Ceres Tactical Systematic (TDFF) 10-Q 2021 Q2 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM

10-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, 2021

OR (  ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period fromto

Commission File Number

000-50718

CERES TACTICAL SYSTEMATIC L.P.

(Exact name of registrant as specified in its charter)

New York	13-4224248
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer 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: None.

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.

Yes

X

    No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation

S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes

X

No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

filer, 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 Rule

12b-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 Rule 12b-2 of the Exchange Act).

Yes     No

X

As of July 31, 2021, 79,753.7788 Limited Partnership Class A Redeemable Units were outstanding, 4,553.7410 Limited Partnership Class D Redeemable Units were outstanding, and 138.6360 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,
	2021		2020
	(Unaudited)
Assets:
Redemptions receivable from the Funds (1)	$	-	$	16,694,562
Equity in trading account:
Unrestricted cash		55,160,561		44,736,879
Restricted cash		17,395,592		13,791,629
Net unrealized appreciation on open futures contracts		1,141,883		2,318,834
Net unrealized appreciation on open forward contracts		-		308,695
Total equity in trading account		73,698,036		61,156,037
Interest receivable		946		3,963
Total assets	$	73,698,982	$	77,854,562
Liabilities and Partners’ Capital:
Liabilities:
Net unrealized depreciation on open forward contracts	$	228,307	$	-
Accrued expenses:
Ongoing selling agent fees		45,301		62,628
Management fees		49,826		58,925
Incentive fees		832,695		99,425
General Partner fees		53,391		56,549
Professional fees		203,058		238,652
Redemptions payable to General Partner		-		300,000
Redemptions payable to Limited Partners		1,572,568		3,353,249
Total liabilities		2,985,146		4,169,428
Partners’ Capital:
General Partner, Class Z, 802.3520 and 983.4910 Redeemable Units outstanding at June 30, 2021 and December 31, 2020, respectively		830,105		906,740
Limited Partners, Class A, 80,923.2918 and 93,586.8678 Redeemable Units outstanding at June 30, 2021 and December 31, 2020, respectively		65,151,985		67,400,489
Limited Partners, Class D, 4,553.7410 and 5,824.8820 Redeemable Units outstanding at June 30, 2021 and December 31, 2020, respectively		4,588,315		5,250,088
Limited Partners, Class Z, 138.6360 Redeemable Units outstanding at June 30, 2021 and December 31, 2020		143,431		127,817
Total partners’ capital (net asset value)		70,713,836		73,685,134
Total liabilities and partners’ capital	$	73,698,982	$	77,854,562
Net asset value per Redeemable Unit:
Class A	$	805.11	$	720.19
Class D	$	1,007.59	$	901.32
Class Z	$	1,034.59	$	921.96

(1)

Defined in Note 1.

See accompanying notes to financial statements.

1

Ceres Tactical Systematic L.P.

Condensed Schedule of Investments

June 30, 2021

(Unaudited)

	Notional ($)/
	Number of				% of Partners’
	Contracts		Fair Value		Capital
Futures Contracts Purchased
Currencies		22	$	(11,151)		(0.01)	%
Energy		473		1,385,499		1.96
Grains		64		30,298		0.04
Indices		554		(156,111)		(0.22)
Interest Rates U.S.		763		34,226		0.05
Interest Rates Non-U.S.		1,634		183,607		0.26
Livestock		23		(52,000)		(0.07)
Metals		75		(160,553)		(0.23)
Softs		159		51,874		0.07
Total futures contracts purchased				1,305,689		1.85
Futures Contracts Sold
Currencies		147		272,664		0.38
Energy		62		(91,035)		(0.13)
Grains		140		(183,263)		(0.26)
Indices		282		218,051		0.31
Interest Rates U.S.		61		(9,226)		(0.01)
Interest Rates Non-U.S.		934		(376,786)		(0.54)
Livestock		1		(210)		(0.00)	*
Metals		9		4,005		0.01
Softs		47		1,994		0.00	*
Total futures contracts sold				(163,806)		(0.24)
Net unrealized appreciation on open futures contracts			$	1,141,883		1.61	%
Unrealized Appreciation on Open Forward Contracts
Currencies	$	142,132,630	$	1,856,921		2.63	%
Metals		114		320,033		0.45
Total unrealized appreciation on open forward contracts				2,176,954		3.08
Unrealized Depreciation on Open Forward Contracts
Currencies	$	153,753,512		(2,098,812)		(2.97)
Metals		101		(306,449)		(0.43)
Total unrealized depreciation on open forward contracts				(2,405,261)		(3.40)
Net unrealized depreciation on open forward contracts			$	(228,307)		(0.32)	%

* Due to rounding.

See accompanying notes to financial statements.

2

Ceres Tactical Systematic L.P.

Condensed Schedule of Investments

December 31, 2020

	Notional ($)/
	Number of				% of Partners’
	Contracts		Fair Value		Capital
Futures Contracts Purchased
Currencies		123	$	31,953		0.04	%
Energy		298		942,748		1.28
Grains		357		963,921		1.31
Indices		665		285,626		0.39
Interest Rates U.S.		374		52,992		0.07
Interest Rates Non-U.S.		2,462		132,274		0.18
Livestock		1		(100)		(0.00)	*
Metals		170		427,621		0.58
Softs		244		349,722		0.47
Total futures contracts purchased				3,186,757		4.32
Futures Contracts Sold
Currencies		179		(195,645)		(0.27)
Energy		225		(222,699)		(0.30)
Grains		45		(16,375)		(0.02)
Indices		86		(56,841)		(0.08)
Interest Rates Non-U.S.		333		(276,043)		(0.36)
Livestock		4		(4,860)		(0.01)
Metals		13		(88,545)		(0.12)
Softs		7		(6,915)		(0.01)
Total futures contracts sold				(867,923)		(1.17)
Net unrealized appreciation on open futures contracts			$	2,318,834		3.15	%
Unrealized Appreciation on Open Forward Contracts
Currencies	$	71,155,471	$	774,221		1.05	%
Metals		122		400,403		0.54
Total unrealized appreciation on open forward contracts				1,174,624		1.59
Unrealized Depreciation on Open Forward Contracts
Currencies	$	61,053,423		(727,131)		(0.98)
Metals		56		(138,798)		(0.19)
Total unrealized depreciation on open forward contracts				(865,929)		(1.17)
Net unrealized appreciation on open forward contracts			$	308,695		0.42	%

* Due to rounding.

See accompanying notes to financial statements.

3

Ceres Tactical Systematic L.P.

Statements of Income and Expenses

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
Investment Income:
Interest income	$	1,882		$	14,249		$	8,211		$	170,567
Interest income allocated from the Funds		-			7,507			-			123,479
Total investment income		1,882			21,756			8,211			294,046
Expenses:
Expenses allocated from the Funds		-			98,166			-			247,712
Clearing fees related to direct investments		88,245			27,838			193,564			117,399
Ongoing selling agent fees		138,346			429,155			274,377			919,899
General Partner fees		162,977			225,489			323,439			483,102
Management fees		152,580			203,763			302,888			434,914
Incentive fees		832,695			-			1,402,983			-
Professional fees		86,883			106,850			184,930			207,304
Total expenses		1,461,726			1,091,261			2,682,181			2,410,330
Net investment loss		(1,459,844	)		(1,069,505	)		(2,673,970	)		(2,116,284	)
Trading Results:
Net gains (losses) on trading of commodity interests and investment in the Funds:
Net realized gains (losses) on closed contracts		7,743,582			951,578			12,470,223			(3,824,292	)
Net realized gains (losses) on closed contracts allocated from the Funds		-			(237,567	)		-			(2,994,970	)
Net change in unrealized gains (losses) on open contracts		(1,424,881	)		(1,624,907	)		(1,718,579	)		429,689
Net change in unrealized gains (losses) on open contracts allocated from the Funds		-			(2,559,362	)		-			11,354
Total trading results		6,318,701			(3,470,258	)		10,751,644			(6,378,219	)
Net income (loss)	$	4,858,857		$	(4,539,763	)	$	8,077,674		$	(8,494,503	)
Net income (loss) per Redeemable Unit*:
Class A	$	51.85		$	(34.96	)	$	84.92		$	(63.81	)
Class D	$	64.89		$	(40.86	)	$	106.27		$	(73.88	)
Class Z	$	68.48		$	(39.92	)	$	112.63		$	(71.71	)
Weighted average Redeemable Units outstanding:
Class A		84,339.0498			119,545.0188			87,671.9138			124,305.4751
Class D		5,361.1683			6,178.4300			5,593.0252			6,407.9690
Class Z		940.9880			1,502.3373			1,031.5575			1,516.6177

* 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, 2021 and 2020

(Unaudited)

	Class A						Class D						Class Z						Total
				Redeemable						Redeemable						Redeemable						Redeemable
	Amount			Units			Amount			Units			Amount			Units			Amount			Units
Partners’ Capital, December 31, 2019	$	98,542,340			131,060.4968		$	6,214,764			6,654.5080		$	1,451,495			1,530.8980		$	106,208,599			139,245.9028
Redemptions - Limited Partners		(13,615,362	)		(19,134.7720	)		(429,712	)		(476.0780	)		(38,406	)		(42.8410	)		(14,083,480	)		(19,653.6910	)
Net income (loss)		(7,914,222	)		-			(471,359	)		-			(108,922	)		-			(8,494,503	)		-
Partners’ Capital, June 30, 2020	$	77,012,756			111,925.7248		$	5,313,693			6,178.4300		$	1,304,167			1,488.0570		$	83,630,616			119,592.2118
Partners’ Capital, March 31, 2020	$	90,655,549			125,382.6068		$	5,566,175			6,178.4300		$	1,402,823			1,530.8980		$	97,624,547			133,091.9348
Redemptions - Limited Partners		(9,415,762	)		(13,456.8820	)		-			-			(38,406	)		(42.8410	)		(9,454,168	)		(13,499.7230	)
Net income (loss)		(4,227,031	)		-			(252,482	)		-			(60,250	)		-			(4,539,763	)		-
Partners’ Capital, June 30, 2020	$	77,012,756			111,925.7248		$	5,313,693			6,178.4300		$	1,304,167			1,488.0570		$	83,630,616			119,592.2118
	Class A						Class D						Class Z						Total
				Redeemable						Redeemable						Redeemable						Redeemable
	Amount			Units			Amount			Units			Amount			Units			Amount			Units
Partners’ Capital, December 31, 2020	$	67,400,489			93,586.8678		$	5,250,088			5,824.8820		$	1,034,557			1,122.1270		$	73,685,134			100,533.8768
Redemptions - General Partner		-			-			-			-			(175,000	)		(181.1390	)		(175,000	)		(181.1390	)
Redemptions - Limited Partners		(9,593,891	)		(12,663.5760	)		(1,280,081	)		(1,271.1410	)		-			-			(10,873,972	)		(13,934.7170	)
Net income (loss)		7,345,387			-			618,308			-			113,979			-			8,077,674			-
Partners’ Capital, June 30, 2021	$	65,151,985			80,923.2918		$	4,588,315			4,553.7410		$	973,536			940.9880		$	70,713,836			86,418.0208
Partners’ Capital, March 31, 2021	$	64,482,005			85,604.4518		$	5,434,555			5,764.8820		$	909,103			940.9880		$	70,825,663			92,310.3218
Redemptions - Limited Partners		(3,747,165	)		(4,681.1600	)		(1,223,519	)		(1,211.1410	)		-			-			(4,970,684	)		(5,892.3010	)
Net income (loss)		4,417,145			-			377,279			-			64,433			-			4,858,857			-
Partners’ Capital, June 30, 2021	$	65,151,985			80,923.2918		$	4,588,315			4,553.7410		$	973,536			940.9880		$	70,713,836			86,418.0208

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. and

non-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 0 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. During the periods covered by this report and prior to the Partnership’s redemption from the Funds (as defined below), the General Partner also acted as the trading manager (the “Trading Manager”) of ADG Master (as defined below), Aquantum Master (as defined below) and FORT Contrarian Master (as defined below). 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, 2021 and 2020, the Partnership’s/Funds’ commodity broker was Morgan Stanley & Co. LLC (“MS&Co.”), a registered futures commission merchant.

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, and

non-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, and

non-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 they are subject to different monthly ongoing selling agent fees. Effective January 1, 2021, Class A 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 A Redeemable Units as of the end of each month. From July 1, 2020 through December 31, 2020, Class A Redeemable Units were subject to a monthly ongoing selling agent fee equal to 1/12 of 1.00% (a 1.00% annual rate) of the net assets of Class A Redeemable Units as of the end of each month. Prior to July 1, 2020, Class A Redeemable Units were subject to a monthly ongoing selling agent fee equal to 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 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. 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, 2021, all trading decisions are made for the Partnership by DCM Systematic Advisors SA (“DCM”), Episteme Capital Partners (UK) LLP, Episteme Capital Partners (US) LLC and Episteme Capital Partners (Cayman) LTD (collectively, “Episteme”), FORT, L.P. (“FORT”), ISAM Systematic Management (“ISAM SM”) and Millburn Ridgefield Corporation (“Millburn”) (each an “Advisor” and, collectively, the “Advisors”), each of which is a registered commodity trading advisor. Effective December 31, 2020, the General Partner terminated ADG Capital Management LLP (“ADG”) and Aquantum GmbH (“Aquantum”) as Advisors to the Partnership. Reference herein to “Advisors” may include, as relevant, ADG and Aquantum. 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 the Partnership’s assets allocated to it through a managed account in the name of the Partnership pursuant to ISAM SM’s Systematic Trend Programme. 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 General Partner and FORT have agreed that FORT will trade the Partnership’s assets allocated to FORT at a level that is 1.25 times the amount of assets allocated. Effective January 1, 2020, Millburn directly trades the Partnership’s assets allocated to it through a managed account in the name of the Partnership pursuant to Millburn’s Multi-Markets Program. The General Partner and Millburn have agreed that Millburn will trade the Partnership’s assets allocated to Millburn at a level that is up to 1.5 times the amount of assets allocated. The amount of leverage may be increased or decreased in the future, but it may not exceed 2 times the amount of assets allocated. Effective November 1, 2020, Episteme directly trades the Partnership’s assets allocated to them through a managed account in the name of the Partnership pursuant to Episteme’s Systematic Quest Program. The General Partner and Episteme have agreed that Episteme will trade the Partnership’s assets allocated to Episteme at a level that is up to 2 times the amount of assets allocated. The amount of leverage may be increased or decreased in the future, but it may not exceed 2 times the amount of assets allocated. Effective January 1, 2021, DCM directly trades a portion of the Partnership’s assets allocated to it through a managed account in the name of the Partnership pursuant to DCM’s Diversified Alpha Program. The General Partner and DCM have agreed that DCM will trade the Partnership’s assets allocated to DCM at a level that is 1.5 times the amount of assets allocated.

The Partnership entered into futures brokerage account agreements and foreign exchange prime brokerage account agreements with MS&Co. Prior to the Partnership’s respective full redemptions effective December 31, 2020, CMF ADG Master Fund LLC (“ADG Master”), CMF Aquantum Master Fund LLC (“Aquantum Master”) and CMF FORT Contrarian Master Fund LLC (“FORT Contrarian Master”) had each entered into futures brokerage account agreements with MS&Co. Reference herein to the “Funds” may include, as relevant, ADG Master, Aquantum Master and FORT Contrarian Master. The Partnership pays (or paid with respect to the Funds) 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, user,

give-up,

floor brokerage and National Futures Association (“NFA”) fees (collectively, the “clearing fees”), directly and indirectly through its investment in the Funds.

The Partnership has entered into a selling agreement with Morgan Stanley Wealth Management (the “Selling Agreement”). Under the Selling Agreement and effective January 1, 2021, the Partnership pays Morgan Stanley Wealth Management a monthly ongoing selling agent fee equal to 0.75% per year of adjusted

month-end

net assets for Class A Redeemable Units. From July 1, 2020 through December 31, 2020, the Partnership paid Morgan Stanley Wealth Management a monthly ongoing selling agent fee equal to 1.00% per year of adjusted

month-end

net assets for Class A Redeemable Units. Prior to July 1, 2020, the Partnership paid Morgan Stanley Wealth Management a monthly ongoing selling agent fee equal to 2.00% per year of adjusted

month-end

net assets for Class A Redeemable Units. The Partnership pays Morgan Stanley Wealth Management a monthly ongoing selling agent fee equal to 0.75% per year of the adjusted

month-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.

7

Ceres Tactical Systematic L.P.

Notes to Financial Statements

(Unaudited)

The Partnership has 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 a

non-exclusive

selling agent and

sub-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, 2021 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 additional

one-year

periods. Pursuant to the Harbor Selling Agreement and effective January 1, 2021, the Partnership pays Harbor an ongoing selling agent fee equal to 1/12 of 0.75% (a 0.75% annual rate) of the adjusted

month-end

net asset value per Redeemable Unit for certain holders of Class A Redeemable Units in the Partnership. From July 1, 2020 through December 31, 2020, the Partnership paid Harbor an ongoing selling agent fee equal to 1/12 of 1.0% (a 1.0% annual rate) of the adjusted

month-end

net asset value per Redeemable Unit for certain holders of Class A Redeemable Units in the Partnership. Prior to July 1, 2020, the Partnership paid Harbor an ongoing selling agent fee equal to 1/12 of 2.0% (a 2.0% annual rate) of the adjusted

month-end

net asset value per Redeemable Unit for certain holders of Class A Redeemable Units in the Partnership. The Partnership pays Harbor an ongoing selling agent fee equal to 1/12 of 0.75% (a 0.75% annual rate) of the adjusted

month-end

net asset value per Redeemable Unit for certain holders of Class D Redeemable Units in the Partnership.

Effective July 1, 2020, the General Partner fees paid by the Partnership to the General Partner was reduced for all limited partners from a monthly rate of 1/12 of 1.00% of the adjusted

month-end

net assets per class to a monthly rate of 1/12 of 0.875% of the adjusted

month-end

net assets per class.

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.

The General Partner has 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, 2021 and the results of its operations and changes in partners’ capital for the three and six months ended June 30, 2021 and 2020. 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 Form

10-K

(the “Form

10-K”)

filed with the Securities and Exchange Commission (the “SEC”) for the year ended December 31, 2020. The December 31, 2020 information has been derived from the audited financial statements as of and for the year ended December 31, 2020.

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 accounting principles 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 the Partnership in proportion to the amount of Partnership interest owned by each, except that no limited partner is liable for obligations of the Partnership in excess of its capital contribution and profits, if any, net of distributions, 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 Accounting Standards 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, 2021 and 2020, 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.

Prior the Partnership’s full redemptions,the Partnership carried its investment in the Funds at fair value based on the Partnership’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, including derivative financial instruments and derivative commodity instruments, are (or in the case of the Funds, were) 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 the

first-in,

first-out

method. Unrealized gains or losses on open contracts are (or in the case of the Funds, were) 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 (or in the case of the Funds, were) included in the Partnership’s/Funds’ Statements of Income and Expenses.

The Partnership does not, and the Funds did 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 (or in the case of the Funds, were) 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 margin requirements, as determined by the exchange or counterparty, and required by MS&Co. At June 30, 2021 and December 31, 2020, the amount of cash held for margin requirements was $17,395,592 and $13,791,629, 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 $919,188 (cost of $921,014) and $975,389 (cost of $972,589) as of June 30, 2021 and December 31, 2020, respectively.

Income Taxes.

Income taxes have not been recorded as each partner is individually liable for the taxes, if any, on its share 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 the

more-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 Partnership’s Statements of Income and Expenses in the years in which the position is claimed or expected to be claimed. The General Partner has concluded that there are 0 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 2017 through 2020 tax years remain subject to examination by U.S. federal and most state tax authorities.

Investment Company Status.

The Partnership has been deemed to be an investment company since inception. Accordingly, the Partnership follows the investment company accounting and reporting guidance of Accounting Standards Update

2013-08

“Financial

Services—Investment Companies (Topic 946): Amendments to the Scope, Measurement and Disclosure Requirements”

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 ASC 946, “

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 Form 10-K for the year ended December 31, 2020.

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, 2021 and 2020 were as follows:

	Three Months Ended									Three Months Ended									Six Months Ended									Six Months Ended
	June 30, 2021									June 30, 2020									June 30, 2021									June 30, 2020
	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)	$	67.62		$	85.92		$	86.59		$	(26.50)		$	(33.04)		$	(33.63)		$	112.75		$	142.33		$	144.22		$	(47.67)		$	(59.40)		$	(60.38)
Net investment loss		(15.77)			(21.03)			(18.11)			(8.46)			(7.82)			(6.29)			(27.83)			(36.06)			(31.59)			(16.14)			(14.48)			(11.33)
Increase (decrease) for the period		51.85			64.89			68.48			(34.96)			(40.86)			(39.92)			84.92			106.27			112.63			(63.81)			(73.88)			(71.71)
Net asset value per Redeemable Unit, beginning of period		753.26			942.70			966.11			723.03			900.90			916.34			720.19			901.32			921.96			751.88			933.92			948.13
Net asset value per Redeemable Unit, end of period	$	805.11		$	1,007.59		$	1,034.59		$	688.07		$	860.04		$	876.42		$	805.11		$	1,007.59		$	1,034.59		$	688.07		$	860.04		$	876.42
	Three Months Ended									Three Months Ended									Six Months Ended									Six Months Ended
	June 30, 2021									June 30, 2020									June 30, 2021									June 30, 2020
	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***		(4.7)	%		(4.9)	%		(3.8)	%		(4.9)	%		(3.6)	%		(2.9)	%		(5.5)	%		(5.7)	%		(4.7)	%		(4.5)	%		(3.2)	%		(2.5)	%
Operating expenses		3.5	%		3.6	%		2.7	%		5.0	%		3.7	%		3.0	%		3.6	%		3.7	%		2.8	%		5.2	%		3.9	%		3.2	%
Incentive fees		1.2	%		1.3	%		1.1	%		-	%		-	%		-	%		1.9	%		2.1	%		1.9	%		-	%		-	%		-	%
Total expenses		4.7	%		4.9	%		3.8	%		5.0	%		3.7	%		3.0	%		5.5	%		5.8	%		4.7	%		5.2	%		3.9	%		3.2	%
Total return:
Total return before incentive fees		8.1	%		8.2	%		8.3	%		(4.8)	%		(4.5)	%		(4.4)	%		13.8	%		13.9	%		14.2	%		(8.5)	%		(7.9)	%		(7.6)	%
Incentive fees		(1.2)	%		(1.3)	%		(1.2)	%		-	%		-	%		-	%		(2.0)	%		(2.1)	%		(2.0)	%		-	%		-	%		-	%
Total return after incentive fees		6.9	%		6.9	%		7.1	%		(4.8)	%		(4.5)	%		(4.4)	%		11.8	%		11.8	%		12.2	%		(8.5)	%		(7.9)	%		(7.6)	%

* 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.

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 had also invested certain of its assets through a “master/feeder” structure. The Partnership’s

pro-rata

share of the results of the Funds’ trading activities are 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. and foreign exchange brokerage account agreements give the Partnership, and gave 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 nets, and the Funds netted, 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 ASC

210-20,

“

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, 2021 and 2020 were 5,894 and 3,419, respectively. The monthly average number of futures contracts traded directly by the Partnership during the six months ended June 30, 2021 and 2020 were 6,379 and 3,936, respectively. The monthly average number of metals forward contracts traded directly by the Partnership during the three months ended June 30, 2021 and 2020 were 315 and 385, respectively. The monthly average number of metals forward contracts traded directly by the Partnership during the six months ended June 30, 2021 and 2020 were 319 and 365, respectively. The monthly average notional value of currency forward contracts traded directly by the Partnership during the three months ended June 30, 2021 and 2020 were $261,133,085 and $145,852,872, respectively. The monthly average notional value of currency forward contracts traded directly by the Partnership during the six months ended June 30, 2021 and 2020 were $264,745,366 and $212,081,172, respectively.

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

All clearing fees paid to MS&Co. for the Partnership’s direct trading are borne directly by the Partnership. In addition, clearing fees were borne by the Funds and allocated to the Funds’ limited

partners/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, 2021 and December 31, 2020, respectively.

			Gross Amounts		Net Amounts		Gross Amounts Not Offset in the
			Offset in the		Presented in the		Statements of Financial Condition
	Gross		Statements of		Statements of				Cash Collateral
	Amounts		Financial		Financial		Financial		Received/		Net
June 30, 2021	Recognized		Condition		Condition		Instruments		Pledged*		Amount
Assets
Futures	$	2,860,417	$	(1,718,534)	$	1,141,883	$	-	$	-	$	1,141,883
Forwards		2,176,954		(2,176,954)		-		-		-		-
Total assets	$	5,037,371	$	(3,895,488)	$	1,141,883	$	-	$	-	$	1,141,883
Liabilities
Futures	$	(1,718,534)	$	1,718,534	$	-	$	-	$	-	$	-
Forwards		(2,405,261)		2,176,954		(228,307)		-		228,307		-
Total liabilities	$	(4,123,795)	$	3,895,488	$	(228,307)	$	-	$	228,307	$	-
Net fair value											$	1,141,883	*
			Gross Amounts		Net Amounts		Gross Amounts Not Offset in the
			Offset in the		Presented in the		Statements of Financial Condition
	Gross		Statements of		Statements of				Cash Collateral
	Amounts		Financial		Financial		Financial		Received/		Net
December 31, 2020	Recognized		Condition		Condition		Instruments		Pledged*		Amount
Assets
Futures	$	3,551,366	$	(1,232,532)	$	2,318,834	$	-	$	-	$	2,318,834
Forwards		1,174,624		(865,929)		308,695		-		-		308,695
Total assets	$	4,725,990	$	(2,098,461)	$	2,627,529	$	-	$	-	$	2,627,529
Liabilities
Futures	$	(1,232,532)	$	1,232,532	$	-	$	-	$	-	$	-
Forwards		(865,929)		865,929		-		-		-		-
Total liabilities	$	(2,098,461)	$	2,098,461	$	-	$	-	$	-	$	-
Net fair value											$	2,627,529	*

* In the event of default by the Partnership, MS&Co., the Partnership’s commodity futures broker and the sole counterparty to the Partnership’s non-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. In some instances, the actual collateral received and/or pledged may be more than the amount shown due to overcollateralization.

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, 2021 and December 31, 2020, respectively.

	June 30, 2021
Assets
Futures Contracts
Currencies	$	277,002
Energy		1,412,384
Grains		70,666
Indices		503,306
Interest Rates U.S.		138,367
Interest Rates Non-U.S.		322,941
Livestock		1,720
Metals		57,330
Softs		76,701
Total unrealized appreciation on open futures contracts		2,860,417
Liabilities
Futures Contracts
Currencies		(15,489)
Energy		(117,920)
Grains		(223,631)
Indices		(441,366)
Interest Rates U.S.		(113,367)
Interest Rates Non-U.S.		(516,120)
Livestock		(53,930)
Metals		(213,878)
Softs		(22,833)
Total unrealized depreciation on open futures contracts		(1,718,534)
Net unrealized appreciation on open futures contracts	$	1,141,883	*
Assets
Forward Contracts
Currencies	$	1,856,921
Metals		320,033
Total unrealized appreciation on open forward contracts		2,176,954
Liabilities
Forward Contracts
Currencies		(2,098,812)
Metals		(306,449)
Total unrealized depreciation on open forward contracts		(2,405,261)
Net unrealized depreciation on open forward contracts	$	(228,307)	**

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

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

12

Ceres Tactical Systematic L.P.

Notes to Financial Statements

(Unaudited)

	December 31,
	2020
Assets
Futures Contracts
Currencies	$	41,593
Energy		1,055,787
Grains		967,653
Indices		371,999
Interest Rates U.S.		59,289
Interest Rates Non-U.S.		234,407
Metals		446,812
Softs		373,826
Total unrealized appreciation on open futures contracts		3,551,366
Liabilities
Futures Contracts
Currencies		(205,285	)
Energy		(335,738	)
Grains		(20,107	)
Indices		(143,214	)
Interest Rates U.S.		(6,297	)
Interest Rates Non-U.S.		(378,176	)
Livestock		(4,960	)
Metals		(107,736	)
Softs		(31,019	)
Total unrealized depreciation on open futures contracts		(1,232,532	)
Net unrealized appreciation on open futures contracts	$	2,318,834	*
Assets
Forward Contracts
Currencies	$	774,221
Metals		400,403
Total unrealized appreciation on open forward contracts		1,174,624
Liabilities
Forward Contracts
Currencies		(727,131	)
Metals		(138,798	)
Total unrealized depreciation on open forward contracts		(865,929	)
Net unrealized appreciation on open forward contracts	$	308,695	**

* 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, 2021 and 2020, respectively.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
Sector	2021			2020			2021			2020
Currencies	$	(794,396)		$	(635,186)		$	(556,441)		$	(363,627)
Energy		1,848,784			(664,777)			6,654,346			2,971,649
Grains		1,558,000			71,464			2,443,086			323,284
Indices		874,854			458,650			4,127,984			(9,282,090)
Interest Rates U.S.		1,550,601			127,352			(1,407,525)			1,149,047
Interest Rates Non-U.S.		694,999			471,051			(863,126)			1,650,337
Livestock		(111,839)			45,675			(6,409)			506,188
Metals		678,151			(287,443)			366,741			470,318
Softs		19,547			(260,115)			(7,012)			(819,709)
Total	$	6,318,701	***	$	(673,329)	***	$	10,751,644	***	$	(3,394,603)	***

*** 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 sell an 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 of

non-exchange-traded

foreign currency option contracts is calculated by applying an industry standard model application for options valuation of foreign currency options, using as inputs 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 considers, and the Funds considered, 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, 2021 and December 31, 2020 and for the periods ended June 30, 2021 and 2020, the Partnership and the Funds did 0t 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, 2021	Total		Level 1		Level 2		Level 3
Assets
Futures	$	2,860,417	$	2,860,417	$	-	$	-
Forwards		2,176,954		-		2,176,954		-
Total Assets	$	5,037,371	$	2,860,417	$	2,176,954	$	-
Liabilities
Futures	$	1,718,534	$	1,718,534	$	-	$	-
Forwards		2,405,261		-		2,405,261		-
Total Liabilities	$	4,123,795	$	1,718,534	$	2,405,261	$	-
December 31, 2020	Total		Level 1		Level 2		Level 3
Assets
Futures	$	3,551,366	$	3,551,366	$	-	$	-
Forwards		1,174,624		-		1,174,624		-
Total Assets	$	4,725,990	$	3,551,366	$	1,174,624	$	-
Liabilities
Futures	$	1,232,532	$	1,232,532	$	-	$	-
Forwards		865,929		-		865,929		-
Total Liabilities	$	2,098,461	$	1,232,532	$	865,929	$	-

6. Investment in the Funds:

On January 12, 2018, a portion 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 permitted accounts managed by FORT using its Global Contrarian Trading Program, a proprietary, systematic trading system, to invest together in one trading vehicle. The Partnership fully redeemed its investment in FORT Contrarian Master on December 31, 2020.

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 permitted accounts managed by ADG using its Systematic Macro Strategy, a proprietary, systematic trading system, to invest together in one trading vehicle. The Partnership fully redeemed its investment in ADG Master on December 31, 2020.

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 permitted accounts managed by Aquantum using its Aquantum Commodity Spread (ACS) Program, a proprietary, systematic trading system, to invest together in one trading vehicle. The Partnership fully redeemed its investment in Aquantum Master on December 31, 2020.

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, 2021.

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

Generally, a limited partner/member in the Funds withdrew 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 had been made to the General Partner/Trading Manager at least three days in advance of the Redemption Date. Such withdrawals were classified as a liability when the limited partner/member elected to redeem and informed the Funds. However, a limited partner/member had the right to request a withdrawal as of the end of any day if such request was received by the General Partner/Trading Manager at least three days in advance of the proposed withdrawal day.

15

Ceres Tactical Systematic L.P.

Notes to Financial Statements

(Unaudited)

Management fees, General Partner fees, ongoing selling agent fees and incentive fees are charged at the Partnership level. Clearing fees were borne by the Funds and allocated to the Funds’ limited

partners/non-managing

members, including the Partnership. Clearing fees are also borne by the Partnership directly. Professional fees were borne by the Funds and allocated to the Partnership, and are also charged directly at the Partnership level.

There were no investments in the Funds as of the close of business on December 31, 2020.

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

	For the three months ended June 30, 2020
	Net Investment       Income (Loss)			Total Trading         Results			Net Income (Loss)
ADG Master	$	(23,060	)	$	(2,839,669	)	$	(2,862,729	)
Aquantum Master		(144,298	)		(2,484,374	)		(2,628,672	)
FORT Contrarian Master		(29,653	)		2,359,829			2,330,176
	For the six months ended June 30, 2020
	Net Investment       Income (Loss)			Total Trading         Results			Net Income (Loss)
ADG Master	$	20,428		$	(5,046,774	)	$	(5,026,346	)
Aquantum Master		(280,527	)		460,323			179,796
FORT Contrarian Master		139,024			(3,294,080	)		(3,155,056	)

Summarized information reflecting the Partnership’s investment in and the Partnership’s

pro-rata

share of the results of operations of the Funds is shown in the following table:

Funds	December 31, 2020				For the three months ended June 30, 2020
	% of Partners’ Capital		Fair Value		Income (Loss)			Expenses				Net Income (Loss)			Investment Objective		Redemptions  Permitted
								Clearing Fees		Professional Fees
ADG Master		0.00%	$	0-	$	(1,672,958	)	$	6,332	$	9,990	$	(1,689,280	)		Commodity Portfolio		Monthly
Aquantum Master		0.00%		0-		(1,297,264	)		68,577		8,742		(1,374,583	)		Commodity Portfolio		Monthly
FORT Contrarian Master		0.00%		0-		180,800			3,154		1,371		176,275			Commodity Portfolio		Monthly
Total			$	0-	$	(2,789,422	)	$	78,063	$	20,103	$	(2,887,588	)
Funds	December 31, 2020				For the six months ended June 30, 2020
	% of Partners’ Capital							Expenses				Net Income (Loss)
			Fair Value		Income (Loss)			Clearing Fees		Professional Fees					Investment Objective		Redemptions Permitted
ADG Master		0.00%	$	0-	$	(3,010,275	)	$	19,999	$	20,348	$	(3,050,622	)		Commodity Portfolio		Monthly
Aquantum Master		0.00%		0-		273,260			175,461		17,530		80,269			Commodity Portfolio		Monthly
FORT Contrarian Master		0.00%		0-		(123,122	)		12,042		2,332		(137,496	)		Commodity Portfolio		Monthly
Total			$	0-	$	(2,860,137	)	$	207,502	$	40,210	$	(3,107,849	)

16

Ceres Tactical Systematic L.P.

Notes to Financial Statements

(Unaudited)

7. Financial Instrument Risks:

I

n the normal course of business, the Partnership is, and the Funds were, parties to financial instruments with

off-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, or 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 or

over-the-counter

(“OTC”). Exchange-traded instruments include futures and certain standardized forward, option and swap contracts. 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. 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. Each of these instruments is subject to various risks similar to those relating 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 23.3% to 32.0% of the Partnership’s contracts are traded OTC.

Futures Contracts.

The Partnership trades, and the Funds traded, futures contracts. A futures contract is a firm commitment to buy or 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 if 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 (prior to the Partnership’s redemptions from the Funds) the Funds each business day, depending on the daily fluctuations in the value of the underlying contracts, and are (or were with respect to the Funds) recorded as unrealized gains or losses by the Partnership and the Funds. When the contract is closed, the Partnership records, and the Funds recorded, 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 (or were with respect to the Funds) 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 agrees, and the Funds agreed 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 previously 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 foreign exchange rates at the reporting date, is (or were with respect to the Funds) 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 (or were with respect to the Funds) included in the Partnership’s/Funds’ Statements of Income and Expenses.

London Metal Exchange Forward Contracts.

Metal contracts traded on the London Metal Exchange (“LME”) represent a firm commitment to buy or sell a specified quantity of aluminum, copper, lead, nickel, tin, zinc and other metals. LME contracts traded by the Partnership and the Funds are (or were with respect to the Funds) cash-settled based on prompt dates published by the LME. Variation margin may be made or received by the Partnership (and may have been made or received by the Funds) each business day, depending on the daily fluctuations in the value of the underlying contracts, and are (or were with respect to the Funds) 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 records, and the Funds recorded, 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 (or were with respect to the Funds) included in the Partnership’s/Funds’ Statements of Income and Expenses.

17

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 is, and the Funds were, 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 (or was with respect to the Funds) typically limited to the amounts recognized in the Statements of Financial Condition and is (was) not represented by the contract or notional amounts of the instruments. The Partnership’s/Funds’ risk of loss is (or was with respect to the Funds) reduced through the use of legally enforceable master netting agreements with counterparties that permit the Partnership, and permitted the Funds, to offset unrealized gains and losses and other assets and liabilities with such counterparties upon the occurrence of certain events. The Partnership has, and the Funds had, credit risk and concentration risk, as MS&Co. or an MS&Co. affiliate are (or were with respect to the Funds) counterparties or brokers with respect to the Partnership’s/Funds’ assets. Credit risk with respect to exchange-traded instruments is (or was with respect to the Funds) reduced to the extent that, through MS&Co. or an MS&Co. affiliate, the Partnership’s/Funds’ counterparty is or was an exchange or clearing organization.

The General Partner/Trading Manager monitors and attempts (or with respect to the Funds, monitored and attempted) to mitigate the Partnership’s/Funds’ risk exposure on a daily basis through financial, credit and risk management monitoring systems, and accordingly, believes (or with respect to the Funds, believed) that it has or had effective procedures for evaluating and limiting the credit and market risks to which the Partnership/Funds may or may have been 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, exchange-cleared swaps, 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 or have been 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 (or with respect to the Funds, entered) into contracts and agreements that contain various representations and warranties and which provide or provided 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 General Partner/Trading Manager consider the risk of any future obligation relating to these indemnifications to be remote.

Since its discovery in December 2019, a new strain of coronavirus, which causes the viral disease known as

COVID-19,

has spread from China to many other countries, including the United States. The outbreak has been declared a pandemic by the World Health Organization, and the U.S. Health and Human Services Secretary has declared a public health emergency in the United States in response to the outbreak.

The outbreak of the novel coronavirus in many countries is having and will likely continue to have an adverse impact on global commercial activity, which has contributed to significant volatility in financial markets. The global impact of the outbreak has been rapidly evolving, and as cases of the virus have been identified in additional countries, many countries have reacted by instituting quarantines and restrictions on travel. These actions are creating disruption in supply chains, and adversely impacting a number of industries, including but not limited to transportation, hospitality, and entertainment.

The impact of

COVID-19

on the U.S. and world economies, and the extent of and effectiveness of any responses taken on a national and local level, is uncertain and could result in a world-wide economic downturn and disrupt financial markets that impact trading programs in unanticipated and unintended ways.

The rapid development of this situation precludes any prediction as to the ultimate adverse impact of the novel coronavirus. Nevertheless, the novel coronavirus presents (or presented with respect to the Funds) material uncertainty and risk with respect to the Partnership’s/Funds’ investments and operations.

18

Ceres Tactical Systematic L.P.

Notes to Financial Statements

(Unaudited)

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.

19

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) redemptions receivable from the Funds, (ii) 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 (iii) 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 direct investments and also previously through its investment in the Funds. While substantial losses could lead to a material decrease in liquidity, no such illiquidity occurred in the second quarter of 2021.

The Partnership’s/Funds’ investment in futures, forwards and options may or could have been, 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 prevented the Funds from promptly liquidating their futures or option 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 prevented the Funds from trading in potentially profitable markets or prevent the Partnership and/or prevented 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 knows 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, 2021, the Partnership’s capital decreased 4.0% from $73,685,134 to $70,713,836. This decrease was attributable to redemptions of 12,663.5760 Class A limited partner Redeemable Units totaling $9,593,891, redemptions of 1,271.1410 Class D limited partner Redeemable Units totaling $1,280,081 and redemptions of 181.1390 Class Z General Partner Redeemable Units totaling $175,000, which was partially offset by a net income of $8,077,674. 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 any

off-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.

20

The Partnership records, and the Funds recorded, 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 2021, the Partnership’s net asset value per Class A Redeemable Unit increased 6.9% from $753.26 to $805.11 as compared to a decrease of 4.8% in the same period of 2020. During the Partnership’s second quarter of 2021, the Partnership’s net asset value per Class D Redeemable Unit increased 6.9% from $942.70 to $1,007.59 as compared to a decrease of 4.5% in the same period of 2020. During the Partnership’s second quarter of 2021, the Partnership’s net asset value per Class Z Redeemable Unit increased 7.1% from $966.11 to $1,034.59 as compared to a decrease of 4.4% in the same period of 2020. The Partnership experienced a net trading gain before fees and expenses in the second quarter of 2021 of $6,318,701. Gains were primarily attributable to the Partnership’s trading in energy, grains, indices, U.S. and

non-U.S.

interest rates, metals and softs and were partially offset by losses in currencies and livestock. The Partnership experienced a net trading loss before fees and expenses in the second quarter of 2020 of $3,470,258. Losses were primarily attributable to the Partnership’s/Funds’ trading in currencies, energy, grains, livestock, metals and softs and were partially offset by gains in indices and U.S. and

non-U.S.

interest rates.

The most significant gains were achieved within the global fixed income markets during May from short positions in U.S. fixed income futures as prices fell amid speculation the Federal Reserve would increase interest rates sooner than expected. Additional gains were recorded from positions in European fixed income futures during April. Within the energy complex, gains were experienced during April, May, and June from long positions in crude oil futures as signs of tightening global oil supplies and increasing energy demand boosted prices. Further gains within the energies were recorded during June from long positions in natural gas futures. Gains within the global stock index sector were experienced during April and May from long positions in U.S. and European equity index futures as investor momentum buying pushed stock prices higher. Within the metals markets, gains were recorded during April and May from long positions in gold and copper futures as a weakening U.S. dollar buoyed metals prices. A portion of the Partnership’s gains for the second quarter was offset by losses incurred within the currency sector during April from short positions in the euro and Swiss franc versus the U.S. dollar as the relative value of the dollar fell on signs early in the quarter the Federal Reserve would continue its dovish monetary policies.

During the Partnership’s six months ended June 30, 2021, the Partnership’s net asset value per Class A Redeemable Unit increased 11.8% from $720.19 to $805.11 as compared to a decrease of 8.5% in the same period of 2020. During the Partnership’s six months ended June 30, 2021, the Partnership’s net asset value per Class D Redeemable Unit increased 11.8% from $901.32 to $1,007.59 as compared to a decrease of 7.9% in the same period of 2020. During the Partnership’s six months ended June 30, 2021, the Partnership’s net asset value per Class Z Redeemable Unit increased 12.2% from $921.96 to $1,034.59 as compared to a decrease of 7.6% in the same period of 2020. The Partnership experienced a net trading gain before fees and expenses in the six months of 2021 of $10,751,644. Gains were primarily attributable to the Partnership’s trading in energy, grains, indices and metals and were partially offset by losses in currencies, U.S. and

non-U.S.

interest rates, livestock and softs. The Partnership experienced a net trading loss before fees and expenses in the six months ended June 30, 2020 of $6,378,219. Losses were primarily attributable to the Partnership’s/Funds’ trading in currencies, indices,

non-U.S.

interest rates and softs and were partially offset by gains in energy, grains, U.S. interest rates, livestock and metals.

The most significant gains were achieved within the energy markets during February and March from long positions in Brent crude oil futures as prices rallied amid an outlook for growing global energy demand. Additional gains in the energies were recorded during April, May, and June from long positions in crude oil futures as signs of tightening global oil supplies and increasing energy demand boosted prices. Within the global stock index sector, gains were recorded during February and March, as well as during April and May, from long positions in U.S., Asian and European equity index futures as continued investor appetites for risk assets boosted global stock prices. Further gains were achieved within the agricultural complex during January and February from long futures positions in the grains as adverse weather in the key growing regions of South America threatened crops, pushing prices higher. Additional gains were recorded in the metals sector primarily during April and May from long positions in gold and copper futures as a weakening U.S. dollar buoyed metals prices. A portion of the Partnership’s gains for the first six months of the year was offset by losses incurred within the global fixed income sector during February and March from long positions in U.S. and Canadian fixed income futures as a growing expectation of inflationary pressures pushed bond yields higher. Losses were also recorded within the currency markets during April from short positions in the euro and Swiss franc versus the U.S. dollar as the relative value of the dollar fell early in the second quarter on signs the Federal Reserve would continue its dovish monetary policies.

21

Commodity futures 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 depends, and the profitability of the Funds depended, 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, changes in interest rates, pandemics, epidemics and other public health crises. To the extent that market trends exist and the Advisors are able to identify them, the Partnership expects 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 the

4-week

U.S. Treasury bill discount rate. For the avoidance of doubt, the Partnership/Funds did not receive interest on amounts in the futures brokerage accounts that were 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, was 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 was retained by the Partnership and/or the Funds, as applicable. Interest income for the three and six months ended June 30, 2021 decreased by $19,874 and $285,835, respectively, as compared to the corresponding periods in 2020. The decrease in interest income was primarily due to lower average daily equity as well as lower

4-week

U.S. Treasury bill discount rates during the three and six months ended June 30, 2021 as compared to the corresponding periods in 2020. 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 or MS&Co. had control.

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, 2021 increased by $60,407 and $76,165, respectively, as compared to the corresponding periods in 2020. The increase in these clearing fees was primarily due to an increase in the number of direct trades made by the Partnership during the three and six months ended June 30, 2021 as compared to the corresponding periods in 2020.

22

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, 2021 decreased by $290,809 and $645,522, respectively, as compared to the corresponding periods in 2020. 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, 2021 as compared to the corresponding periods in 2020, as well as a reduction in the ongoing selling agent fee rate for Class A Redeemable Units from 1/12 of 2.00% to 1/12 of 1.00% effective July 1, 2020 and from 1/12 of 1.00% to 1/12 of 0.75% effective January 1, 2021.

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 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, 2021 decreased by $62,512 and $159,663, respectively, as compared to the corresponding periods in 2020. The decrease was primarily due to a decrease in average net assets for the Partnership during the three and six months ended June 30, 2021 as compared to the corresponding periods in 2020, as well as a reduction in the General Partner fee rate from 1/12 of 1.00% to 1/12 of 0.875% effective July 1, 2020.

Management fees are calculated as a percentage of the Partnership’s adjusted net asset value 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, 2021 decreased by $51,183 and $132,026, respectively, as compared to the corresponding periods in 2020. The decrease was primarily due to a decrease in average net assets for the Partnership during the three and six months ended June 30, 2021 as compared to the corresponding periods in 2020.

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, 2021 resulted in incentive fees of $832,695 and $1,402,983, respectively. Trading performance for the three and six months ended June 30, 2020 did not result in any incentive fees. 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, 2021 and March 31, 2021, the Partnership’s assets were allocated among the Advisors in the following approximate percentages:

Advisor	June 30, 2021		June 30, 2021 (percentage of     Partners’ Capital)		March 31, 2021		March 31, 2021 (percentage of     Partners’ Capital)
DCM	$	16,324,900		23%	$	15,767,700		22%
Episteme	$	20,743,923		29%	$	20,235,982		29%
FORT	$	10,598,055		15%	$	12,366,466		17%
ISAM SM	$	13,409,537		19%	$	12,557,194		18%
Millburn	$	9,637,421		14%	$	9,898,321		14%

For additional disclosures about operational and financial risk related to the

COVID-19

outbreak, refer to Part II, Item 5. “

Other Information

.” in this

Form 10-Q.

23

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

.

The Partnership is a speculative commodity pool. The market sensitive instruments held by the Partnership are acquired for speculative trading purposes, and all or substantially all of the Partnership’s 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 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 open positions and, consequently, in its earnings and cash balances. The Partnership’s 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 open positions and the liquidity of the markets in which they trade.

The Partnership rapidly acquires and liquidates 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 past performance is not necessarily indicative of their future results.

Quantifying the Partnership’s Trading Value at Risk

The following quantitative disclosures regarding the Partnership’s 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 accounts for open positions on the basis of fair value accounting principles. Any loss in the market value of the Partnership’s open positions is directly reflected in the Partnership’s earnings and cash flow.

The Partnership’s 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 could reasonably be expected to lose in a given market sector. However, the inherent uncertainty of the Partnership’s speculative trading and the recurrence in the markets traded by the Partnership of market movements far exceeding expectations could result in actual trading or

non-trading

losses far beyond the indicated Value at Risk or the Partnership’s 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 losses in any market sector will be limited to Values at Risk or by the Partnership’s attempt to manage its market risk.

Exchange margin requirements have been used by the Partnership as the measure of its 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 in

95%-99%

of any

one-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-term

one-day

price fluctuation.

Value at Risk tables represent a probabilistic assessment of the risk of loss in market risk sensitive instruments. DCM, Episteme, ISAM SM, Millburn and FORT each directly trade managed accounts in the name of the Partnership. The trading Value at Risk tables reflect the market sensitive instruments held by the Partnership directly as of June 30, 2021 and December 31, 2020. The Partnership held no investment in Funds as of December 31, 2020. There have been no material changes in the trading Value at Risk information previously disclosed in the Partnership’s Annual Report on Form

10-K

for the year ended December 31, 2020.

24

The following tables indicate the trading Value at Risk associated with the Partnership’s direct investments by market category as of June 30, 2021 and December 31, 2020, and the highest, lowest and average values during the three and six months ended June 30, 2021 and the twelve months ended December 31, 2020. All open contracts trading risk exposures have been included in calculating the figures set forth below.

As of June 30, 2021, the Partnership’s total capitalization was $70,713,836.

June 30, 2021
						Three Months Ended June 30, 2021
			% of Total			High		Low		Average
Market Sector	Value at Risk		Capitalization			Value at Risk		Value at Risk		Value at Risk*
Currencies	$	5,522,001		7.81	%	$	5,522,001	$	4,436,383	$	4,928,533
Energy		1,944,465		2.75			3,165,850		1,786,418		2,679,043
Grains		430,840		0.61			959,613		390,213		704,653
Indices		3,025,637		4.28			3,195,389		1,408,841		2,144,119
Interest Rates U.S.		1,156,614		1.64			1,548,226		491,895		1,005,005
Interest Rates Non-U.S.		3,754,449		5.31			3,865,774		2,476,828		3,136,765
Livestock		47,630		0.07			96,690		47,630		76,029
Metals		879,026		1.24			2,479,421		714,374		1,800,376
Softs		359,806		0.51			504,213		234,408		352,230
Total	$	17,120,468		24.22	%

* Average of daily Values at Risk.

As of December 31, 2020, the Partnership’s total capitalization was $73,685,134.

December 31, 2020
						Twelve Months Ended December 31, 2020
			% of Total			High		Low		Average
Market Sector	Value at Risk		Capitalization			Value at Risk		Value at Risk		Value at Risk*
Currencies	$	3,041,939		4.13	%	$	9,404,341	$	853,157	$	3,095,632
Energy		1,835,859		2.49			2,011,876		285,278		835,218
Grains		495,617		0.67			679,437		155,660		340,335
Indices		2,735,563		3.71			3,255,908		387,162		1,574,058
Interest Rates U.S.		655,356		0.89			995,963		47,630		451,257
Interest Rates Non-U.S.		2,568,180		3.49			2,731,962		486,831		1,445,262
Livestock		13,365		0.02			183,425		13,365		116,623
Metals		1,674,575		2.27			1,674,575		479,059		921,183
Softs		509,656		0.69			584,300		136,136		322,885
Total	$	13,530,110		18.36	%

* Annual average of daily Values at Risk.

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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 Rules

13a-15(e)

and

15d-15(e)

under the Exchange Act) as of June 30, 2021 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’s

internal 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, 2021 that materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

26

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 Securities Exchange Act of 1934, as amended (the “Exchange Act”) 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 SEC 10-K filings for 2020, 2019, 2018, 2017, 2016 and 2015. 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 at

www.morganstanley.com

. We refer you to the Commitments, Guarantees and Contingencies – Legal section of MS&Co.’s 2020 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.

During the preceding five years, the following administrative, civil, or criminal actions pending, on appeal or concluded against MS&Co. or any of its principals are material within the meaning of CFTC Rule 4.24(l)(2) or 4.34(k)(2):

27

Regulatory and Governmental Matters.

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 Rule 10b-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 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 Rules 15c3-3(e), 17a-5(a), and 17a-5(d) thereunder, by inaccurately calculating its Reserve Account requirement under Rule 15c3-3 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 $7.5 million.

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 CFTC Rule 166.3.

On November 2, 2017, the CFTC issued an order filing and simultaneously settling charges against MS&Co. for non-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.

On September 30, 2020, the SEC entered into a settlement order with MS&Co. settling an administrative action which relates to MS&Co.’s violations of the order marking requirements of Regulation SHO of the Exchange Act resulting from its improper use of aggregation units in structuring the Firm’s equity swaps business. The order found that MS&Co. improperly operated its equity swaps business without netting certain “long” and “short” positions as required by Rule 200(c) of Regulation SHO. The order found that the long exposure to an equity security (the “Long Unit”) and the short exposure to an equity security (the “Short Unit”) were not independent from one another and did not have separate trading strategies or objectives without regard to each other, and that the Long and Short Units were not eligible for the exception in Rule 200(f) of Regulation SHO. The order found that MS&Co. willfully violated Section 200(g) of Regulation SHO. MS&Co. consented, without admitting or denying the findings and without adjudication of any issue of law or fact, to a censure; to cease and desist from committing or causing future violations; to pay a civil penalty of $5 million; and to comply with the undertaking enumerated in the order.

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Civil Litigation

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, styled

Federal 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 December 25, 2019, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $35 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 $35 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co., plus pre- 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 in

IKB 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 First Department affirmed the trial court’s decision denying in part MS&Co.’s motion to dismiss the complaint. At December 25, 2019, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $22 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 $22 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, plus pre- 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 styled

Iowa 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.

29

The class action complaint was filed on behalf of a purported 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.

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, styled

Federal 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 July 15, 2010, China Development Industrial Bank (“CDIB”) filed a complaint against MS&Co., styled

China

Development 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 related to a $275 million credit default swap (“CDS”) referencing the super senior portion of the STACK 2006-1 CDO. The complaint asserted claims for common law fraud, fraudulent inducement and fraudulent concealment and alleges that MS&Co. misrepresented the risks of the STACK 2006-1 CDO to CDIB, and that MS&Co knew that the assets backing the CDO were of poor quality when it entered into the CDS with CDIB. On March 22, 2021, the parties entered into a settlement agreement. On April 16, 2021, the court entered a stipulation of voluntary discontinuance, with prejudice.

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 styled

Federal 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 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 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 styled

Federal 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 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

30

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 in

Deutsche Zentral-Genossenschaftsbank AG et al. v. Morgan Stanley et al.

filed a complaint against MS&Co., 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 MS&Co. to plaintiff was approximately $634 million. The complaint alleged causes of action against MS&Co. for common law fraud, fraudulent concealment, aiding and abetting fraud, negligent misrepresentation, and rescission and sought, 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 styled

California 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 asserted 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.

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 NY, the first of which is styled

Alaska Electrical Pension Fund v. BofA Secs., Inc., et al

. Each complaint alleged 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. The purported class period for each suit is from January 1, 2012 to June 1, 2018. Each complaint raised a claim under Section 1 of the Sherman Act and sought, among other things, injunctive relief and treble compensatory damages. On May 23, 2019, plaintiffs filed a consolidated amended class action complaint styled

In re GSE

Bonds Antitrust Litigation

, with a purported class period from January 1, 2009 to January 1, 2016. On June 13, 2019, the defendants filed a joint motion to dismiss the consolidated amended complaint. On August 29, 2019, the court denied MS&Co.’s motion to dismiss. On December 15, 2019, MS&Co. and certain other defendants entered into a stipulation of settlement to resolve the action as against each of them in its entirety. On June 16, 2020, the court granted final approval of the settlement.

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.

31

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 Form

10-K

for the fiscal year ended December 31, 2020 and under Part II, Item 1A. “

Risk Factors

.” in the Partnership’s Quarterly Report on Form

10-Q

for the quarter ended March 31, 2021.

Item 2.

Unregistered Sales

of Equity Securities and Use of Proceeds

.

For the three months ended June 30, 2021, there were no additional subscriptions. 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**		Class D (a) Total Number of Redeemable Units Purchased*		Class D (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, 2021 - April 30, 2021		1,068.2800	$	781.55		N/A		N/A	N/A	N/A
May 1, 2021 - May 31, 2021		1,659.6460	$	807.21		1,211.1410	$	1,010.22	N/A	N/A
June 1, 2021 - June 30, 2021		1,953.2340	$	805.11		N/A		N/A	N/A	N/A
		4,681.1600	$	800.48		1,211.1410	$	1,010.22

* 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

.

Certain impacts to public health conditions particular to the coronavirus

(COVID-19)

outbreak that occurred after December 31, 2020 could impact the operations and financial performance of the Partnership’s investments subsequent to June 30, 2021. The extent of the impact to the financial performance of the Partnership’s investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Partnership’s investments is impacted because of these factors for an extended period, the Partnership’s performance may be adversely affected.

32

Item 6.

Exhibits

.

31.1 — Rule 13a-14(a)/15d-14(a) Certification (Certification of President and Director) (filed herewith).

31.2 — Rule 13a-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.

104. Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

33

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 11, 2021
By:	/s/ Steven Ross
	Steven Ross
	Chief Financial Officer and Director
	(Principal Accounting Officer)
Date:	August 11, 2021

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.

34