Ceres Tactical Systematic (TDFF) 10-Q 2019 Q2 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM10-Q

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

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 Number000-50718

CERES TACTICAL SYSTEMATIC L.P.

(Exact name of registrant as specified in its charter)

New York	13-4224248
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

c/o Ceres Managed Futures LLC

522 Fifth Avenue

New York, New York 10036

(Address of principal executive offices) (Zip Code)

(855)672-4468

(Registrant’s telephone number, including area code)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which  registered
N/A	N/A	N/A

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.

YesX    No    

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of RegulationS-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

YesX    No    

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule12b-2 of the Exchange Act.

Large accelerated filer	Accelerated filer	Non-accelerated filer X
Smaller reporting company	Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    

Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act).

Yes        NoX

As of July 31, 2019, 142,511.7788 Limited Partnership Class A Redeemable Units were outstanding, 7,789.3400 Limited Partnership Class D Redeemable Units were outstanding, and 261.1000 Limited Partnership Class Z Redeemable Units were outstanding.

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements.

Ceres Tactical Systematic L.P.

Statements of Financial Condition

	June 30,		December 31,
	2019		2018
	(Unaudited)
Assets:
Investment in the Funds(1), at fair value	$	63,434,481	$	83,239,963
Redemptions receivable from the Funds		25,652,689		5,040,947
Equity in trading account:
Unrestricted cash		25,098,370		38,672,319
Restricted cash		8,624,825		10,116,332
Net unrealized appreciation on open futures contracts		3,151,983		1,971,870
Net unrealized appreciation on open forward contracts		107,826		217,139
Total equity in trading account		36,983,004		50,977,660
Interest receivable		92,173		87,133
Total assets	$	126,162,347	$	139,345,703
Liabilities and Partners’ Capital:
Liabilities:
Accrued expenses:
Ongoing selling agent fees	$	198,891	$	219,228
Management fees		111,650		124,614
Incentive fees		371,111		1,209,783
General Partner fees		104,810		115,789
Professional fees		191,803		180,094
Redemptions payable to General Partner		525,000		-
Redemptions payable to Limited Partners		2,274,291		3,477,975
Total liabilities		3,777,556		5,327,483
Partners’ Capital:
General Partner, Class Z, 1,308.8850 and 1,844.4570 Redeemable Units outstanding at June 30, 2019 and December 31, 2018, respectively		1,283,049		1,746,751
Limited Partners, Class A, 144,285.0428 and 162,712.3818 Redeemable Units outstanding at June 30, 2019 and December 31, 2018, respectively		113,296,245		124,683,920
Limited Partners, Class D, 7,789.3400 and 7,839.3400 Redeemable Units outstanding at June 30, 2019 and December 31, 2018, respectively		7,549,551		7,368,184
Limited Partners, Class Z, 261.1000 and 231.6350 Redeemable Units outstanding at June 30, 2019 and December 31, 2018, respectively		255,946		219,365
Total partners’ capital (net asset value)		122,384,791		134,018,220
Total liabilities and partners’ capital	$	126,162,347	$	139,345,703
Net asset value per Redeemable Unit:
Class A	$	785.23	$	766.28
Class D	$	969.22	$	939.90
Class Z	$	980.26	$	947.03

⁽¹⁾ Defined in Note 1.

See accompanying notes to financial statements.

1

Ceres Tactical Systematic L.P.

Condensed Schedule of Investments

June 30, 2019

(Unaudited)

	Notional ($)/
	Number of					% of Partners’
	Contracts		Fair Value			Capital
Futures Contracts Purchased
Currencies		48	$	6,468			0.01	%
Energy		56		28,988			0.02
Grains		51		(42,948	)		(0.03)
Indices		359		120,558			0.10
Interest Rates U.S.		150		347,680			0.28
Interest RatesNon-U.S.		3,021		2,252,282			1.84
Metals		113		396,254			0.32
Softs		89		(10,434	)		(0.01)
Total futures contracts purchased				3,098,848			2.53
Futures Contracts Sold
Currencies		35		(33,016	)		(0.03)
Energy		106		128,132			0.11
Grains		178		28,356			0.02
Indices		202		14,824			0.01
Livestock		34		34,645			0.03
Metals		27		(42,010	)		(0.03)
Softs		144		(77,796	)		(0.06)
Total futures contracts sold				53,135			0.05
Net unrealized appreciation on open futures contracts			$	3,151,983			2.58	%
Unrealized Appreciation on Open Forward Contracts
Currencies	$	43,862,386	$	421,494			0.34	%
Metals		118		145,770			0.12
Total unrealized appreciation on open forward contracts				567,264			0.46
Unrealized Depreciation on Open Forward Contracts
Currencies	$	31,866,214		(351,445	)		(0.28)
Metals		53		(107,993	)		(0.09)
Total unrealized depreciation on open forward contracts				(459,438	)		(0.37)
Net unrealized appreciation on open forward contracts			$	107,826			0.09	%
Investment in the Funds			Fair Value			% of Partners’ Capital
CMF ADG Master Fund LLC			$	21,702,793			17.73	%
CMF Aquantum Master Fund LLC				19,408,056			15.86
CMF FORT Contrarian Master Fund LLC				22,323,632			18.24
Total investment in the Funds			$	63,434,481			51.83	%

See accompanying notes to financial statements.

2

Ceres Tactical Systematic L.P.

Condensed Schedule of Investments

December 31, 2018

	Notional ($)/
	Number of					% of Partners’
	Contracts		Fair Value			Capital
Futures Contracts Purchased
Currencies		24	$	8,090			0.01	%
Energy		121		113,418			0.08
Grains		64		(9,337	)		(0.01)
Indices		89		(75,222	)		(0.06)
Interest Rates U.S.		109		201,289			0.15
Interest RatesNon-U.S.		2,512		937,423			0.70
Livestock		46		25,025			0.02
Metals		65		91,341			0.07
Total futures contracts purchased				1,292,027			0.96
Futures Contracts Sold
Currencies		86		(36,374	)		(0.03)
Energy		127		345,047			0.26
Grains		444		140,223			0.11
Indices		552		111,610			0.08
Interest RatesNon-U.S.		12		(16,588	)		(0.01)
Livestock		7		(740	)		(0.00)	*
Metals		77		12,430			0.01
Softs		315		124,235			0.09
Total futures contracts sold				679,843			0.51
Net unrealized appreciation on open futures contracts			$	1,971,870			1.47	%
Unrealized Appreciation on Open Forward Contracts
Currencies	$	42,320,704	$	443,534			0.33	%
Metals		103		392,441			0.29
Total unrealized appreciation on open forward contracts				835,975			0.62
Unrealized Depreciation on Open Forward Contracts
Currencies	$	39,926,876		(549,780	)		(0.41)
Metals		36		(69,056	)		(0.05)
Total unrealized depreciation on open forward contracts				(618,836	)		(0.46)
Net unrealized appreciation on open forward contracts			$	217,139			0.16	%
Investment in the Funds			Fair Value			% of Partners’ Capital
CMF AE Capital Master Fund LLC			$	15,603,718			11.64	%
Cambridge Master Fund L.P.				17,284,725			12.90
CMF FORT Contrarian Master Fund LLC				20,501,423			15.30
SECOR Master Fund L.P.				29,850,097			22.27
Total investment in the Funds			$	83,239,963			62.11	%

* Due to rounding.

See accompanying notes to financial statements.

3

Ceres Tactical Systematic L.P.

Statements of Income and Expenses

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Investment Income:
Interest income	$	216,943		$	231,086		$	445,977		$	455,656
Interest income allocated from the Funds		416,903			399,586			887,856			732,069
Total investment income		633,846			630,672			1,333,833			1,187,725
Expenses:
Expenses allocated from the Funds		265,633			227,619			501,287			437,562
Clearing fees related to direct investments		33,669			44,633			61,996			119,703
Ongoing selling agent fees		607,246			773,928			1,239,045			1,603,768
General Partner fees		319,610			408,410			651,268			845,810
Management fees		323,372			435,765			680,646			873,289
Incentive fees		(66,820	)		201,138			371,111			847,024
Professional fees		124,285			213,513			250,129			348,860
Total expenses		1,606,995			2,305,006			3,755,482			5,076,016
Net investment loss		(973,149	)		(1,674,334	)		(2,421,649	)		(3,888,291	)
Trading Results:
Net gains (losses) on trading of commodity interests and investment in the Funds:
Net realized gains (losses) on closed contracts		1,530,732			(2,284,702	)		1,907,774			(4,672,788	)
Net realized gains (losses) on closed contracts allocated from the Funds		1,106,256			87,680			2,689,101			1,286,294
Net change in unrealized gains (losses) on open contracts		661,333			471,107			1,078,956			824,920
Net change in unrealized gains (losses) on open contracts allocated from the Funds		(1,104,514	)		913,626			(67,972	)		3,567,673
Total trading results		2,193,807			(812,289	)		5,607,859			1,006,099
Net income (loss)	$	1,220,658		$	(2,486,623	)	$	3,186,210		$	(2,882,192	)
Net income (loss) per Redeemable Unit*:
Class A	$	7.42		$	(12.26	)	$	18.95		$	(14.65	)
Class D	$	12.18		$	(11.78	)	$	29.32		$	(11.53	)
Class Z	$	14.14		$	(9.93	)	$	33.23		$	(7.80	)
Weighted average Redeemable Units outstanding:
Class A		150,505.1431			184,953.5285			154,874.5065			189,056.8464
Class D		7,789.3400			11,263.4550			7,806.0067			11,304.0710
Class Z		2,105.5570			2,087.0920			2,105.5570			2,185.6727

* Represents the change in net asset value per Redeemable Unit during the period.

See accompanying notes to financial statements.

4

Ceres Tactical Systematic L.P.

Statements of Changes in Partners’ Capital

For the Three and Six Months Ended June 30, 2019 and 2018

(Unaudited)

	Class A						Class D						Class Z						Total
				Redeemable						Redeemable						Redeemable						Redeemable
	Amount			Units			Amount			Units			Amount			Units			Amount			Units
Partners’ Capital, December 31, 2017	$	91,851,689			111,250.8072		$	-			-		$	-			-		$	91,851,689			111,250.8072
Subscriptions - General Partner		-			-			-			-			2,445,193			2,418.2350			2,445,193			2,418.2350
Subscriptions - Limited Partners		70,601,619			85,512.4190			11,507,151			11,507.1510			242,635			242.6350			82,351,405			97,262.2050
Redemptions - General Partner		(1,157,560	)		(1,371.6544	)		-			-			(575,000	)		(573.7780	)		(1,732,560	)		(1,945.4324	)
Redemptions - Limited Partners		(13,328,444	)		(16,286.3370	)		(306,091	)		(301.0940	)		-			-			(13,634,535	)		(16,587.4310	)
Net income (loss)		(2,715,934	)		-			(124,249	)		-			(42,009	)		-			(2,882,192	)		-
Partners’ Capital, June 30, 2018	$	145,251,370			179,105.2348		$	11,076,811			11,206.0570		$	2,070,819			2,087.0920		$	158,399,000			192,398.3838
Partners’ Capital, March 31, 2018	$	154,656,165			187,862.9808		$	11,266,252			11,263.4550		$	2,091,547			2,087.0920		$	168,013,964			201,213.5278
Redemptions - Limited Partners		(7,071,605	)		(8,757.7460	)		(56,736	)		(57.3980	)		-			-			(7,128,341	)		(8,815.1440	)
Net income (loss)		(2,333,190	)		-			(132,705	)		-			(20,728	)		-			(2,486,623	)		-
Partners’ Capital, June 30, 2018	$	145,251,370			179,105.2348		$	11,076,811			11,206.0570		$	2,070,819			2,087.0920		$	158,399,000			192,398.3838
	Class A						Class D						Class Z						Total
				Redeemable						Redeemable						Redeemable						Redeemable
	Amount			Units			Amount			Units			Amount			Units			Amount			Units
Partners’ Capital, December 31, 2018	$	124,683,920			162,712.3818		$	7,368,184			7,839.3400		$	1,966,116			2,076.0920		$	134,018,220			172,627.8138
Subscriptions - Limited Partners		92,700			119.1810			-			-			27,904			29.4650			120,604			148.6460
Redemptions - General Partner		-			-			-			-			(525,000	)		(535.5720	)		(525,000	)		(535.5720	)
Redemptions - Limited Partners		(14,368,141	)		(18,546.5200	)		(47,102	)		(50.0000	)		-			-			(14,415,243	)		(18,596.5200	)
Net income (loss)		2,887,766			-			228,469			-			69,975			-			3,186,210			-
Partners’ Capital, June 30, 2019	$	113,296,245			144,285.0428		$	7,549,551			7,789.3400		$	1,538,995			1,569.9850		$	122,384,791			153,644.3678
Partners’ Capital, March 31, 2019	$	119,240,158			153,303.1398		$	7,454,723			7,789.3400		$	2,034,229			2,105.5570		$	128,729,110			163,198.0368
Subscriptions - Limited Partners		92,700			119.1810			-			-			-			-			92,700			119.1810
Redemptions - General Partner		-			-			-			-			(525,000	)		(535.5720	)		(525,000	)		(535.5720	)
Redemptions - Limited Partners		(7,132,677	)		(9,137.2780	)		-			-			-			-			(7,132,677	)		(9,137.2780	)
Net income (loss)		1,096,064			-			94,828			-			29,766			-			1,220,658			-
Partners’ Capital, June 30, 2019	$	113,296,245			144,285.0428		$	7,549,551			7,789.3400		$	1,538,995			1,569.9850		$	122,384,791			153,644.3678

See accompanying notes to financial statements.

5

Ceres Tactical Systematic L.P.

Notes to Financial Statements

(Unaudited)

1. Organization:

Ceres Tactical Systematic L.P. (the “Partnership”) is a limited partnership organized under the partnership laws of the State of New York on December 3, 2002 to engage, directly or indirectly, in the speculative trading of a diversified portfolio of commodity interests including futures, option, swap and forward contracts. The sectors traded include currencies, energy, grains, indices, U.S. andnon-U.S. interest rates, livestock, metals and softs. The commodity interests that are traded by the Partnership directly or indirectly through its investment in the Funds (as defined below) are volatile and involve a high degree of market risk. The General Partner (as defined below) may also determine to invest up to all of the Partnership’s assets (directly or indirectly through its investment in the Funds) in United States (“U.S.”) Treasury bills and/or money market mutual funds, including money market mutual funds managed by Morgan Stanley or its affiliates.

Between March 27, 2003 (commencement of the public offering period) and April 30, 2003, 36,616 redeemable units of limited partnership interest in the Partnership (“Redeemable Units”) were sold at $1,000 per Redeemable Unit. The proceeds of the initial public offering were held in an escrow account until April 30, 2003, at which time they were turned over to the Partnership for trading. The Partnership was authorized to publicly offer 300,000 Redeemable Units during the initial public offering period. As of December 4, 2003, the Partnership was authorized to publicly offer an additional 700,000 Redeemable Units. As of October 7, 2004, the Partnership was authorized to publicly offer an additional 1,000,000 Redeemable Units. As of June 30, 2005, the Partnership was authorized to publicly offer Redeemable Units previously registered. The public offering of Redeemable Units terminated on November 30, 2008. The Partnership currently privately and continuously offers Redeemable Units to qualified investors. There is no maximum number of Redeemable Units that may be sold by the Partnership.

Ceres Managed Futures LLC, a Delaware limited liability company, acts as the general partner (the “General Partner”) and commodity pool operator of the Partnership, is the trading manager (the “Trading Manager”) of ADG Master (as defined below), Aquantum Master (as defined below) and FORT Contrarian Master (as defined below), and was the Trading Manager of AE Capital Master (as defined below) prior to AE Capital Master’s termination effective April 30, 2019. The General Partner is a wholly-owned subsidiary of Morgan Stanley Domestic Holdings, Inc. (“MSD Holdings”). MSD Holdings is ultimately owned by Morgan Stanley. Morgan Stanley is a publicly held company whose shares are listed on the New York Stock Exchange. Morgan Stanley is engaged in various financial services and other businesses.

During the reporting periods ended June 30, 2019 and 2018, the Partnership’s/Funds’ commodity broker was Morgan Stanley & Co. LLC (“MS&Co.”), a registered futures commission merchant. JPMorgan Chase Bank, N.A. (“JPMorgan”) was also a foreign exchange forward contract counterparty for certain Funds. During prior periods included in this report, the Partnership/Funds deposited a portion of their cash innon-trading bank accounts at JPMorgan.

As of January 1, 2018, the Partnership began offering three classes of limited partnership interests, Class A Redeemable Units, Class D Redeemable Units and Class Z Redeemable Units. All Redeemable Units issued prior to January 1, 2018 were deemed Class A Redeemable Units. The rights, liabilities, risks, and fees associated with investment in Class A Redeemable Units were not changed. Class A Redeemable Units are available to taxable U.S. individuals and institutions, U.S. tax exempt individuals and institutions, andnon-U.S. investors. Class D Redeemable Units and Class Z Redeemable Units were first issued on January 1, 2018. Class A Redeemable Units, Class D Redeemable Units and Class Z Redeemable Units will each be referred to as a “Class” and collectively referred to as the “Classes.” The Class of Redeemable Units that a limited partner receives upon a subscription will generally depend upon the amount invested in the Partnership or the status of the limited partner, although the General Partner may determine to offer any Class of Redeemable Units to investors at its discretion. Class D Redeemable Units are available to taxable U.S. individuals and institutions, U.S. tax exempt individuals and institutions, andnon-U.S. investors. Class Z Redeemable Units are offered to certain employees of Morgan Stanley and its subsidiaries (and their family members). In the future, Class Z Redeemable Units may also be offered to certain limited partners who receive advisory services from Morgan Stanley Smith Barney LLC, doing business as Morgan Stanley Wealth Management (“Morgan Stanley Wealth Management”). Class A Redeemable Units, Class D Redeemable Units and Class Z Redeemable Units are identical, except that Class D Redeemable Units are subject to a monthly ongoing selling agent fee equal to 1/12 of 0.75% (a 0.75% annual rate) of the net assets of Class D Redeemable Units as of the end of each month, which differs from the Class A Redeemable Units’ monthly ongoing selling agent fee of 1/12 of 2.00% (a 2.00% annual rate) of the net assets of Class A Redeemable Units as of the end of each month. Class Z Redeemable Units are not subject to a monthly ongoing selling agent fee.

6

Ceres Tactical Systematic L.P.

Notes to Financial Statements

(Unaudited)

As of June 30, 2019, all trading decisions were made for the Partnership by ADG Capital Management LLP (“ADG”), AQUANTUM GmbH (“Aquantum”), FORT, L.P. (“FORT”) and ISAM Systematic Management (“ISAM SM”) (each an “Advisor” and, collectively, the “Advisors”), each of which is a registered commodity trading advisor. Effective June 30, 2019, the General Partner terminated SECOR Capital Advisors, LP (“SECOR”) as an Advisor to the Partnership. Effective April 3, 2019, the General Partner terminated AE Capital Pty Limited (“AE Capital”) as an Advisor to the Partnership. Effective October 1, 2018, the Partnership, the General Partner, The Cambridge Strategy (Asset Management) Limited (“Cambridge”) and Mesirow Financial International UK Limited (“Mesirow”) entered into a novation, assignment and assumption agreement, dated September 28, 2018, pursuant to which Cambridge transferred all of its future rights, obligations, and liabilities under that certain amended and restated management agreement, by and among the General Partner, the Partnership and Cambridge, dated as of December 1, 2015, as amended January 1, 2018 (collectively, the “Cambridge Initial Advisory Agreement”), to Mesirow. As of October 1, 2018 and until its termination effective March 31, 2019, Mesirow had undertaken to perform the Cambridge Initial Advisory Agreement and be bound by its terms in every way as if it were the original party to it in place of Cambridge. Effective November 1, 2018, the Partnership, the General Partner, ISAM (USA) LLC, ISAM Funds (UK) Limited, International Standard Asset Management (“ISAM”) and ISAM SM entered into a novation agreement, dated October 25, 2018, pursuant to which ISAM transferred all of its future rights, obligations, and liabilities under that certain amended and restated management agreement, by and among the General Partner, the Partnership, ISAM, ISAM (USA) LLC and ISAM Funds (UK) Limited, dated as of November 1, 2017 (the “ISAM Initial Advisory Agreement”), to ISAM SM. As of November 1, 2018, ISAM SM has undertaken to perform the ISAM Initial Advisory Agreement and be bound by its terms in every way as if it were the original party in place of ISAM. Reference herein to “Advisors” may include, as relevant, AE Capital, Cambridge, Mesirow, ISAM and SECOR. The Advisors are not affiliated with one another, are not affiliated with the General Partner or MS&Co., and are not responsible for the operation of the Partnership.

ISAM SM directly trades, and ISAM directly traded, the Partnership’s assets allocated to it through a managed account in the name of the Partnership pursuant to ISAM SM’s/ISAM’s Systematic Trend Programme. Effective January 19, 2018, FORT directly trades a portion of the Partnership’s assets allocated to it through a managed account in the name of the Partnership pursuant to FORT’s Global Trend Trading Program.

The Partnership, and prior to the Partnership’s full redemption effective June 30, 2019, SECOR Master Fund L.P. (“SECOR Master”), and prior to the Partnership’s full redemption effective April 30, 2019, CMF AE Capital Master Fund LLC (“AE Capital Master”), and prior to the Partnership’s full redemption effective March 31, 2019, Cambridge Master Fund L.P. (“Cambridge Master”), have entered into futures brokerage account agreements and foreign exchange prime brokerage account agreements with MS&Co. CMF ADG Master Fund LLC (“ADG Master”), CMF Aquantum Master Fund LLC (“Aquantum Master”) and CMF FORT Contrarian Master Fund LLC (“FORT Contrarian Master”) have entered into futures brokerage account agreements with MS&Co. ADG Master, Aquantum Master and FORT Contrarian Master are collectively referred to as the “Funds”. Reference herein to the “Funds” may include, as relevant, AE Capital Master, Cambridge Master and SECOR Master. The Partnership, directly and through its investment in the Funds, pays MS&Co. (or will reimburse MS&Co. if previously paid) its allocable share of all trading fees for the clearing and, where applicable, execution of transactions, as well as exchange, clearing, user,give-up, floor brokerage and National Futures Association fees (collectively, the “clearing fees”).

Effective July 12, 2017 and prior to their respective terminations, Cambridge Master and SECOR Master each entered into certain agreements with JPMorgan in connection with trading in forward foreign currency contracts on behalf of the referenced Funds and, indirectly, the Partnership. These agreements included a foreign exchange and bullion authorization agreement (“FX Agreement”), an International Swap Dealers Association, Inc. master agreement (“Master Agreement”), a schedule to the Master Agreement, a 2016 credit support annex for variation margin to the schedule and an institutional account agreement. On October 10, 2018, Cambridge, Mesirow, Cambridge Master and JPMorgan entered into an amendment and assignment agreement (the “Assignment Agreement”), effective as of October 1, 2018, to the FX Agreement, pursuant to which Cambridge assigned to Mesirow all of its rights, liabilities, duties and obligations under and in respect of the FX Agreement, Mesirow accepted such assignment and assumed all rights, liabilities, duties and obligations under and in respect of the FX Agreement, and JPMorgan consented to such assignment and assumption. Pursuant to the Assignment Agreement, all references to Cambridge were replaced by references to Mesirow, and all references to “Investment Manager” were deemed to refer to Mesirow. On October 10, 2018, Cambridge Master and JPMorgan entered into an amendment (the “ISDA Amendment”), effective as of October 1, 2018, to the schedule to the Master Agreement, dated as of July 12, 2017, between Cambridge Master and JPMorgan. Pursuant to the ISDA Amendment, all references to Cambridge were replaced by references to Mesirow. In addition to SECOR Master and Cambridge Master, SECOR and Mesirow/Cambridge were parties to the FX Agreements for the Funds to which each acted as an Advisor. Under each FX Agreement, JPMorgan charged a fee on the aggregate foreign currency transactions entered into on behalf of the respective Fund during a month.

7

Ceres Tactical Systematic L.P.

Notes to Financial Statements

(Unaudited)

The Partnership has entered into a selling agreement (the “Selling Agreement”) with Morgan Stanley Wealth Management. Pursuant to the Selling Agreement, Morgan Stanley Wealth Management receives a monthly ongoing selling agent fee equal to (i) 2.0% per year of adjustedmonth-end net assets for Class A Redeemable Units and (ii) 0.75% per year of adjustedmonth-end net assets for Class D Redeemable Units. Morgan Stanley Wealth Management pays a portion of its ongoing selling agent fees to properly registered or exempted financial advisors who have sold Class A and Class D Redeemable Units. Class Z Redeemable Units are not subject to an ongoing selling agent fee.

As of November 1, 2018, the Partnership entered into an alternative investment placement agent agreement (the “Harbor Selling Agreement”), by and among the Partnership, the General Partner, Morgan Stanley Distribution Inc. (“MSDI”) and Harbor Investment Advisory, LLC, a Maryland limited liability company (“Harbor”), which supersedes and replaces the alternative investment selling agent agreement, dated January 19, 2018, between the Partnership, the General Partner and Harbor. Pursuant to the Harbor Selling Agreement, MSDI and Harbor have been appointed as anon-exclusive selling agent andsub-selling agent, respectively, of the Partnership for the purpose of finding eligible investors for Redeemable Units through offerings that are exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) thereof and Rule 506 of Regulation D promulgated thereunder and for Harbor to serve as an investment advisor to its customers investing in one or more of the partnerships party to the Harbor Selling Agreement; provided, that, included within such appointment, Harbor will provide certain services to certain holders of Redeemable Units of the Partnership who had acquired such Redeemable Units prior to such holders becoming clients of Harbor. The Harbor Selling Agreement continues in effect until September 30, 2019 unless terminated in certain circumstances as set forth in the Harbor Selling Agreement, including by any party on thirty days’ prior written notice, after which the General Partner or the Partnership may, in its sole discretion, renew the Harbor Selling Agreement for additionalone-year periods. Pursuant to the Harbor Selling Agreement, the Partnership will pay Harbor an ongoing selling agent fee equal to (i) 1/12 of 2.0% (a 2.0% annual rate) of the net asset value per Redeemable Unit for certain holders of Class A Redeemable Units in the Partnership, and (ii) 1/12 of 0.75% (a 0.75% annual rate) of the net asset value per Redeemable Unit for certain holders of Class D Redeemable Units in the Partnership, as set forth in the Harbor Selling Agreement.

The General Partner fees, management fees, incentive fees and professional fees of the Partnership are allocated proportionally to each Class based on the net asset value of the Class.

In July 2015, the General Partner delegated certain administrative functions to SS&C Technologies, Inc., a Delaware corporation, currently doing business as SS&C GlobeOp (the “Administrator”). Pursuant to a master services agreement, the Administrator furnishes certain administrative, accounting, regulatory reporting, tax and other services as agreed from time to time. In addition, the Administrator maintains certain books and records of the Partnership. The cost of retaining the Administrator is allocated among the pools operated by the General Partner, including the Partnership.

2. Basis of Presentation and Summary of Significant Accounting Policies:

The accompanying financial statements and accompanying notes are unaudited but, in the opinion of the General Partner, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Partnership’s financial condition at June 30, 2019 and the results of its operations and changes in partners’ capital for the three and six months ended June 30, 2019 and 2018. These financial statements present the results for interim periods and do not include all disclosures normally provided in annual financial statements. These financial statements should be read together with the financial statements and notes included in the Partnership’s Annual Report on Form10-K (the “Form10-K”) filed with the Securities and Exchange Commission (the “SEC”) for the year ended December 31, 2018. The December 31, 2018 information has been derived from the audited financial statements as of and for the year ended December 31, 2018.

Due to the nature of commodity trading, the results of operations for the interim periods presented should not be considered indicative of the results that may be expected for the entire year.

Use of Estimates. The preparation of financial statements and accompanying notes in conformity with accountingprinciples generally accepted in the United States of America (“GAAP”) requires the General Partner to make estimates and assumptions that affect the reported amounts of assets and liabilities, income and expenses, and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. As a result, actual results could differ from these estimates, and those differences could be material.

Profit Allocation.The General Partner and each limited partner of the Partnership share in the profits and losses of thePartnership in proportion to the amount of Partnership interest owned by each, except that no limited partner shall be liable for obligations of the Partnership in excess of its capital contribution and profits, if any, net of distributions or redemptions and losses, if any.

8

Ceres Tactical Systematic L.P.

Notes to Financial Statements

(Unaudited)

Statement of Cash Flows.The Partnership has not provided a Statement of Cash Flows, as permitted by AccountingStandards Codification (“ASC”) 230,“Statement of Cash Flows.” The Statements of Changes in Partners’ Capital is included herein, and as of and for the periods ended June 30, 2019 and 2018, the Partnership carried no debt, and all of the Partnership’s and the Funds’ investments were carried at fair value and classified as Level 1 and Level 2 measurements.

Partnership’s Investment in the Funds.The Partnership carries its investment in the Funds at fair value based on thePartnership’s (1) net contribution to the Funds and (2) its allocated share of the undistributed profits and losses, including realized gains (losses) and net change in unrealized gains (losses), of the Funds.

Partnership’s/Funds’ Derivative Investments.All commodity interests held by the Partnership/Funds, includingderivative financial instruments and derivative commodity instruments, are held for trading purposes. The commodity interests are recorded on the trade date, and open contracts are recorded at fair value (as described in Note 5, “Fair Value Measurements”) at the measurement date. Investments in commodity interests denominated in foreign currencies are translated into U.S. dollars at the exchange rates prevailing at the measurement date. Gains or losses are realized when contracts are liquidated and are determined using thefirst-in,first-out method. Unrealized gains or losses on open contracts are included as a component of equity in trading account in the Partnership’s/Funds’ Statements of Financial Condition. Net realized gains or losses and net change in unrealized gains or losses are included in the Partnership’s/Funds’ Statements of Income and Expenses.

The Partnership and the Funds do not isolate the portion of the results of operations arising from the effect of changes in foreign exchange rates on investments from fluctuations from changes in market prices of investments held. Such fluctuations are included in total trading results in the Partnership’s/Funds’ Statements of Income and Expenses.

Partnership’s Cash.The Partnership’s restricted cash is equal to the cash portion of assets on deposit to meet marginrequirements, as determined by the exchange or counterparty, and required by MS&Co. At June 30, 2019 and December 31, 2018, the amount of cash held for margin requirements was $8,624,825 and $10,116,332, respectively. Cash that is not classified as restricted cash is therefore classified as unrestricted cash. The Partnership’s restricted and unrestricted cash includes cash denominated in foreign currencies of $(188,767) (proceeds of $187,197) and $(1,736,101) (proceeds of $1,726,375) as of June 30, 2019 and December 31, 2018, respectively.

Income Taxes.Income taxes have not been recorded as each partner is individually liable for the taxes, if any, on itsshare of the Partnership’s income and expenses. The Partnership follows the guidance of ASC 740,“Income Taxes,” which prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of tax positions taken or expected to be taken in the course of preparing the Partnership’s tax returns to determine whether the tax positions are“more-likely-than-not” of being sustained “when challenged” or “when examined” by the applicable tax authority. Tax positions determined not to meet themore-likely-than-not threshold would be recorded as a tax benefit or liability in the Partnership’s Statements of Financial Condition for the current year. If a tax position does not meet the minimum statutory threshold to avoid the incurring of penalties, an expense for the amount of the statutory penalty and interest, if applicable, shall be recognized in the Statements of Income and Expenses in the period in which the position is claimed or expected to be claimed. The General Partner has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. The Partnership files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The 2015 through 2018 tax years remain subject to examination by U.S. federal and most state tax authorities.

Investment Company Status.Effective January 1, 2014, the Partnership adopted Accounting Standards Update2013-08, “Financial Services — Investment Companies (Topic 946): Amendments to the Scope, Measurement and Disclosure Requirements”and based on the General Partner’s assessment, the Partnership has been deemed to be an investmentcompany since inception. Accordingly, the Partnership follows the investment company accounting and reporting guidance of Topic 946 and reflects its investments at fair value with unrealized gains and losses resulting from changes in fair value reflected in the Statements of Income and Expenses.

Net Income (Loss) per Redeemable Unit.Net income (loss) per Redeemable Unit is calculated in accordance with ASC946, “Financial Services-Investment Companies.” See Note 3, “Financial Highlights.”

There have been no material changes with respect to the Partnership’s critical accounting policies as reported in the Partnership’s Annual Report on Form10-K for the year ended December 31, 2018.

9

Ceres Tactical Systematic L.P.

Notes to Financial Statements

(Unaudited)

3. Financial Highlights:

Financial highlights for the limited partner Classes as a whole for the three and six months ended June 30, 2019 and 2018 were as follows:

	Three Months Ended June 30, 2019									Three Months Ended June 30, 2018									Six Months Ended June 30, 2019									Six Months Ended June 30, 2018
	Class A			Class D			Class Z			Class A			Class D			Class Z			Class A			Class D			Class Z			Class A			Class D			Class Z
Per Redeemable Unit Performance (for a unit outstanding throughout the period):*
Net realized and unrealized gains (losses)	$	13.61		$	16.81		$	16.98		$	(3.72)		$	(4.45)		$	(4.44)		$	33.85		$	41.52		$	41.87		$	4.73		$	5.74		$	5.15
Net investment loss		(6.19)			(4.63)			(2.84)			(8.54)			(7.33)			(5.49)			(14.90)			(12.20)			(8.64)			(19.38)			(17.27)			(12.95)
Increase (decrease) for the period		7.42			12.18			14.14			(12.26)			(11.78)			(9.93)			18.95			29.32			33.23			(14.65)			(11.53)			(7.80)
Net asset value per Redeemable Unit, beginning of period		777.81			957.04			966.12			823.24			1,000.25			1,002.13			766.28			939.90			947.03			825.63			1,000.00			1,000.00
Net asset value per Redeemable Unit, end of period	$	785.23		$	969.22		$	980.26		$	810.98		$	988.47		$	992.20		$	785.23		$	969.22		$	980.26		$	810.98		$	988.47		$	992.20
	Three Months Ended June 30, 2019									Three Months Ended June 30, 2018									Six Months Ended June 30, 2019									Six Months Ended June 30, 2018
	Class A			Class D			Class Z			Class A			Class D			Class Z			Class A			Class D			Class Z			Class A			Class D			Class Z
Ratios to Average Limited Partners’ Capital:**
Net investment loss***		(3.3)	%		(2.1)	%		(1.4)	%		(3.9)	%		(2.6)	%		(1.8)	%		(3.6)	%		(2.3)	%		(1.6)	%		(4.3)	%		(3.0)	%		(2.2)	%
Operating expenses		5.4	%		4.1	%		3.4	%		5.3	%		4.0	%		3.3	%		5.4	%		4.1	%		3.4	%		5.2	%		3.9	%		3.1	%
Incentive fees		(0.1)	%		(0.0)	%****		(0.0)	%****		0.1	%		0.1	%		0.1	%		0.3	%		0.3	%		0.3	%		0.5	%		0.5	%		0.5	%
Total expenses		5.3	%		4.1	%		3.4	%		5.4	%		4.1	%		3.4	%		5.7	%		4.4	%		3.7	%		5.7	%		4.4	%		3.6	%
Total return:
Total return before incentive fees		0.9	%		1.2	%		1.4	%		(1.4)	%		(1.1)	%		(0.9)	%		2.8	%		3.4	%		3.8	%		(1.3)	%		(0.7)	%		(0.3)	%
Incentive fees		0.1	%		0.1	%		0.1	%		(0.1)	%		(0.1)	%		(0.1)	%		(0.3)	%		(0.3)	%		(0.3)	%		(0.5)	%		(0.5)	%		(0.5)	%
Total return after incentive fees		1.0	%		1.3	%		1.5	%		(1.5)	%		(1.2)	%		(1.0)	%		2.5	%		3.1	%		3.5	%		(1.8)	%		(1.2)	%		(0.8)	%

* Net investment loss per Redeemable Unit is calculated by dividing the interest income less total expenses by the average number of Redeemable Units outstanding during the period. The net realized and unrealized gains (losses) per Redeemable Unit is a balancing amount necessary to reconcile the change in net asset value per Redeemable Unit with the other per unit information.

** Annualized (except for incentive fees).

*** Interest income less total expenses.

**** Due to rounding.

The above ratios and total return may vary for individual investors based on the timing of capital transactions during the period. Additionally, these ratios are calculated for the limited partner class using the limited partners’ share of income, expenses and average partners’ capital of the Partnership and include the income and expenses allocated from the Funds.

4. Trading Activities:

The Partnership was formed for the purpose of trading contracts in a variety of commodity interests, including derivative financial instruments and derivative commodity instruments. The results of the Partnership’s trading activities are shown in the Statements of Income and Expenses. The Partnership also invests certain of its assets through a “master/feeder” structure. The Partnership’spro-rata share of the results of the Funds’ trading activities is shown in the Partnership’s Statements of Income and Expenses.

The Partnership’s customer agreement with MS&Co. and the Funds’ futures brokerage account agreements with MS&Co. give the Partnership and the Funds, respectively, the legal right to net unrealized gains and losses on open futures contracts and open forward contracts in their respective Statements of Financial Condition. The Partnership and the Funds net, for financial reporting purposes, the unrealized gains and losses on open futures contracts and open forward contracts in their respective Statements of Financial Condition as the criteria under ASC210-20, “Balance Sheet,” have been met.

10

Ceres Tactical Systematic L.P.

Notes to Financial Statements

(Unaudited)

All of the commodity interests owned directly by the Partnership are held for trading purposes. All of the commodity interests owned by the Funds are held for trading purposes. The monthly average number of futures contracts traded directly by the Partnership during the three months ended June 30, 2019 and 2018 were 5,297 and 5,225, respectively. The monthly average number of futures contracts traded directly by the Partnership during the six months ended June 30, 2019 and 2018 were 4,863 and 6,144, respectively. The monthly average number of metals forward contracts traded directly by the Partnership during the three months ended June 30, 2019 and 2018 were 187 and 297, respectively. The monthly average number of metals forward contracts traded directly by the Partnership during the six months ended June 30, 2019 and 2018 were 199 and 357, respectively. The monthly average notional value of currency forward contracts traded directly by the Partnership during the three months ended June 30, 2019 and 2018 were $130,932,850 and $165,760,163, respectively. The monthly average notional value of currency forward contracts traded directly by the Partnership during the six months ended June 30, 2019 and 2018 were $132,198,208 and $176,261,747, respectively.

Trading and transaction fees are based on the number of trades executed by the Advisors and the Partnership’s respective percentage ownership of each Fund.

All clearing fees paid to MS&Co. are borne directly by the Partnership for its direct trading. In addition, clearing fees are borne by the Funds and allocated to the Funds’ limitedpartners/non-managing members, including the Partnership.

The following tables summarize the gross and net amounts recognized relating to assets and liabilities of the Partnership’s derivatives and their offsetting subject to master netting arrangements or similar agreements as of June 30, 2019 and December 31, 2018, respectively.

			Gross Amounts		Net Amounts		Gross Amounts Not Offset in the
			Offset in the		Presented in the		Statements of Financial Condition
June 30, 2019	Gross Amounts Recognized		Statements of Financial Condition		Statements of Financial Condition		Financial Instruments		Cash Collateral Received/ Pledged*		Net Amount
Assets
Futures	$	3,499,920	$	(347,937)	$	3,151,983	$	-	$	-	$	3,151,983
Forwards		567,264		(459,438)		107,826		-		-		107,826
Total assets	$	4,067,184	$	(807,375)	$	3,259,809	$	-	$	-	$	3,259,809
Liabilities
Futures	$	(347,937)	$	347,937	$	-	$	-	$	-	$	-
Forwards		(459,438)		459,438		-		-		-		-
Total liabilities	$	(807,375)	$	807,375	$	-	$	-	$	-	$	-
Net fair value											$	3,259,809	*
			Gross Amounts		Net Amounts		Gross Amounts Not Offset in the
			Offset in the		Presented in the		Statements of Financial Condition
			Statements of		Statements of				Cash Collateral
	Gross Amounts		Financial		Financial		Financial		Received/		Net
December 31, 2018	Recognized		Condition		Condition		Instruments		Pledged*		Amount
Assets
Futures	$	2,636,639	$	(664,769)	$	1,971,870	$	-	$	-	$	1,971,870
Forwards		835,975		(618,836)		217,139		-		-		217,139
Total assets	$	3,472,614	$	(1,283,605)	$	2,189,009	$	-	$	-	$	2,189,009
Liabilities
Futures	$	(664,769)	$	664,769	$	-	$	-	$	-	$	-
Forwards		(618,836)		618,836		-		-		-		-
Total liabilities	$	(1,283,605)	$	1,283,605	$	-	$	-	$	-	$	-
Net fair value											$	2,189,009	*

* In the event of default by the Partnership, MS&Co., the Partnership’s commodity futures broker and the sole counterparty to the Partnership’snon-exchange-traded contracts, as applicable, has the right to offset the Partnership’s obligation with the Partnership’s cash and/or U.S. Treasury bills held by MS&Co., thereby minimizing MS&Co.’s risk of loss. In certain instances, MS&Co. may not post collateral and as such, in the event of default by MS&Co., the Partnership is exposed to the amount shown in the Statements of Financial Condition. In the case of exchange-traded contracts, the Partnership’s exposure to counterparty risk may be reduced since the exchange’s clearinghouse interposes its credit between buyer and seller and the clearinghouse’s guarantee funds may be available in the event of a default.

11

Ceres Tactical Systematic L.P.

Notes to Financial Statements

(Unaudited)

The following tables indicate the gross fair values of derivative instruments of futures and forward contracts held directly by the Partnership as separate assets and liabilities as of June 30, 2019 and December 31, 2018, respectively.

	June 30,         2019
Assets
Futures Contracts
Currencies	$	14,563
Energy		205,010
Grains		56,896
Indices		155,308
Interest Rates U.S.		347,976
Interest RatesNon-U.S.		2,258,525
Livestock		39,015
Metals		397,064
Softs		25,563
Total unrealized appreciation on open futures contracts		3,499,920
Liabilities
Futures Contracts
Currencies		(41,111)
Energy		(47,890)
Grains		(71,488)
Indices		(19,926)
Interest Rates U.S.		(296)
Interest RatesNon-U.S.		(6,243)
Livestock		(4,370)
Metals		(42,820)
Softs		(113,793)
Total unrealized depreciation on open futures contracts		(347,937)
Net unrealized appreciation on open futures contracts	$	3,151,983	*
Assets
Forward Contracts
Currencies	$	421,494
Metals		145,770
Total unrealized appreciation on open forward contracts		567,264
Liabilities
Forward Contracts
Currencies		(351,445)
Metals		(107,993)
Total unrealized depreciation on open forward contracts		(459,438)
Net unrealized appreciation on open forward contracts	$	107,826	**

* This amount is in “Net unrealized appreciation on open futures contracts” in the Statements of Financial Condition.

** This amount is in “Net unrealized appreciation on open forward contracts” in the Statements of Financial Condition.

12

Ceres Tactical Systematic L.P.

Notes to Financial Statements

(Unaudited)

	December 31,     2018
Assets
Futures Contracts
Currencies	$	41,947
Energy		647,829
Grains		160,024
Indices		196,704
Interest Rates U.S.		202,570
Interest RatesNon-U.S.		949,077
Livestock		26,050
Metals		140,316
Softs		272,122
Total unrealized appreciation on open futures contracts		2,636,639
Liabilities
Futures Contracts
Currencies		(70,231)
Energy		(189,364)
Grains		(29,138)
Indices		(160,316)
Interest Rates U.S.		(1,281)
Interest RatesNon-U.S.		(28,242)
Livestock		(1,765)
Metals		(36,545)
Softs		(147,887)
Total unrealized depreciation on open futures contracts		(664,769)
Net unrealized appreciation on open futures contracts	$	1,971,870	*
Assets
Forward Contracts
Currencies	$	443,534
Metals		392,441
Total unrealized appreciation on open forward contracts		835,975
Liabilities
Forward Contracts
Currencies		(549,780)
Metals		(69,056)
Total unrealized depreciation on open forward contracts		(618,836)
Net unrealized appreciation on open forward contracts	$	217,139	**

* This amount is in “Net unrealized appreciation on open futures contracts” in the Statements of Financial Condition.

** This amount is in “Net unrealized appreciation on open forward contracts” in the Statements of Financial Condition.

13

Ceres Tactical Systematic L.P.

Notes to Financial Statements

(Unaudited)

The following table indicates the trading gains and losses, by market sector, on derivative instruments traded directly by the Partnership for the three and six months ended June 30, 2019 and 2018, respectively.

	Three Months Ended June 30,						Six Months Ended June 30,
Sector	2019			2018			2019			2018
Currencies	$	(328,735)		$	(976,090)		$	(862,556)		$	(911,844)
Energy		(173,443)			1,548,473			(1,094,968)			1,346,460
Grains		(448,608)			(289,059)			(188,541)			(858,548)
Indices		(351,482)			(360,124)			(268,865)			(2,101,827)
Interest Rates U.S.		588,531			(125,883)			757,835			406,921
Interest RatesNon-U.S.		3,055,360			(996,857)			5,580,433			(63,622)
Livestock		(246,515)			(113,012)			(418,812)			(8,484)
Metals		368,050			(602,350)			(264,662)			(1,868,829)
Softs		(271,093)			101,307			(253,134)			211,905
Total	$	2,192,065	***	$	(1,813,595)	***	$	2,986,730	***	$	(3,847,868)	***

***     This amount is included in “Total trading results” in the Statements of Income and Expenses.

5. Fair Value Measurements:

Partnership’s and the Funds’ Fair Value Measurements. Fair value is defined as the value that would be received to sellan asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to fair values derived from unobservable inputs (Level 3). The level in the fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The fair value of exchange-traded futures, option and forward contracts is determined by the various exchanges, and reflects the settlement price for each contract as of the close of business on the last business day of the reporting period. The fair value of foreign currency forward contracts is extrapolated on a forward basis from the spot prices quoted as of approximately 3:00 P.M. (E.T.) on the last business day of the reporting period from various exchanges. The fair value ofnon-exchange-traded foreign currency option contracts is calculated by applying an industry standard model application for options valuation of foreign currency options, using as input the spot prices, interest rates, and option implied volatilities quoted as of approximately 3:00 P.M. (E.T.) on the last business day of the reporting period. U.S. Treasury bills are valued at the last available bid price received from independent pricing services as of the close of the last business day of the reporting period.

The Partnership and the Funds consider prices for commodity futures, swap and option contracts to be based on unadjusted quoted prices in active markets for identical assets and liabilities (Level 1). The values of U.S. Treasury bills,non-exchange-traded forward, swap and certain option contracts for which market quotations are not readily available are priced by pricing services that derive fair values for those assets and liabilities from observable inputs (Level 2). As of June 30, 2019 and December 31, 2018 and for the periods ended June 30, 2019 and 2018, the Partnership and the Funds did not hold any derivative instruments that were priced at fair value using unobservable inputs through the application of the General Partner’s assumptions and internal valuation pricing models (Level 3).

14

Ceres Tactical Systematic L.P.

Notes to Financial Statements

(Unaudited)

June 30, 2019	Total		Level 1		Level 2		Level 3
Assets
Futures	$	3,499,920	$	3,499,920	$	-	$	-
Forwards		567,264		-		567,264		-
Total Assets	$	4,067,184	$	3,499,920	$	567,264	$	-
Liabilities
Futures	$	347,937	$	347,937	$	-	$	-
Forwards		459,438		-		459,438		-
Total Liabilities	$	807,375	$	347,937	$	459,438	$	-
December 31, 2018	Total		Level 1		Level 2		Level 3
Assets
Futures	$	2,636,639	$	2,636,639	$	-	$	-
Forwards		835,975		-		835,975		-
Total Assets	$	3,472,614	$	2,636,639	$	835,975	$	-
Liabilities
Futures	$	664,769	$	664,769	$	-	$	-
Forwards		618,836		-		618,836		-
Total Liabilities	$	1,283,605	$	664,769	$	618,836	$	-

6. Investment in the Funds:

On January 12, 2018, approximately 49% of the assets allocated to FORT for trading were invested in FORT Contrarian Master, a limited liability company organized under the limited liability company laws of the State of Delaware. FORT Contrarian Master permits accounts managed by FORT using its Global Contrarian Trading Program, a proprietary, systematic trading system, to invest together in one trading vehicle. The General Partner is also the Trading Manager of FORT Contrarian Master. Individual and pooled accounts currently managed by FORT are permitted to be members of FORT Contrarian Master. The Trading Manager and FORT believe that trading through this master/feeder structure promotes efficiency and economy in the trading process. The Trading Manager and FORT have agreed that FORT will trade the Partnership’s assets allocated to FORT at a level that is up to 1.25 times the assets allocated. The amount of leverage may be increased or decreased in the future.

On February 1, 2019, the assets allocated to ADG for trading were invested in ADG Master, a limited liability company organized under the limited liability company laws of the State of Delaware. ADG Master permits accounts managed by ADG using its Systematic Macro Strategy, a proprietary, systematic trading system, to invest together in one trading vehicle. The General Partner is also the Trading Manager of ADG Master. Individual and pooled accounts currently managed by ADG are permitted to be members of ADG Master. The Trading Manager and ADG believe that trading through this master/feeder structure promotes efficiency and economy in the trading process.

On June 1, 2019, the assets allocated to Aquantum for trading were invested in Aquantum Master, a limited liability company organized under the limited liability company laws of the State of Delaware. Aquantum Master permits accounts managed by Aquantum using its Aquantum Commodity Spread (ACS) Program, a proprietary, systematic trading system, to invest together in one trading vehicle. The General Partner is also the Trading Manager of Aquantum Master. Individual and pooled accounts currently managed by Aquantum are permitted to be members of Aquantum Master. The Trading Manager and Aquantum believe that trading through this master/feeder structure promotes efficiency and economy in the trading process.

On January 1, 2018, the assets allocated to SECOR for trading were invested in SECOR Master, a limited partnership organized under the partnership laws of the State of Delaware. SECOR Master permitted accounts managed by SECOR using a variation of the program traded by SECOR Alpha Master Fund L.P., a proprietary, systematic trading program, to invest together in one trading vehicle. The Partnership fully redeemed its investment in SECOR Master on June 30, 2019.

15

Ceres Tactical Systematic L.P.

Notes to Financial Statements

(Unaudited)

On February 1, 2018, the assets allocated to AE Capital for trading were invested in AE Capital Master, a limited liability company organized under the limited liability company laws of the State of Delaware. AE Capital Master permitted accounts managed by AE Capital using its AE Systematic FX Fund Program, a proprietary, systematic trading system, to invest together in one trading vehicle. The Partnership fully redeemed its investment in AE Capital Master on April 30, 2019.

On December 1, 2015, the assets allocated to Cambridge for trading were invested in Cambridge Master, a limited partnership organized under the partnership laws of the State of Delaware. Effective October 1, 2018 until its termination effective March 31, 2019, Mesirow had undertaken to perform the Cambridge Initial Advisory Agreement and be bound by its terms in every way as if it were the original party to it in place of Cambridge. Cambridge Master permitted accounts managed by Mesirow/Cambridge using the Asian Markets Alpha Programme and the Emerging Markets Alpha Programme, each a proprietary, systematic trading program, to invest together in one trading vehicle. The Partnership fully redeemed its investment in Cambridge Master on March 31, 2019.

The General Partner is not aware of any material changes to the trading programs discussed above or in Note 1, “Organization” during the fiscal quarter ended June 30, 2019.

The Partnership’s and the Funds’ trading of futures, forward and option contracts, as applicable, on commodities is done primarily on U.S. and foreign commodity exchanges. The Partnership and the Funds engage in such trading through commodity brokerage accounts maintained with MS&Co.

Generally, a limited partner/member in the Funds withdraws all or part of its capital contribution and undistributed profits, if any, from the Funds as of the end of any month (the “Redemption Date”) after a request has been made to the General Partner/Trading Manager at least three days in advance of the Redemption Date. Such withdrawals are classified as a liability when the limited partner/member elects to redeem and informs the Funds. However, a limited partner/member may request a withdrawal as of the end of any day if such request is received by the General Partner/Trading Manager at least three days in advance of the proposed withdrawal day.

Management fees, General Partner fees, ongoing selling agent fees and incentive fees are charged at the Partnership level. Clearing fees are borne by the Funds and allocated to the Funds’ limitedpartners/non-managing members, including the Partnership. Clearing fees are also borne by the Partnership directly. Professional fees are borne by the Funds and allocated to the Partnership, and also charged directly at the Partnership level.

As of June 30, 2019, the Partnership owned approximately 68.4% of ADG Master, 46.1% of Aquantum Master and 13.7% of FORT Contrarian Master. As of December 31, 2018, the Partnership owned approximately 79.2% of AE Capital Master, 100.0% of Cambridge Master, 11.5% of FORT Contrarian Master and 84.7% of SECOR Master. It is the Partnership’s intention to continue to invest in the Funds. The performance of the Partnership is directly affected by the performance of the Funds. Expenses to investors as a result of investment in the Funds are approximately the same as they would be if the Partnership traded directly and the redemption rights are not affected.

Summarized information reflecting the total assets, liabilities and partners’/members’ capital of the Funds is shown in the following tables:

	June 30, 2019
	Total Assets		Total Liabilities		Total Capital
ADG Master	$	32,409,874	$	744,151	$	31,665,723
Aquantum Master		45,267,870		3,234,291		42,033,579
FORT Contrarian Master		163,543,136		594,639		162,948,497
SECOR Master		41,824,942		41,824,942		-
	December 31, 2018
	Total Assets		Total Liabilities		Total Capital
AE Capital Master	$	19,758,302	$	99,954	$	19,658,348
Cambridge Master		21,433,817		4,151,814		17,282,003
FORT Contrarian Master		180,042,210		1,648,773		178,393,437
SECOR Master		37,347,676		2,170,539		35,177,137

16

Ceres Tactical Systematic L.P.

Notes to Financial Statements

(Unaudited)

Summarized information reflecting the net investment income (loss), total trading results and net income (loss) of the Funds is shown in the following tables:

	For the three months ended June 30, 2019
	Net Investment       Income (Loss)		Total Trading       Results		Net Income (Loss)
ADG Master	$	143,731	$	(528,384)	$	(384,653)
AE Capital Master(a)		(14,754)		4,772		(9,982)
Aquantum Master(b)		(55,069)		(1,108,871)		(1,163,940)
FORT Contrarian Master		765,106		9,385,122		10,150,228
SECOR Master		(37,085)		(606,850)		(643,935)
	For the six months ended June 30, 2019
	Net Investment Income (Loss)		Total Trading Results		Net Income (Loss)
ADG Master(c)	$	211,875	$	(778,093)	$	(566,218)
AE Capital Master(d)		71,739		(890,810)		(819,071)
Aquantum Master(b)		(55,069)		(1,108,871)		(1,163,940)
FORT Contrarian Master		1,568,976		29,085,204		30,654,180
SECOR Master		(84,266)		2,719,987		2,635,721
	For the three months ended June 30, 2018
	Net Investment Income (Loss)		Total Trading Results		Net Income (Loss)
AE Capital Master	$	50,825	$	(658,284)	$	(607,459)
Cambridge Master		99,367		(517,681)		(418,314)
FORT Contrarian Master		482,012		4,767,045		5,249,057
SECOR Master		(47,605)		1,685,965		1,638,360
	For the six months ended June 30, 2018
	Net Investment Income (Loss)		Total Trading Results		Net Income (Loss)
AE Capital Master(e)	$	89,539	$	(813,757)	$	(724,218)
Cambridge Master		184,655		1,492,646		1,677,301
FORT Contrarian Master		733,246		757,328		1,490,574
SECOR Master		(97,706)		5,252,493		5,154,787

(a) From April 1, 2019 through April 30, 2019, the date AE Capital Master terminated operations.

(b) From June 1, 2019, commencement of operations for Aquantum Master, through June 30, 2019.

(c) From February 1, 2019, commencement of operations for ADG Master, through June 30, 2019.

(d) From January 1, 2019 through April 30, 2019, the date AE Capital Master terminated operations.

(e) From February 1, 2018, commencement of operations for AE Capital Master, through June 30, 2018.

17

Ceres Tactical Systematic L.P.

Notes to Financial Statements

(Unaudited)

Summarized information reflecting the Partnership’s investment in and the Partnership’spro-rata share of the results of operations of the Funds is shown in the following tables:

	June 30, 2019					For the three months ended June 30, 2019
	% of							Expenses				Net
	Partners’			Fair		Income		Clearing		Professional		Income		Investment	Redemptions
Funds	Capital			Value		(Loss)		Fees		Fees		(Loss)		Objective	Permitted
ADG Master		17.73	%	$	21,702,793	$	(246,103)	$	8,684	$	12,701	$	(267,488)	Commodity Portfolio	Monthly
AE Capital Master(a)		0.00	%		-		28,094		19,088		15,620		(6,614)	Commodity Portfolio	Monthly
Aquantum Master(b)		15.86	%		19,408,056		(462,742)		48,282		7,090		(518,114)	Commodity Portfolio	Monthly
FORT Contrarian Master		18.24	%		22,323,632		1,377,409		15,665		2,430		1,359,314	Commodity Portfolio	Monthly
SECOR Master		0.00	%		-		(278,013)		126,236		9,837		(414,086)	Commodity Portfolio	Monthly
Total				$	63,434,481	$	418,645	$	217,955	$	47,678	$	153,012
	June 30, 2019					For the six months ended June 30, 2019
	% of							Expenses				Net
	Partners’			Fair		Income		Clearing		Professional		Income		Investment	Redemptions
Funds	Capital			Value		(Loss)		Fees		Fees		(Loss)		Objective	Permitted
ADG Master(c)		17.73	%	$	21,702,793	$	(342,610)	$	16,745	$	20,415	$	(379,770)	Commodity Portfolio	Monthly
AE Capital Master(d)		0.00	%		-		(503,135)		30,394		26,381		(559,910)	Commodity Portfolio	Monthly
Aquantum Master(b)		15.86	%		19,408,056		(462,742)		48,282		7,090		(518,114)	Commodity Portfolio	Monthly
Cambridge Master(e)		0.00	%		-		(1,069,568)		13,782		14,753		(1,098,103)	Commodity Portfolio	Monthly
FORT Contrarian Master		18.24	%		22,323,632		3,815,337		29,537		4,426		3,781,374	Commodity Portfolio	Monthly
SECOR Master		0.00	%		-		2,071,703		269,386		20,096		1,782,221	Commodity Portfolio	Monthly
Total				$	63,434,481	$	3,508,985	$	408,126	$	93,161	$	3,007,698
	December 31, 2018					For the three months ended June 30, 2018
	% of							Expenses				Net
	Partners’			Fair		Income		Clearing		Professional		Income		Investment	Redemptions
Funds	Capital			Value		(Loss)		Fees		Fees		(Loss)		Objective	Permitted
AE Capital Master		11.64	%	$	15,603,718	$	(390,147)	$	23,531	$	12,407	$	(426,085)	Commodity Portfolio	Monthly
Cambridge Master		12.90	%		17,284,725		(456,342)		21,434		15,103		(492,879)	Commodity Portfolio	Monthly
FORT Contrarian Master		15.30	%		20,501,423		881,224		21,500		2,795		856,929	Commodity Portfolio	Monthly
SECOR Master		22.27	%		29,850,097		1,366,157		117,389		13,460		1,235,308	Commodity Portfolio	Monthly
Total				$	83,239,963	$	1,400,892	$	183,854	$	43,765	$	1,173,273
	December 31, 2018					For the six months ended June 30, 2018
	% of							Expenses				Net
	Partners’			Fair		Income		Clearing		Professional		Income		Investment	Redemptions
Funds	Capital			Value		(Loss)		Fees		Fees		(Loss)		Objective	Permitted
AE Capital Master(f)		11.64	%	$	15,603,718	$	(465,538)	$	26,052	$	21,395	$	(512,985)	Commodity Portfolio	Monthly
Cambridge Master		12.90	%		17,284,725		1,535,958		42,280		30,589		1,463,089	Commodity Portfolio	Monthly
FORT Contrarian Master		15.30	%		20,501,423		21,279		40,761		10,442		(29,924)	Commodity Portfolio	Monthly
SECOR Master		22.27	%		29,850,097		4,494,337		237,930		28,113		4,228,294	Commodity Portfolio	Monthly
Total				$	83,239,963	$	5,586,036	$	347,023	$	90,539	$	5,148,474

(a) From April 1, 2019 through April 30, 2019, the date the Partnership fully redeemed its investment in AE Capital Master.

(b) From June 1, 2019, the date the Partnership invested into Aquantum Master, through June 30, 2019.

(c) From February 1, 2019, the date the Partnership invested into ADG Master, through June 30, 2019.

(d) From January 1, 2019 through April 30, 2019, the date the Partnership fully redeemed its investment in AE Capital Master.

(e) From January 1, 2019 through March 31, 2019, the date the Partnership fully redeemed its investment in Cambridge Master.

(f) From February 1, 2018, the date the Partnership invested into AE Capital Master, through June 30, 2018.

18

Ceres Tactical Systematic L.P.

Notes to Financial Statements

(Unaudited)

7. Financial Instrument Risks:

In the normal course of business, the Partnership and the Funds are parties to financial instruments withoff-balance-sheet risk, including derivative financial instruments and derivative commodity instruments. These financial instruments may include forwards, futures, options and swaps, whose values are based upon an underlying asset, index, or reference rate, and generally represent future commitments to exchange currencies or cash balances, to purchase or sell other financial instruments at specific terms at specified future dates, or, in the case of derivative commodity instruments, to have a reasonable possibility to be settled in cash, through physical delivery or with another financial instrument. These instruments may be traded on an exchange, a swap execution facility orover-the-counter (“OTC”). Exchange-traded instruments include futures and certain standardized forward, swap and option contracts. Specific market movements of commodities or futures contracts underlying an option cannot accurately be predicted. The purchaser of an option may lose the entire premium paid for the option. The writer or seller of an option has unlimited risk. Certain swap contracts may also be traded on a swap execution facility or OTC. OTC contracts are negotiated between contracting parties and also include certain forward and option contracts. Each of these instruments is subject to various risks similar to those related to the underlying financial instruments, including market and credit risk. In general, the risks associated with OTC contracts are greater than those associated with exchange-traded instruments because of the greater risk of default by the counterparty to an OTC contract. The General Partner estimates that at any given time approximately 22.2% to 31.6% of the Partnership’s/Funds’ contracts are traded OTC.

Futures Contracts.The Partnership and the Funds trade futures contracts. A futures contract is a firm commitment to buyor sell a specified quantity of investments, currency or a standardized amount of a deliverable grade commodity, at a specified price on a specified future date, unless the contract is closed before the delivery date or the delivery quantity is something where physical delivery cannot occur (such as the S&P 500 Index), whereby such contract is settled in cash. Payments (“variation margin”) may be made or received by the Partnership and the Funds each business day, depending on the daily fluctuations in the value of the underlying contracts, and are recorded as unrealized gains or losses by the Partnership and the Funds. When the contract is closed, the Partnership and the Funds record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Transactions in futures contracts require participants to make both initial margin deposits of cash or other assets and variation margin deposits, through the futures broker, directly with the exchange on which the contracts are traded. Net realized gains (losses) and net change in unrealized gains (losses) on futures contracts are included in the Partnership’s/Funds’ Statements of Income and Expenses.

Forward Foreign Currency Contracts.Forward foreign currency contracts are those contracts where the Partnership andthe Funds agree to receive or deliver a fixed quantity of foreign currency for an agreed-upon price on an agreed-upon future date. Forward foreign currency contracts are valued daily, and the Partnership’s and the Funds’ net equity therein, representing unrealized gain or loss on the contracts as measured by the difference between the forward foreign exchange rates at the dates of entry into the contracts and the forward rates at the reporting date, is included in the Partnership’s/Funds’ Statements of Financial Condition. Net realized gains (losses) and net change in unrealized gains (losses) on forward foreign currency contracts are recognized in the period in which the contract is closed or the changes occur, respectively, and are included in the Partnership’s/Funds’ Statements of Income and Expenses.

London Metals Exchange Forward Contracts.Metal contracts traded on the London Metal Exchange (“LME”) representa firm commitment to buy or sell a specified quantity of aluminum, copper, lead, nickel, tin or zinc. LME contracts traded by the Partnership and the Funds are cash settled based on prompt dates published by the LME. Variation margin may be made or received by the Partnership and the Funds each business day, depending on the daily fluctuations in the value of the underlying contracts, and are recorded as unrealized gains or losses by the Partnership and the Funds. A contract is considered offset when all long positions have been matched with a like number of short positions settling on the same prompt date. When the contract is closed at the prompt date, the Partnership and the Funds record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Transactions in LME contracts require participants to make both initial margin deposits of cash or other assets and variation margin deposits, through the broker, directly with the LME. Net realized gains (losses) and net change in unrealized gains (losses) on metal contracts are included in the Partnership’s/Funds’ Statements of Income and Expenses.

19

Ceres Tactical Systematic L.P.

Notes to Financial Statements

(Unaudited)

Market risk is the potential for changes in the value of the financial instruments traded by the Partnership/Funds due to market changes, including interest and foreign exchange rate movements and fluctuations in commodity or security prices. Market risk is directly impacted by the volatility and liquidity in the markets in which the related underlying assets are traded. The Partnership and the Funds are exposed to market risk equal to the value of the futures and forward contracts held and unlimited liability on such contracts sold short.

Credit risk is the possibility that a loss may occur due to the failure of a counterparty to perform according to the terms of a contract. The Partnership’s/Funds’ risk of loss in the event of counterparty default is typically limited to the amounts recognized in the Statements of Financial Condition and is not represented by the contract or notional amounts of the instruments. The Partnership’s/Funds’ risk of loss is reduced through the use of legally enforceable master netting agreements with counterparties that permit the Partnership/Funds to offset unrealized gains and losses and other assets and liabilities with such counterparties upon the occurrence of certain events. The Partnership/Funds have credit risk and concentration risk, as MS&Co. or an MS&Co. affiliate are counterparties or brokers with respect to the Partnership’s/Funds’ assets. For certain OTC contracts traded by Cambridge Master and SECOR Master prior to their respective full redemptions, JPMorgan was the counterparty with respect to those assets. Credit risk with respect to exchange-traded instruments is reduced to the extent that, through MS&Co. or an MS&Co. affiliate, the Partnership’s/Funds’ counterparty is an exchange or clearing organization.

The General Partner/Trading Manager monitors and attempts to mitigate the Partnership’s/Funds’ risk exposure on a daily basis through financial, credit and risk management monitoring systems and, accordingly, believes that it has effective procedures for evaluating and limiting the credit and market risks to which the Partnership/Funds may be subject. These monitoring systems generally allow the General Partner/Trading Manager to statistically analyze actual trading results with risk-adjusted performance indicators and correlation statistics. In addition, online monitoring systems provide account analysis of futures, forward and option contracts by sector, margin requirements, gain and loss transactions and collateral positions.

The majority of these financial instruments mature within one year of the inception date. However, due to the nature of the Partnership’s/Funds’ business, these instruments may not be held to maturity.

The risk to the limited partners that have purchased Redeemable Units is limited to the amount of their share of the Partnership’s net assets and undistributed profits. This limited liability is a result of the organization of the Partnership as a limited partnership under New York law.

In the ordinary course of business, the Partnership/Funds enter into contracts and agreements that contain various representations and warranties and which provide general indemnifications. The Partnership’s/Funds’ maximum exposure under these arrangements cannot be determined, as this could include future claims that have not yet been made against the Partnership/Funds. The Partnership/Funds consider the risk of any future obligation relating to these indemnifications to be remote.

8. Subsequent Events:

The General Partner evaluates events that occur after the balance sheet date but before and up until financial statements are available to be issued. The General Partner has assessed the subsequent events through the date the financial statements were issued and has determined that there were no subsequent events requiring adjustment to or disclosure in the financial statements.

20

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

Liquidity and Capital Resources

The Partnership does not have, nor does it expect to have, any capital assets. The Partnership does not engage in sales of goods or services. Its assets are its (i) investment in the Funds, (ii) redemptions receivable from the Funds, (iii) equity in trading account, consisting of unrestricted cash, restricted cash, net unrealized appreciation on open futures contracts, net unrealized appreciation on open forward contracts and investment in U.S. Treasury bills at fair value, if applicable, and (iv) interest receivable. Because of the low margin deposits normally required in commodity futures trading, relatively small price movements may result in substantial losses to the Partnership, through its investment in the Funds and direct investments. While substantial losses could lead to a material decrease in liquidity, no such illiquidity occurred in the second quarter of 2019.

The Partnership’s/Funds’ investment in futures, forwards and options may, from time to time, be illiquid. Most U.S. futures exchanges limit fluctuations in prices during a single day by regulations referred to as “daily price fluctuation limits” or “daily limits.” Trades may not be executed at prices beyond the daily limit. If the price for a particular futures or option contract has increased or decreased by an amount equal to the daily limit, positions in that futures or option contract can neither be taken nor liquidated unless traders are willing to effect trades at or within the limit. Futures prices have occasionally moved the daily limit for several consecutive days with little or no trading. These market conditions could prevent the Partnership and/or the Funds from promptly liquidating their futures contracts and result in restrictions on redemptions.

There is no limitation on daily price movements in trading forward contracts on foreign currencies. The markets for some world currencies have low trading volume and are illiquid, which may prevent the Partnership and/or the Funds from trading in potentially profitable markets or prevent the Partnership and/or the Funds from promptly liquidating unfavorable positions in such markets, subjecting them to substantial losses. Either of these market conditions could result in restrictions on redemptions. For the periods covered by this report, illiquidity has not materially affected the Partnership’s or the Funds’ assets.

Other than the risks inherent in commodity futures, forwards, options, swaps and other derivatives trading and U.S. Treasury bills and money market mutual fund securities, the Partnership and the Funds know of no trends, demands, commitments, events or uncertainties at the present time that are reasonably likely to result in the Partnership’s or the Funds’ liquidity increasing or decreasing in any material way.

The Partnership’s capital consists of the capital contributions of the partners as increased or decreased by realized and/or unrealized gains or losses on trading and by expenses, interest income, subscriptions, redemptions of Redeemable Units and distributions of profits, if any.

For the six months ended June 30, 2019, the Partnership’s capital decreased 8.7% from $134,018,220 to $122,384,791. This decrease was attributable to redemptions of 18,546.5200 Class A limited partner Redeemable Units totaling $14,368,141, redemptions of 50.0000 Class D limited partner Redeemable Units totaling $47,102, and redemptions of 535.5720 Class Z General Partner Redeemable Units totaling $525,000, which was partially offset by subscriptions of 119.1810 Class A limited partner Redeemable Units totaling $92,700, subscriptions of 29.4650 Class Z limited partner Redeemable Units totaling $27,904 and net income of $3,186,210. Future redemptions can impact the amount of funds available for investment in subsequent periods.

Other than as discussed above, there are no known material trends, favorable or unfavorable, that would affect, nor any expected material changes to, the Partnership’s capital resource arrangements at the present time.

Off-Balance Sheet Arrangements and Contractual Obligations

The Partnership does not have anyoff-balance sheet arrangements, nor does it have contractual obligations or commercial commitments to make future payments, that would affect its liquidity or capital resources.

Critical Accounting Policies

The preparation of financial statements in conformity with GAAP requires the General Partner to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. The General Partner believes that the estimates and assumptions utilized in preparing the financial statements are reasonable. Actual results could differ from those estimates. The Partnership’s significant accounting policies are described in detail in Note 2, “Basis of Presentation and Summary of Significant Accounting Policies,” of the Financial Statements.

21

The Partnership and the Funds record all investments at fair value in their financial statements, with changes in fair value reported as a component of net realized gains (losses) and net change in unrealized gains (losses) in the Statements of Income and Expenses.

Results of Operations

During the Partnership’s second quarter of 2019, the Partnership’s net asset value per Class A Redeemable Unit increased 1.0% from $777.81 to $785.23 as compared to a decrease of 1.5% in the same period of 2018. During the Partnership’s second quarter of 2019, the Partnership’s net asset value per Class D Redeemable Unit increased 1.3% from $957.04 to $969.22 as compared to a decrease of 1.2% in the same period of 2018. During the Partnership’s second quarter of 2019, the Partnership’s net asset value per Class Z Redeemable Unit increased 1.5% from $966.12 to $980.26 as compared to a decrease of 1.0% in the same period of 2018. The Partnership experienced a net trading gain before fees and expenses in the second quarter of 2019 of $2,193,807. Gains were primarily attributable to the Partnership’s/Funds’ trading in indices and U.S. andnon-U.S. interest rates and were partially offset by losses in currencies, energy, grains, livestock, metals and softs. The Partnership experienced a net trading loss before fees and expenses in the second quarter of 2018 of $812,289. Losses were primarily attributable to the Partnership’s/Funds’ trading in currencies, grains, U.S andnon-U.S. interest rates, livestock, metals and indices and were partially offset by gains in energy and softs.

The most significant gains were achieved within the global interest rate sector during May and June from long positions in U.S., European, and Asian fixed income futures as central banks across the globe indicated they would fight slowing economic growth with a variety of easing policies. Additional gains were recorded during April and June within the global stock index sector primarily from long positions in European equity index futures as ebbing trade concerns and supportive fiscal measures buoyed global stocks. A portion of the Partnership’s gains for the second quarter was offset by losses incurred within the agricultural sector during May and June from short positions in corn and wheat futures as prices moved higher as flooding in the U.S. Midwest threatened crops. Additional losses in the agriculturals were experienced from positions in livestock futures during April, May, and June. Within the currency sector, losses were incurred during May from positions in the Japanese yen and during June from positions in the Swiss franc and Canadian dollar. Further losses were recorded during May within the energies from long positions in crude oil and its refined products as prices declined on demand concerns. Losses in the metals sector were experienced during May from long positions in zinc futures as prices declined amid renewed trade tensions globally.

During the Partnership’s six months ended June 30, 2019, the Partnership’s net asset value per Class A Redeemable Unit increased 2.5% from $766.28 to $785.23 as compared to a decrease of 1.8% in the same period of 2018. During the Partnership’s six months ended June 30, 2019, the Partnership’s net asset value per Class D Redeemable Unit increased 3.1% from $939.90 to $969.22 as compared to a decrease of 1.2% in the same period of 2018. During the Partnership’s six months ended June 30, 2019, the Partnership’s net asset value per Class Z Redeemable Unit increased 3.5% from $947.03 to $980.26 as compared to a decrease of 0.8% in the same period of 2018. The Partnership experienced a net trading gain before fees and expenses in the six months ended June 30, 2019 of $5,607,859. Gains were primarily attributable to the Partnership’s/Funds’ trading in indices and U.S. andnon-U.S. interest rates and were partially offset by losses in currencies, energy, grains, livestock, metals and softs. The Partnership experienced a net trading gain before fees and expenses in the six months ended June 30, 2018 of $1,006,099. Gains were primarily attributable to the Partnership’s/Funds’ trading in currencies, energy, U.S andnon-U.S. interest rates, livestock and softs and were partially offset by losses in grains, metals and indices.

The most notable trading gains were recorded within the global interest rate sector during May and June from long positions in U.S., European, and Asian fixed income futures as central banks across the globe indicated they would fight slowing economic growth with a variety of easing policies. Additional gains in the global fixed income sector were experienced during March from long positions in European fixed income futures as prices rallied amid continued uncertainty surrounding the UK’s exit from the European Union. Gains within the global stock index sector were recorded throughout the first six months of the year, with the exception of May, from long positions in global equity futures as investor demand for risk assets buoyed stock prices. A portion of the Partnership’s gains for the first six months of the year was offset by losses incurred within the agricultural sector during May and June from short positions in corn and wheat futures as prices moved higher as flooding in the U.S. Midwest threatened crops. Further losses in the agricultural markets were recorded during March, April, May, and June from positions in livestock futures. Within the energy sector, losses were experienced during January from short positions in crude oil and its refined products as prices rebounded off prior lows on the announcement of additional supply cuts by the OPEC bloc. Additional losses were experienced within the currency sector primarily during February from long positions in the Australian dollar versus the U.S. dollar as the value of the Pacific nation’s currency declined amid global trade war concerns. Within the metals markets, losses were recorded during January from short positions in nickel, copper, aluminum, and zinc futures as industrial metals prices rallied higher on signs of growing global demand. Further losses within the metals markets were incurred during May from positions in zinc and platinum futures.

22

Commodity markets are highly volatile. Broad price fluctuations and rapid inflation increase not only the risks involved in commodity trading, but also the possibility of profit. The profitability of the Partnership/Funds depends on the existence of major price trends and the ability of the Advisors to correctly identify those price trends. Price trends are influenced by, among other things, changing supply and demand relationships, weather, governmental, agricultural, commercial and trade programs and policies, national and international political and economic events and changes in interest rates. To the extent that market trends exist and the Advisors are able to identify them, the Partnership/Funds expect to increase capital through operations.

The Partnership receives monthly interest on 100% of the average daily equity maintained in cash in the Partnership’s (or the Partnership’s allocable portion of a Fund’s) brokerage account at MS&Co. during each month at a rate equal to the monthly average of the4-week U.S. Treasury bill discount rate. For the avoidance of doubt, the Partnership/Funds will not receive interest on amounts in the futures brokerage account that are committed to margin. Any interest earned on the Partnership’s and/or each Fund’s cash account in excess of the amounts described above, if any, will be retained by MS&Co. and/or shared with the General Partner. All interest earned on U.S. Treasury bills and money market mutual fund securities will be retained by the Partnership and/or the Funds, as applicable. Any interest income earned on collateral or excess cash deposited by certain of the Funds and held by JPMorgan in its capacity as such Funds’ forward foreign currency counterparty was retained by such Funds, and the Partnership received its allocable portion of such interest from the applicable Fund. Interest income for the three and six months ended June 30, 2019 increased by $3,174 and $146,108, respectively, as compared to the corresponding periods in 2018. The increase in interest income was primarily due to higher4-week U.S. Treasury bill discount rates during the three and six months ended June 30, 2019 as compared to the corresponding periods in 2018. Interest earned by the Partnership will increase the net asset value of the Partnership. The amount of interest income earned by the Partnership and the Funds depended on (1) the average daily equity maintained in cash in the Partnership’s and/or applicable Fund’s accounts, (2) the amount of U.S. Treasury bills and/or money market mutual fund securities held by the Partnership and/or the Funds and (3) interest rates over which none of the Partnership, the Funds, MS&Co. or JPMorgan had control.

23

Certain clearing fees are based on the number of trades executed by the Advisors for the Partnership/Funds. Accordingly, they must be compared in relation to the number of trades executed during the period. Clearing fees related to direct investments for the three and six months ended June 30, 2019 decreased by $10,964 and $57,707, respectively, as compared to the corresponding periods in 2018. The decrease in these clearing fees was primarily due to a decrease in the number of direct trades made by the Partnership during the three and six months ended June 30, 2019 as compared to the corresponding periods in 2018.

Ongoing selling agent fees are calculated as a percentage of the Partnership’s adjusted net asset value of Class A and Class D Redeemable Units on the last day of each month and are affected by trading performance, subscriptions and redemptions. Accordingly, they must be compared in relation to the fluctuations in the monthly net asset values. Ongoing selling agent fees for the three and six months ended June 30, 2019 decreased by $166,682 and $364,723, respectively, as compared to the corresponding periods in 2018. The decrease was primarily due to a decrease in average net assets attributable to Class A and Class D Redeemable Units during the three and six months ended June 30, 2019 as compared to the corresponding periods in 2018.

General Partner fees are paid to the General Partner for administering the business and affairs of the Partnership. General Partner fees are calculated as a percentage of the Partnership’s adjusted net asset value per Class as of the end of each month and are affected by trading performance, subscriptions and redemptions. Accordingly, they must be compared in relation to the fluctuations in the monthly net asset values. General Partner fees for the three and six months ended June 30, 2019 decreased by $88,800 and $194,542, respectively, as compared to the corresponding periods in 2018. The decrease was primarily due to a decrease in average net assets per Class during the three and six months ended June 30, 2019 as compared to the corresponding periods in 2018.

Management fees are calculated as a percentage of the Partnership’s adjusted net asset value per Class as of the end of each month and are affected by trading performance, subscriptions and redemptions. Accordingly, they must be compared in relation to the fluctuations in the monthly net asset values. Management fees for the three and six months ended June 30, 2019 decreased by $112,393 and $192,643, respectively, as compared to the corresponding periods in 2018. The decrease was primarily due to a decrease in average net assets during the three and six months ended June 30, 2019 as compared to the corresponding periods in 2018.

Incentive fees are based on the new trading profits generated by each Advisor at the end of the quarter, half-year or year, as applicable, as defined in the respective management agreements between the Partnership, the General Partner and each Advisor. Trading performance for the three and six months ended June 30, 2019 resulted in a reversal of incentive fees of $66,820 and incentive fees of $371,111, respectively. Trading performance for the three and six months ended June 30, 2018 resulted in incentive fees of $201,138 and $847,024, respectively. To the extent an Advisor incurs a loss for the Partnership, the Advisor will not be paid incentive fees until such Advisor recovers any net loss incurred by the Advisor and earns additional new trading profits for the Partnership.

In allocating the assets of the Partnership among the Advisors, the General Partner considers, among other factors, each Advisor’s past performance, trading style, volatility of markets traded and fee requirements. The General Partner may modify or terminate the allocation of assets among the Advisors and may allocate assets to additional advisors at any time.

As of June 30, 2019 and March 31, 2019, the Partnership’s assets were allocated among the Advisors in the following approximate percentages:

Advisor	June 30, 2019						March 31, 2019
ADG		20	%	$	24,752,793			19	%	$	23,630,118
AE Capital		0	%	$	-			9	%	$	12,416,489
Aquantum		20	%	$	24,608,054			0	%	$	-
FORT		38	%	$	46,704,707	*		31	%	$	39,542,688	**
ISAM SM		22	%	$	26,319,237			20	%	$	26,353,159
SECOR		0	%	$	-			21	%	$	26,786,656

* Amount includes $24,582,997 allocated to FORT Contrarian Master and $22,121,710 allocated to FORT for direct trading.

** Amount includes $23,132,308 allocated to FORT Contrarian Master and $16,410,380 allocated to FORT for direct trading.

24

Item 3.Quantitative and Qualitative Disclosures about Market Risk.

The Partnership/Funds are speculative commodity pools. The market sensitive instruments held by them are acquired for speculative trading purposes, and all or substantially all of the Partnership’s/Funds’ assets are subject to the risk of trading loss. Unlike an operating company, the risk of market sensitive instruments is integral, not incidental, to the Partnership’s/Funds’ main line of business.

The limited partners will not be liable for losses exceeding the current net asset value of their investment.

Market movements result in frequent changes in the fair value of the Partnership’s/Funds’ open positions and, consequently, in their earnings and cash balances. The Partnership’s/Funds’ market risk is influenced by a wide variety of factors, including the level and volatility of interest rates, exchange rates, equity price levels, the market value of financial instruments and contracts, the diversification effects among the Partnership’s/Funds’ open positions and the liquidity of the markets in which they trade.

The Partnership/Funds rapidly acquire and liquidate both long and short positions in a wide range of different markets. Consequently, it is not possible to predict how a particular future market scenario will affect performance, and the Partnership’s/Funds’ past performance is not necessarily indicative of their future results.

Quantifying the Partnership’s and the Funds’ Trading Value at Risk

The following quantitative disclosures regarding the Partnership’s/Funds’ market risk exposures contain “forward-looking statements” within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). All quantitative disclosures in this section are deemed to be forward-looking statements for purposes of the safe harbor, except for statements of historical fact.

The Partnership/Funds account for open positions on the basis of fair value accounting principles. Any loss in the market value of the Partnership’s and each Fund’s open positions is directly reflected in the Partnership’s and each Fund’s earnings and cash flow.

The Partnership’s/Funds’ risk exposure in the market sectors traded by the Advisors is estimated below in terms of Value at Risk. Please note that the Value at Risk model is used to numerically quantify market risk for historic reporting purposes only and is not utilized by either the General Partner or the Advisors in their daily risk management activities.

“Value at Risk” is a measure of the maximum amount which the Partnership/Funds could reasonably be expected to lose in a given market sector. However, the inherent uncertainty of the Partnership’s/Funds’ speculative trading and the recurrence in the markets traded by the Partnership/Funds of market movements far exceeding expectations could result in actual trading ornon-trading losses far beyond the indicated Value at Risk or the Partnership’s/Funds’ experience to date (i.e., “risk of ruin”). In light of the foregoing as well as the risks and uncertainties intrinsic to all future projections, the inclusion of the quantification in this section should not be considered to constitute any assurance or representation that the Partnership’s/Funds’ losses in any market sector will be limited to Value at Risk or by the Partnership’s/Funds’ attempts to manage their market risk.

Exchange margin requirements have been used by the Partnership/Funds as the measure of their Value at Risk. Margin requirements are set by exchanges to equal or exceed the maximum losses reasonably expected to be incurred in the fair value of any given contract in95%-99% of anyone-day interval. The margin levels are established by dealers and exchanges using historical price studies as well as an assessment of current market volatility (including the implied volatility of the options on a given futures contract) and economic fundamentals to provide a probabilistic estimate of the maximum expected near-termone-day price fluctuation.

Value at Risk tables represent a probabilistic assessment of the risk of loss in market risk sensitive instruments. The Advisors, with the exception of ISAM SM and with respect to a portion of the assets allocated to FORT, currently trade the Partnership’s assets indirectly in master fund managed accounts established in the name of the master funds over which they have been granted limited authority to make trading decisions. ISAM SM and FORT directly trade managed accounts in the name of the Partnership. The first two trading Value at Risk tables reflect the market sensitive instruments held by the Partnership directly and through its investment in the Funds. The remaining trading Value at Risk tables reflect the market sensitive instruments held by the Partnership directly (i.e., in the managed accounts in the Partnership’s name traded by ISAM SM and FORT) and indirectly by each Fund separately. There have been no material changes in the trading Value at Risk information previously disclosed in the Partnership’s Annual Report on Form10-K for the year ended December 31, 2018.

25

The following tables indicate the trading Value at Risk associated with the Partnership’s open positions by market category as of June 30, 2019 and December 31, 2018. As of June 30, 2019, the Partnership’s total capitalization was $122,384,791.

June 30, 2019

			% of Total
Market Sector	Value at Risk		Capitalization
Currencies	$	5,059,930		4.13	%
Energy		595,916		0.49
Grains		182,243		0.15
Indices		3,438,584		2.81
Interest Rates U.S.		460,910		0.38
Interest RatesNon-U.S.		2,823,106		2.31
Livestock		367,467		0.30
Metals		612,984		0.50
Softs		347,543		0.28
Total	$	13,888,683		11.35	%
As of December 31, 2018, the Partnership’s total capitalization was $134,018,220. December 31, 2018
			% of Total
Market Sector	Value at Risk		Capitalization
Currencies	$	11,854,972		8.85	%
Energy		1,982,250		1.48
Grains		1,144,646		0.85
Indices		5,831,824		4.35
Interest Rates U.S.		325,581		0.24
Interest RatesNon-U.S.		2,993,718		2.24
Livestock		509,818		0.38
Metals		1,940,043		1.45
Softs		755,651		0.56
Total	$	27,338,503		20.40	%

26

The following tables indicate the trading Value at Risk associated with the Partnership’s direct investments and indirect investment in the Funds by market category as of June 30, 2019 and December 31, 2018, and the highest, lowest and average values during the three months ended June 30, 2019 and the twelve months ended December 31, 2018. All open contracts trading risk exposures have been included in calculating the figures set forth below.

As of June 30, 2019 and December 31, 2018, the Partnership’s Value at Risk for the portion of its assets that are traded directly was as follows:

June 30, 2019

						Three Months Ended June 30, 2019
			% of Total			High		Low		Average
Market Sector	Value at Risk		Capitalization			Value at Risk		Value at Risk		Value at Risk*
Currencies	$	4,370,409		3.57	%	$	6,370,541	$	3,999,802	$	5,277,289
Energy		360,522		0.29			902,839		325,859		543,337
Grains		145,851		0.12			680,028		136,109		442,375
Indices		987,057		0.81			1,880,997		614,357		1,183,844
Interest Rates U.S.		349,258		0.29			454,118		260,051		357,933
Interest Rates Non-U.S.		1,352,889		1.11			1,687,641		1,286,269		1,488,821
Livestock		77,330		0.06			206,910		50,806		108,392
Metals		596,265		0.49			729,603		410,724		576,567
Softs		347,543		0.28			591,490		296,350		444,308
Total	$	8,587,124		7.02	%

* Average of daily Values at Risk.

December 31, 2018

						Twelve Months Ended December 31, 2018
			% of Total			High		Low		Average
Market Sector	Value at Risk		Capitalization			Value at Risk		Value at Risk		Value at Risk*
Currencies	$	4,327,889		3.23	%	$	10,968,659	$	127,556	$	6,230,429
Energy		892,557		0.67			1,954,791		497,317		950,471
Grains		453,083		0.34			907,466		189,581		421,500
Indices		1,053,861		0.79			4,922,389		637,480		1,580,120
Interest Rates U.S.		220,562		0.16			394,893		70,521		243,206
Interest Rates Non-U.S.		1,413,022		1.05			1,718,201		337,661		1,251,307
Livestock		89,155		0.07			226,270		10,890		119,768
Metals		846,820		0.63			2,002,271		350,990		803,209
Softs		497,762		0.37			1,200,765		175,815		617,547
Total	$	9,794,711		7.31	%

* Annual average ofmonth-end Values at Risk.

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As of June 30, 2019, ADG Master’s total capitalization was $31,665,723. The Partnership owned approximately 68.4% of ADG Master. As of June 30, 2019, ADG Master’s Value at Risk for its assets (including the portion of the Partnership’s assets allocated to ADG Master for trading) was as follows:

June 30, 2019

						Three Months Ended June 30, 2019
			% of Total			High		Low		Average
Market Sector	Value at Risk		Capitalization			Value at Risk		Value at Risk		Value at Risk*
Currencies	$	641,023		2.02	%	$	946,644	$	611,028	$	810,034
Indices		2,534,676		8.00			3,018,124		2,085,346		2,562,935
Interest Rates U.S.		32,340		0.10			97,026		3,003		46,799
Interest Rates Non-U.S.		1,217,329		3.84			1,651,468		1,199,856		1,484,718
Total	$	4,425,368		13.96	%

* Average of daily Values at Risk.

As of June 30, 2019, Aquantum Master’s total capitalization was $42,033,579. The Partnership owned approximately 46.1% of Aquantum Master. As of June 30, 2019, Aquantum Master’s Value at Risk for its assets (including the portion of the Partnership’s assets allocated to Aquantum Master for trading) was as follows:

June 30, 2019

						Three Months Ended June 30, 2019
			% of Total			High		Low		Average
Market Sector	Value at Risk		Capitalization			Value at Risk		Value at Risk		Value at Risk*
Energy	$	389,464		0.93	%	$	1,315,641	$	318,276	$	784,409
Grains		78,942		0.19			372,809		74,300		251,572
Livestock		629,365		1.50			1,272,700		333,190		677,441
Total	$	1,097,771		2.62	%

* Average of daily Values at Risk.

As of June 30, 2019, FORT Contrarian Master’s total capitalization was $162,948,497. The Partnership owned approximately 13.7% of FORT Contrarian Master. As of June 30, 2019, FORT Contrarian Master’s Value at Risk for its assets (including the portion of the Partnership’s assets allocated to FORT Contrarian Master for trading) was as follows:

June 30, 2019

						Three Months Ended June 30, 2019
			% of Total			High		Low		Average
Market Sector	Value at Risk		Capitalization			Value at Risk		Value at Risk		Value at Risk*
Currencies	$	1,832,562		1.12	%	$	2,665,096	$	1,791,702	$	2,268,668
Energy		407,672		0.25			720,189		182,826		351,630
Indices		5,239,480		3.22			7,273,188		4,069,041		5,409,723
Interest Rates U.S.		653,515		0.40			921,548		152,886		582,328
Interest Rates Non-U.S.		4,653,755		2.86			4,653,755		2,270,618		3,600,542
Metals		122,034		0.07			146,388		8,118		50,486
Total	$	12,909,018		7.92	%

* Average of daily Values at Risk.

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As of December 31, 2018, FORT Contrarian Master’s total capitalization was $178,393,437. The Partnership owned approximately 11.5% of FORT Contrarian Master. As of December 31, 2018, FORT Contrarian Master’s Value at Risk for its assets (including the portion of the Partnership’s assets allocated to FORT Contrarian Master for trading) was as follows:

December 31, 2018

						Twelve Months Ended December 31, 2018
			% of Total			High		Low		Average
Market Sector	Value at Risk		Capitalization			Value at Risk		Value at Risk		Value at Risk*
Currencies	$	2,240,447		1.26	%	$	2,757,775	$	172,452	$	1,520,555
Energy		244,947		0.14			967,522		73,178		531,249
Indices		5,237,924		2.94			7,387,056		456,333		4,533,675
Interest Rates U.S.		349,766		0.20			1,397,202		20,173		551,742
Interest Rates Non-U.S.		3,395,359		1.90			4,340,103		151,500		2,533,930
Metals		194,128		0.11			264,990		6,732		114,975
Total	$	11,662,571		6.55	%

* Annual average ofmonth-end Values at Risk.

As of June 30, 2019, the Partnership fully redeemed its investment in SECOR Master. As of December 31, 2018, SECOR Master’s total capitalization was $35,177,137. The Partnership owned approximately 84.7% of SECOR Master. As of December 31, 2018, SECOR Master’s Value at Risk for its assets (including the portion of the Partnership’s assets allocated to SECOR for trading) was as follows:

December 31, 2018

						Twelve Months Ended December 31, 2018
			% of Total			High		Low		Average
Market Sector	Value at Risk		Capitalization			Value at Risk		Value at Risk		Value at Risk*
Currencies	$	3,287,086		9.34	%	$	6,257,227	$	1,094,272	$	3,205,784
Energy		1,253,275		3.56			1,253,275		105,559		412,027
Grains		816,485		2.32			816,485		153,069		451,748
Indices		4,929,872		14.01			6,674,279		2,219,184		4,478,112
Interest Rates U.S.		76,500		0.22			661,243		17,135		162,483
Interest Rates Non-U.S.		1,405,230		3.99			1,466,923		484,834		953,496
Livestock		496,650		1.41			522,040		38,310		313,104
Metals		1,264,343		3.59			1,372,159		617,688		955,032
Softs		304,474		0.87			720,287		204,580		501,666
Total	$	13,833,915		39.31	%

* Annual average ofmonth-end Values at Risk.

As of April 30, 2019, the Partnership fully redeemed its investment in AE Capital Master. As of December 31, 2018, AE Capital Master’s total capitalization was $19,658,348. The Partnership owned approximately 79.2% of AE Capital Master. As of December 31, 2018, AE Capital Master had no Value at Risk for its assets (including the portion of the Partnership’s assets allocated to AE Capital Master for trading.)

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As of March 31, 2019, the Partnership fully redeemed its investment in Cambridge Master. As of December 31, 2018, Cambridge Master’s total capitalization was $17,282,003. The Partnership owned 100.0% of Cambridge Master. As of December 31, 2018, Cambridge Master’s Value at Risk for its assets (including the portion of the Partnership’s assets allocated to Cambridge (prior to October 1, 2018) and Mesirow (from October 1, 2018 to December 31, 2018) for trading) was as follows:

December 31, 2018

						Twelve Months Ended December 31, 2018
			% of Total			High		Low		Average
Market Sector	Value at Risk		Capitalization			Value at Risk		Value at Risk		Value at Risk*
Currencies	$	4,485,270		25.95	%	$	30,767,671	$	3,814,941	$	11,781,646
Total	$	4,485,270		25.95	%

* Annual average ofmonth-end Values at Risk.

Item 4.Controls and Procedures.

The Partnership’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Partnership on the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods expected in the SEC’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Partnership in the reports it files is accumulated and communicated to management, including the President and Chief Financial Officer (“CFO”) of the General Partner, to allow for timely decisions regarding required disclosure and appropriate SEC filings.

The General Partner is responsible for ensuring that there is an adequate and effective process for establishing, maintaining and evaluating disclosure controls and procedures for the Partnership’s external disclosures.

The General Partner’s President and CFO have evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as defined in Rules13a-15(e) and15d-15(e) under the Exchange Act) as of June 30, 2019 and, based on that evaluation, the General Partner’s President and CFO have concluded that, at that date, the Partnership’s disclosure controls and procedures were effective.

The Partnership’sinternal control over financial reporting is a process under the supervision of the General Partner’s President and CFO to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. These controls include policies and procedures that:

• pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Partnership;

• provide reasonable assurance that (i) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and (ii) the Partnership’s receipts are handled and expenditures are made only pursuant to authorizations of the General Partner; and

• provide reasonable assurance regarding prevention or timely detection and correction of unauthorized acquisition, use or disposition of the Partnership’s assets that could have a material effect on the financial statements.

There were no changes in the Partnership’s internal control over financial reporting process during the fiscal quarter ended June 30, 2019 that materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1.Legal Proceedings.

This section describes the major pending legal proceedings, other than ordinary routine litigation incidental to the business, to which MS&Co. or its subsidiaries is a party or to which any of their property is subject. There are no material legal proceedings pending against the Partnership or the General Partner.

On June 1, 2011, Morgan Stanley & Co. Incorporated converted from a Delaware corporation to a Delaware limited liability company. As a result of that conversion, Morgan Stanley & Co. Incorporated is now named Morgan Stanley & Co. LLC (“MS&Co.”).

MS&Co. is a wholly-owned, indirect subsidiary of Morgan Stanley, a Delaware holding company. Morgan Stanley files periodic reports with the SEC as required by the Exchange Act of 1934, which include current descriptions of material litigation and material proceedings and investigations, if any, by governmental and/or regulatory agencies or self-regulatory organizations concerning Morgan Stanley and its subsidiaries, including MS&Co. As a consolidated subsidiary of Morgan Stanley, MS&Co. does not file its own periodic reports with the SEC that contain descriptions of material litigation, proceedings and investigations. As a result, we refer you to the “Legal Proceedings” section of Morgan Stanley’s SEC10-K filings for 2018, 2017, 2016, 2015 and 2014. In addition, MS&Co. annually prepares an Audited, Consolidated Statement of Financial Condition (“Audited Financial Statement”) that is publicly available on Morgan Stanley’s website atwww.morganstanley.com. We refer you to the Commitments, Guarantees and Contingencies – Legal section of MS&Co.’s 2018 Audited Financial Statement.

In addition to the matters described in those filings, in the normal course of business, each of Morgan Stanley and MS&Co. has been named, from time to time, as a defendant in various legal actions, including arbitrations, class actions, and other litigation, arising in connection with its activities as a global diversified financial services institution. Certain of the legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. Each of Morgan Stanley and MS&Co. is also involved, from time to time, in investigations and proceedings by governmental and/or regulatory agencies or self-regulatory organizations, certain of which may result in adverse judgments, fines or penalties. The number of these investigations and proceedings has increased in recent years with regard to many financial services institutions, including Morgan Stanley and MS&Co.

MS&Co. is a Delaware limited liability company with its main business office located at 1585 Broadway, New York, New York 10036. Among other registrations and memberships, MS&Co. is registered as a futures commission merchant and is a member of the National Futures Association.

Regulatory and Governmental Matters.    

On February 25, 2015, MS&Co. reached an agreement in principle with the United States Department of Justice, Civil Division and the United States Attorney’s Office for the Northern District of California, Civil Division (collectively, the “Civil Division”) to pay $2.6 billion to resolve certain claims that the Civil Division indicated it intended to bring against MS&Co. That settlement was finalized on February 10, 2016.

In October 2014, the Illinois Attorney General’s Office (“ILAG”) sent a letter to MS&Co. alleging that MS&Co. knowingly made misrepresentations related to RMBS purchased by certain pension funds affiliated with the State of Illinois and demanding that MS&Co. pay

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ILAG approximately $88 million. MS&Co. and ILAG reached an agreement to resolve the matter on February 10, 2016.

On January 13, 2015, the New York Attorney General’s Office (“NYAG”), which is also a member of the RMBS Working Group, indicated that it intended to file a lawsuit related to approximately 30 subprime securitizations sponsored by MS&Co. NYAG indicated that the lawsuit would allege that MS&Co. misrepresented or omitted material information related to the due diligence, underwriting and valuation of the loans in the securitizations and the properties securing them and indicated that its lawsuit would be brought under the Martin Act. MS&Co. and NYAG reached an agreement to resolve the matter on February 10, 2016.

On July 23, 2014, the SEC approved a settlement by MS&Co. and certain affiliates to resolve an investigation related to certain subprime RMBS transactions sponsored and underwritten by those entities in 2007. Pursuant to the settlement, MS&Co. and certain affiliates were charged with violating Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933, agreed to pay disgorgement and penalties in an amount of $275 million and neither admitted nor denied the SEC’s findings.

On April 21, 2015, the Chicago Board Options Exchange, Incorporated (CBOE) and the CBOE Futures Exchange, LLC (CFE) filed statements of charges against MS&Co. in connection with trading by one of MS&Co.’s former traders of EEM options contracts that allegedly disrupted the final settlement price of the November 2012 VXEM futures. CBOE alleged that MS&Co. violated CBOE Rules 4.1, 4.2 and 4.7, Sections 9(a) and 10(b) of the Exchange Act, and Rule10b-5 thereunder. CFE alleged that MS&Co. violated CFE Rules 608, 609 and 620. The matters were resolved on July 12, 2016 and June 28, 2016, respectively, without any findings of fraud. Pursuant to the settlements, MS&Co. was required to pay a $750,000 penalty to the CBOE (for which MS&Co. and an individual were jointly and severally liable) and a $400,000 penalty to the CFE (for which MS&Co. and an individual were jointly and severally liable) and $152,664 in disgorgement.

On June 18, 2015, MS&Co. entered into a settlement with the SEC and paid a fine of $500,000 as part of the Municipalities Continuing Disclosure Corporation Initiative to resolve allegations that MS&Co. failed to form a reasonable basis through adequate due diligence for believing the truthfulness of the assertions by issuers and/or obligors regarding their compliance with previous continuing disclosure undertakings pursuant to Rule15c2-12 under the Exchange Act in connection with offerings in which MS&Co. acted as senior or sole underwriter.

On August 6, 2015, MS&Co. consented to and became the subject of an order by the CFTC to resolve allegations that MS&Co. violated CFTC Regulation 22.9(a) by failing to hold sufficient US Dollars in cleared swap segregated accounts in the United States to meet all US dollar obligations to cleared swaps customers. Specifically, the CFTC found that while MS&Co. at all times held sufficient funds in segregation to cover its obligations to its customers, on certain days during 2013 and 2014, it held currencies, such as euros, instead of US dollars, to meet its US dollar obligations. In addition, the CFTC found that MS&Co. violated Regulation 166.3 by failing to have in place adequate procedures to ensure that it complied with Regulation 22.9(a). Without admitting or denying the findings or conclusions and without adjudication of any issue of law or fact, MS&Co. accepted and consented to the entry of findings, the imposition of a cease and desist order, a civil monetary penalty of $300,000, and undertakings related to public statements, cooperation, and payment of the monetary penalty.

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On December 20, 2016, MS&Co. consented to and became the subject of an order by the SEC in connection with allegations that MS&Co. willfully violated Sections 15(c)(3) and 17(a)(1) of the Exchange Act and Rules15c3-3(e),17a-5(a), and17a-5(d) thereunder, by inaccurately calculating its Reserve Account requirement under Rule15c3-3 by including margin loans to an affiliate in its calculations, which resulted in making inaccurate records and submitting inaccurate reports to the SEC. Without admitting or denying the underlying allegations and without adjudication of any issue of law or fact, MS&Co. consented to a cease and desist order, a censure, and a civil monetary penalty of $7,500,000.

On September 28, 2017, the CFTC issued an order filing and simultaneously settling charges against MS&Co. regarding violations of CFTC Rule 166.3 by failing to diligently supervise the reconciliation of exchange and clearing fees with the amounts it ultimately charged customers for certain transactions on multiple exchanges. The order and settlement required MS&Co. to pay a $500,000 penalty and cease and desist from violating Rule 166.3.

On November 2, 2017, the CFTC issued an order filing and simultaneously settling charges against MS&Co. fornon-compliance with applicable rules governing Part 17 Large Trader reports to the CFTC. The order requires MS&Co. to pay a $350,000 penalty and cease and desist from further violations of the Commodity Exchange Act.

Civil Litigation

On July 15, 2010, China Development Industrial Bank (“CDIB”) filed a complaint against MS&Co., styledChinaDevelopment Industrial Bank v. Morgan Stanley & Co. Incorporated et al., which is pending in the Supreme Court of the State of New York, New York County (“Supreme Court of NY”). The complaint relates to a $275 million credit default swap referencing the super senior portion of the STACK2006-1 CDO. The complaint asserts claims for common law fraud, fraudulent inducement and fraudulent concealment and alleges that MS&Co. misrepresented the risks of the STACK2006-1 CDO to CDIB, and that MS&Co. knew that the assets backing the CDO were of poor quality when it entered into the credit default swap with CDIB. The complaint seeks compensatory damages related to the approximately $228 million that CDIB alleges it has already lost under the credit default swap, rescission of CDIB’s obligation to pay an additional $12 million, punitive damages, equitable relief, fees and costs. On February 28, 2011, the court denied MS&Co.’s motion to dismiss the complaint. On June 27, 2018, MS&Co. filed a motion for summary judgment and spoliation sanctions against CDIB. On December 21, 2018, the court denied MS&Co.’s motion for summary judgment and granted in part MS&Co,’s motion for sanctions relating to the spoliation of evidence. On January 18, 2019, CDIB filed a motion to clarify and resettle the portion of the court’s December 21, 2018 order granting spoliation sanctions. On January 24, 2019, CDIB filed a notice of appeal from the court’s December 21, 2018 order, and on January 25, 2019, MS&Co. filed a notice of appeal from the same order. On March 7, 2019, the court denied the relief that CDIB sought in a motion to clarify and resettle the portion of the court’s December 21, 2018 order granting spoliation sanctions. Based on currently available information, MS&Co. believes it could incur a loss in this action of up to approximately $240 million pluspre- and post-judgment interest, fees and costs.

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On October 15, 2010, the Federal Home Loan Bank of Chicago filed a complaint against MS&Co. and other defendants in the Circuit Court of the State of Illinois, styledFederal Home Loan Bank of Chicago v. Bank of America Funding Corporation et al. A corrected amended complaint was filed on April 8, 2011, which alleges that defendants made untrue statements and material omissions in the sale to plaintiff of a number of mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans and asserts claims under Illinois law. The total amount of certificates allegedly sold to plaintiff by MS&Co. at issue in the action was approximately $203 million. The complaint seeks, among other things, to rescind the plaintiff’s purchase of such certificates. The defendants filed a motion to dismiss the corrected amended complaint on May 27, 2011, which was denied on September 19, 2012. On December 13, 2013, the court entered an order dismissing all claims related to one of the securitizations at issue. On January 18, 2017, the court entered an order dismissing all claims related to an additional securitization at issue. After those dismissals, the remaining amount of certificates allegedly issued by MS&Co. or sold to plaintiff by MS&Co. was approximately $65 million. At March 25, 2019, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $36 million, and the certificates had not yet incurred actual losses. Based on currently available information, MS&Co. believes it could incur a loss in this action up to the difference between the $36 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co., pluspre- and post-judgment interest, fees and costs. MS&Co. may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff prior to a judgment.

On May 17, 2013, plaintiff inIKB International S.A. in Liquidation, et al. v. Morgan Stanley, et al. filed a complaint against MS&Co. and certain affiliates in the Supreme Court of NY. The complaint alleges that defendants made material misrepresentations and omissions in the sale to plaintiff of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by MS&Co. to plaintiff was approximately $133 million. The complaint alleges causes of action against MS&Co. for common law fraud, fraudulent concealment, aiding and abetting fraud, and negligent misrepresentation, and seeks, among other things, compensatory and punitive damages. On October 29, 2014, the court granted in part and denied in part MS&Co.’s motion to dismiss. All claims regarding four certificates were dismissed. After these dismissals, the remaining amount of certificates allegedly issued by MS&Co. or sold to plaintiff by MS&Co. was approximately $116 million. On August 11, 2016, the Appellate Division, First Department affirmed the trial court’s decision denying in part MS&Co.’s motion to dismiss the complaint. At March 25, 2019, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $23 million, and the certificates had incurred actual losses of $58 million. Based on currently available information, MS&Co. believes it could incur a loss in this action up to the difference between the $23 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co., or upon sale, pluspre- and post-judgment interest, fees and costs. MS&Co. may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff prior to a judgment.

In August of 2017, MS&Co. was named as a defendant in a purported antitrust class action in the United States District Court for the United States District Court for the Southern District of New York styledIowa Public Employees’ Retirement System et al. v. Bank of America Corporation et al. Plaintiffs allege, inter alia, that MS&Co., together with a number of other financial institution defendants, violated U.S. antitrust laws and New York state law in connection with their alleged efforts to prevent the development of electronic exchange-based platforms for securities lending. The class action complaint was filed on behalf of a purported

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class of borrowers and lenders who entered into stock loan transactions with the defendants. The class action complaint seeks, among other relief, certification of the class of plaintiffs and treble damages. On September 27, 2018, the court denied the defendants’ motion to dismiss the class action complaint.

Beginning on March 25, 2019, MS&Co. was named as a defendant in a series of putative class action complaints filed in the Southern District of New York, the first of which was styledAlaska Electrical Pension Fund v. BofA Secs., Inc., et al. Each complaint alleges a conspiracy to fix prices and restrain competition in the market for unsecured bonds issued by the following Government-Sponsored Enterprises: the Federal National Mortgage Association; the Federal Home Loan Mortgage Corporation; the Federal Farm Credit Banks Funding Corporation; and the Federal Home Loan Banks. Each complaint raises a claim under Section 1 of the Sherman Act and seeks, among other things, injunctive relief and treble compensatory damages. On May 23, 2019, plaintiffs filed a consolidated amended class action complaint, now styledIn re GSE Bonds Antitrust Litigation. The purported class period in the consolidated amended complaint is now from January 1, 2009 to January 1, 2016. On June 13, 2019, the defendants filed a joint motion to dismiss the consolidated amended complaint.

Settled Civil Litigation

On December 23, 2009, the Federal Home Loan Bank of Seattle filed a complaint against MS&Co. and another defendant in the Superior Court of the State of Washington, styledFederal Home Loan Bank of Seattle v. Morgan Stanley & Co. Inc., et al. The amended complaint, filed on September 28, 2010, alleged that defendants made untrue statements and material omissions in the sale to plaintiff of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sold to plaintiff by MS&Co. was approximately $233 million. The complaint raised claims under the Washington State Securities Act and sought, among other things, to rescind the plaintiff’s purchase of such certificates. On January 23, 2017, the parties reached an agreement to settle the litigation.

On March 15, 2010, the Federal Home Loan Bank of San Francisco filed a complaint against MS&Co. and other defendants in the Superior Court of the State of California styledFederal Home Loan Bank of San Francisco v. Credit Suisse Securities (USA) LLC, et al. An amended complaint filed on June 10, 2010 alleged that defendants made untrue statements and material omissions in connection with the sale to plaintiff of a number of mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The amount of certificates allegedly sold to plaintiff by MS&Co. was approximately $704 million. The complaint raised claims under both the federal securities laws and California law and sought, among other things, to rescind the plaintiff’s purchase of such certificates. On January 26, 2015, as a result of a settlement with certain other defendants, the plaintiff requested and the court subsequently entered a dismissal with prejudice of certain of the plaintiff’s claims, including all remaining claims against MS&Co.

On March 15, 2010, the Federal Home Loan Bank of San Francisco filed a complaint against MS&Co. and other defendants in the Superior Court of the State of California styledFederal Home Loan Bank of San Francisco v. Deutsche Bank Securities Inc. et al. An amended complaint, filed on June 10, 2010, alleged that defendants made untrue statements and material omissions in connection with the sale to plaintiff of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The amount of certificates allegedly sold to plaintiff by MS&Co. was approximately $276 million. The complaint raised

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claims under both the federal securities laws and California law and sought, among other things, to rescind the plaintiff’s purchase of such certificates. On December 21, 2016, the parties reached an agreement to settle the litigation.

On October 25, 2010, MS&Co., certain affiliates and Pinnacle Performance Limited, a special purpose vehicle (“SPV”), were named as defendants in a purported class action in the United States District Court for the Southern District of New York (“SDNY”), styledGe Dandong, et al. v. Pinnacle Performance Ltd., et al. On January 31, 2014, the plaintiffs in the action, which related to securities issued by the SPV in Singapore, filed a second amended complaint, which asserted common law claims of fraud, aiding and abetting fraud, fraudulent inducement, aiding and abetting fraudulent inducement, and breach of the implied covenant of good faith and fair dealing.    On July 17, 2014, the parties reached an agreement to settle the litigation, which received final court approval on July 2, 2015.

On July 5, 2011, Allstate Insurance Company and certain of its affiliated entities filed a complaint against MS&Co. in the Supreme Court of NY, styledAllstate Insurance Company, et al. v. Morgan Stanley, et al. An amended complaint was filed on September 9, 2011, and alleged that the defendants made untrue statements and material omissions in the sale to the plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly issued and/or sold to the plaintiffs by MS&Co. was approximately $104 million. The complaint raised common law claims of fraud, fraudulent inducement, aiding and abetting fraud, and negligent misrepresentation and sought, among other things, compensatory and/or recessionary damages associated with the plaintiffs’ purchases of such certificates. On January 16, 2015, the parties reached an agreement to settle the litigation.

On July 18, 2011, the Western and Southern Life Insurance Company and certain affiliated companies filed a complaint against MS&Co. and other defendants in the Court of Common Pleas in Ohio, styledWestern and Southern Life Insurance Company, et al. v. Morgan Stanley Mortgage Capital Inc., et al. An amended complaint was filed on April 2, 2012 and alleged that defendants made untrue statements and material omissions in the sale to plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The amount of the certificates allegedly sold to plaintiffs by MS&Co. was approximately $153 million. On June 8, 2015, the parties reached an agreement to settle the litigation.

On April 25, 2012, The Prudential Insurance Company of America and certain affiliates filed a complaint against MS&Co. and certain affiliates in the Superior Court of the State of New Jersey, styledThe Prudential Insurance Company of America, et al. v. Morgan Stanley, et al. On October 16, 2012, plaintiffs filed an amended complaint. The amended complaint alleged that defendants made untrue statements and material omissions in connection with the sale to plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by MS&Co. was approximately $1.073 billion. The amended complaint raised claims under the New Jersey Uniform Securities Law, as well as common law claims of negligent misrepresentation, fraud, fraudulent inducement, equitable fraud, aiding and abetting fraud, and violations of the New Jersey RICO statute, and included a claim for treble damages. On January 8, 2016, the parties reached an agreement to settle the litigation.

In re Morgan Stanley Mortgage Pass-Through Certificates Litigation, which had been pending in the SDNY, was a putative class action involving allegations that, among other things,

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the registration statements and offering documents related to the offerings of certain mortgage pass-through certificates in 2006 and 2007 contained false and misleading information concerning the pools of residential loans that backed these securitizations. On December 18, 2014, the parties’ agreement to settle the litigation received final court approval, and on December 19, 2014, the court entered an order dismissing the action.

On November 4, 2011, the Federal Deposit Insurance Corporation (“FDIC”), as receiver for Franklin Bank S.S.B, filed two complaints against MS&Co. in the District Court of the State of Texas. Each was styledFederal Deposit Insurance Corporation as Receiver for Franklin Bank, S.S.B v. Morgan Stanley & Company LLC F/K/A Morgan Stanley & Co. Inc. and alleged that MS&Co. made untrue statements and material omissions in connection with the sale to plaintiff of mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The amount of certificates allegedly underwritten and sold to plaintiff by MS&Co. in these cases was approximately $67 million and $35 million, respectively. On July 2, 2015, the parties reached an agreement to settle the litigation.

On February 14, 2013, Bank Hapoalim B.M. filed a complaint against MS&Co. and certain affiliates in the Supreme Court of NY, styledBank Hapoalim B.M. v. Morgan Stanley et al. The complaint alleged that defendants made material misrepresentations and omissions in the sale to plaintiff of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by MS&Co. to plaintiff was approximately $141 million. On July 28, 2015, the parties reached an agreement to settle the litigation, and on August 12, 2015, the plaintiff filed a stipulation of discontinuance with prejudice.

On September 23, 2013, the plaintiff inNational Credit Union Administration Board v. Morgan Stanley & Co. Inc., et al.filed a complaint against MS&Co. and certain affiliates in the SDNY. The complaint alleged that defendants made untrue statements of material fact or omitted to state material facts in the sale to the plaintiff of certain mortgage pass-through certificates issued by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by MS&Co. to plaintiffs in the matter was approximately $417 million. The complaint alleged violations of federal and various state securities laws and sought, among other things, rescissionary and compensatory damages. On November 23, 2015, the parties reached an agreement to settle the matter.

On September 16, 2014, the Virginia Attorney General’s Office filed a civil lawsuit, styledCommonwealth of Virginia ex rel. Integra REC LLC v. Barclays Capital Inc., et al., against MS&Co. and several other defendants in the Circuit Court of the City of Richmond related to RMBS. The lawsuit alleged that MS&Co. and the other defendants knowingly made misrepresentations and omissions related to the loans backing RMBS purchased by the Virginia Retirement System. The complaint asserted claims under the Virginia Fraud Against Taxpayers Act, as well as common law claims of actual and constructive fraud, and sought, among other things, treble damages and civil penalties. On January 6, 2016, the parties reached an agreement to settle the litigation. An order dismissing the action with prejudice was entered on January 28, 2016.

On April 20, 2011, the Federal Home Loan Bank of Boston filed a complaint against MS&Co. and other defendants in the Superior Court of the Commonwealth of Massachusetts styledFederal Home Loan Bank of Boston v. Ally Financial, Inc. F/K/A GMAC LLC et al. An amended complaint was filed on June 29, 2012 and alleged that defendants made untrue statements and material omissions in the sale to plaintiff of certain mortgage pass-through

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certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly issued by MS&Co. or sold to plaintiff by MS&Co. was approximately $385 million. The amended complaint raised claims under the Massachusetts Uniform Securities Act, the Massachusetts Consumer Protection Act and common law and sought, among other things, to rescind the plaintiff’s purchase of such certificates. On November 25, 2013, July 16, 2014, and May 19, 2015, respectively, the plaintiff voluntarily dismissed its claims against MS&Co. with respect to three of the securitizations at issue. After these voluntary dismissals, the remaining amount of certificates allegedly issued by MS&Co. or sold to plaintiff by MS&Co. was approximately $332 million. On July 13, 2018, the parties reached an agreement in principle to settle the litigation.

On May 3, 2013, plaintiffs inDeutsche Zentral-Genossenschaftsbank AG et al. v. Morgan Stanley et al. filed a complaint against the Firm, certain affiliates, and other defendants in the Supreme Court of NY. The complaint alleged that defendants made material misrepresentations and omissions in the sale to plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by the Firm to plaintiff was approximately $634 million. The complaint alleged causes of action against the Firm for common law fraud, fraudulent concealment, aiding and abetting fraud, negligent misrepresentation, and rescission and seeks, among other things, compensatory and punitive damages. On June 26, 2018, the parties entered into an agreement to settle the litigation.

On April 1, 2016, the California Attorney General’s Office filed an action against MS&Co. in California state court styledCalifornia v. Morgan Stanley, et al., on behalf of California investors, including the California Public Employees’ Retirement System and the California Teachers’ Retirement System. The complaint alleged that MS&Co. made misrepresentations and omissions regarding residential mortgage-backed securities and notes issued by the Cheyne SIV, and asserts violations of the California False Claims Act and other state laws and sought treble damages, civil penalties, disgorgement, and injunctive relief. On April 24, 2019, the parties reached an agreement to settle the litigation.

Additional lawsuits containing claims similar to those described above may be filed in the future. In the course of its business, MS&Co., as a major futures commission merchant, is party to various civil actions, claims and routine regulatory investigations and proceedings that the General Partner believes do not have a material effect on the business of MS&Co. MS&Co. may establish reserves from time to time in connections with such actions.

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Item 1A.Risk Factors.

There have been no material changes to the risk factors set forth under Part I, Item 1A. “Risk Factors.” in the Partnership’s Annual Report on Form10-K for the fiscal year ended December 31, 2018 and under Part II, Item 1A. “Risk Factors.” in the Partnership’s Quarterly Report on Form10-Q for the quarter ended March 31, 2019.

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

For the three months ended June 30, 2019, there were subscriptions of 119.1810 Class A limited partner Redeemable Units totaling $92,700. Redeemable Units are issued in reliance upon applicable exemptions from registration under Section 4(a)(2) of the Securities Act and Section 506 of Regulation D promulgated thereunder. Redeemable Units are purchased by accredited investors, as defined in Regulation D. In determining the applicability of the exemption, the General Partner relies on the fact that the Redeemable Units are purchased by accredited investors in a private offering.

Proceeds from the sale of Redeemable Units are used for the trading of commodity interests including futures and forward contracts.

The following chart sets forth the purchases of limited partner Redeemable Units for each Class by the Partnership.

Period	Class A (a) Total Number of Redeemable Units Purchased*		Class A (b) Average Price Paid per Redeemable Unit**		(c) Total Number of   Redeemable   Units Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value)   of Redeemable   Units that May Yet Be Purchased Under the Plans or Programs
April 1, 2019 - April 30, 2019		2,510.5930	$	791.10	N/A	N/A
May 1, 2019 - May 31, 2019		3,730.3470	$	769.97	N/A	N/A
June 1, 2019 - June 30, 2019		2,896.3380	$	785.23	N/A	N/A
		9,137.2780	$	780.61

* Generally, limited partners are permitted to redeem their Redeemable Units as of the end of each month on three business days’ notice to the General Partner. Under certain circumstances, the General Partner can compel redemption, although to date the General Partner has not exercised this right. Purchases of Redeemable Units by the Partnership reflected in the chart above were made in the ordinary course of the Partnership’s business in connection with effecting redemptions for limited partners.

** Redemptions of Redeemable Units are effected as of the end of each month at the net asset value per Redeemable Unit as of that day. No fee will be charged for redemptions.

Item 3.Defaults Upon Senior Securities.None.

Item 4.Mine Safety Disclosures.Not applicable.

Item 5.Other Information.None.

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Item 6.Exhibits.

31.1 —Rule13a-14(a)/15d-14(a) Certification (Certification of President and Director) (filed herewith).

31.2 —Rule13a-14(a)/15d-14(a) Certification (Certification of Chief Financial Officer and Director) (filed herewith).

32.1 —Section 1350 Certification (Certification of President and Director) (filed herewith).

32.2 —Section  1350 Certification (Certification of Chief Financial Officer and Director) (filed herewith).

101. INS	XBRL Instance Document.
101. SCH	XBRL Taxonomy Extension Schema Document.
101. CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101. LAB	XBRL Taxonomy Extension Label Linkbase Document.
101. PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
101. DEF	XBRL Taxonomy Extension Definition Linkbase Document.

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SIGNATURES

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

CERES TACTICAL SYSTEMATIC L.P.

By:	Ceres Managed Futures LLC
	(General Partner)
By:	/s/ Patrick T. Egan
	Patrick T. Egan
	President and Director
Date:	August 8, 2019
By:	/s/ Steven Ross
	Steven Ross
	Chief Financial Officer and Director
	(Principal Accounting Officer)
Date:	August 8, 2019

The General Partner which signed the above is the only party authorized to act for the registrant. The registrant has no principal executive officer, principal financial officer, controller, or principal accounting officer and has no Board of Directors.

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