40
Series 47		5,407,597		—			—		(782,461	)		(186,304	)		4,438,832		94.44
Series 48		10,142,713		(10,142,713	)		—		—			—			—		—
Series 49		13,960,216		—			—		(3,471,113	)		(486,753	)		10,002,350		95.24
Series 50		18,928,004		—			—		(4,942,839	)		(644,708	)		13,340,457		93.51
Series 51		9,855,874		—			—		(4,067,906	)		(292,657	)		5,495,311		93.46
Series 52		8,669,138		—			—		—			(341,820	)		8,327,318		95.99
Series 53		5,610,812		(5,610,812	)		—		—			—			—		—
Series 54		62,770,502		(62,770,502	)		—		—			—			—		—
Series 66		9,079,321		—			—		(1,708,760	)		(336,345	)		7,034,216		103.52
Series 67		147,361		—			—		(141,551	)		(5,810	)		—		—
Series 68		6,151,816		—			—		(147,778	)		(242,563	)		5,761,475		103.52
Series 69		2,248,358		—			—		—			(88,652	)		2,159,706		103.52
Series 70		738,106		—			—		—			(29,103	)		709,003		103.52
Series 71		151,306		—			—		(145,340	)		(5,966	)		—		—
Series 72		745,329		—			—		—			(29,388	)		715,941		103.52
Series 73		143,967		—			—		—			(5,676	)		138,291		103.52
Series 77		8,047,216		(8,047,216	)		—		—			—			—		—
Series 78		6,529,247		(6,529,247	)		—		—			—			—		—
Series 79		7,466,991		(7,466,991	)		—		—			—			—		—
Series 80		5,883,928		(5,883,928	)		—		—			—			—		—
Series 81		20,682,620		(20,682,620	)		—		—			—			—		—
Series 82		1,273,182		—			—		(633,275	)		(28,416	)		611,491		99.47
Series 83		565,505		—			—		—			(22,297	)		543,208		99.47
Series 84		3,566,739		(3,566,739	)		—		—			—			—		—
Series 85		1,749,127		(1,749,127	)		—		—			—			—		—
Series 86		2,311,363		(2,311,363	)		—		—			—			—		—
Series 87		3,557,487		(3,557,487	)		—		—			—			—		—
Series 88		103,011		(103,011	)		—		—			—			—		—
Series 89		4,394,876		(4,394,876	)		—		—			—			—		—
Series 90		1,216,988		(1,216,988	)		—		—			—			—		—
Series 91		—		—			3,950,000		(1,152,683	)		(155,747	)		2,641,570		96.06
Series 92		—		—			2,650,000		—			(108,972	)		2,541,028		95.89
Series 93		—		—			1,825,000		—			(92,680	)		1,732,320		94.92
Series 94		—		—			3,920,000		—			(191,835	)		3,728,165		95.11
Series 95		—		—			4,650,000		—			(275,632	)		4,374,368		94.07
Series 96		—		—			2,100,000		—			(102,151	)		1,997,849		95.14
Series 97		—		—			1,700,000		—			(58,477	)		1,641,523		96.56
Series 98		—		—			1,125,000		—			(37,835	)		1,087,165		96.64
Series 99		—		—			1,050,000		—			(15,727	)		1,034,273		98.50
Series 100		—		—			4,050,000		—			13,351			4,063,351		100.33
Series 101		—		—			950,000		—			(7,594	)		942,406		99.20
Series 102		—		—			250,000		—			(1,053	)		248,947		99.58
Subtotal:		621,793,993		—			28,220,000		(104,264,112	)		(23,471,110	)		522,278,771
Total	$	621,793,993	$	—		$	28,220,000	$	(104,270,138	)	$	(23,465,084	)	$	522,278,771

21

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2012

Note 9 - Ownership in Investees

During the nine months ended September 30, 2012 and the year ended December 31, 2011, 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 levels. The Company does not consolidate the results of the Investees in its financial statements because 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 does not exercise control over majority owned Investees. The following tables summarize the Company’s ownership in the Investees at September 30, 2012 and December 31, 2011:

	September 30, 2012 (Unaudited)
	Company investment		Investee equity(1)		% owned by the Company(1)
GELS	$	174,094,338	$	395,184,006		44.05	%
GFS		106,979,719	$	293,591,705		36.44	%
GFS Trust		10,939,031	$	38,928,390		28.10	%
GRV		1,244,222	$	4,736,579		26.27	%
GTT		136,341,383	$	514,005,070		26.53	%
HFPO		368,552	$	620,716		59.38	%
Total	$	429,967,245

	December 31, 2011 (Audited)
	Company investment		Investee equity(1)		% owned by the Company(1)
GELS	$	210,487,878	$	443,770,805		47.43	%
GFS		127,322,190	$	329,976,037		38.59	%
GFS Trust		13,856,921	$	49,312,195		28.10	%
GRV		1,125,167	$	4,283,354		26.27	%
GTT		164,808,737	$	491,269,750		33.55	%
HFPO		691,659	$	1,164,893		59.38	%
Total	$	518,292,552

(1) The Investees’ equity used in the calculation of the percentage owned by the Company is based on the net assets per the Investee’s Balance Sheet and in accordance with ASC 480, “Distinguishing Liabilities from Equity.”

Note 10 - 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

22

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2012

Note 10 - Indemnifications (continued)

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 to be remote.

Note 11 - Financial highlights

Financial highlights for the Company for the three and nine months ended September 30, 2012 and 2011 are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
	Class A Series 1			Class A Series 1			Class A Series 1			Class A Series 1
Per unit operating performance:
Net asset value, beginning of period	$	147.62		$	150.03		$	144.87		$	150.82
Income from operations:
Net realized and unrealized gain/(loss)		3.00			(5.09	)		6.91			(4.82	)
Net investment income/(loss)(1)(2)		(0.60	)		(0.57	)		(1.76	)		(1.63	)
Total income/(loss) from operations		2.40			(5.66	)		5.15			(6.45	)
Net asset value, end of period	$	150.02		$	144.37		$	150.02		$	144.37
Ratios to average members’ equity(3)
Expenses		1.60	%		1.55	%		1.58	%		1.45	%
Incentive allocation		0.00			0.00			0.00			0.00
Total expenses and incentive allocation		1.60	%		1.55	%		1.58	%		1.45	%
Net investment income/(loss)(2)		(1.60	)%		(1.55	)%		(1.57	)%		(1.45	)%
Total return (prior to incentive allocation)(4)		1.63	%		(3.77	)%		3.55	%		(4.28	)%
Incentive allocation		0.00			0.00			0.00			0.00
Total return		1.63	%		(3.77	)%		3.55	%		(4.28	)%

(1) Net investment income/(loss) is calculated based on average units outstanding during the period.

(2) Includes incentive allocation, if applicable.

(3) The ratios of expenses and net investment income/(loss) to average members’ equity are calculated by dividing total expenses and net investment income /(loss), respectively, by the month-end average members’ equity for the period. The ratio of expenses to average members’ equity is annualized. The ratio of incentive allocation, if any, to average members’ equity is not annualized. The ratios to average members’ equity calculated above do not include the Company’s proportionate share of the net investment income and expenses of the Investees. The ratios to average members’ equity for each member may vary based on individualized incentive allocation bases and the timing of capital transactions.

23

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2012

Note 11 - Financial highlights (continued)

(4) The components of total return are calculated by dividing the change in the per unit value of each component for the period by the NAV per unit at the beginning of the period. The total return for Class A Series 1 units is calculated taken as a whole and is not annualized. The total return for each member may vary based on individualized incentive allocation bases and the timing of capital transactions.

The per unit operating performance, ratios to average net assets and total return are calculated and presented for the initial series.

Note 12 - Significant Investees

The following is a summary of financial information for Investees that represented more than 20% of the Company’s total assets and/or income as of and/or for the nine months ended September 30, 2012 (the “Significant Investees”):

Balance Sheet

The balance sheets as of September 30, 2012 and December 31, 2011, are summarized as follows:

	September 30, 2012 (Unaudited)
	GELS		GFS		GTT
Assets
Investments in Investees, at fair value	$	410,166,778	$	275,632,753	$	322,399,131
Investments in affiliated Investees, at fair value		—		18,150,644		216,588,684
Cash and cash equivalents		8,652,090		9,057,254		7,303,124
Other assets		1,213,814		5,379,432		—
Total assets	$	420,032,682	$	308,220,083	$	546,290,939
Liabilities and Net Assets
Liabilities
Redemptions payable	$	24,416,012	$	11,322,108	$	30,988,600
Loan payable		—		2,800,000		—
Accrued expenses and other liabilities		432,664		506,270		1,297,269
Total liabilities		24,848,676		14,628,378		32,285,869
Net assets		395,184,006		293,591,705		514,005,070
Total liabilities and net assets	$	420,032,682	$	308,220,083	$	546,290,939

24

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2012

Note 12 - Significant Investees (continued)

	December 31, 2011 (Audited)
	GELS		GFS		GTT
Assets
Investments in Investees, at fair value	$	457,573,900	$	300,385,846	$	280,620,004
Investments in affiliated Investees, at fair value		—		18,900,663		203,425,660
Cash and cash equivalents		2,383,725		11,003,284		11,203,993
Other assets		22,131,626		9,363,243		10,956,300
Total assets	$	482,089,251	$	339,653,036	$	506,205,957
Liabilities and Net Assets
Liabilities
Redemptions payable	$	20,424,366	$	9,249,662	$	14,108,920
Loan payable		17,500,000		—		—
Accrued expenses and other liabilities		394,080		427,337		827,287
Total liabilities		38,318,446		9,676,999		14,936,207
Net assets		443,770,805		329,976,037		491,269,750
Total liabilities and net assets	$	482,089,251	$	339,653,036	$	506,205,957

Statement of Operations

For the three months ended September 30, 2012 and September 30, 2011, the statements of operations are summarized as follows:

	September 30, 2012 (Unaudited)
Income/(Loss)	GELS			GFS			GTT
Net realized gain/(loss) on Investees	$	9,686,491		$	4,506,787		$	3,355,671
Net change in unrealized gain/(loss) on Investees		(251,020	)		1,618,437			9,395,293
Investment income		1,331			1,693			1,349
Expenses		(407,088	)		(430,543	)		(1,414,079	)
Net income/(loss) from operations	$	9,029,714		$	5,696,374		$	11,338,234

	September 30, 2011 (Unaudited)
Income/(Loss)	GELS			GFS			GTT
Net realized gain/(loss) on Investees	$	2,997,811		$	5,826,501		$	7,821,860
Net change in unrealized gain/(loss) on Investees		(36,465,416	)		(22,562,363	)		(672,767	)
Investment income		581			336			269
Expenses		(525,432	)		(567,169	)		(1,035,961	)
Net income/(loss) from operations	$	(33,992,456	)	$	(17,302,695	)	$	6,113,401

25

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2012

Note 12 - Significant Investees (continued)

For the nine months ended September 30, 2012 and September 30, 2011, the statements of operations are summarized as follows:

	September 30, 2012 (Unaudited)
Income/(Loss)	GELS			GFS			GTT
Net realized gain/(loss) on Investees	$	18,473,296		$	14,127,713		$	8,742,524
Net change in unrealized gain/(loss) on Investees		11,022,522			5,396,018			7,734,273
Investment income		1,822			4,715			3,775
Expenses		(1,338,375	)		(1,407,923	)		(4,053,678	)
Net income/(loss) from operations	$	28,159,265		$	18,120,523		$	12,426,894

	September 30, 2011 (Unaudited)
Income/(Loss)	GELS			GFS			GTT
Net realized gain/(loss) on Investees	$	5,199,281		$	25,552,810		$	8,836,726
Net change in unrealized gain/(loss) on Investees		(37,600,542	)		(38,200,872	)		(1,509,133	)
Investment income		3,360			2,107			2,861
Expenses		(1,736,957	)		(1,792,051	)		(2,898,166	)
Net income/(loss) from operations	$	(34,134,858	)	$	(14,438,006	)	$	4,432,288

Statement of Cash Flows

For the nine months ended September 30, 2012 and September 30, 2011, the statements of cash flows are summarized as follows:

	September 30, 2012 (Unaudited)
	GELS			GFS			GTT
Cash flows from operating activities
Net income/(loss) from operations	$	28,159,265		$	18,120,523		$	12,426,894
Net change in investments in Investees and affiliated Investees		47,407,122			25,503,112			(54,942,151	)
Net change in operating assets and liabilities		20,956,396			4,062,744			11,426,282
Net cash provided by/(used in) operating activities		96,522,783			47,686,379			(31,088,975	)
Cash flows from financing activities
Net subscriptions/(redemptions)		(72,754,418	)		(52,432,409	)		27,188,106
Proceeds/(repayments) from loan		(17,500,000	)		2,800,000			—
Net cash provided by/(used in) financing activities		(90,254,418	)		(49,632,409	)		27,188,106
Net change in cash and cash equivalents		6,268,365			(1,946,030	)		(3,900,869	)
Cash and cash equivalents at beginning of period		2,383,725			11,003,284			11,203,993
Cash and cash equivalents at end of period	$	8,652,090		$	9,057,254		$	7,303,124

26

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2012

Note 12 - Significant Investees (continued)

	September 30, 2011 (Unaudited)
	GELS			GFS			GTT
Cash flows from operating activities
Net income/(loss) from operations	$	(34,134,858	)	$	(14,438,006	)	$	4,432,288
Net change in investments in Investees and affiliated Investees		50,189,578			37,674,934			(74,214,099	)
Net change in operating assets and liabilities		3,417,749			6,140,537			(5,346,350	)
Net cash provided by/(used in) operating activities		19,472,469			29,377,465			(75,128,161	)
Cash flows from financing activities
Net subscriptions/(redemptions)		(42,214,008	)		(18,258,000	)		63,195,398
Proceeds/(repayments) from loan		(3,100,000	)		—			—
Net cash provided by/(used in) financing activities		(45,314,008	)		(18,258,000	)		63,195,398
Net change in cash and cash equivalents		(25,841,539	)		11,119,465			(11,932,763	)
Cash and cash equivalents at beginning of period		36,020,084			8,819,210			13,003,556
Cash and cash equivalents at end of period	$	10,178,545		$	19,938,675		$	1,070,793

27

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

Overview

The following discussion should be read in conjunction with the financial statements of Goldman Sachs Hedge Fund Partners, LLC (the “Company”) and the related notes thereto.

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. HFS, a Delaware limited liability company, serves as the Company’s managing member (the “Managing Member”).

As of September 30, 2012, the Company had total assets of $453,854,785 compared with total assets of $548,994,309 as of December 31, 2011. Total liabilities of the Company were $53,599,754 as of September 30, 2012 compared with $26,715,538 as of December 31, 2011. Members’ equity of the Company was $400,255,031 as of September 30, 2012 compared with $522,278,771 as of December 31, 2011.

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 investment funds managed by the Managing Member (such funds and any successor funds thereto, individually, an “Investment Fund” and collectively the “Investment Funds”), each of which (directly or through other entities) 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 or more of the following hedge fund sectors (each, an “Investment Sector” and, collectively, the “Investment Sectors”): the tactical trading sector, the equity long/short sector, the event driven sector and the relative value sector. Currently, substantially all of the Company’s assets are invested in three Investment Funds, each of which is managed by the Managing Member. The current Investment Funds are Goldman Sachs Global Tactical Trading, LLC (“GTT”), which employs investment strategies in the tactical trading sector; Goldman Sachs Global Equity Long/Short, LLC (“GELS”), which employs investment strategies within the equity long/short sector; and Goldman Sachs Global Fundamental Strategies, LLC (“GFS”), which employs investment strategies within the event driven sector. The balance of the Company’s assets are invested in Goldman Sachs Fundamental Strategies Asset Trust (the “GFS Trust”), which is a trust containing certain interests in illiquid assets transferred by GFS; Goldman Sachs Global Relative Value, LLC (“GRV”), which, along with the GFS Trust, is in the process of liquidation; and Goldman Sachs HFP Opportunistic Fund, LLC (“HFPO” and together with the GFS Trust, GRV and the Investment Funds, the “Investees”), which employs investment strategies within one or more of the Investment Sectors. In addition, the Company may, directly or indirectly, allocate assets to Advisors whose principal investment strategies are not within one of the Investment Sectors referenced herein.

Performance of the Company in any period will be dependent upon the performance in the relevant period by the Investees and the weighted average percentage of the Company’s assets in each of the Investees 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.

While the Managing Member currently expects to allocate assets to all the Investment Sectors through allocations to the Investment Funds, the Managing Member has no constraints with respect to the percentage of the Company’s assets to be allocated, directly or indirectly, to any single Advisor, group of Advisors, Investment Fund, or Investment Sector, or with respect to the number of Investment Funds and Advisors to which, directly or indirectly, assets of the Company are allocated at any time. The percentage of the Company’s assets to be allocated to any single Advisor, group of Advisors, Investment Fund or Investment Sector, and the number of Investment Funds and Advisors to which the Company allocates assets from time to time will be determined by the Managing Member in its sole discretion, based on factors deemed relevant by the Managing Member at the time of such allocation, which may include the amount of the Company’s assets under management, constraints on the capital capacity of the Investment Funds and Advisors, the availability of attractive opportunities, and other portfolio construction and portfolio management considerations.

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The performance described herein is based in part on estimates of the recovery value of the Advisors’ claims against Lehman Brothers Holdings, Inc. and for certain subsidiaries and affiliates (“Lehman”), including cash claims involving amounts owed to the Advisors by Lehman and/or proprietary claims involving the recovery of the Advisors’ assets held by Lehman at the time of its insolvency. These estimates are based on information received from the majority, but not all of, the Advisors, and the Company has no way of independently verifying or otherwise confirming the accuracy of the information provided. As a result, there can be no guarantee that such estimates are accurate. There is significant uncertainty with respect to the ultimate outcome of the Lehman insolvency proceedings, and therefore the amounts ultimately recovered in respect of the Advisor’s claims against Lehman could be materially different than such estimates. Based on the information received, the gross indirect exposure to Lehman did not materially affect the Company’s Members’ Equity.

The managing member of GFS created the GFS Trust, a Delaware statutory trust, for the benefit of its investors, including the Company. On March 31, 2009, GFS transferred to the GFS Trust its interest in certain illiquid investments, including illiquid investments made by Advisor Funds, as well as liquidating vehicles that Advisors formed as liquidity decreased for previously liquid investments, such as certain credit instruments. See “— Liquidity and Capital Resources” for a further discussion of the GFS Trust.

GRV ceased trading activities effective July 1, 2009 and will dissolve at the time all assets are liquidated, liabilities are satisfied and liquidation proceeds are distributed through payment of a liquidating distribution. Investors in GRV (including the Company) will receive proceeds from the liquidation over time as GRV receives redemption proceeds from Advisors. See “— Liquidity and Capital Resources” and ITEM 3. “QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK — Risk Management.”

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 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 uncertain nature of the Company’s investments and since the Company’s investments in the Investment Funds are managed to seek to eliminate or 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 for the Three and Nine Months Ended September 30, 2012 and September 30, 2011

The following presents a summary of the operations for the three and nine months ended September 30, 2012 and September 30, 2011 and a general discussion of each material Investees’ performance during those periods. The Investees’ dealing net asset value (“NAV”) and reported performance are prepared using the latest information available from the Advisor Funds at the time of such valuation in accordance with their Limited Liability Company Agreement. The Investees’ investments in the Advisor Funds are determined utilizing NAVs supplied by, or on behalf of, the Advisors of each Advisor Fund. Furthermore, NAVs received from the administrator of the Advisor Funds may be estimates and such values will be used to calculate the NAV of the Investees for purposes of determining amounts payable on redemptions and reported performance of the Investees. Such estimates provided by the administrators of the Advisor Funds may be subject to subsequent revisions which may not be reflected in the Investees’ final month-end dealing NAV. The annual audited financial statements may reflect adjustments for such subsequent revisions which may result in a variance between the Investees’ total return reported in their audited financial statements and the reported performance based on the month-end dealing NAV.

Performance for the Three and Nine Months Ended September 30, 2012

The Company’s net realized and unrealized gain/(loss) for the three and nine months ended September 30, 2012 was $9,060,888 and $23,410,175, respectively, compared to the Company’s net realized and unrealized gain/(loss) for the three and nine months ended September 30, 2011 of $(20,007,989) and $(18,758,273), respectively.

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Overview

The Company is designed to be broadly exposed to hedge fund strategies by allocating its assets to the Investment Funds in the Investment Sectors. As further described under ITEM 3. “QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK — Risk Management,” quantitative analysis is combined with judgment to determine weightings, strategic return, risk and correlation estimates to inform the quantitative analysis. Judgment is applied to both estimates and weights in an attempt to achieve exposure to hedge funds while targeting attractive risk adjusted returns.

After a challenging second quarter, markets recovered notably over the summer months. Volatility declined across the majority of asset classes and most risk assets ended the quarter higher. Equities and other risk assets traded in a wide range in July but generally finished higher, with markets traveling a choppy path as downward pressure from persistent weakness in economic data was reversed on multiple occasions by encouraging rhetoric from policymakers. Policymakers on both sides of the Atlantic reiterated their willingness to act in response to weak data, as Federal Reserve Bank Chairman Ben Bernanke listed an array of easing options at his semiannual congressional testimony and ECB President Mario Draghi provided renewed support for risk assets with his comments that the ECB would do “whatever it takes” to save the euro. Risk assets continued to drift higher in August and continued supportive rhetoric from policymakers was accompanied by stronger economic data, most notably in the U.S. payrolls report, to support markets. Despite the rally, longer-term uncertainty persisted in August, with a series of data releases, ECB and FOMC meetings, and a German court decision regarding the constitutionality of the European Stability Mechanism (“ESM”) looming in the first half of September. However, the risk rally accelerated in the first half of September as anticipation of a more forceful policy response was confirmed by strong statements from the ECB and the Federal Reserve and the German constitutional court decision was in favor of the ESM. Risk assets failed to follow through on these moves in the second half of the month though as economic data releases became more mixed. Other lingering concerns also resurfaced with investors focusing on the Chinese slowdown, the U.S. fiscal cliff, and ongoing political hurdles in Europe as potential risks. Despite some moderation, most risk assets nevertheless finished September in positive territory.

Over the third quarter as a whole, global equity markets (proxied by the MSCI World Index) were up 6.7%, more than offsetting the losses from the second quarter. Performance was largely positive across regions and relatively similar in the United States, Europe and emerging markets. Two notable exceptions were Japan (proxied by the TOPIX Index in JPY) and China (proxied by the Shanghai SE Composite Index), which were down (4.2%) and (6.3%) over the quarter, respectively. Performance was also positive across commodities with the S&P GSCI Total Return Index gaining 11.5% over the quarter. Among the strongest commodities sectors were agriculturals and precious metals. In agriculturals, prices increased primarily due to an expected negative weather-related supply impact, for example reflected in the price of the front month futures contract for wheat increasing by more than 20%. Precious metals prices continued to trend higher as many large central banks continued their unorthodox monetary easing programs. The general positive sentiment for risk assets was also reflected in currency markets as the U.S. dollar sold off against the majority of developed and emerging markets, with the Brazilian real, Indian rupee and Chinese renminbi being notable exceptions. In fixed income, yields in major developed markets continued to decline and yield curves broadly steepened as long term rates declined less notably, or even increased. For example, 2 year yields in the Eurozone declined by 10 bps, whereas 30 year yields only fell by 7 bps. In the United, States, short term yields also declined whereas 30 year yields actually increased by 7 bps over the quarter. In addition, after fixed income rallied primarily in July and August, part of the decline in yields was reversed in September. Performance in credit was positive over the month as the asset class benefitted from both declining yields as well as tighter credit spreads. For example, the spread on the Credit Suisse High Yield Index compressed by 68 bps over the quarter, resulting in a positive total return of 4.3%.

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The Company cannot predict which Investment Sector and accordingly which Investee will perform best in the future. The table below illustrates the portfolio weighting of each material Investee as of September 30, 2012, as well as each material Investee’s net return for the three and nine months ended September 30, 2012.

Investee	Portfolio Weight as a % of Members’ Equity(1)			Three Months Ended September 30, 2012 Net Return(2)			Nine Months Ended September 30, 2012 Net Return(2)
GELS		43.50	%		2.23	%		6.67	%
GFS		26.73	%		1.97	%		5.94	%
GTT		34.06	%		2.42	%		3.23	%

(1) Members’ equity, used in the calculation of the fair value of the Investees as a percentage of members’ equity, is reduced for member redemptions that are paid after the balance sheet date according to ASC 480, “Distinguishing Liabilities from Equity.” Member redemptions are included in redemptions payable in the Balance Sheet of the financial statements.

(2) These returns are based on the performance of Class C Series 1 units for GELS, GFS and GTT. 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 three and nine months ended September 30, 2012, the Company’s Class A Series 1 units returned 1.63% and 3.55%, respectively, net of fees and incentive allocation.

The Investees

The material Investees’ performance during the three and nine months ended September 30, 2012 is described in the following.

Goldman Sachs Global Equity Long/Short, LLC

As of September 30, 2012, GELS represented approximately 44% of the Company’s members’ equity. GELS returned 2.23% and 6.67%, respectively, for Class C Series 1 units for the three and nine months ended September 30, 2012.

For the Three Months Ended September 30, 2012

GELS Advisors generated positive performance in the third quarter as rising equity markets and improved investor sentiment provided a good environment for GELS Advisors to both benefit from positive market returns and generate excess returns from stock selection.

In July, GELS Advisors realized moderately positive performance with low dispersion. GELS Advisors with long net exposure in more defensive sectors such as telecom, consumer staples, and healthcare generally outperformed GELS Advisors with greater net exposure to cyclical sectors, including consumer discretionary, information technology, and materials. Stock selection also contributed to performance amid the dispersion resulting from the quarterly earnings season and GELS Advisors benefited from long positions focused in more stable companies with less economic sensitivity. GELS Advisors with greater exposure to small market capitalization companies tended to underperform given the pronounced difference between small cap and large cap stock performance during the month. In August, GELS Advisors generally generated positive performance although there was some dispersion of performance across the sector. Top performing GELS Advisors benefited from long exposure to cyclical sectors, including information technology, consumer discretionary, and financials, as well as from idiosyncratic stock gains. Underperforming GELS Advisors had greater exposure to more defensive sectors, including consumer staples and telecommunications, and realized losses from long exposure to the emerging markets and Asia. Short exposure broadly detracted across sectors given the positive market conditions. In September, GELS Advisors generally generated positive

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absolute performance, although there was some dispersion across the strategy. Net exposure rose from relatively low levels during August, translating to moderate upside capture in the early part of September. GELS Advisors only slightly increased risk throughout the month of September as they remained focused on company fundamentals rather than technical market factors. Top performing GELS Advisors benefited from idiosyncratic stock gains and long exposure to cyclical sectors which led the most recent leg of the rally, as well as healthcare and telecom. Underperforming GELS Advisors had greater exposure to more defensive sectors such as consumer staples and utilities. Short exposure broadly detracted from absolute performance across sectors given the positive market returns.

For the Nine Months Ended September 30, 2012

GELS Advisors finished the first nine months of 2012 with positive performance as gains generated during the first and third quarter were not fully offset by losses in the second quarter, particularly in May.

GELS Advisors generated broadly positive performance throughout the first quarter of 2012. In January, GELS Advisors’ performance benefited from an aggressive broad sector rotation effect that caused the weakest sectors of 2011 to rally significantly and outperform the markets during the month, including financials, materials, industrials, consumer discretionary and technology. In February, most GELS Advisors finished in positive territory as well. In general, many of the same trends that had characterized January continued into February. Cyclical sectors, such as technology, financials, consumer discretionary and energy continued to lead the rally during the month. In March, GELS Advisors generally realized modest positive performance, producing returns that were generally in line with that of global equity markets in aggregate, although there was some dispersion of performance across the sector.

Performance turned negative over the second quarter, primarily driven by losses in May. In April, GELS Advisors generally realized flat performance. Generation of excess returns from stock selection during the month was strong in some cases with a number of GELS Advisors generating flat to positive performance despite losses across most developed equity markets. Top performing GELS Advisors benefited from long exposure to consumer discretionary and consumer staples. Underperforming GELS Advisors realized losses from long exposure to financials, information technology, and, to a lesser extent, energy & materials. In May, GELS Advisors generally realized losses, although many outperformed relative to global equity markets. Given the significant directional move in markets, GELS Advisors with higher net exposure struggled, while GELS Advisors with lower net exposure realized more modest losses and a small number of GELS Advisors produced positive performance. Performance turned largely flat again in June as macroeconomic issues such as political developments, policy announcements, and shifting investor sentiment created a risk-on/risk-off environment. Most GELS Advisors entered the month of June with relatively low levels of net exposure. In response to economic stimulus and notable healthcare legislation, GELS Advisors with long positions focused in the financials and health care sectors generally outperformed, while GELS Advisors with exposure to the technology and consumer sectors generally lagged.

Positive performance resumed in the more benign market environment of the third quarter. In July, GELS Advisors realized moderately positive performance with low dispersion. Performance was generally stronger for GELS Advisors with long exposure in more defensive sectors. GELS Advisors were also able to generate positive performance from individual stock selection as the quarterly earnings season led to notable dispersion between individual stock performances. In August, GELS Advisors generally generated positive performance although there was some dispersion of performance across the sector. Top performing GELS Advisors benefited from long exposure to cyclical sectors, as well as from idiosyncratic stock gains. Underperforming GELS Advisors had greater exposure to more defensive sectors and realized losses from long exposure to the emerging markets and Asia. In September, GELS Advisors generally generated positive absolute performance. Net exposure rose from relatively low levels during August, translating to moderate upside capture in the early part of September. GELS Advisors only slightly increased risk throughout the month as they remained focused on company fundamentals rather than technical market factors. Top performing GELS Advisors benefited from idiosyncratic stock gains and long exposure to cyclical sectors as well as healthcare and telecom. Underperforming GELS Advisors had greater exposure to more defensive sectors.

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Goldman Sachs Global Fundamental Strategies, LLC

As of September 30, 2012, GFS represented approximately 27% of the Company’s members’ equity. GFS returned 1.97% and 5.94%, respectively, for Class C Series 1 units for the three and nine months ended September 30, 2012.

For the Three Months Ended September 30, 2012

Following mixed performance in the second quarter, when market volatility rose sharply, price action across risk assets was generally positive throughout much of the third quarter, allowing GFS Advisors to generate broadly positive returns.

In July, long credit exposure was generally a contributor to performance for GFS Advisors, with a rally in rates, spread compression in corporate credit, idiosyncratic developments in certain liquidation investments and positive performance in structured credit. Equity special situations were generally a positive contributor to performance as well, and merger arbitrage exposure was generally a modest contributor to performance. Performance from hedges was mixed, with equity market hedges generally detracting but peripheral European sovereign hedges generally contributing positively, although partially reversing as markets rallied into month-end. Through August, credit market activity slowed into month-end, with limited new issuance activity and lower secondary trading volumes. Nonetheless, performance was positive in leveraged credit. However, structured credit attribution during August was generally muted following two strong months of performance in June and July. Equity exposure, in both merger arbitrage as well as equity special situations, was generally a source of positive returns. Performance from hedges, including equity market hedges and peripheral European sovereign hedges, was largely negative in August. In September, with stimulative monetary responses propelling markets and limited near term catalysts that might cause a market sell-off, many GFS Advisors benefited from having been positioned for positive market performance with long credit and equity exposures. A few GFS Advisors had been positioned long volatility and directionally net short, which led to losses or muted performance in September.

For the Nine Months Ended September 30, 2012

GFS Advisors generally produced positive returns during the first nine months of 2012, as positive performance over the first and third quarters outweighed slight negative performance in the second quarter.

In January and February, GFS Advisors generally benefited from “risk on” sentiment, with long positions in both equities and credit contributing to performance. While positioning was still relatively balanced in January after the 2011 volatility and GFS Advisors did not fully participate in the rally, positioning was more bullish in February, resulting in more positive performance. Positive sentiment from January and February largely carried through the month of March as well, albeit with some reversals throughout the month. Equity exposure, including special situations equity and merger arbitrage positions, generally contributed positive returns in March. Credit performance was more muted, due partly to rising rates as well as widening credit spreads in some instances. Through most of the first quarter of 2012, hedges and short exposure typically detracted from performance as prices of risk assets generally rose.

Performance was more mixed during the second quarter of 2012 as market volatility started to pick up again. Performance was generally muted in April and June. Corporate credit positions generally contributed positively while structured credit positions detracted in April but were more positive in June. Equity special situations and merger arbitrage performance was mixed during both months. However, this muted performance was offset by losses in May when GFS Advisors collectively realized negative performance as concerns around the macro environment returned. Equity exposure was broadly a source of negative performance, with losses from special situations equity, although there were a few positive idiosyncratic drivers from merger arbitrage investments. Corporate credit markets were relatively resilient through early May, but sold off sharply into month-end as risk sentiment deteriorated on an increase in negative economic news. Structured credit also detracted from performance. GFS Advisors generally benefited from portfolio hedges in May, which offset some losses.

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Performance turned positive again over the third quarter of 2012. In July, both special situations equity and credit exposures contributed positively. The latter benefitted from spread compression in corporate credit as well as idiosyncratic developments in certain liquidation investments and positive performance in structured credit. In August, credit market activity slowed into month-end, with limited new issuance activity and lower secondary trading volumes. Nonetheless, performance was positive in leveraged credit. However, structured credit attribution during August was generally muted. Equity exposure, in both merger arbitrage as well as equity special situations, was generally a source of positive returns. Performance from hedges, including equity market hedges and peripheral European sovereign hedges, was largely negative in August. In September, many GFS Advisors benefited from having been positioned for positive market performance with long credit and equity exposures, benefitting from the market rally after stimluative policymaker action. A few GFS Advisors had been positioned long volatility and directionally net short, which led to losses or muted performance in September.

Goldman Sachs Global Tactical Trading, LLC

As of September 30, 2012, GTT represented approximately 34% of the Company’s members’ equity. GTT returned 2.42% and 3.23%, respectively, for Class C Series 1 units for the three and nine months ended September 30, 2012.

For the Three Months Ended September 30, 2012

In aggregate, tactical trading strategies generated positive performance in the third quarter, driven by macro GTT Advisors, while managed futures GTT Advisors realized flat performance.

In July, managed futures GTT Advisors generated notable positive returns and macro GTT Advisors were also positive. Managed futures GTT Advisors benefitted from long positions in fixed income, most notably in European and U.S. fixed income instruments as yields decreased over the month. Macro GTT Advisors experienced mixed performance in fixed income trading as exposures varied, particularly at the back end of developed market yield curves. Trading in foreign exchange also contributed positively for both managed futures and macro GTT Advisors as long U.S. dollar positioning benefited from an appreciation against several other currencies, most notably against the euro, which sold off on the back of continued pessimistic sentiment towards Europe. Trading in commodities generated mixed performance. GTT Advisors with net long positioning in grains typically outperformed, driven by the heat wave in the U.S. Midwest, which led to a rally in grains prices, while short exposure to energy commodities detracted due to a strong rally across the sector. Global equities rallied in July, which led to mixed results for GTT Advisors, many of which had switched from long to short equity exposure over the prior several months; however, risk in equities was relatively low, so the contribution to performance was limited. In both August and September, there was a high dispersion of returns among GTT Advisors but in aggregate they experienced losses, driven by managed futures GTT Advisors. Managed futures GTT Advisors suffered from their long fixed income positioning, most notably in both European and U.S. fixed income instruments as price action reversed. Trading in foreign exchange also detracted, as most GTT Advisors entered August with a more bearish view on Europe, which suffered as the euro appreciated against the U.S. dollar as a result of the improved sentiment towards Europe. Trading in equities generated positive performance for most GTT Advisors who were broadly bullishly positioned and benefited from the appreciation in major global equity markets. Commodity trading generated mixed performance, given the dispersion of positioning across managers.

For the Nine Months Ended September 30, 2012

Tactical trading strategies generated positive performance in the first nine months of 2012 as both macro and managed futures GTT Advisors overall generated gains in the first and third quarter, offsetting negative performance in the second quarter.

In both January and February, macro GTT Advisors and managed futures GTT Advisors experienced gains as healthy economic data and an improving investor risk sentiment benefited tactical trading strategies. Macro GTT

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Advisors and managed futures GTT Advisors broadly benefited from gains in long-biased commodities trading and performance was mixed in currency trading. Macro GTT Advisors generally profited from trading in fixed income and had mixed performance in equities, while managed futures GTT Advisors inversely experienced gains in long developed and emerging market equity positioning and realized mixed performance in fixed income. March was characterized by mixed economic data, which cast uncertainty over recently improved investor risk sentiment. In aggregate, tactical trading strategies experienced negative performance. Managed futures GTT Advisors were the primary driver of losses for the sector, while macro GTT Advisors realized modest losses in aggregate with fairly high dispersion. Trading in fixed income generally contributed positively for macro GTT Advisors while trading in currencies and commodities generally detracted. Losses for managed futures GTT Advisors occurred primarily in fixed income, as long positions suffered, most notably in U.K. and U.S. government bonds. Managed futures GTT Advisors also had limited success trading in both currencies and commodities, both of which detracted in March.

In both April and May, managed futures GTT Advisors experienced strong gains while macro GTT Advisors experienced broadly flat performance. Managed futures GTT Advisors benefitted from long positions in fixed income but as fixed income positioning was more mixed for macro GTT Advisors, there was greater dispersion of returns for macro GTT Advisors. Performance was mixed in currency trading and both macro and managed futures GTT Advisors experienced losses in equity trading. Both macro and managed futures GTT Advisors had mixed positioning in commodities throughout the second quarter, which led to dispersed returns across the asset class. In June, GTT Advisors experienced losses across asset classes as many GTT Advisors maintained a more bearish view on global growth, which hurt performance. Managed futures GTT Advisors were the primary driver of losses for the sector, while macro GTT Advisors experienced more moderate losses. Fixed income trading was a significant detractor in June as long positions suffered as price action reversed from the prior month. Conversely some select macro GTT Advisors profited from short fixed income positioning. Equities trading was a detractor for both macro and managed futures GTT Advisors in June. Trading in currencies also detracted as GTT Advisors had uniform long positioning in the U.S. dollar which depreciated against most currencies in June. Some macro GTT Advisors partially offset these losses with long emerging market currency positions. Trading in commodities led to mixed performance in June due to limited consensus in positioning.

In July, managed futures GTT Advisors generated notable positive returns and macro GTT Advisors were also positive. Managed futures GTT Advisors benefitted from long positions in fixed income as yields broadly decreased over the month. Macro GTT Advisors experienced mixed performance in fixed income trading as exposures varied. Trading in foreign exchange also contributed positively for both managed futures and macro GTT Advisors as long U.S. dollar positioning benefited from an appreciation against several other currencies. Trading in commodities generated mixed performance. Global equities rallied in July, which led to mixed results for GTT Advisors, many of which had switched from long to short equity exposure over the prior several months; however, risk in equities was relatively low, so the contribution to performance was limited. In both August and September, there was a high dispersion of returns among GTT Advisors but in aggregate they experienced losses, driven by managed futures GTT Advisors. Managed futures GTT Advisors suffered from their long fixed income positioning as price action reversed. Trading in foreign exchange also detracted, as most GTT Advisors entered August with a more bearish view on Europe, which suffered as the euro appreciated against the U.S. dollar. Trading in equities generated positive performance for most GTT Advisors who were broadly bullishly positioned and benefited from the appreciation in major global equity markets. Commodity trading generated mixed performance, given the dispersion of positioning across managers.

Performance for the Three and Nine Months Ended September 30, 2011

The Company’s net realized and unrealized gain/(loss) for the three and nine months ended September 30, 2011 was $(20,007,989) and $(18,758,273), respectively, compared to the Company’s net realized and unrealized gain/(loss) for the three and nine months ended September 30, 2010 of $20,889,590 and $16,214,062, respectively.

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Overview

Worries about long-term sovereign debt trajectories and European bank solvency negatively impacted market sentiment during the third quarter of 2011. Markets reflected increasing investor concern as signs of a potential global growth slow-down resurfaced. After averaging 18 for the first seven months of 2011, the VIX index averaged 35 and did not dip below 23 during the month of August, reaching a yearly high of 48 on August 8. World equities (proxied by the MSCI AC World TR Index) finished down 7.3% in August and then down 9.4% in September, bringing the year-to-date return to -17.4%. Headlines dictated market sentiment in the credit space as well, albeit with less volatility than equity positions. High yield bonds returned -5.1% for the third quarter and -0.5% for the full year 2011 (proxied by the Credit Suisse High Yield Index) and leveraged loans (proxied by the S&P Leveraged Loan Index) returned -3.4% for the third quarter and -1.3% for the full year 2011. Credit flows were negative for the third quarter, with August recording the largest and second largest outflows on record for leveraged loans and high yield bonds, respectively. In August and early September, fears of debt contagion in the Eurozone led to higher credit default swap (“CDS”) spreads across the region, with formerly overlooked EU members such as France under increased scrutiny. The year’s steady downward trend for 5-year and 10-year yields was accelerated by these developments throughout the third quarter. Overall, yields on US and European 10-year bonds dropped an additional 124 bps and 114 bps, respectively, over the quarter (proxied by the US and Euro Generic Government Bond 10-Year Yields). In currencies, the US Dollar reversed its recent trend of depreciation as risk selloffs in September and August sparked a flight to perceived quality. There were a few notable exceptions: EUR/USD experienced limited movement in either direction throughout most of the summer, and Asian and commodity-related currencies alternately gained and lost ground versus the US dollar throughout the summer until the Federal Reserve announcement of “Operation Twist” on September 22 saw the US dollar appreciate, finishing the quarter up 5.7% (proxied by the Dollar Index). Gold continued to rally with spot prices up 22% from June 1 to reach a record high of $1,888.7 per ounce on August 22 until price pullbacks during the mid-September sell-off threatened its perceived status as a safe haven asset. Commodities trended upwards early in the third quarter but sold off sharply in August, returning -11.7% for the quarter and -9.3% for the year (proxied by the S&P GSCI TR Index). HFP Advisors generally maintained more cautious positioning and as a result outperformed in both the third quarter and for the full year 2011. GELS Advisors experienced the weakest performance, as stock and sector selection were overwhelmed by macro concerns during equity market declines. GFS broadly saw negative returns throughout the summer and into early September, as credit was also negatively impacted by macro headwinds. The Company’s outperformance was attributable to the large allocation to GTT Advisors, who were able to capture correlated and sustained moves in the direction of longer-term trends across many markets.

The Company cannot predict which Investment Sector and accordingly which Investee will perform best in the future. The table below illustrates the portfolio weighting of each material Investee as of September 30, 2011, as well as each material Investee’s net return for the three and nine months ended September 30, 2011.

Investee	Portfolio Weight as a % of Members’ Equity(1)			Three Months Ended September 30, 2011 Net Return(2)			Nine Months Ended September 30, 2011 Net Return(2)
GELS		39.29	%		(6.82	)%		(6.81	)%
GFS		25.25	%		(4.51	)%		(3.63	)%
GTT		31.47	%		1.55	%		1.63	%

(1) Members’ equity, used in the calculation of the fair value of the Investees as a percentage of members’ equity, is based on the members’ equity per the Balance Sheet and in accordance with ASC 480, “Distinguishing Liabilities from Equity.”

(2) These returns are based on the performance of Class C Series 1 units for GELS, GFS and GTT. 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 three and nine months ended September 30, 2011, the Company’s Class A Series 1 units returned (3.77)% and (4.28)%, respectively, net of fees and incentive allocation.

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The Investees

The material Investees’ performance during the three and nine months ended September 30, 2011 is described in the following.

Goldman Sachs Global Equity Long/Short, LLC

As of September 30, 2011, GELS represented approximately 39% of the Company’s members’ equity. GELS returned (6.82)% and (6.81)%, respectively, for Class C Series 1 units for the three and nine months ended September 30, 2011.

For the Three Months Ended September 30, 2011

GELS Advisors generated broadly negative performance in the third quarter of 2011, with performance driven by the steep declines in global equity markets in July, August, and September.

GELS Advisors realized losses in all three months of the quarter, most notably August and September, although in the aggregate, performed better than equity markets with much lower volatility. In the third quarter, there was a wide dispersion of performance, with the magnitude of performance driven largely by gross and net exposure levels, and to a lesser extent, sector selection and single-stock exposures. GELS Advisors with long exposure concentrated in financials or cyclical sectors such as energy, industrials, materials, consumer cyclical and technology underperformed during this period, while losses were more limited for GELS Advisors with long exposures concentrated in defensive sectors. Stock and sector selection were somewhat marginalized by the continued dominance of macro factors on equity markets in September and August, although this came after what had proven to be a more fruitful period for stock-picking in early July, as a strong earnings season generally rewarded investors who judged company fundamentals effectively.

GELS Advisors’ returns were broadly in line with net exposure levels, which decreased throughout the quarter. GELS Advisors with high levels of portfolio net exposure were unable to avoid the large market decline and realized some of the largest losses in the quarter. Certain GELS Advisors with more moderate net exposure combined with high levels of gross exposure and large underlying sector, geography, and style biases also realized challenging performance. Those GELS Advisors with more neutrally or net short positioned portfolios and those who adopted more cautious positioning in late July and early August generally outperformed peers.

GELS Advisors exited the third quarter with substantially lower levels of gross and net exposure compared to those at the start, although risk levels were still well above the levels seen during the financial crisis in 2008. With correlations and volatility remaining high through the end of August and into September, most GELS Advisors held exposure to the lower end of their internal risk spectrums, awaiting a sustained period of calm and greater macro certainty before meaningfully increasing risk to take advantage of enticing valuations following sell-offs. This has led GELS Advisors to reduce position sizes, concentrate portfolios in their highest conviction positions, and increase portfolio hedging, often leading to a decrease in both gross and net exposure.

For the Nine Months Ended September 30, 2011

GELS Advisors finished the first nine months of 2011 with negative performance as gains generated during the first quarter were erased by losses in the second and third quarters.

GELS Advisors had positive performance in the first quarter of 2011 with positive performance in January and February and more muted performance in March. In January, GELS Advisors who had higher levels of long exposure to the U.S., energy, industrials, and technology sectors outperformed GELS Advisors with long exposure to Asia and emerging markets, long positions in the consumer sector, and short positions in European financials. In February, GELS Advisors generally extended their January gains supported by developed market

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equity performance. Underperforming GELS Advisors generally had exposure to Asia and emerging markets, as concerns about inflation tempered the returns of emerging market equities. In March, U.S. and emerging market focused GELS Advisors realized gains from long exposure to cyclically-oriented sectors such as energy, industrials and materials, while GELS Advisors with exposure to Europe and Asia underperformed.

GELS Advisors generated negative performance in the second quarter, as volatile markets and macroeconomic concerns created a challenging environment for stock picking. GELS Advisors added to their first quarter gains in April, as long exposures in cyclically orientated sectors underperformed relative to more stable sectors. In May, GELS Advisors who underperformed generally had a growth bias to their portfolios and overweight long exposure to commodities and industrials sectors, while top performing GELS Advisors had long exposure to large cap equities and defensive sectors such as healthcare and consumer staples. GELS Advisors losses continued into June as underperforming GELS Advisors significantly reduced exposures due to losses during the first half of the month, causing them to have more limited participation in the strong equity rally at the end of June.

In the third quarter, GELS Advisors realized losses in all three months, most notably August and September, although in the aggregate, performed better than equity markets with much lower volatility. There was a wide dispersion of performance, with the magnitude of performance driven largely by gross and net exposure levels, and to a lesser extent, sector selection and single-stock exposures. GELS Advisors with long exposure concentrated in financials or cyclical sectors such as energy, industrials, materials, consumer cyclical and technology underperformed during this period, while losses were more limited for GELS Advisors with long exposures concentrated in defensive sectors. GELS Advisors’ returns were broadly in line with net exposure levels, which decreased throughout the quarter. GELS Advisors with high levels of portfolio net exposure were unable to avoid the large market decline and realized some of the largest losses in the quarter. Those GELS Advisors with more neutrally or net short positioned portfolios and those who adopted more cautious positioning in late July and early August generally outperformed peers.

Goldman Sachs Global Fundamental Strategies, LLC

As of September 30, 2011, GFS represented approximately 25% of the Company’s members’ equity. GFS returned (4.51)% and (3.63)%, respectively, for Class C Series 1 units for the three and nine months ended September 30, 2011.

For the Three Months Ended September 30, 2011

GFS Advisors experienced negative performance during the third quarter of 2011, collectively realizing negative performance in all three months of the quarter.

The third quarter was marked by significant volatility and negative performance, driven by macro uncertainty largely centered in Europe. During July, most multi-strategy GFS Advisors experienced losses while the performance of credit-focused GFS Advisors was mixed. The GFS Advisors who had maintained relatively balanced positioning or shifted to a more neutral portfolio typically fared better. Equity exposure, particularly post-reorganization equities, contributed to sizable losses. Bearish views on Europe generated positive returns via short sovereign or single name European financial CDS. In August, concerns about the solvency of European sovereigns and banks along with a more muted global growth outlook weighed on risk assets. Multi-strategy GFS Advisors experienced losses, generally driven by their overall level of directional exposure, with special situation equity positions with high hedge fund ownership the biggest detractors. Credit focused GFS Advisors largely generated negative performance in August as well, with large markdowns in individual positions. Detractors once again included post-reorganization equity positions. Additionally, exposure to some large, distressed capital structures detracted from performance as market participants looking to reduce risk sold down exposures in these more liquid names. Both multi-strategy and credit focused GFS Advisors benefited from portfolio hedges, which offset some losses. Despite a more muted start to performance in September and intermittent relief rallies during

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the month, both credit and equity markets were again impacted by broad risk aversion, experiencing significant losses over the course of the month. In September, credit focused GFS Advisors experienced losses, although those with more balanced exposures and a trading-oriented style fared better. Multi-strategy GFS Advisors experienced losses across both credit and equity positions during September despite general risk reduction in August. Some GFS Advisors attempted to further hedge equity market exposure, but many of these positions still resulted in losses during September. Conversely, merger arbitrage exposure was generally a small contributor in September as some deal spreads tightened modestly following losses in August. Through the end of the third quarter, GFS Advisors were generally more cautious than they had been throughout most of the first half of 2011.

For the Nine Months Ended September 30, 2011

GFS Advisors finished the first nine months of 2011 with negative performance as gains generated during the first quarter were offset by negative performance in the second and third quarters.

The first quarter of 2011 began as a continuation of 2010 for GFS Advisors and their portfolios, with the market environment generally supportive of long positions in both equity and credit markets. High yield and leveraged loan assets both finished the first quarter in positive territory, and distressed credit positions also largely performed well. Merger arbitrage positions contributed to performance with increased activity throughout the first quarter. Additionally, special situation equities continued to generate positive returns due to a combination of idiosyncratic developments and the supportive market backdrop. In contrast, hedges were notable detractors over the first quarter, although GFS Advisors with more balanced positioning generally avoided significant losses in the middle of March when volatility spiked. Overall, GFS Advisors collectively realized positive performance in January and February, while March saw high dispersion in performance of underlying GFS Advisors given heightened market volatility.

The second quarter began with continued positive performance from the first quarter. However, as negative data points on global market conditions came to light, the positive backdrop for GFS Advisors reversed in May, causing several GFS Advisors to report negative performance during May and most GFS Advisors to report negative performance during June. Losses in May were largely driven by equity exposures, in contrast to credit exposures which were generally more resilient to negative risk sentiment during the month. In June, however, credit markets experienced significant declines and equity markets continued to sell off. While GFS Advisors experienced some recovery during the last week of June given the sharp turnaround in the equity markets, both equity and credit exposure contributed to losses in June, leading to collectively negative performance from GFS Advisors during the month and for the second quarter.

The third quarter was marked by significant volatility and negative performance, driven by macro uncertainty largely centered in Europe. GFS Advisors collectively realized negative performance in all three months of the third quarter, generally driven by their overall level of directional exposure. The GFS Advisors who had maintained relatively balanced positioning or shifted to a more neutral portfolio typically fared better over the quarter. Equity exposure, particularly special situation equity positions with high hedge fund ownership were the biggest detractors. Post re-organized and levered equities also contributed to sizable losses. Credit contributed to losses as well, with large mark downs in individual positions despite somewhat limited trading volume. Particularly, exposure to some large, distressed capital structures detracted from performance as market participants looking to reduce risk sold down exposures in these more liquid names. Both multi-strategy and credit focused GFS Advisors benefited from portfolio hedges, which offset some losses. Bearish views on Europe generated positive returns via short sovereign or single name European financial CDS. Through the end of the third quarter, GFS Advisors were generally more cautious than they had been through most of the first half of 2011. Despite the cautious posture of many portfolios, GFS Advisors’ highlighted the increased opportunity set stemming from the recent market dislocation. While the risk-reward trade-off had improved for a number of investment opportunities, during the third quarter, GFS Advisors were cognizant that markets remained vulnerable to further selling pressure as broader market volatility and macro uncertainty remained high.

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Goldman Sachs Global Tactical Trading, LLC

As of September 30, 2011, GTT represented approximately 31% of the Company’s members’ equity. GTT returned 1.55% and 1.63%, respectively, for Class C Series 1 units for the three and nine months ended September 30, 2011.

For the Three Months Ended September 30, 2011

Tactical Trading strategies generated positive performance in the third quarter. Both macro GTT Advisors and managed futures GTT Advisors exhibited fairly high dispersion through the quarter, but overall contributed positively to performance. In the aggregate, macro GTT Advisors outperformed managed futures GTT Advisors, or commodity trading advisor (“CTA”) strategies, as sharp trend reversals across key markets during the quarter led to more significant declines for CTAs than for macro GTT Advisors, which more tactically adjusted positioning. In July, performance was positive as both macro GTT Advisors and CTAs captured correlated and sustained moves in the direction of longer-term trends across many markets, most notably in the U.S. Dollar versus Asia and commodity-related currencies, precious metals and fixed income markets. Trading in equities, however, led to mixed performance in the month, as GTT Advisors’ positioning was more varied. In August, macro GTT Advisors and CTA strategies continued to benefit from trends in fixed income as long positions in U.S. and non-peripheral European government bonds benefited from a decline in yields. Trading in precious metals also contributed gains, while CTA strategies, and to a lesser extent macro GTT Advisors, suffered in currency trading following the strengthening of the U.S. Dollar. GTT Advisors experienced mixed performance in September as losses from CTAs were offset by gains from macro GTT Advisors. Most of September was again characterized by an elevated level of investor risk aversion. The U.S. Dollar continued to strengthen against emerging market currencies, which led to losses for many GTT Advisors. However, both macro GTT Advisors and CTAs largely offset these losses through gains in fixed income trading, as yields continued to decline in U.S. and non-peripheral European government bonds. Commodities also detracted from performance, notably in energies and precious metals, while performance in equities was mixed. GTT Advisors generally continued to have long positioning in fixed income, but became generally net short in equities in September. GTT Advisors broadly have more mixed positioning in both currencies and commodities. Risk levels for macro GTT Advisors remained low to moderate, but generally increased over the quarter, while risk levels for CTAs saw greater dispersion but generally decreased through the quarter.

For the Nine Months Ended September 30, 2011

Tactical trading strategies generated positive performance in the first nine months of 2011 as positive returns generated by macro GTT Advisors offset mixed, but overall negative returns experienced by managed futures GTT Advisors.

GTT Advisors focused on macro trading generated positive returns in the first nine months of 2011, as positive performance from fixed income and to a lesser extent commodities trading offset mixed performance in foreign exchange and equities. Trading in fixed income contributed positively for nearly all macro GTT Advisors, with profits generated largely in the first and third quarters. With the exception of relatively sharp fixed income reversals in the second quarter, yields on U.S. and German government bonds have fairly steadily declined over the period. In commodities, macro GTT Advisors have benefited primarily from long precious metals and energy commodity positions held consistently throughout the period. However, many macro GTT Advisors gave up the majority of commodity gains in the third quarter, following a strong sell-off across most commodity markets. Foreign exchange positions have led to mixed and muted results in the first nine months of 2011, as prior gains from long positioning in non-Japan Asia, emerging market and commodity-related currency positions sharply reversed in August and September, while trading in other developed market currencies, notably the Swiss Franc and Japanese Yen, has been difficult for macro GTT Advisors over the period. GTT Advisors focused on macro trading generally held low risk in equities over the period, which led to muted and mixed performance.

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During the first nine months of 2011, managed futures GTT Advisors’ losses were driven by trading in currencies and equities. Performance in emerging market and commodity-related currencies was particularly challenging for managed futures GTT Advisors. Trading in commodities resulted in mixed performance for managed futures GTT Advisors, as risk exposure in the asset class was lighter and positioning more mixed. Fixed income has been the largest positive contributor for GTT Advisors focused on managed futures, primarily due to strong performance in the third quarter as long fixed income positioning benefited from declining yields in both U.S. and non-peripheral European government bonds.

Comparison of Selected Financial Information for the Three and Nine Months ended September 30, 2012 and September 30, 2011

Dividend Income

Dividend income for the three and nine months ended September 30, 2012 was $3,185 and $8,785, respectively, compared to dividend income for the three and nine months ended September 30, 2011 of $684 and $6,037, respectively. The Company’s dividend income fluctuates with the level of cash available to invest.

Expenses

The management fee for the three and nine months ended September 30, 2012 was $1,407,032 and $4,719,687, respectively, compared to the management fee for the three and nine months ended September 30, 2011 of $1,808,099 and $5,709,730, respectively. Because the management fee is calculated as a percentage of the Company’s net assets as of each month end (equal to one-twelfth of 1.25% of the net assets of the Company of the applicable month), the changes in the expense were due to fluctuations in the Company’s net assets for the period ended September 30, 2012 compared to the same period in 2011.

Professional fees for the three and nine months ended September 30, 2012 were $343,803 and $982,650, respectively, compared to professional fees for the three and nine months ended September 30, 2011 of $366,246 and $631,271, respectively. The increase in professional fees for the period ended September 30, 2012 was primarily due to increased costs related to additional regulatory filing requirements for Extensible Business Reporting Language (“XBRL”).

The Company incurs a monthly administration fee payable to SEI equal to one twelfth of 0.02% of the net assets of the Company as of each month end. For the three and nine months ended September 30, 2012, the Company incurred an administration fee of $29,388 and $96,142, respectively, compared to the administration fee for the three and nine months ended September 30, 2011 of $35,805 and $111,983, respectively. Through its investments in the Investment Funds, the Company continues to bear a pro-rata portion of the administration fee paid to the administrator of the Investment Funds for services provided to the Investment Funds. For the three and nine months ended September 30, 2012, the Company’s pro-rata indirect share of the administration fee charged at the Investee level totaled $53,075 and $176,148, respectively, compared to the Company’s pro-rata indirect share of the administration fee charged at the Investee level for the three and nine months ended September 30, 2011 of $65,367 and $206,333, respectively. SEI is the administrator of each Investment Fund.

Miscellaneous expenses for the three and nine months ended September 30, 2012 were $38,217 and $153,757, respectively, compared to miscellaneous expenses for the three and nine months ended September 30, 2011 of $45,773 and $139,281, respectively.

Incentive Allocation

The incentive allocation for the three and nine months ended September 30, 2012 was $9,089 and $16,208, respectively, compared to incentive allocation for the three and nine months ended September 30, 2011 of $0 and $5,323, respectively. Because the incentive allocation is calculated as a percentage of any new net appreciation in

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the net asset value attributable to each series, the changes in the incentive allocation were due to fluctuations in net income from operations for the period resulting in certain series of Class A Shares moving above or below their high watermark.

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

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, to fund quarterly 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. Redemptions are permitted on a quarterly 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. Accordingly, 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 redemptions, or as otherwise permitted in the limited liability company agreements of the Investment Funds) of its investments in the Investment Funds and from new investments from existing and new investors. Neither the GFS Trust nor GRV provide investors with a voluntary redemption right. Redemptions can be made quarterly, subject to certain limitations. During certain historic periods, the Company only took in investments from existing investors and limited subscriptions from new qualified investors; however, the Company has been accepting additional amounts of new subscriptions throughout the third quarter of 2012. The Company may close again and stop accepting subscriptions at any time without notice at the sole discretion of the Managing Member. The acceptance of future subscriptions in the Company will be determined by the Managing Member in its sole discretion. Although the Managing Member has been receiving new subscriptions, 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 NAV 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.

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.

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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.

In addition, certain of the investments held by the Investment Funds are subject to various lock-up provisions. Additionally, the Advisors of the investments held by the Investment Funds may, at their discretion, transfer a portion of the Investment Funds’ investment into share classes where liquidity terms are directed by the Advisor in accordance with the respective investment’s private placement memorandum, commonly referred to as side pocket share classes (“side pockets”). These side pockets may have restricted liquidity and prohibit the Investment Funds from fully liquidating their investments without delay. The managing member of each Investment Fund attempts to determine each Advisor’s strategy on side pockets through its due diligence process prior to making an allocation to the investment managed by the Advisor. However, no assurance can be given on whether or not the Advisor will implement side pockets during the investment period. The Advisors of the investments held by the Investment Funds may also, at their discretion, suspend redemptions or implement other restrictions on liquidity which could impact the Investment Funds’ ability to meet redemptions submitted by the Company. As of September 30, 2012, approximately 2% of the Company’s investments in the Investees were considered illiquid due to restrictions implemented by the Advisors of the investments held by Investees, excluding contractual restrictions imposed by the Advisors at the time of purchase, such as lock-ups. In addition, as of September 30, 2012, approximately 3% of the Company’s members’ equity was considered illiquid due to restrictions implemented by the Investees including the lack of a voluntary redemption right from the GFS Trust and GRV. The sum of these amounts represents the total amount of the Company’s members’ equity which was considered illiquid as of September 30, 2012.

HFS, the managing member of GFS, created the GFS Trust for the benefit of its investors, including the Company. Goldman Sachs Trust Company, a Delaware Corporation, is the trustee of the GFS Trust (the “Trustee”). The Trustee appointed HFS as the “Special Assets Direction Advisor”, responsible for, among other things, disposition of GFS Trust assets. On March 31, 2009, GFS transferred to the GFS Trust its interest in certain illiquid investments, including illiquid investments made by Advisor Funds, as well as liquidating vehicles that the Advisors formed as liquidity decreased for previously liquid investments, such as certain credit instruments. GFS transferred to the GFS Trust the economic risks and benefits of its interests in the assets. In connection with such transfer, each investor in GFS, including the Company, was issued its pro-rata share of GFS Trust interests based on its ownership in GFS as of the transfer date. Distributions from the GFS Trust in respect of GFS Trust interests will be made to holders of GFS Trust interests, including the Company, as amounts in respect of the assets transferred to the GFS Trust are received from the Advisors. However, the actual timing of these distributions will be dependent on the Advisors’ ability to liquidate positions as market conditions allow, and it could be a significant period of time before such positions are realized or disposed of.

The Company received subscriptions from new and existing investors of $250,000 and $6,491,936, respectively, during the three and nine months ended September 30, 2012 and of $3,875,000 and $22,970,000, respectively, during the three and nine months ended September 30, 2011.

Demand from new and existing investors varies from period to period based upon market conditions, the Company’s returns and other alternative investments available to investors. The Company believes that in more recent periods investors’ interest has decreased from earlier periods as investors have sought to reduce overall portfolio exposure.

The Company paid out redemptions in the amount of $72,647,186 and $119,547,247, respectively, during the three and nine months ended September 30, 2012 and $22,053,852 and $70,058,148, respectively, during the three and nine months ended September 30, 2011. The Company had redemptions payable in the amount of

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$51,357,366 at September 30, 2012 and $24,922,213 at December 31, 2011. The Company funded the redemptions made in 2011 and in January, April, July and October 2012 by making redemptions from the Investment Funds in proportion to the then current weightings and through the use of uninvested cash on hand. The Managing Member expects the Company to fund future redemptions in a similar manner and does not believe that the redemptions payable in October 2012 had a material adverse effect on the value of the units or the performance of the Company.

Demand for redemptions varies from period to period based upon market conditions, the Company’s returns and other alternative investments available to investors.

Subject to applicable law, 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 Goldman Sachs Group, Inc. or its affiliates, including Goldman, Sachs & Co. (collectively referred to herein, together with their affiliates, directors, partners, trustees, managers, members, officers and employees, as the “GS Group”), or other parties, when deemed appropriate by its managing member, including to make investments and distributions in respect of redemptions of membership units, to pay expenses or for other purposes.

As of September 30, 2012, the Company had cash and cash equivalents on hand of $23,887,540. As of December 31, 2011, the Company had cash and cash equivalents on hand of $30,701,757.

Investments as of September 30, 2012 were $429,967,245 as compared to $518,292,552 as of December 31, 2011. The decrease was primarily due to net redemptions made by the Company from the Investment Funds, partially offset by net realized and unrealized gains during the nine months ended September 30, 2012.

Management fee payable represents the management fees due to the Managing Member. Management fee payable as of September 30, 2012 was $1,407,032 as compared to $1,143,333 as of December 31, 2011. 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 NAV of the Company. The increase in Management fee payable is due to the amount and timing of the payment of the monthly management fee to the Managing Member and fluctuations in the NAV.

The Company generally expects that its cash flows from liquidating its investment positions in the Investment Funds, to the extent necessary, and from new subscriptions into the Company are adequate to fund its operations and liquidity requirements.

The value of the Company’s directly held cash and financial instruments is not expected to be materially affected by inflation. At the Investee level, given that GFS’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.

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Recent Accounting Pronouncements

Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (“IFRS”) (FASB ASC 820). In May 2011, the FASB issued ASU No. 2011-04, “Fair Value Measurements and Disclosures (Topic 820) — Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS.” ASU No. 2011-04 clarifies the application of existing fair value measurement and disclosure requirements, changes certain principles related to measuring fair value, and requires additional disclosures about fair value measurements. ASU No. 2011-04 is effective for periods beginning after December 15, 2011. The adoption of ASU No. 2011-04 did not materially affect the Company’s financial condition, results of operations, or cash flows.

Critical Accounting Policies and Estimates

Use of 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 U.S. 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 significant accounting policies is set forth in Note 2 to the Company’s financial statements. In the Managing Member’s view, the policy that involves the most subjective judgment is set forth below.

Fair value of investments

The Company’s investments in Investees are subject to the terms and conditions of the operating agreements of the respective Investees. These investments are carried at fair value, based on the Company’s attributable share of the net assets of the respective Investee. The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

U.S. GAAP has a three-level fair value hierarchy for disclosure of fair value measurements. The fair value hierarchy prioritizes inputs to the valuation techniques used to measure fair value, giving the highest priority to Level 1 inputs and the lowest to Level 3 inputs. A financial instrument’s level in the fair value hierarchy is based on the lowest level of any input that is significant to its fair value measurement.

The Company uses NAV as its measure of fair value for investments in Investees. In evaluating the level at which the fair value measurements of the Company’s investments have been classified, the Company has assessed factors including, but not limited to, price transparency, the ability to redeem at NAV at the measurement date and the existence or absence of certain restrictions at the measurement date. See Note 2 and 3 to the Company’s financial statements.

For the nine months ended September 30, 2012 and the fiscal year ended December 31, 2011, approximately 100% of the fair value of the Company’s pro-rata share of investments in the Investees was determined predominately from utilizing NAVs provided by external advisors. At September 30, 2012 and December 31, 2011, investments valued using quoted market prices represented 0% of the fair value of the Company’s pro-rata share of investments in the Investees.

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 Investees, 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. The Company receives preliminary and final NAVs from each

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of the Investees on a monthly basis. Historically, the Company has not experienced any material variance between the preliminary and final NAVs, which would have required adjustment to the Company’s financial statements. 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 Investees 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 more fully described in the Company’s Form 10-K for the year ended December 31, 2011 (the “Form 10-K”).

The valuation provisions of the Company’s limited liability company agreement and the limited liability company agreements of the Investment Funds 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. Valuations are performed in a substantially similar manner for the GFS Trust. 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 be able to take the bankruptcy into account to attempt to more accurately determine the fair value of such assets.

There has been no situation during the periods contained in this Quarterly Report on Form 10-Q where the Managing Member has determined that valuation provided by an Advisor or independent investment manager in which one of the Investment Funds had invested was not complete or was inaccurate.

Off-Balance Sheet Risk

In the normal course of business, the Advisors of the Advisor Funds may trade various financial instruments and enter into various investment transactions with off-balance sheet risk, which includes, but are not limited, to securities sold short, futures, forwards, swaps and written options. There are no off-balance sheet or material contingent liabilities at the Company or Investee levels.

Contractual Obligations

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

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

The following table lists the significant market risk sensitive instruments held by the Company, through the Investees, as of September 30, 2012 and as of December 31, 2011, as indicated by the Fair Value/Value at Risk column, and the Net Realized and Unrealized Gain/(Loss) column from January 1, 2012 to September 30, 2012 and from January 1, 2011 to December 31, 2011. Because of the uncertain nature of the investments that the Company engages in through the Investees, 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 because 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.

	Nine Months Ended September 30, 2012
Investee	% of Members’ Equity(1)			Fair Value/Value at Risk		Net Realized and Unrealized Gain/(Loss) (In millions)			Liquidity
GELS		43.50	%	$	174,094,338	$	12.6		(2)
GFS		26.73			106,979,719		6.9		(3)
GFS Trust		2.73			10,939,031		(0.4	)	(4)
GRV		0.31			1,244,222		0.1		(5)
GTT		34.06			136,341,383		4.5		(6)
HFPO		0.09			368,552		(0.3	)	(7)
Total		107.42	%(8)	$	429,967,245	$	23.4

	Year Ended December 31, 2011
Investee	% of Members’ Equity(1)			Fair Value/Value at Risk		Net Realized and Unrealized Gain/(Loss) (In millions)			Liquidity
GELS		40.30	%	$	210,487,878	$	(8.6	)	(2)
GFS		24.38			127,322,190		(5.2	)	(3)
GFS Trust		2.65			13,856,921		(1.8	)	(4)
GRV		0.22			1,125,167		(0.3	)	(5)
GTT		31.56			164,808,737		1.1		(6)
HFPO		0.13			691,659		(0.0	)	(7)
Total		99.24	%(9)	$	518,292,552	$	(14.8	)

(1) Members’ equity, used in the calculation of the investments as a percentage of members’ equity, based on the members’ equity per the Balance Sheet and in accordance with ASC 480, “Distinguishing Liabilities from Equity.”

(2) Redemptions can be made quarterly with 61 days’ notice, or at the sole discretion of the Managing Member.

(3) Redemptions can be made quarterly on or after the first anniversary of the initial purchase of the units with at least 91 days’ notice, or at the sole discretion of the Managing Member.

(4) The GFS Trust does not provide investors with a voluntary redemption right. Pursuant to the terms of the trust agreement for the GFS Trust, distributions will be made to holders of interests in the GFS Trust as the GFS Trust receives proceeds in respect of its Advisors. The estimated remaining holding periods of its remaining underlying investments range from one to five years.

(5) GRV ceased its trading activities effective on July 1, 2009, and will dissolve at the time all assets are liquidated, liabilities are satisfied and liquidation proceeds are distributed through payment of a liquidating distribution. GRV suspended redemptions pending the completion of the liquidation proceedings. The estimated remaining holding periods of its remaining underlying investments range from one to five years.

(6) Redemptions can be made quarterly with 60 days’ notice, or at the sole discretion of the Managing Member.

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(7) HFPO’s current holdings consist solely of one illiquid investment in an Advisor Fund, which cannot be redeemed until the relevant Advisor liquidates such investment. The estimated remaining holding period of the illiquid investment is approximately five years.

(8) The total value of the Company’s investment in the Investees exceeded 100% of members’ equity because members’ equity reflected certain accrued liabilities of the Company, including fees and expenses, and also reflected redemptions payable on the balance sheet date.

(9) The total value of the Company’s investment in the Investees was less than 100% of members’ equity because members’ equity reflected cash and cash equivalents greater than total liabilities.

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 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 for each Advisor using a Monte Carlo simulation with a one-year look back period. The Managing Member looks at VaR over a one-day horizon at the 95% and 99% confidence intervals. As of September 30, 2012, the Managing Member had full position level transparency for approximately 69% (as a percentage of fair value investments) of the Advisors in which the Company invests through the Investment Funds. To determine position level transparency, the Company uses a list containing all Advisors for whom the Company received position level details, whether or not the Advisors also provided pricing information for those positions. The Company believes that knowing its transparency on the position level details of its Advisors provides meaningful information about its underlying investments in its Advisors whether or not the Company also has transparency on the pricing information for these positions and therefore will continue to use such methodology for conveying information regarding the Company’s position level transparency in future quarters. The Managing Member believes that the VaR assumptions it utilizes are reasonable given that VaR is only one determinant in the Managing Member’s overall risk management. 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 Company’s maximum risk of loss is limited to the Company’s investment in the Investment Funds. The risks involved are more fully described in the Company’s Form 10-K.

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. Position 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 more fully described in the Company’s Form 10-K.

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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 10-30 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. The managing member of the Investment Funds, in its sole discretion, may determine from time to time the number of Advisors with which the Investment Funds invest based on factors such as the amount of assets under management of the Investment Funds, the availability of attractive opportunities, and other portfolio construction considerations. Any such greater concentration with any single Advisor or in any single investment strategy may entail additional risks. The risks involved are more fully described in the Company’s Form 10-K.

Quantitative analysis is combined with judgment to determine weightings, strategic return, risk and correlation estimates to inform the quantitative analysis. Judgment is applied to both estimates and weights in an attempt to achieve exposure to hedge funds while delivering attractive risk-adjusted returns. The approximate weights of the material Investees were 44% GELS, 27% GFS and 34% GTT as of September 30, 2012 as a percentage of members’ equity. The approximate weights of the material Investees were 40% GELS, 24% GFS and 32% GTT as of December 31, 2011 as a percentage of members’ equity. This portfolio construction process is designed to create a diversified hedge fund portfolio with attractive return and risk characteristics.

The Managing Member may, from time to time, vary or change materially the actual allocation of assets made by the Company, as it deems appropriate in its sole discretion, including without limitation by way of allocation of Company assets to any new Investment Fund or Advisor, complete or partial withdrawal of an allocation from any existing Investment Fund or Advisor, a reallocation of assets among existing Investment Funds or Advisors, or any combination of the foregoing. In carrying out any reallocation of Company assets, the Managing Member will have the sole discretion to determine the manner of such reallocation, including from which Investment Funds or Advisors to withdraw assets and to which Investment Funds or Advisors to allocate assets. Any reallocation of Company assets, for purposes of diversification, attempts to meet target allocations or otherwise, may take a significant period of time to implement due to the liquidity provisions and restrictions of the Investment Funds and the Advisors and for other reasons. There can be no assurance that market or other events will not have an adverse impact on the strategies employed by multiple Investment Funds and Advisors. Investment Funds and Advisors may at certain times hold large positions in a relatively limited number of investments. The Company could be subject to significant losses if an Investment Fund or an Advisor holds a large position in a particular investment that declines in value that cannot be liquidated without adverse market reaction or is otherwise adversely affected by changes in market conditions or circumstances. While the Managing Member currently expects to allocate assets to all the Investment Sectors (other than relative value) through allocations to the Investment Funds, the Managing Member has no constraints with respect to the percentage of the Company’s assets to be allocated, directly or indirectly, to any single Advisor, group of Advisors, Investment Fund, or Investment Sector, or with respect to the number of Investment Funds and Advisors to which, directly or indirectly, assets of the Company are allocated at any time. The percentage of the Company’s assets to be allocated to any single Advisor, group of Advisors, Investment Fund or Investment Sector, and the number of Investment Funds and Advisors to which the Company allocates assets from time to time will be determined by the Managing Member in its sole discretion, based on factors deemed relevant by the Managing Member at the time of such allocation, which may include the amount of the Company’s assets under management, constraints on the capital capacity of the Investment Funds and Advisors, the availability of attractive opportunities, and other portfolio construction and portfolio management considerations.

The Company invests in the Investment Funds, and may from time to time redeem its membership units of the Investment Funds. Neither the GFS Trust nor GRV provide investors with a voluntary redemption right. 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.

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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 4. 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 principal executive officer and principal financial officer (or persons performing similar functions), 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, the Company’s principal executive officer and principal financial officer (or persons performing similar functions) 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 most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. 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 1A. Risk Factors

None.

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

From January 1, 2012 to September 30, 2012, aggregate subscriptions totaled $6,491,936. Details of the sale of the series of units are as follows:

Date of Sale	Class and Series of Units	Number of Units Sold		Number of Investors		Total Subscription Amount
January 1, 2012	Class A Series 103		23,243.86		5	$	2,324,386
February 1, 2012	Class A Series 104		12,500.00		3		1,250,000
March 1, 2012	Class A Series 105		7,675.50		3		767,550
April 1, 2012	Class A Series 106		4,500.00		2		450,000
May 1, 2012	Class A Series 107		9,000.00		2		900,000
June 1, 2012	Class A Series 108		5,500.00		2		550,000
July 1, 2012	Class A Series 109		2,500.00		1		250,000
Total			64,919.36		18	$	6,491,936

The units were sold at $100.00 per unit. The sale was not subject to any underwriting discount or commission. 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 of 1933.

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 holder (each a “Redemption Date”). Units of a particular series will be redeemed at a per unit price based upon the NAV of such series as of the close of business on the day immediately preceding the Redemption Date (taking into account the allocation of any net appreciation or depreciation in the net assets of the Company for the accounting period then ending), after reduction for any management fee and incentive fee and other liabilities to the extent accrued or otherwise attributable to the units being redeemed. The Company paid out redemptions of $72,647,186 during the three months ended September 30, 2012.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Reserved

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Item 5. Other Information

This Form 10-Q contains certain “forward-looking statements” regarding the operation of the Company and the Company’s investment objective, including, among other things:

• investment strategies and allocations of assets;

• future performance; and

• trends in the Investment 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 Form 10-Q will prove to be accurate.

In light of the significant uncertainties inherent in the forward-looking statements included in this Form 10-Q, 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 Form 10-Q 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.

In addition to the risks identified in our Form 10-K, which is incorporated herein by reference, the following list indicates some of the risks that could impact the likelihood that any forward-looking statements will come true:

• The Company relies on the Managing Member and the Advisors and there can be no assurance that the allocation and investment decisions made by the Managing Member and the Advisors will be successful;

• Changes to the Investment Strategies by the Managing Member may not be successful and may have an adverse effect on the Company;

• Redemptions of Units are subject to a substantial waiting period and potentially outdated information;

• Certain Advisors impose restrictions on redemptions and may impose redemption fees under certain circumstances; an Investment Fund’s inability to redeem its interests may have a material adverse effect on the Investment Funds’ and the Company’s investment program and investment objective;

• Substantial redemptions could have a material adverse effect on the Company;

• Valuation of the Company’s Investments;

• The Company’s NAV estimates 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 Managing Member of the Investment Funds may make investment decisions based on limited or incomplete information;

• The Company faces legal, tax and regulatory risks that may adversely affect the Company;

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• Advisors’ activities may be limited due to investment by the Company; Advisors may limit investment by the Company;

• Performance of the Company, the Investment Funds, the offshore fund, affiliated funds and Advisors is not indicative of future results;

• 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;

• Investment Fund allocations to Advisor Funds are difficult to monitor and control;

• The Investment Funds’ and the Advisors’ investments may not be diversified and there can be no assurance that the Company’s allocation methodologies will achieve the Company’s allocation goals;

• Members 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;

• Advisors invest independently and may hold economically offsetting positions;

• Indemnification of Advisors may create costs for the Company and the Investment Funds;

• An Investment Fund may not be able to vote or may limit its voting abilities;

• Transactions between and among Investment Funds may be undervalued and negatively affect the Company’s performance;

• Frequent trading and turnover typically result in high transaction costs and the Investment Funds have no control over this turnover;

• Non-U.S. investments involve special risks not usually associated with investments in U.S. securities;

• Equity securities and equity-related instruments may be subject to various types of risk, including market risk, liquidity risk, counterparty credit risk, legal and settlement risk; and

• The issuers of securities acquired by Advisors will sometimes face a high degree of business and financial risk.

The foregoing list of factors is not exhaustive. Investors should carefully consider the foregoing factors and the other uncertainties and potential events described in the Form 10-K. 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 are provided for Investor’s information only. Reference to an index does not imply that the portfolio will achieve results similar (or dissimilar) to that index.

Item 6. Exhibits

Number	Description
31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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Signatures

Pursuant to the requirements 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/    HELEN A. CROWLEY
	Name:  Helen A. Crowley Title:  Chief Financial Officer, Managing Director

Date: November 13, 2012

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Index to Exhibits

Number	Description
31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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