Emerging Cta Portfolio 10-Q 2014 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM10-Q

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

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

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

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to                     

Commission File Number0-53211

EMERGING CTA PORTFOLIO L.P.

(Exact name of registrant as specified in its charter)

New York	04-3768983
(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)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YesX  No -

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

YesX  No -

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

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

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

Yes-  NoX

As of October 31, 2014, 87,872.8932 Limited Partnership Class A Redeemable Units were outstanding.

EMERGING CTA PORTFOLIO L.P.

FORM10-Q

INDEX

			Page Number
PART I-Financial Information:
	Item 1.	Financial Statements:
		Statements of Financial Condition at September 30, 2014 (unaudited) and December 31, 2013	3
		Condensed Schedules of Investments at September 30, 2014 (unaudited) and December 31, 2013	4–5
		Statements of Income and Expenses and Changes in Partners’ Capital for the three and nine months ended September  30, 2014 and 2013 (unaudited)	6
		Notes to Financial Statements (unaudited)	7–26
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27–29
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	30–37
	Item 4.	Controls and Procedures	38
PART II-Other Information
	Item 1.	Legal Proceedings	39–45
	Item 1A.	Risk Factors	46
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
	Item 3.	Defaults Upon Senior Securities	47
	Item 4.	Mine Safety Disclosures	47
	Item 5.	Other Information	47
	Item 6.	Exhibits	48–50

2

PART I

Item 1. Financial Statements

Emerging CTA Portfolio L.P.

Statements of Financial Condition

	(Unaudited) September  30, 2014		December 31, 2013
Assets:
Investment in Funds, at fair value	$	98,063,189	$	123,486,175
Redemptions receivable from Funds		2,000		14,986,312
Equity in trading account:
Cash		21,225,932		24,966,156
Cash margin		146,743		4,901,267
Net unrealized appreciation on open futures contracts		1,542		634,229
Options purchased, at fair value (cost $0 and $1,372,875 at September 30, 2014 and December 31, 2013, respectively)		—		1,278,375
Total trading equity		119,439,406		170,252,514
Interest receivable		68		333
Total assets	$	119,439,474	$	170,252,847
Liabilities and Partners’ Capital:
Liabilities:
Options premium received, at fair value (premium $0 and $517,125 at September 30, 2014 and December 31, 2013, respectively)	$	—	$	322,350
Accrued expenses:
Ongoing selling agent fees		248,826		495,616
Management fees		149,828		179,798
Administrative fees		49,696		70,741
Incentive fees		683,131		12,209
Clearing fees due to MS&Co.		2,795		5,003
Other		165,449		147,797
Redemptions payable to General Partner		202,665		—
Redemptions payable to Limited Partners		3,835,209		6,897,645
Total liabilities		5,337,599		8,131,159
Partners’ Capital:
General Partner, 942.3886 and 1,512.9756 Class A Unit equivalents outstanding at September 30, 2014 and December 31, 2013, respectively		1,190,119		2,043,122
Limited Partners, 89,408.5022 and 118,541.4712 Class A Redeemable Units outstanding at September 30, 2014 and December 31, 2013, respectively		112,911,756		160,078,566
Total partners’ capital		114,101,875		162,121,688
Total liabilities and partners’ capital	$	119,439,474	$	170,252,847
Net asset value per unit, Class A	$	1,262.88	$	1,350.40

See accompanying notes to financial statements.

3

Emerging CTA Portfolio L.P.

Statements of Financial Condition

Condensed Scheduleof Investments

September 30, 2014

(Unaudited)

	Number of Contracts		Fair Value			% of Partners’ Capital
Futures Contracts Purchased
Currencies		11	$	(4,949	)		(0.00	)*%
Indices		5		(288	)		(0.00	)*
Interest Rates Non-U.S.		3		290			0.00	*
Livestock		2		886			0.00	*
Softs		1		(1,256	)		(0.00	)*
Total futures contracts purchased				(5,317	)		(0.00	)*
Futures Contracts Sold
Currencies		16		(2,283	)		(0.00	)*
Energy		16		8,673			0.00	*
Indices		3		77			0.00	*
Livestock		1		(162	)		(0.00	)*
Metals		1		(335	)		(0.00	)*
Softs		3		889			0.00	*
Total futures contracts sold				6,859			0.00	*
Net unrealized appreciation on open futures contracts				1,542			0.00	*
Investment in Funds
Blackwater Master Fund L.P.				4,494,108			3.94
Secor Master Fund L.P.				24,260,531			21.26
Cambridge Master Fund L.P.				31,039,544			27.20
CMF Willowbridge Master Fund L.P.				10,035,221			8.80
300 North Capital Master Fund L.P.				17,026,200			14.92
PGM Master Fund L.P.				11,207,585			9.82
Total investment in Funds				98,063,189			85.94
Net fair value			$	98,064,731			85.94	%

* Due to rounding

See accompanying notes to financial statements.

4

Emerging CTA Portfolio L.P.

Condensed Schedule of Investments

December 31, 2013

	Number of Contracts		Fair Value			% of Partners’ Capital
Futures Contracts Purchased
Energy		57	$	23,033			0.01	%
Grains		68		(62,003	)		(0.04	)
Indices		232		539,634			0.33
Interest Rates Non-U.S.		170		(68,531	)		(0.04	)
Interest Rates U.S.		298		(201,662	)		(0.12	)
Livestock		15		(3,570	)		(0.00	)*
Metals		10		21,662			0.01
Softs		46		54,350			0.04
Total futures contracts purchased				302,913			0.19
Futures Contracts Sold
Grains		281		329,286			0.20
Indices		603		(344,629	)		(0.21	)
Interest Rates Non-U.S.		243		245,199			0.15
Interest Rates U.S.		17		6,242			0.00	*
Livestock		9		(100	)		(0.00	)*
Metals		17		30,720			0.02
Softs		163		64,598			0.04
Total futures contracts sold				331,316			0.20
Net unrealized appreciation on open futures contracts				634,229			0.39
Options Purchased
Call
Energy		500		1,278,375			0.79
Total options purchased				1,278,375			0.79
Options Premium Received
Call
Energy		500		(322,350	)		(0.20	)
Total options premium received				(322,350	)		(0.20	)
Investment in Funds
Blackwater Master Fund L.P.				24,550,063			15.14
Secor Master Fund L.P.				15,383,266			9.49
Cambridge Master Fund L.P.				26,222,525			16.17
CMF Willowbridge Master Fund L.P.				14,357,559			8.86
300 North Capital Master Fund L.P.				24,373,736			15.04
Principle Master Fund L.P.				18,599,026			11.47
Total investment in Funds				123,486,175			76.17
Net fair value			$	125,076,429			77.15	%

* Due to rounding.

See accompanying notes to financial statements.

5

Emerging CTA Portfolio L.P.

Statements of Income and Expenses and Changes in Partners’ Capital

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Investment Income:
Interest income	$	1,007		$	1,105		$	4,174		$	6,691
Interest income from investment in Funds		2,912			7,167			17,293			41,067
Total investment income		3,919			8,272			21,467			47,758
Expenses:
Clearing fees		314,937			363,377			845,727			1,231,035
Ongoing selling agent fees		759,211			1,537,102			2,932,408			4,852,591
Management fees		443,091			624,918			1,422,240			1,990,150
Administrative fees		151,686			218,614			510,083			690,501
Incentive fees		683,130			201,857			670,921			1,347,427
Other		308,758			270,013			726,475			730,447
Total expenses		2,660,813			3,215,881			7,107,854			10,842,151
Net investment income (loss)		(2,656,894	)		(3,207,609	)		(7,086,387	)		(10,794,393	)
Trading Results:
Net gains (losses) on trading of commodity interests and investment in Funds:
Net realized gains (losses) on closed contracts		(783,500	)		(805,659	)		(3,186,342	)		(1,328,473	)
Net realized gains (losses) on investment in Funds		3,804			(7,414,206	)		1,492,945			13,958,152
Change in net unrealized gains (losses) on open contracts		(810,312	)		224,597			(732,961	)		188,265
Change in net unrealized gains (losses) on investment in Funds		5,242,218			(2,463,109	)		(1,957,546	)		(8,769,104	)
Total trading results		3,652,210			(10,458,377	)		(4,383,904	)		4,048,840
Net income (loss)		995,316			(13,665,986	)		(11,470,291	)		(6,745,553	)
Subscriptions — Limited Partners		645,260			5,388,693			6,466,983			13,982,329
Redemptions — Limited Partners		(14,588,077	)		(10,885,823	)		(42,313,886	)		(29,647,970	)
Redemptions — General Partner		(702,619	)		—			(702,619	)		(200,699	)
Net increase (decrease) in Partners’ Capital		(13,650,120	)		(19,163,116	)		(48,019,813	)		(22,611,893	)
Partners’ Capital, beginning of period		127,751,995			184,703,169			162,121,688			188,151,946
Partners’ Capital, end of period	$	114,101,875		$	165,540,053		$	114,101,875		$	165,540,053
Net asset value per unit, Class A (90,350.8908 and 126,608.3998 units outstanding at September 30, 2014 and 2013, respectively)	$	1,262.88		$	1,307.50		$	1,262.88		$	1,307.50
Net income (loss) per unit*	$	13.86		$	(103.64	)	$	(87.52	)	$	(52.31	)
Weighted average Class A units outstanding		98,070.5265			131,810.4512			108,828.8182			134,251.5455

* Based on change in net asset value per unit.

See accompanying notes to financial statements.

6

Emerging CTA Portfolio L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

1. General:

Emerging CTA Portfolio L.P. (the “Partnership”) is a limited partnership that was organized on July 7, 2003 under the partnership laws of the State of New York. The objective of the Partnership is to achieve capital appreciation through the allocation of assets to early-stage commodity trading advisors which engage, directly and indirectly, in speculative trading of a diversified portfolio of commodity interests, including futures, options on futures, forwards, options on forwards, spot and swap contracts, cash commodities and any other rights or interest pertaining thereto. The Partnership may also enter into swap and other derivative transactions with the approval of the General Partner (defined below). The sectors traded include currencies, livestock, lumber, energy, grains, metals, indices, softs and U.S. andnon-U.S. interest rates. The Partnership directly and through its investment in the Funds (as defined in Note 5, “Investment in Funds”) may trade futures, forward and option contracts of any kind. The Partnership may also engage in swap transactions and other derivative transactions directly and through its investments in the Funds with the approval of the General Partner. The commodity interests that are traded by the Partnership and the Funds are volatile and involve a high degree of market risk.

Between December 1, 2003 (commencement of the offering period) and August 5, 2004, 20,872 redeemable units of limited partnership interest (“Redeemable Units”) were sold at $1,000 per Redeemable Unit. The proceeds of the initial offering were held in an escrow account until August 6, 2004, at which time they were remitted to the Partnership for trading. The Partnership privately and continuously offers Redeemable Units in the Partnership to qualified investors. There is no maximum number of Redeemable Units that may be sold by the Partnership.

Ceres Managed Futures LLC, a Delaware limited liability company, acts as the general partner (the “General Partner”) and commodity pool operator of the Partnership. The General Partner is wholly owned by Morgan Stanley Smith Barney Holdings LLC (“MSSB Holdings”). MSSB 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. Prior to June 28, 2013, Morgan Stanley indirectly owned a majority equity interest in MSSB Holdings and Citigroup Inc. indirectly owned a minority equity interest in MSSB Holdings. Prior to July 31, 2009, the date as of which MSSB Holdings became its owner, the General Partner was wholly owned by Citigroup Financial Products Inc., a wholly owned subsidiary of Citigroup Global Markets Holdings Inc., the sole owner of which is Citigroup Inc.

As of September 1, 2011, the Partnership began offering three classes of limited partnership interests: Class A units, Class D units and Class Z units; each will be referred to as a “Class” and collectively referred to as the “Classes.” All Redeemable Units issued prior to September 1, 2011 were deemed “Class A Units.” The rights, liabilities, risks, and fees associated with investment in the Class A Units were not changed. Class A Units and Class D Units are available to taxable U.S. individuals and institutions, as well as U.S. tax exempt individuals and institutions. Class Z Units will be offered to certain employees of Morgan Stanley Wealth Management and its affiliates (and their family members). The Class of units that a limited partner of the Partnership (each a “Limited Partner”) receives upon 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 units to investors at its discretion. As of September 30, 2014, there were no Redeemable Units outstanding in Class D or Class Z.

As of September 30, 2014, all trading decisions were made for the Partnership by its trading advisors (the “Advisors”) either directly, through individually managed accounts, or indirectly, through investments in other collective investment vehicles. As of September 30, 2014, Blackwater Capital Management, LLC, Willowbridge Associates Inc., SECOR Capital Advisors, LP, 300 North Capital LLC and The Cambridge Strategy (Asset Management) Limited served as the Partnership’s major commodity trading advisors. In addition, the General Partner has allocated the Partnership’s assets to additional non-major trading advisors (i.e. commodity trading advisors intended to be allocated less than 10% of the Partnership’s assets). Information about advisors allocated less than 10% of the Partnership’s assets may not be disclosed. The General Partner may allocate less than 10% of the Partnership’s assets to a new trading advisor or another trading program of a current Advisor. The Advisors are not affiliated with one another, are not affiliated with the General Partner, Citigroup Global Markets Inc. (“CGM”) or Morgan Stanley & Co. LLC (“MS&Co”) and are not responsible for the organization or operation of the Partnership.

7

Emerging CTA Portfolio L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

Effective October 16, 2014, the Partnership terminated its management agreement with 300 North Capital LLC (“300 North Capital”) and fully redeemed its investment in 300 North Capital Master Fund L.P (“300 North Master”) on or about November 1, 2014.

Since the period covered by this report, Centurion Investment Management, LLC (“Centurion”) and Perella Weinberg Partners Capital Management LP (“Perella”) have been selected by the General Partner as major commodity trading advisors. Accordingly, the General Partner increased Centurion’s and Perella’s allocations on November 1, 2014 to 12.6% and 16.8% of the Partnership’s assets, respectively.

The assets allocated to Centurion for trading are invested directly pursuant to Centurion’s Short Term Systematic Strategy Program.

During the nine months ended September 30, 2014, the Partnerhip’s/Funds’ commodity broker was MS&Co., a registered futures commission merchant. During the prior periods included in this report, CGM also served as a commodity broker.

During the second quarter of 2013, Cambridge Master Fund, L.P. (“Cambridge Master”) entered into a foreign exchange brokerage account agreement with MS&Co. Cambridge Master commenced foreign exchange trading through an account at MS&Co. on or about May 1, 2013. During the third quarter of 2013, CMF Willowbridge Master Fund L.P. (“Willowbridge Master”), Principle Master Fund L.P. (“Principle Master”) and Cambridge Master entered into a futures brokerage account agreement with MS&Co. Willowbridge Master, Principle Master and Cambridge Master commenced futures trading through accounts at MS&Co. on or about July 29, 2013, September 27, 2013 and September 1, 2013, respectively. SECOR Master Fund L.P (“SECOR Master”) continues to be a party to a futures brokerage account agreement with MS&Co. During the fourth quarter of 2013, 300 North Master and Blackwater Master Fund L.P. (“Blackwater Master”) entered into a futures account agreement with MS&Co. and commenced trading through accounts at MS&Co. on or about October 2, 2013 and October 3, 2013, respectively. Effective August 21, 2013, the Partnership entered into a futures brokerage account agreement with MS&Co. and began transferring the brokerage account of the Partnership from CGM to MS&Co. PGM Master Fund L.P. has been a party to a futures brokerage account agreement with MS&Co. since September 1, 2014. The Partnership, directly and through its investment in the Funds, pays MS&Co. trading fees for the clearing and, where applicable, execution of transactions.

Effective October 1, 2013, the Partnership ceased paying a brokerage fee to CGM and CGM ceased acting as a selling agent for the Partnership. Also effective October 1, 2013, the Partnership entered into a selling agreement with Morgan Stanley Smith Barney LLC (d/b/a Morgan Stanley Wealth Management). Pursuant to the selling agreement, Morgan Stanley Wealth Management received a selling agent fee equal to (i) 3.5% per year of adjusted month-end net assets for Class A units, (ii) 1.25% per year of adjusted month-end net assets for Class D units and (iii) 0.5% per year of adjusted month-end net assets for Class Z units. The selling agent fee received by Morgan Stanley Wealth Management is shared with the properly registered/licensed financial advisers of Morgan Stanley Wealth Management who sell redeemable units in the Partnership.

8

Emerging CTA Portfolio L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

Effective April 1, 2014, the monthly ongoing selling agent fee was reduced from an annual rate of 3.5% to an annual rate of 2.5% for Class A units.

Effective October 1, 2014, the monthly ongoing selling agent fee was (i) reduced from an annual rate of 2.5% to an annual rate of 2.0% for Class A Redeemable Units, (ii) reduced from an annual rate of 1.25% to an annual rate of 0.75% for Class D Redeemable Units and (iii) eliminated for Class Z Redeemable Units. As of the same date, the administrative fee was increased from an annual rate of 0.5% to an annual rate of 1.0%. The October 1, 2014 fee changes offset each other and, accordingly, there was no change to the aggregate fees incurred by the Partnership.

Certain prior period amounts have been reclassified to conform to current period presentation. Amounts reported separately on the Statements of Income and Expenses and Changes in Partners’ Capital as ongoing selling agent fees and clearing fees were previously combined and presented as brokerage fees, including clearing fees.

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 statement of the Partnership’s financial condition at September 30, 2014 and December 31, 2013, and the results of its operations and changes in partners’ capital for the three and nine months ended September 30, 2014 and 2013. These financial statements present the results of interim periods and do not include all disclosures normally provided in annual financial statements. These financial statements should be read together with the financial statements and notes included in the Partnership’s Annual Report on Form10-K (the “Form 10-K”) filed with the Securities and Exchange Commission (the “SEC”) for the year ended December 31, 2013.

The General Partner and each Limited Partner 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 and losses, if any.

        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.

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.

9

Emerging CTA Portfolio L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

2. Financial Highlights:

Changes in the net asset value per unit for Class A for the three and nine months ended September 30, 2014 and 2013 were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Net realized and unrealized gains (losses)1	$	30.32		$	(93.74	)	$	(55.88	)	$	(17.19	)
Interest Income		0.04			0.06			0.19			0.35
Expenses2		(16.50	)		(9.96	)		(31.83	)		(35.47	)
Increase (decrease) for the period		13.86			(103.64	)		(87.52	)		(52.31	)
Net asset value per unit, beginning of period		1,249.02			1,411.14			1,350.40			1,359.81
Net asset value per unit, end of period	$	1,262.88		$	1,307.50		$	1,262.88		$	1,307.50

¹  Includes ongoing selling agent and clearing fees. Net realized and unrealized gains (losses) excluding ongoing selling agent fees for the three and nine months ended September 30, 2014 and 2013 were $41.27, $(79.32), $(21.40) and $28.11, respectively.

²  Excludes ongoing selling agent and clearing fees .. Total expenses including ongoing selling agent fees for the three and nine months ended September 30, 2014 and 2013 were $(28.46), $(24.38), $(67.32) and $(80.77), respectively.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Ratios to average net assets:3
Net investment income (loss)		(6.6	)%		(6.9	)%		(6.4	)%		(7.6	)%
Incentive fees		0.6	%		0.1	%		0.5	%		0.7	%
Net investment income (loss) before incentive fees4		(6.0	)%		(6.8	)%		(5.9	)%		(6.9	)%
Operating expense		6.6	%		6.9	%		6.5	%		7.0	%
Incentive fees		0.6	%		0.1	%		0.5	%5		0.7	%
Total expenses		7.2	%		7.0	%		7.0	%		7.7	%
Total return:
Total return before incentive fees		1.7	%		(7.2	)%		(6.0	)%		(3.1	)%
Incentive fees		(0.6	)%		(0.1	)%		(0.5	)%5		(0.7	)%
Total return after incentive fees		1.1	%		(7.3	)%		(6.5	)%		(3.8	)%

³  Annualized (other than incentive fees).

⁴  Interest income less total expenses.

⁵  Due to rounding.

The above ratios 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 net assets.

10

Emerging CTA Portfolio L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

3. 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 and Changes in Partners’ Capital.

The customer agreement among the Partnership, each of the Funds and MS&Co. gives, and the customer agreements between the Partnership and CGM and each of the Funds and CGM gave, the Partnership and the Funds the legal right to net unrealized gains and losses on open futures and forward contracts on the Statements of Financial Condition. The Partnership and the Funds net, for financial reporting purposes, the unrealized gains and losses on open futures and on open forward contracts on the Statements of Financial Condition, as the criteria under Accounting Standards Codification (“ASC”) 210-20, “Balance Sheet,” have been met.

All of the commodity interests owned 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 September 30, 2014 and 2013 were 197 and 1,627, respectively. The monthly average number of futures contracts traded directly by the Partnership during the nine months ended September 30, 2014 and 2013 were 563 and 1,597, respectively. There were no metals forward contracts traded directly by the Partnership during the three months ended September 30, 2014 and 2013. The monthly average number of metals forward contracts traded directly by the Partnership during the nine months ended September 30, 2014 and 2013, were 0 and 12, respectively. The monthly average number of option contracts held directly by the Partnership during the three months ended September 30, 2014 and 2013 were 1,319 and 0, respectively. The monthly average number of option contracts held directly by the Partnership during the nine months ended September 30, 2014 and 2013 were 1,619 and 17, respectively. The monthly average notional value of currency forward contracts held directly by the Partnership during the three months ended September 30, 2014 and 2013 were $55,892,125 and $0, respectively. The monthly average notional values of currency forward contracts held directly by the Partnership during the nine months ended September 30, 2014 and 2013 were $79,892,256 and $601, respectively.

Brokerage fees previously paid to CGM were calculated as a percentage of the Partnership’s adjusted net asset value on the last day of each month and were affected by trading performance, subscriptions and redemptions.

Trading and transaction fees are based on the number of trades executed by the Advisors and the Partnership’s ownership of the Funds.

11

Emerging CTA Portfolio L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

On January 1, 2013, the Partnership adopted Accounting Standards Update (“ASU”) 2011-11, “Disclosure about Offsetting Assets and Liabilities” and ASU 2013-01, “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities.” ASU 2011-11 created a new disclosure requirement about the nature of an entity’s rights to setoff and the related arrangements associated with its financial instruments and derivative instruments, while ASU 2013-01 clarified the types of instruments and transactions that are subject to the offsetting disclosure requirements established by ASU 2011-11. Entities are required to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial condition and instruments and transactions subject to an agreement similar to a master netting arrangement. The objective of these disclosures is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of International Financial Reporting Standards.

The following tables summarize the valuation of the Partnership’s investments at September 30, 2014 and December 31, 2013, respectively.

	Gross Amounts Recognized			Gross Amounts Offset in the Statement of Financial Condition			Amounts Presented  in the Statement of Financial Condition		Gross Amounts not Offset in the Statement of Financial Condition				Net Amount
September 30, 2014									Financial Instruments		Cash Collateral Received
Assets
Futures	$	12,305		$	(10,763	)	$	1,542	$	—	$	—	$	1,542
Total Assets		12,305			(10,763	)		1,542		—		—		1,542
Liabilities
Futures	$	(10,763	)	$	10,763		$	—	$	—	$	—	$	—
Total Liabilities		(10,763	)		10,763			—		—		—		—
Net fair value													$	1,542

	Gross Amounts Recognized			Gross  Amounts Offset in the Statements of Financial Condition			Amounts Presented in the Statements of Financial  Condition			Gross Amounts not Offset in the Statements of Financial Condition
December 31, 2013										Financial Instruments			Cash Collateral Received		Net Amount
Assets
Futures	$	1,432,133		$	(797,904	)	$	634,229		$	—		$	—	$	634,229
Options purchased		1,278,375			—			1,278,375			(322,350	)		—		956,025
Total Assets		2,710,508			(797,904	)		1,912,604			(322,350	)		—		1,590,254
Liabilities
Futures	$	(797,904	)	$	797,904		$	—		$	—		$	—	$	—
Options premium received		(322,350	)		—			(322,350	)		322,350			—		—
Total Liabilities		(1,120,254	)		797,904			(322,350	)		322,350			—		—
Net fair value															$	1,590,254

12

Emerging CTA Portfolio L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

The following tables indicate the gross fair va lues of derivative instruments of futures, forwards and options contracts as separate assets and liabilities as of September 30, 2014 and December 31, 2013.

Assets	September 30, 2014
Futures Contracts
Currencies	$	215
Energy		9,095
Indices		340
Interest Rates Non-U.S.		290
Livestock		1,476
Softs		889
Total unrealized appreciation on open futures contracts	$	12,305
Liabilities
Futures Contracts
Currencies	$	(7,447	)
Energy		(422	)
Indices		(551	)
Livestock		(752	)
Metals		(335	)
Softs		(1,256	)
Total unrealized depreciation on open futures contracts	$	(10,763	)
Net unrealized appreciation on open futures contracts	$	1,542	*

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

13

Emerging CTA Portfolio L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

	December 31, 2013
Assets
Futures Contracts
Energy	$	47,952
Grains		330,270
Indices		581,789
Interest Rates Non-U.S.		281,256
Interest Rates U.S.		6,242
Livestock		380
Metals		54,812
Softs		129,432
Total unrealized appreciation on open futures contracts	$	1,432,133
Liabilities
Futures Contracts
Energy	$	(24,919	)
Grains		(62,987	)
Indices		(386,784	)
Interest Rates Non-U.S.		(104,588	)
Interest Rates U.S.		(201,662	)
Livestock		(4,050	)
Metals		(2,430	)
Softs		(10,484	)
Total unrealized depreciation on open futures contracts	$	(797,904	)
Net unrealized appreciation on open futures contracts	$	634,229	*
Assets
Options purchased
Energy	$	1,278,375
Total options purchased	$	1,278,375	**
Liabilities
Options premium received
Energy	$	(322,350	)
Total options premium received	$	(322,350	)***

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

** This amount is included in “Options purchased, at fair value” on the Statements of Financial Condition.

*** This amount is included in “Options premium received, at fair value” on the Statements of Financial Condition.

14

Emerging CTA Portfolio L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

The following tables indicate the trading gains and losses, by market sector, on derivative instruments traded directly by the Partnership for the three and nine months ended September 30, 2014 and 2013.

	Three Months Ended September 30,						Nine Months Ended September 30,
Sector	2014			2013			2014			2013
Currencies	$	310,584		$	1,763,058		$	138,278		$	2,254,507
Energy		(1,876,447	)		—			(2,914,078	)		114,173
Grains		146,038			—			214,650			(1,670	)
Indices		(292,559	)		(2,054,179	)		(922,817	)		(2,131,293	)
Interest Rates U.S.		30,009			114,414			295,483			29,339
Interest Rates Non-U.S.		59,703			(404,355	)		(716,102	)		(1,073,592	)
Livestock		(95,957	)		—			(59,067	)		(4,570	)
Metals		47,682			—			92,195			(350,475	)
Softs		77,135			—			(47,845	)		23,373
Total	$	(1,593,812	)****	$	(581,062	)****	$	(3,919,303	)****	$	(1,140,208	)****

**** This amount is included in “Total trading results” on the Statements of Income and Expenses and Changes in Partners’ Capital.

4. Fair Value Measurements:

Partnership’s and the Funds’ Investments.All commodity interests held by the Partnership and the Funds (including derivative financial instruments and derivative commodity instruments) are held for trading purposes. The commodity interests are recorded on the trade date and open contracts are recorded at fair value (as described below) 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. Unrealized gains or losses on open contracts are included as a component of equity in trading account on the Statements of Financial Condition. Net realized gains or losses and any change in net unrealized gains or losses from the preceding period are reported in the Statements of Income and Expenses and Changes in Partners’ Capital.

Partnership’s and the Funds’ Fair Value Measurements.Fair value is defined as the price 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 General Partner has concluded that based on available information in the marketplace, the Partnership’s and the Funds’ Level 1 assets and liabilities are actively traded.

GAAP also requires the use of judgment in determining if a formerly active market has become inactive and in determining fair values when the market has become inactive. The General Partner has concluded that based on available information in the marketplace, there has not been a significant decrease in the volume and level of activity in the Partnership’s and the Funds’ Level 2 assets and liabilities.

The Partnership and the Funds will separately present purchases, sales, issuances and settlements in their reconciliation of Level 3 fair value measurements (i.e., to present such items on a gross basis rather than on a net basis), and make disclosures regarding the level of disaggregation as well as the inputs and valuation techniques used to measure fair value for measurements that fall within either Level 2 or Level 3 of the fair value hierarchy as required under GAAP.

On October 1, 2012, the Financial Accounting Standards Board (the “FASB”) issued ASU 2012-04 “Technical Corrections and Improvements,” which makes minor technical corrections and clarifications to ASC 820, “Fair Value Measurements and Disclosures.” When the FASB issued Statement 157 (codified in ASC 820), it conformed the use of the term “fair value” in certain pre-codification standards but not others. ASU 2012-04 conforms the term’s use throughout the ASC “to fully reflect the fair value measurement and disclosure requirements” of ASC 820. ASU 2012-04 also amends the requirements that must be met for an investment company to qualify for the exemption from presenting a statement of cash flows. Specifically, it eliminates the requirements that substantially all of an entity’s investments be carried at “market value” and that the investments be highly liquid. Instead, it requires substantially all of the entity’s investments to be carried at “fair value” and classified as Level 1 or Level 2 measurements under ASC 820.

15

Emerging CTA Portfolio L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

The Partnership and the Funds consider prices for exchange-traded commodity futures, forwards, swaps and options contracts to be based on unadjusted quoted prices in active markets for identical assets and liabilities (Level 1). The values ofnon-exchange-traded forwards, swaps and certain options contracts for which market quotations are not readily available are priced by broker-dealers that derive fair values for those assets and liabilities from observable inputs (Level 2). Investments in funds (other commodity pools) where there are no other rights or obligations inherent within the ownership interest held by the Partnership are priced based on the end of the day net asset value (Level 2). The value of the Partnership’s investments in the Funds reflects its proportional interest in the Funds. As of and for the periods ended September 30, 2014 and December 31, 2013, the Partnership and the Funds did not hold any derivative instruments that were priced at fair value using unobservable inputs through the application of the General Partner’s assumptions and internal valuation pricing models (Level 3). During the nine months ended September 30, 2014 and the twelve months ended December 31, 2013, there were no transfers of assets or liabilities between Level 1 and Level 2.

	September 30, 2014		Quoted Prices in Active  Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable  Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)
Assets
Investment in Funds	$	98,063,189	$	—	$	98,063,189	$	—
Futures		12,305		12,305		—		—
Total assets	$	98,075,494	$	12,305	$	98,063,189	$	—
Liabilities
Futures	$	10,763	$	10,763	$	—	$	—
Total liabilities		10,763		10,763		—		—
Net fair value	$	98,064,731	$	1,542	$	98,063,189	$	—

	December 31, 2013		Quoted Prices in Active Markets for Identical Assets and  Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Investment in Funds	$	123,486,175	$	—	$	123,486,175	$	—
Futures		1,432,133		1,432,133		—		—
Options purchased		1,278,375		1,278,375		—		—
Total assets		126,196,683		2,710,508		123,486,175		—
Liabilities
Futures	$	797,904	$	797,904	$	—	$	—
Options premium received		322,350		322,350		—		—
Total liabilities		1,120,254		1,120,254		—		—
Net fair value	$	125,076,429	$	1,590,254	$	123,486,175	$	—

16

Emerging CTA Portfolio L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

5. Investment in Funds:

On March 1, 2010, the assets allocated to Waypoint Capital Management LLC (“Waypoint”) for trading were invested in the Waypoint Master Fund L.P. (“Waypoint Master”), a limited partnership organized under the partnership laws of the State of New York. The Partnership purchased 26,581.6800 units of Waypoint Master with cash equal to $26,581,680. Effective November 30, 2013, the Partnership fully redeemed its investment in Waypoint Master for cash equal to $4,378,673.

On November 1, 2010, the assets allocated to PGR Capital LLP (“PGR”) for trading were invested in PGR Master Fund L.P. (“PGR Master”), a limited partnership organized under the partnership laws of the State of Delaware. The Partnership invested in PGR Master with cash equal to $14,913,029. Effective December 31, 2013, the Partnership fully redeemed its investment in PGR Master for cash equal to $14,986,312.

On November 1, 2010, the assets allocated to Blackwater Capital Management, LLC (“Blackwater”) for trading were invested in Blackwater Master, a limited partnership organized under the partnership laws of the State of Delaware. The Partnership invested in Blackwater Master with cash equal to $15,674,694. Blackwater Master permits accounts managed by Blackwater using the Blackwater Global Program, a proprietary, systematic trading program, to invest together in one trading vehicle. The General Partner is also the general partner of Blackwater Master. Individual and pooled accounts currently managed by Blackwater, including the Partnership, are permitted to be limited partners of Blackwater Master. The General Partner and Blackwater believe that trading through this structure should promote efficiency and economy in the trading process.

On January 1, 2011, the assets allocated to J E Moody & Company LLC (“J E Moody”) for trading were invested in JEM Master Fund L.P. (“JEM Master”), a limited partnership organized under the partnership laws of the State of Delaware. The Partnership purchased 19,624.4798 units of JEM Master with cash equal to $19,624,480. Effective October 31, 2013, the Partnership fully redeemed its investment in JEM Master for cash equal to $4,400,957.

On January 1, 2011, the assets allocated to Cirrus Capital Management LLC (“Cirrus”) for trading were invested in CMF Cirrus Master Fund L.P. (“Cirrus Master”), a limited partnership organized under the partnership laws of the State of Delaware. The Partnership purchased 22,270.9106 units of Cirrus Master with cash equal to $22,270,911. Effective August 31, 2013, the Partnership fully redeemed its investment in Cirrus Master for cash equal to $9,645,872.

On September 1, 2012, the assets allocated to The Cambridge Strategy (Asset Management) Limited (“Cambridge”) for trading were invested in Cambridge Master, a limited partnership organized under the partnership laws of the State of Delaware. The Partnership invested in Cambridge Master with cash equal to $3,000,000. Cambridge Master permits accounts managed by Cambridge using the Asian Markets Alpha Programme and the Emerging Markets Alpha Programme, each a proprietary, systematic trading program, to invest together in one trading vehicle. The General Partner is also the general partner of Cambridge Master. Individual and pooled accounts currently managed by Cambridge, including the Partnership, are permitted to be limited partners of Cambridge Master. The General Partner and Cambridge believe that trading through this structure should promote efficiency and economy in the trading process. The General Partner and Cambridge agreed that Cambridge will trade the Partnership’s assets allocated to Cambridge 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. However, in no event will the amount of leverage be greater than 2 times the amount of assets allocated.

17

Emerging CTA Portfolio L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

Effective January 1, 2013, the assets traded directly by Willowbridge Associates Inc. (“Willowbridge”) using its wPraxis Futures Trading Approach, were invested in Willowbridge Master, a limited partnership organized under the partnership laws of the State of New York. The Partnership purchased 14,103.3175 units of Willowbridge Master with cash equal to $29,484,306. Willowbridge Master permits accounts managed by Willowbridge using the wPraxis Futures Trading Approach, a proprietary, discretionary trading system, to invest together in one trading vehicle. The General Partner is also the general partner of Willowbridge Master. Individual and pooled accounts currently managed by Willowbridge, including the Partnership, are permitted to be limited partners of Willowbridge Master. The General Partner and Willowbridge believe that trading through this structure should promote efficiency and economy in the trading process. The General Partner and Willowbridge agreed that Willowbridge will trade the Partnership’s assets allocated to Willowbridge at a level that is up to 3 times the amount of assets allocated. Effective February 28, 2013, Willowbridge ceased trading the Partnership’s assets using its MStrategy Trading Approach.

On March 1, 2013, the assets allocated to Principle Capital Management LLC (“Principle”) for trading were invested in Principle Master, a limited partnership organized under the partnership laws of the State of Delaware. The Partnership invested in Principle Master with cash equal to $6,503,661. Effective July 31, 2014, the Partnership fully redeemed its investment in Principle Master for cash equal to $12,165,827.

On March 1, 2013, the assets allocated to 300 North Capital for trading were invested in 300 North Master, a limited partnership organized under the partnership laws of the State of Delaware. The Partnership invested in 300 North Master with cash equal to $10,000,000. 300 North Master permits accounts managed by 300 North Capital using the Global Macro Program, a proprietary, discretionary trading program, to invest together in one trading vehicle. The General Partner is also the general partner of 300 North Master. Individual and pooled accounts currently managed by 300 North Capital are permitted to be limited partners of 300 North Master. The General Partner and 300 North Capital believed that trading through this structure promoted efficiency and economy in the trading process. The General Partner and 300 North Capital agreed that 300 North Capital would trade the Partnership’s assets allocated to 300 North Capital at a level that was up to 1.5 times the amount of assets allocated. Effective on or about November 1, 2014, the Partnership fully redeemed its investment in 300 North Master for cash equal to $12,374,970.

On August 1, 2013, the assets allocated to SECOR Capital Advisors, LP (“SECOR”) for trading were invested in the SECOR Master, a limited partnership organized under the partnership laws of the State of Delaware. The Partnership invested in SECOR Master with cash equal to $10,000,000. SECOR Master permits accounts managed by SECOR using a variation of the program traded by SECOR Alpha Master Fund L.P., a proprietary, systematic trading program, to invest together in one trading vehicle. The General Partner is also the general partner of SECOR Master. Individual and pooled accounts currently managed by SECOR are permitted to be limited partners of SECOR Master. The General Partner and SECOR believe that trading through this structure should promote efficiency and economy in the trading process. The General Partner and SECOR agreed that SECOR will trade the Partnership’s assets allocated to SECOR at a level that is up to 1.5 times the amount of assets allocated.

On September 1, 2014, the assets allocated to Perella Weinberg Partners Capital Management LP (“Perella”) for trading were invested in PGM Master Fund L.P. (“PGM Master”), a limited partnership organized under the partnership laws of the State of Delaware. The Partnership invested in PGM Master with cash equal to $10,500,000. PGM Master permits accounts managed by Perella using a selected variation of the program traded by PWP Global Macro Master Fund L.P., a proprietary, systematic trading system, to invest together in one trading vehicle. The General Partner is also the general partner of PGM Master. Individual and pooled accounts currently managed by Perella are permitted to be limited partners of PGM Master. The General Partner and Perella believe that trading through this structure should promote efficiency and economy in the trading process.

The General Partner is not aware of any material changes to any of the trading programs discussed above during the fiscal quarter ended September 30, 2014.

18

Emerging CTA Portfolio L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

Blackwater Master’s, Cambridge Master’s, Willowbridge Master’s, 300 North Master’s, PGM Master’s and SECOR Master’s (collectively, the “Funds”) and the Partnership’s trading of futures, forwards and options contracts, as applicable, on commodities was done and is done primarily on United States of America commodity exchanges and foreign commodity exchanges. Reference to “Funds” included in this report may include, as relevant, Waypoint Master, PGR Master, JEM Master, Principle Master and Cirrus Master. During the nine months ended September 30, 2014, the Funds engaged in such trading through commodity brokerage accounts maintained with MS&Co. During prior periods included in this report, the Funds also engaged in such trading through commodity brokerage accounts maintained with CGM.

A limited partner of the Funds may withdraw all or part of their capital contribution and undistributed profits, if any, from the Funds as of the end of any day (the “Redemption Date”) after a request for redemption has been made to the General Partner at least three days in advance of the Redemption Date. Such withdrawals are classified as a liability when the limited partner elects to redeem and informs the Funds.

Management, administrative and incentive fees are charged at the Partnership level. All trading, exchange, clearing, user,give-up, floor brokerage and National Futures Association fees (collectively the “clearing fees”) are borne by the Funds and allocated to their limited partners, including the Partnership. All other fees are charged at the Partnership level.

At September 30, 2014, the Partnership owned approximately 16.7% of Blackwater Master, 71.7% of Cambridge Master, 8.5% of Willowbridge Master, 100% of 300 North Master, 100% of PGM Master and 100% of SECOR Master. At December 31, 2013, the Partnership owned approximately 38.8% of Blackwater Master, 58.2% of PGR Master (prior to its redemptions on December 31, 2013), 15.2% of Willowbridge Master, 100% of 300 North Master, 100% of Principle Master, 100% of SECOR Master and 69.9% of Cambridge Master. It is the Partnership’s intention to continue to invest in the Funds (with the exception of 300 North Master). The performance of the Partnership is directly affected by the performance of the Funds. Expenses to investors as a result of investment in the Funds are approximately the same and the redemption rights are not affected.

19

Emerging CTA Portfolio L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

Summarized information reflecting the total assets, liabilities and capital of the Funds is shown in the following tables.

	September 30, 2014
	Total Assets		Total Liabilities		Total Capital
Blackwater Master	$	27,337,271	$	370,501	$	26,966,770
SECOR Master		24,610,150		349,698		24,260,452
Cambridge Master		43,328,564		49,350		43,279,214
Willowbridge Master		118,333,859		180,327		118,153,532
300 North Master		17,046,801		20,657		17,026,144
PGM Master		11,221,726		14,176		11,207,550
	December 31, 2013
	Total Assets		Total Liabilities		Total Capital
Blackwater Master	$	63,936,601	$	610,828	$	63,325,773
PGR Master		25,764,457		15,005,082		10,759,375
SECOR Master		15,463,167		80,075		15,383,092
Cambridge Master		37,549,964		28,580		37,521,384
Willowbridge Master		95,699,725		7,316,065		88,383,660
300 North Master		24,407,958		34,469		24,373,489
Principle Master		18,952,159		353,341		18,598,818

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

	For the three months ended September 30, 2014
	Net Investment Income (Loss)			Total Trading Results			Net Income (Loss)
Blackwater Master	$	(14,963	)	$	2,462,046		$	2,447,083
SECOR Master		(155,854	)		325,929			170,075
Cambridge Master		(54,962	)		6,532,519			6,477,557
Willowbridge Master		(166,398	)		3,692,929			3,526,531
300 North Master		(42,217	)		(270,614	)		(312,831	)
Principle Master		(74,652	)		(1,025,740	)		(1,100,392	)
PGM Master		(26,211	)		733,796			707,585
	For the nine months ended September 30, 2014
	Net Investment Income (Loss)			Total Trading Results			Net Income (Loss)
Blackwater Master	$	(62,309	)	$	732,472		$	670,163
SECOR Master		(400,635	)		1,161,971			761,336
Cambridge Master		(121,681	)		6,865,193			6,743,512
Willowbridge Master		(379,676	)		2,654,368			2,274,692
300 North Master		(128,732	)		(3,974,712	)		(4,103,444	)
Principle Master		(184,996	)		(3,248,158	)		(3,433,154	)
PGM Master		(26,211	)		733,796			707,585

20

Emerging CTA Portfolio L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

	For the three months ended September 30, 2013
	Net Investment Income (Loss)			Total Trading Results			Net Income (Loss)
Waypoint Master	$	(28,980	)	$	(764,582	)	$	(793,562	)
Blackwater Master		(20,014	)		(2,708,600	)		(2,728,614	)
PGR Master		(18,354	)		(905,930	)		(924,284	)
JEM Master		(266,418	)		3,946,878			3,680,460
SECOR Master		(50,104	)		(473,511	)		(523,615	)
Cirrus Master		(84,022	)		(5,580,690	)		(5,664,712	)
Cambridge Master		(9,603	)		(3,121,089	)		(3,130,692	)
Willowbridge Master		(168,584	)		(3,203,058	)		(3,371,642	)
300 North Master		(50,593	)		(3,336,850	)		(3,387,443	)
Principle Master		(73,502	)		748,525			675,023
	For the nine months ended September 30, 2013
	Net Investment Income (Loss)			Total Trading Results			Net Income (Loss)
Waypoint Master	$	(94,780	)	$	(917,399	)	$	(1,012,179	)
Blackwater Master		(79,090	)		(2,792,564	)		(2,871,654	)
PGR Master		(105,210	)		4,944,302			4,839,092
JEM Master		(958,201	)		4,775,028			3,816,827
SECOR Master		(50,104	)		(473,511	)		(523,615	)
Cirrus Master		(172,349	)		(2,058,250	)		(2,230,599	)
Cambridge Master		(38,020	)		79,930			41,910
Willowbridge Master		(409,377	)		9,714,029			9,304,652
300 North Master		(88,988	)		(1,469,577	)		(1,558,565	)
Principle Master		(139,602	)		651,883			512,281

Summarized information reflecting the Partnership’s investments in, and the operations of, the Funds is shown in the following tables.

	September 30, 2014						For the three months ended September 30, 2014
	% of Partnership’s Net Assets			Fair Value			Income (Loss)				Expenses						Net  Income (Loss)				Investment Objective	Redemptions Permitted
Funds											Clearing Fees			Other
Blackwater Master		3.94	%		$	4,494,108		$	542,258			$	4,222		$	5,006		$	533,030		Commodity Portfolio	Monthly
SECOR Master		21.26	%			24,260,531			326,625				132,688			23,862			170,075		Commodity Portfolio	Monthly
Cambridge Master		27.20	%			31,039,544			4,656,321				27,556			28,520			4,600,245		Commodity Portfolio	Monthly
Willowbridge Master		8.80	%			10,035,221			285,494				15,452			3,896			266,146		Commodity Portfolio	Monthly
300 North Master		14.92	%			17,026,200			(270,035	)			17,054			25,742			(312,831	)	Commodity Portfolio	Monthly
Principle Master		—	%			—			(1,025,560	)			16,097			58,735			(1,100,392	)	Commodity Portfolio	Monthly
PGM Master		9.82	%			11,207,585			733,831				13,746			12,500			707,585		Commodity Portfolio	Monthly
Total					$	98,063,189		$	5,248,934			$	226,815		$	158,261		$	4,863,858
	September 30, 2014						For the nine months ended September 30, 2014
	% of Partnership’s Net Assets			Fair Value			Income (Loss)				Expenses						Net  Income (Loss)				Investment Objective	Redemptions Permitted
Funds											Clearing Fees			Other
Blackwater Master		3.94	%		$	4,494,108		$	(266,742	)		$	28,027		$	22,901		$	(317,670	)	Commodity Portfolio	Monthly
SECOR Master		21.26	%			24,260,531			1,164,738				335,246			68,156			761,336		Commodity Portfolio	Monthly
Cambridge Master		27.20	%			31,039,544			4,957,816				58,423			68,799			4,830,594		Commodity Portfolio	Monthly
Willowbridge Master		8.80	%			10,035,221			180,353				46,358			11,665			122,330		Commodity Portfolio	Monthly
300 North Master		14.92	%			17,026,200			(3,971,404	)			62,977			69,063			(4,103,444	)	Commodity Portfolio	Monthly
Principle Master		—	%			—			(3,245,900	)			85,947			101,307			(3,433,154	)	Commodity Portfolio	Monthly
PGM Master		9.82	%			11,207,585			733,831				13,746			12,500			707,585		Commodity Portfolio	Monthly
Total					$	98,063,189		$	(447,308	)		$	630,724		$	354,391		$	(1,432,423	)

21

Emerging CTA Portfolio L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

	December 31, 2013					For the three months ended September 30, 2013
	% of Partnership’s Net Assets			Fair Value		Income (Loss)			Expenses				Net Income (Loss)			Investment Objective	Redemptions Permitted
Funds									Clearing Fees		Other
Waypoint Master		—	%		—	$	(288,193	)	$	3,333	$	7,824	$	(299,350	)	Commodity Portfolio	Monthly
Blackwater Master		15.14	%		24,550,063		(1,075,007	)		11,700		8,721		(1,095,428	)	Commodity Portfolio	Monthly
PGR Master		—	%		—		(592,472	)		11,581		3,179		(607,232	)	Commodity Portfolio	Monthly
JEM Master		—	%		—		2,364,017			124,685		8,263		2,231,069		Commodity Portfolio	Monthly
SECOR Master		9.49	%		15,383,266		(473,174	)		33,166		17,275		(523,615	)	Commodity Portfolio	Monthly
Cirrus Master		—	%		—		(4,935,462	)		11,755		62,967		(5,010,184	)	Energy Markets	Monthly
Cambridge Master		16.17	%		26,222,525		(1,801,205	)		762		10,223		(1,812,190	)	Commodity Portfolio	Monthly
Willowbridge Master		8.86	%		14,357,559		(481,849	)		23,070		2,938		(507,857	)	Commodity Portfolio	Monthly
300 North Master		15.04	%		24,373,736		(3,336,097	)		32,946		18,400		(3,387,443	)	Commodity Portfolio	Monthly
Principle Master		11.47	%		18,599,026		749,294			56,612		17,659		675,023
Total				$	123,486,175	$	(9,870,148	)	$	309,610	$	157,449	$	(10,337,207	)
	December 31, 2013					For the nine months ended September 30, 2013
	% of Partnership’s Net Assets			Fair Value		Income (Loss)			Expenses				Net Income (Loss)			Investment Objective	Redemptions Permitted
Funds									Clearing Fees		Other
Waypoint Master		—	%	$	—	$	(356,944	)	$	15,982	$	25,925	$	(398,851	)	Commodity Portfolio	Monthly
Blackwater Master		15.14	%		24,550,063		(1,083,541	)		52,294		33,910		(1,169,745	)	Commodity Portfolio	Monthly
PGR Master		—	%		—		3,643,669			46,586		43,080		3,554,003		Commodity Portfolio	Monthly
JEM Master		—	%		—		2,975,168			608,979		31,769		2,334,420		Commodity Portfolio	Monthly
SECOR Master		9.49	%		15,383,266		(473,174	)		33,166		17,275		(523,615	)	Commodity Portfolio	Monthly
Cirrus Master		—	%		—		(1,948,940	)		56,226		96,747		(2,101,913	)	Energy Markets	Monthly
Cambridge Master		16.17	%		26,222,525		(26,021	)		762		43,732		(70,515	)	Commodity Portfolio	Monthly
Willowbridge Master		8.86	%		14,357,559		3,313,766			82,378		20,025		3,211,363		Commodity Portfolio	Monthly
300 North Master		15.04	%		24,373,736		(1,467,261	)		48,504		42,800		(1,558,565	)	Commodity Portfolio	Monthly
Principle Master		11.47	%		18,599,026		653,734			99,886		41,567		512,281
Total				$	123,486,175	$	5,230,456		$	1,044,763	$	396,830	$	3,788,863

22

Emerging CTA Portfolio L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

6. Financial Instrument Risks:

In the normal course of business, the Partnership and the Funds are parties to financial instruments withoff-balance sheet risk, including derivative financial instruments and derivative commodity instruments. These financial instruments may include forwards, futures, options and swaps, whose values are based upon an underlying asset, index, or reference rate, and generally represent future commitments to exchange currencies or cash balances, to purchase or sell other financial instruments at specific terms at specified future dates, or, in the case of derivative commodity instruments, to have a reasonable possibility to be settled in cash, through physical delivery or with another financial instrument. These instruments may be traded on an exchange, a swap execution facility orover-the-counter (“OTC”). Exchange-traded instruments include futures and certain standardized forward, 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 forwards 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 55.7% to 73.4% of the Partnership’s/Fund’s contracts are traded OTC.

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.

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/Funds are exposed to a market risk equal to the value of futures and forward contracts purchased 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 a counterparty default is typically limited to the amounts recognized in the Statements of Financial Condition and is not represented by the contract or notional amounts of the instruments. The Partnership’s/Funds’ risk of loss is reduced through the use of legally enforceable master netting agreements with counterparties that permit the Partnership/Funds to offset unrealized gains and losses and other assets and liabilities with such counterparties upon the occurrence of certain events. The Partnership/Funds had credit risk and concentration risk during the reporting period and prior periods included in this report, as CGM and/or MS&Co. or their affiliates were the sole counterparties or brokers with respect to the Partnership’s/Funds’ assets. Credit risk with respect to exchange-traded instruments is reduced to the extent that, through CGM/MS&Co., the Partnership’s/Funds’ counterparty is an exchange or clearing organization. The Partnership and the Funds continue to be subject to such risks with respect to MS&Co.

As both a buyer and seller of options, the Partnership/Funds pay or receive a premium at the outset and then bear the risk of unfavorable changes in the price of the contract underlying the option. Written options expose the Partnership/Funds to potentially unlimited liability; for purchased options, the risk of loss is limited to the premiums paid. Certain written put options permit cash settlement and do not require the option holder to own the reference asset. The Partnership/Funds do not consider these contracts to be guarantees.

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

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

23

Emerging CTA Portfolio L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

7. Critical Accounting Policies

Use of Estimates.The preparation of financial statements and accompanying notes in conformity with 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.

Partnership’s and the Funds’ Investments.All commodity interests held by the Partnership and the Funds, including derivative financial instruments and derivative commodity instruments, are held for trading purposes. The commodity interests are recorded on the trade date and open contracts are recorded at fair value (as described below) 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. Unrealized gains or losses on open contracts are included as a component of equity in trading account on the Statements of Financial Condition. Net realized gains or losses and any change in net unrealized gains or losses from the preceding period are reported in the Statements of Income and Expenses and Changes in Partners’ Capital.

Partnership’s and the Funds’ Fair Value Measurements.Fair value is defined as the price 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 General Partner has concluded that based on available information in the marketplace, the Partnership’s and the Funds’ Level 1 assets and liabilities are actively traded.

GAAP also requires the use of judgment in determining if a formerly active market has become inactive and in determining fair values when the market has become inactive. The General Partner has concluded that, based on available information in the marketplace, there has not been a significant decrease in the volume and level of activity in the Partnership’s and the Funds’ Level 2 assets and liabilities.

24

Emerging CTA Portfolio L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

The Partnership and the Funds will separately present purchases, sales, issuances and settlements in their reconciliation of Level 3 fair value measurements (i.e., to present such items on a gross basis rather than on a net basis), and make disclosures regarding the level of disaggregation as well as the inputs and valuation techniques used to measure fair value for measurements that fall within either Level 2 or Level 3 of the fair value hierarchy as required under GAAP.

The Partnership and the Funds consider prices for exchange-traded commodity futures, forwards, swaps and options contracts to be based on unadjusted quoted prices in active markets for identical assets and liabilities (Level 1). The values ofnon-exchange-traded forwards, swaps and certain option contracts for which market quotations are not readily available, are priced by broker-dealers that derive fair values for those assets and liabilities from observable inputs (Level 2). Investments in funds (other commodity pools) where there are no other rights or obligations inherent within the ownership interest held by the Partnership are priced based on the end of the day net asset value (Level 2). The value of the Partnership’s investments in the Funds reflects its proportional interest in the Funds. As of and for the periods ended September 30, 2014 and December 31, 2013, the Partnership and the Funds did not hold any derivative instruments that were priced at fair value using unobservable inputs through the application of the General Partner’s assumptions and internal valuation pricing models (Level 3). For the nine months ended September 30, 2014 and the twelve months ended December 31, 2013, there were no transfers of assets and liabilities between Level 1 and Level 2.

Futures Contracts.The Partnership and the Funds trade 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 the Funds each business day, depending on the daily fluctuations in the value of the underlying contracts, and are recorded as unrealized gains or losses by the Partnership and the Funds. When the contract is closed, the Partnership and the Funds record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Transactions in futures contracts require participants to make both initial margin deposits of cash or other assets and variation margin deposits, through the futures broker, directly with the exchange on which the contracts are traded. Net realized gains (losses) and changes in net unrealized gains (losses) on futures contracts are included in the Statements of Income and Expenses and Changes in Partners’ Capital.

Forward Foreign Currency Contracts.Forward foreign currency contracts are those contracts where the Partnership and the Funds agree to receive or deliver a fixed quantity of foreign currency for an agreed-upon price on an agreed-upon future date. Forward foreign currency contracts are valued daily, and the Partnership’s and 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 included in the Statements of Financial Condition. Net realized gains (losses) and changes in net unrealized gains (losses) on forward foreign currency contracts are recognized in the period in which the contract is closed or the changes occur and are included in the Statements of Income and Expenses and Changes in Partners’ Capital.

The Partnership and the Funds do not isolate the portion of the results of operations arising from the effect of changes in foreign exchange rates on investments from fluctuations due to changes in market prices of investments held. Such fluctuations are included in net income (loss) in the Statements of Income and Expenses and Changes in Partners’ Capital.

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

25

Emerging CTA Portfolio L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

Options.The Partnership/Funds may purchase and write (sell) both exchange-listed and OTC options on commodities or financial instruments. An option is a contract allowing, but not requiring, its holder to buy (call) or sell (put) a specific or standard commodity or financial instrument at a specified price during a specified time period. The option premium is the total price paid or received for the option contract. When the Partnership/Funds write an option, the premium received is recorded as a liability in the Statements of Financial Condition and marked-to-market daily. When the Partnership/Funds purchase an option, the premium paid is recorded as an asset in the Statements of Financial Condition and marked-to-market daily. Net realized gains (losses) and changes in net unrealized gains (losses) on option contracts are included in the Statements of Income and Expenses and Changes in Partners’ Capital.

Investment Company Status. Effective January 1, 2014, the Partnership adopted ASU 2013-08, “Financial Services — Investment Companies (Topic 946): Amendments to the Scope, Measurement and Disclosure Requirements.” ASU 2013-08 changes the approach to the investment company assessment, requires non-controlling ownership interests in other investment companies to be measured at fair value, and requires additional disclosures about the investment company’s status as an investment company. ASU 2013-08 is effective for interim and annual reporting periods beginning after December 15, 2013. The adoption of this ASU did not have a material impact on the Partnership’s financial statements. Based on management’s assessment, the Partnership has been deemed to be an investment company since inception. It has all of the fundamental and typical characteristics of an investment company.

Income Taxes.Income taxes have not been provided as each partner is individually liable for the taxes, if any, on its share of the Partnership’s income and expenses.

GAAP provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements, and requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Partnership’s financial statements to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions with respect to tax at the Partnership level not deemed to meet the “more-likely-than-not” threshold would be recorded as a tax benefit or expense in the current year. The General Partner has concluded that no provision for income tax is required in the Partnership’s financial statements.

The Partnership files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The 2011 through 2013 tax years remain subject to examination by U.S. federal and most state tax authorities. The General Partner does not believe that there are any uncertain tax positions that require recognition of a tax liability.

Net Income (Loss) per unit.Net income (loss) per unit is calculated in accordance with investment company guidance. See Note 2, “Financial Highlights.”

Subsequent Events.The General Partner evaluates events that occur after the balance sheet date but before financial statements are issued. The General Partner has assessed the subsequent events through the date of issuance and has determined that, other than that referenced in Note 1 to the Financial Statements, there were no subsequent events requiring adjustment of or disclosure in the financial statements.

26

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

Liquidity and Capital Resources

The Partnership does not engage in sales of goods or services. Its assets are its (i) investments in the Funds, (ii) equity in its trading account, consisting of cash and cash margin, net unrealized appreciation on open futures contracts and options purchased and (iii) interest receivable. The Funds’ only assets are their equity in trading accounts, consisting of cash and cash margin, net unrealized appreciation on open futures contracts, net unrealized appreciation on open forward contracts and options purchased, if applicable. 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 investment in the Funds. While substantial losses could lead to a material decrease in liquidity, no such illiquidity occurred in the third quarter of 2014.

The Partnership’s capital consists of the capital contributions of the partners as increased or decreased by net 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 nine months ended September 30, 2014, Partnership capital decreased 29.6% from $162,121,688 to $114,101,875. This decrease was attributable to a net loss of $11,470,291, coupled with redemptions of 34,250.6190 Class A Redeemable Units totaling $42,313,886 and 570.5870 General Partner Class A unit equivalents totaling $702,619, which was partially offset by subscriptions for 5,117.6500 Class A Redeemable Units totaling $6,466,983. Future redemptions can impact the amount of funds available for investment in funds in subsequent periods.

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 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 7 of the Financial Statements.

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

Results of Operations

During the Partnership’s third quarter of 2014 the net asset value per unit increased 1.1% from $1,249.02 to $1,262.88, as compared to a decrease of 7.3% in the third quarter of 2013. The Partnership experienced a net trading gain before fees and expenses in the third quarter 2014 of $3,652,210. Gains were primarily attributable to the Partnership’s/Funds’ trading of commodity futures in currencies, grains, metals and softs, and were partially offset by losses in energy, U.S. and non-U.S. interest rates, indices and livestock. The Partnership experienced a net trading loss before fees and expenses in the third quarter of 2013 of $10,458,377. Losses were primarily attributable to the Partnership’s/Funds’ trading of commodity futures in currencies, energy, indices, U.S. and non-U.S. interest rates and metals, and were partially offset by gains in grains and livestock.

The most significant gains were achieved within the currency sector throughout the third quarter from short positions in the euro, Swiss franc, and Japanese yen versus the U.S. dollar as diverging central bank policy paths contributed to a strong U.S. dollar relative to its peers. The Bank of Japan’s and the European Central Banks’ focus on keeping interest rates low, while the U.S. Federal Reserve indicated higher interest rates, benefitted the Fund’s short currency positions. Within the agriculturals sector, gains were recorded primarily during July from short cotton futures positions as prices decreased as expanding planted acreage and improved farming conditions within the U.S. boosted the outlook for crop yields. Within the metals sector, gains were experienced during the August from long futures positions in industrial metals as prices increased amid signs of a strengthening economic recovery in the U.S. A portion of the Partnership’s gains for the quarter was offset by losses incurred within the energy sector during July and August from long crude oil and oil distillates positions as prices declined amid reports of rising oil stockpiles and speculation of slowing global growth. In the global equity index sector, losses were recorded during July and September from long U.S. and European equity index futures positions as prices decreased amid concern over economic growth in Europe and Ukrainian-Russian tensions. Within the global interest rate sector, losses were incurred during July from long positions in U.S. fixed income futures after prices declined as reports showed U.S. jobless claims unexpectedly fell to a multi-year low, raising expectations that the U.S. Federal Reserve may increase interest rates sooner-than-forecast. Additional losses were recorded in this sector during September from long positions in U.S. Treasury bond and Treasury note futures as prices declined after strong economic indicators in the U.S. increased speculation that the Federal Reserve would raise interest rates in 2015.

27

During the Partnership’s nine months ended September 30, 2014 the net asset value per unit decreased 6.5% from $1,350.40 to $1,262.88, as compared to a decrease of 3.8% during the nine months ended September 30, 2013. The Partnership experienced a net trading loss before fees and expenses in the nine months ended September 30, 2014 of $4,383,904. Losses were primarily attributable to the Partnership’s/Funds’ trading of commodity futures in energy, indices, non-U.S. interest rates and metals, and were partially offset by gains in currencies, grains, livestock, U.S. interest rates and softs. The Partnership experienced a net trading gain before fees and expenses in the nine months ended September 30, 2013 of $4,048,840. Gains were primarily attributable to the Partnership’s/Funds’ trading of commodity futures in indices, livestock and metals, and were partially offset by losses in currencies, energy, grains, U.S. and non-U.S. interest rates and softs.

The most significant losses were recorded within the global stock index sector during January and March from long positions in U.S., European, and Asian equity index futures as prices declined following softer-than-expected economic data in the U.S. and China, along with political and economic headwinds facing emerging markets. Additional losses were recorded during the third quarter from long U.S. and European equity index futures as prices decreased amid concern over economic growth in Europe and Ukrainian-Russian tensions. Within the energy complex, losses were recorded in January and February from short futures positions in natural gas and petroleum distillates as prices advanced following cold weather in the U.S., which boosted demand for heating fuel. Additional losses were incurred within this sector during July and August from long crude oil and oil distillates positions as prices declined amid reports of rising oil stockpiles and speculation of slowing global growth. Losses within the global interest rates sector were recorded primarily during the middle of June from long positions in U.S. fixed income futures as prices moved lower amid concern that signs of increased inflation may influence the U.S. Federal Reserve to take a more hawkish stance with interest rates. Additional losses were incurred during July and September from long positions in U.S. fixed income futures after prices declined after strong economic indicators in the U.S. increased speculation that the Federal Reserve would raise interest rates sooner-than-forecast. Within the metals complex, losses were experienced during February and June from short precious metals positions as prices increased following geopolitical concerns in emerging markets, Ukraine, and the Middle East, which caused investor anxiety and sporadic demand for “safe-haven” assets. Additional losses in this sector were incurred in the second half of April from short base metals futures positions as prices rose amid a rising demand outlook for the metals. The Partnership’s losses during the first nine months of the year were partially offset by gains experienced within the currency sector during May from long positions in the Hungarian forint and Polish zloty versus the euro as the value of the euro declined after manufacturing and business confidence signaled uneven economic growth, bolstering bets on further European Central Bank stimulus. Throughout the third quarter, additional gains were achieved in this sector from short positions in the euro, Swiss franc Japanese yen versus the U.S. dollar as diverging central bank policy paths contributed to a strong U.S. dollar relative to its peers. The Bank of Japan’s and the European Central Banks’ focus on keeping interest rates low, while the U.S. Federal Reserve indicated higher interest rates. In the agricultural complex, gains were achieved during June from long cattle futures positions as prices advanced as the U.S. cattle herd dwindled to record lows and demand for beef increased. Additional gains within this sector were recorded during July from short cotton futures positions as prices decreased as expanding planted acreage and improved farming conditions within the U.S. boosted the outlook for crop yields.

        Commodity futures markets are highly volatile. Broad price fluctuations and rapid inflation increase the risks involved in commodity trading, but also increase the possibility of profit. The profitability of the Partnership/Funds depends on the existence of major price trends and the ability of the Advisors to correctly identify those price trends. Price trends are influenced by, among other things, changing supply and demand relationships, weather, governmental, agricultural, commercial and trade programs and policies, national and international political and economic events, and changes in interest rates. To the extent that market trends exist and the Advisors are able to identify them, the Partnership expects to increase capital through operations.

        Interest income 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 during each month was earned at a 30-day U.S. Treasury bill rate determined weekly based on the average noncompetitive yield on 3-month U.S. Treasury bills maturing in 30 days or at the monthly average of the 4-week U.S. Treasury bill discount rate, as applicable. Interest income for the three and nine months ended September 30, 2014 decreased by $4,353 and $26,291, respectively, as compared to the corresponding periods in 2013. The decrease in interest income is due to lower U.S. Treasury bill rates and lower average net assets during the three and nine months ended September 30, 2014, as compared to the corresponding periods in 2013. 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 depends on the average daily equity in the Partnership’s and the Funds’ accounts and upon interest rates over which neither the Partnership/Funds nor CGM and/or MS&Co. has control.

Ongoing selling agent/brokerage 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 monthly net asset values. Ongoing selling agent/brokerage fees for the three and nine months ended September 30, 2014 decreased by $777,891 and $1,920,183, respectively, as compared to the corresponding periods in 2013. The decrease in ongoing selling agent/brokerage fees is due to lower average net assets and a reduction in the monthly ongoing selling agent fee rate during the three and nine months ended September 30, 2014, as compared to the corresponding periods in 2013.

28

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 for the three and nine months ended September 30, 2014 decreased by $48,440 and $385,308, respectively, as compared to the corresponding periods in 2013. The decrease in clearing fees is primarily due to a decrease in the number of trades during the three and nine months ended September 30, 2014, as compared to the corresponding periods in 2013.

Management fees are calculated as a percentage of the Partnership’s adjusted net asset value 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 monthly net asset values. Management fees for the three and nine months ended September 30, 2014 decreased by $181,827 and $567,910, respectively, as compared to the corresponding periods in 2013. The decrease in management fees is due to lower average net assets during the three and nine months ended September 30, 2014, as compared to the corresponding periods in 2013.

Administrative fees are paid to the General Partner for administering the business and affairs of the Partnership. These fees are calculated as a percentage of the Partnership’s adjusted net asset value 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 monthly net asset values. Administrative fees for the three and nine months ended September 30, 2014 decreased by $66,928 and $180,418, respectively, as compared to the corresponding periods in 2013. The decrease in administrative fees is due to lower average net assets during the three and nine months ended September 30, 2014, as compared to the corresponding periods in 2013.

Incentive fees paid by the Partnership to the Advisors are based on the new trading profits generated by each Advisor at the end of the quarter, as defined in the management agreements among the Partnership, the General Partner and each Advisor. Trading performance for the three and nine months ended September 30, 2014 resulted in incentive fees in the amount of $683,130 and $670,921, respectively. Trading performance for the three and nine months ended September 30, 2013 resulted in incentive fees of $201,857 and $1,347,427, respectively. To the extent an Advisor incurs a loss for the Partnership, the Advisor will not be paid incentive fees until such Advisor recovers any net loss incurred by the Advisor and earns additional new trading profits for the Partnership.

In allocating the assets of the Partnership among the Advisors, the General Partner conducts proprietary research and considers the background of the Advisors’ principals, as well as the Advisors’ trading styles, strategies and markets traded, expected volatility, trading results (to the extent available) 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 September 30, 2014 and June 30, 2014, the Partnership’s assets were allocated among the Advisors in the following approximate percentages:

Advisor	September 30, 2014				June 30, 2014
Blackwater	$	4,482,920	4	%	$	7,998,920	6	%
Willowbridge	$	9,991,016	9	%	$	11,866,914	9	%
SECOR	$	24,152,982	21	%	$	18,681,433	15	%
Cambridge	$	26,365,519	23	%	$	23,148,191	18	%
300 North Capital	$	16,954,375	15	%	$	20,389,535	16	%
Principle	$	—	—	%	$	13,266,219	10	%
Centurion	$	10,925,298	9	%	$	—	—	%
Perella	$	11,030,056	10	%	$	—	—	%
Other	$	10,199,709	9	%	$	32,400,783	26	%

29

Item 3. Quantitative and Qualitative Disclosures about Market Risk

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

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

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

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

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

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

Value at Risk tables represent a probabilistic assessment of the risk of loss in market risk sensitive instruments. With the exception of certain advisors, the Advisors currently trade the Partnership’s assets indirectly in master fund managed accounts established in the name of the master fund over which they have been granted limited authority to make trading decisions. The first two trading Value at Risk tables reflect the market sensitive instruments held by the Partnership directly and through its investments in the Funds. The remaining trading Value at Risk tables reflect the market sensitive instruments held by the Partnership directly (i.e., in the managed accounts in the Partnership’s name traded by certain advisors), and indirectly by each Fund separately. There has been no material change in the trading Value at Risk information previously disclosed in the Partnership’sForm 10-K for the year ended December 31, 2013.

The following tables indicate the trading Value at Risk associated with the Partnership’s open positions by market category as of September 30, 2014 and December 31, 2013, as applicable. As of September 30, 2014, the Partnership’s total capitalization was $114,101,875.

September 30, 2014

Market Sector	Value at Risk		% of Total Capitalization
Currencies		$16,615,879		14.56	%
Energy		611,524		0.54	%
Grains		533,336		0.47	%
Indices		7,708,000		6.75	%
Interest Rates U.S.		700,589		0.61	%
Interest Rates Non-U.S.		1,856,385		1.63	%
Livestock		58,468		0.05	%
Metals		1,023,661		0.90	%
Softs		134,420		0.12	%
Total	$	29,242,262		25.63	%

30

As of December 31, 2013, the Partnership’s total capitalization was $162,121,688.

December 31, 2013

Market Sector	Value at Risk		% of Total Capitalization
Currencies	$	9,798,209		6.04	%
Energy		810,779		0.50	%
Grains		542,380		0.33	%
Indices		6,287,254		3.88	%
Interest Rates U.S.		921,670		0.57	%
Interest Rates Non-U.S.		1,459,970		0.90	%
Livestock		134,659		0.08	%
Metals		2,191,744		1.35	%
Softs		149,935		0.10	%
Total	$	22,296,600		13.75	%

The following tables indicate the trading Value at Risk associated with the Partnership’s direct investments and through its investments in the Funds by market category as of September 30, 2014 and December 31, 2013, and the highest, lowest and average values during the three months ended September 30, 2014 and the twelve months ended December 31, 2013. All open contracts trading risk exposures have been included in calculating the figures set forth below.

As of September 30, 2014, the Partnership’s Value at Risk for the portion of its assets that are traded directly was as follows:

September 30, 2014

						Three Months Ended September 30, 2014
Market Sector	Value at Risk		% of  Total Capitalization			High Value at  Risk		Low Value at  Risk		Average Value at Risk*
Currencies	$	37,994		0.03	%	$	249,922	$	2,970	$	22,675
Energy		56,177		0.05	%		2,315,173		300,860		606,819
Indices		28,794		0.03	%		1,721,458		18,773		547,546
Interest Rates Non-U.S.		3,978		0.00	%**		256,906		1,333		48,678
Livestock		3,960		0.00	%**		27,720		1,320		7,480
Metals		7,150		0.01	%		106,920		3,036		8,250
Softs		8,690		0.01	%		127,435		1,210		34,577
Total	$	146,743		0.13	%

* Average ofmonth-end Values at Risk.

** Due to rounding

As of December 31, 2013, the Partnership’s Value at Risk for the portion of its assets that are traded directly was as follows:

December 31, 2013

						Twelve Months Ended December 31, 2013
Market Sector	Value at Risk		% of  Total Capital			High Value at  Risk		Low Value at  Risk		Average Value at Risk*
Currencies	$	2,730,072		1.69	%	$	3,330,421	$	32,900	$	579,457
Energy		391,078		0.24	%		391,078		77,616		53,533
Grains		585,692		0.36	%		621,898		242,632		94,657
Indices		2,547,873		1.57	%		3,758,951		676,026		2,060,613
Interest Rates U.S.		263,677		0.16	%		502,502		1,100		171,295
Interest Rates Non-U.S.		937,148		0.58	%		1,366,132		64,294		675,932
Livestock		20,959		0.01	%		39,150		4,050		4,078
Metals		156,585		0.10	%		314,264		76,423		50,138
Softs		174,900		0.11	%		207,625		1,705		28,951
Total	$	7,807,984		4.82	%

* Annual average of month-end Values at Risk.

31

As of September 30, 2014, Blackwater Master’s total capitalization was $26,966,770. The Partnership owned approximately 16.7% of Blackwater Master. As of September 30, 2014, Blackwater Master’s Value at Risk for its assets (including the portion of the Partnership’s assets allocated to Blackwater for trading) was as follows:

September 30, 2014

						Three Months Ended September 30, 2014
Market Sector	Value at Risk		% of Total Capitalization			High Value at Risk		Low Value at  Risk		Average Value at  Risk*
Currencies	$	367,806		1.36	%	$	1,801,965	$	367,806	$	799,963
Energy		222,868		0.83	%		416,537		112,530		236,521
Grains		197,808		0.73	%		197,808		4,125		68,961
Indices		1,397,600		5.18	%		2,206,286		796,633		1,219,330
Interest Rates U.S.		101,475		0.38	%		459,140		66,726		188,522
Interest Rates Non-U.S.		146,069		0.54	%		461,918		146,069		220,230
Livestock		10,230		0.04	%		59,400		10,230		10,560
Metals		495,940		1.84	%		1,148,900		340,845		567,129
Total	$	2,939,796		10.90	%

* Average ofmonth-end Values at Risk.

32

As of December 31, 2013, Blackwater Master’s total capitalization was $63,325,773. The Partnership owned approximately 38.8% of Blackwater Master. As of December 31, 2013, Blackwater Master’s Value at Risk for its assets (including the portion of the Partnership’s assets allocated to Blackwater for trading) was as follows:

December 31, 2013

						Twelve Months Ended December 31, 2013
Market Sector	Value at Risk		% of Total Capitalization			High Value at Risk		Low Value at Risk		Average Value at  Risk*
Currencies	$	1,840,305		2.91	%	$	4,682,024	$	288,643	$	1,519,891
Energy		494,616		0.78	%		2,022,000		56,625		831,779
Grains		738,262		1.17	%		1,421,500		194,600		630,543
Indices		2,912,606		4.60	%		4,710,210		1,221,043		3,016,332
Interest Rates U.S.		655,463		1.03	%		655,463		20,900		231,447
Interest Rates Non-U.S.		1,412,783		2.23	%		1,674,803		186,215		928,368
Livestock		314,888		0.50	%		401,963		15,000		154,801
Metals		1,722,627		2.72	%		2,838,178		56,320		998,173
Total	$	10,091,550		15.94	%

* Annual average month-end Values at Risk.

As of September 30, 2014, Cambridge Master’s total capital was $43,279,214. The Partnership owned approximately 71.7% of Cambridge Master. As of September 30, 2014, Cambridge Master’s Value at Risk for its assets (including the portion of the Partnership’s assets allocated to Cambridge for trading) was as follows:

September 30, 2014

						Three Months Ended September 30, 2014
Market Sector	Value at Risk		% of Total Capitalization			High Value at Risk		Low Value at Risk		Average Value at Risk*
Currencies	$	13,134,963		30.35	%	$	24,691,801	$	13,134,963	$	19,212,079
Total	$	13,134,963		30.35	%

* Average of month-end Values at Risk.

As of December 31, 2013, Cambridge Master’s total capitalization was $37,521,384. The Partnership owned approximately 69.9% of Cambridge Master. As of December 31, 2013, Cambridge Master’s Value at Risk for its assets (including the portion of the Partnership’s assets allocated to Cambridge for trading) was as follows:

December 31, 2013

						Twelve Months Ended December 31, 2013
Market Sector	Value at Risk		% of Total Capitalization			High Value at Risk		Low Value at Risk		Average Value at Risk*
Currencies	$	7,040,583		18.76	%	$	18,193,109	$	3,957,766	$	9,986,113
Total	$	7,040,583		18.76	%

* Annual average month-end Values at Risk.

33

As of September 30, 2014, Willowbridge Master’s total capitalization was $118,153,532. The Partnership owned approximately 8.5% of Willowbridge Master. As of September 30, 2014, Willowbridge Master’s Value at Risk for its assets (including the portion of the Partnership’s assets allocated to Willowbridge for trading) was as follows:

September 30, 2014

						Three Months Ended September 30, 2014
Market Sector	Value at Risk		% of Total Capitalization			High Value at Risk		Low Value at Risk		Average Value at Risk*
Currencies	$	3,184,358		2.70	%	$	9,184,633	$	12,311	$	4,789,533
Energy		977,130		0.83	%		1,407,351		188,567		382,054
Interest Rates U.S.		1,485,356		1.26	%		5,476,741		652,776		2,669,265
Interest Rates Non-U.S.		1,475,288		1.24	%		2,138,186		493,906		1,152,574
Total	$	7,122,132		6.03	%

* Average of month-end Values at Risk.

As of December 31, 2013, Willowbridge Master’s total capitalization was $88,383,660. The Partnership owned approximately 15.2% of Willowbridge Master. As of December 31, 2013, Willowbridge Master’s Value at Risk for its assets (including the portion of the Partnership assets allocated to Willowbridge for trading) was as follows:

December 31, 2013

						Twelve Months Ended December 31, 2013
Market Sector	Value at Risk		% of Total Capitalization			High Value at Risk		Low Value at Risk		Average Value at Risk*
Currencies	$	3,210,939		3.63	%	$	4,945,148	$	148,500	$	1,861,929
Energy		726,752		0.82	%		2,264,273		46,200		424,936
Indices		684,033		0.77	%		6,842,689		21,635		594,408
Interest Rates U.S.		537,550		0.61	%		3,564,310		8,280		911,307
Interest Rates Non-U.S.		289,287		0.33	%		1,216,176		2,178		337,625
Total	$	5,448,561		6.16	%

* Annual average month-end Values at Risk.

34

As of September 30, 2014, 300 North Master’s total capitalization was $17,026,144. The Partnership owned 100% of 300 North Master. As of September 30, 2014, 300 North Master’s Value at Risk for its assets (including the portion of the Partnership’s assets allocated to 300 North Capital for trading) was as follows:

September 30, 2014

						Three Months Ended September 30, 2014
Market Sector	Value at Risk		% of Total Capitalization			High Value at Risk		Low Value at Risk		Average Value at Risk*
Currencies	$	111,760		0.66	%	$	146,531	$	31,680	$	107,507
Energy		135,630		0.80	%		330,440		34,100		71,023
Grains		107,085		0.63	%		323,400		61,050		66,495
Indices		1,984,652		11.65	%		3,469,133		93,745		2,353,625
Metals		134,310		0.79	%		325,875		47,520		115,170
Total	$	2,473,437		14.53	%

* Average of month-end Values at Risk.

As of December 31, 2013, 300 North Master’s total capitalization was $24,373,489. The Partnership owned 100% of 300 North Master. As of December 31, 2013, 300 North Master’s Value at Risk for its assets (including the portion of the Partnership’s assets allocated to 300 North Capital for trading) was as follows:

December 31, 2013

						Twelve Months Ended December 31, 2013
Market Sector	Value at Risk		% of Total Capitalization			High Value at  Risk		Low Value at  Risk		Average Value at  Risk*
Currencies	$	155,155		0.64	%	$	169,884	$	39,270	$	77,918
Indices		2,401,950		9.85	%		4,213,547		247,642		958,552
Interest Rates U.S.		52,250		0.21	%		82,500		16,500		28,725
Interest Rates Non-U.S.		82,211		0.34	%		146,460		13,282		56,512
Metals		470,525		1.93	%		633,600		42,350		165,643
Total	$	3,162,091		12.97	%

* For the period March 1, 2013 (commencement of trading operations) to December 31, 2013 average of month-end Values at Risk.

35

As of September 30, 2014, SECOR’s Master total capitalization was $24,260,452. The Partnership owned 100% of SECOR Master. As of September 30, 2014, SECOR’s Master Value at Risk for its assets (including the portion of the Partnership’s assets allocated to SECOR for trading) was as follows:

September 30, 2014

						Three Months Ended September 30, 2014
Market Sector	Value at Risk		% of Total Capitalization			High Value at Risk		Low Value at Risk		Average Value at Risk*
Currencies	$	6,155,863		25.37	%	$	7,375,075	$	4,462,229	$	5,560,541
Energy		317,009		1.31	%		317,009		77,990		197,503
Grains		261,217		1.08	%		283,635		137,844		237,135
Indices		3,514,892		14.49	%		4,248,457		1,722,006		3,528,334
Interest Rates U.S.		278,097		1.15	%		728,519		183,334		458,088
Interest Rates Non-U.S.		682,519		2.81	%		985,473		298,506		575,505
Livestock		56,760		0.23	%		67,221		3,300		46,222
Metals		748,889		3.09	%		930,993		497,555		767,788
Softs		134,420		0.55	%		383,075		106,260		198,587
Total	$	12,149,666		50.08	%

* Average of month-end Values at Risk.

As of December 31, 2013, SECOR Master’s total capitalization was $15,383,092. The Partnership owned 100% of SECOR Master. As of December 31, 2013, SECOR Master’s Value at Risk for its assets (including the portion of the Partnership’s assets allocated to SECOR for trading) was as follows:

December 31, 2013

						Twelve Months Ended December 31, 2013
Market Sector	Value at Risk		% of Total Capitalization			High Value at Risk		Low Value at Risk		Average Value at  Risk*
Currencies	$	3,373,250		21.93	%	$	4,555,067	$	1,975,945	$	3,259,540
Energy		43,483		0.28	%		296,065		43,483		116,140
Grains		162,934		1.06	%		336,232		162,934		236,096
Indices		2,185,611		14.21	%		3,225,557		573,272		1,544,256
Interest Rates U.S.		463,563		3.01	%		538,858		19,995		370,398
Interest Rates Non-U.S.		622,292		4.04	%		923,051		164,929		507,120
Livestock		10,125		0.07	%		75,094		10,125		40,973
Metals		901,096		5.86	%		901,096		314,456		576,001
Softs		97,735		0.64	%		199,540		81,070		131,615
Total	$	7,860,089		51.10	%

* For the period August 1, 2013 (commencement of trading operations) to December 31, 2013 average of month-end Values at Risk.

36

As of September 30, 2014, PGM Master’s total capitalization was $11,207,550. The Partnership owned 100% of PGM Master. As of September 30, 2014, PGM Master’s Value at Risk for its assets (including the portion of the Partnership’s assets allocated to Perella for trading) was as follows:

Market Sector	Value at Risk		% of Total Capitalization			High Value at Risk		Low Value at Risk		Average Value at Risk*
Currencies	$	598,393		5.34	%	$	765,535	$	598,393	$	598,393
Energy		38,610		0.35	%		38,610		37,895		38,610
Grains		132,000		1.18	%		158,400		132,000		132,000
Indices		1,975,057		17.62	%		2,015,159		1,974,883		1,975,057
Interest Rates U.S.		279,290		2.49	%		328,482		279,290		279,290
Interest Rates Non-U.S.		1,024,073		9.14	%		1,057,290		1,021,029		1,024,073
Metals		57,640		0.51	%		57,640		57,640		57,640
Total	$	4,105,063		36.63	%

* For the period September 1, 2014 (commencement of trading operations) to September 30, 2014 average of month-end Values at Risk.

As of December 31, 2013, PGR Master’s (prior to its redemptions) total capitalization was $10,759,375. The Partnership owned approximately 58.2% of PGR Master. As of December 31, 2013, PGR Master’s Value at Risk for its assets (including the portion of the Partnership’s assets allocated to PGR for trading) was as follows:

December 31, 2013

						Twelve Months Ended December 31, 2013
Market Sector	Value at Risk		% of Total Capitalization			High Value at Risk		Low Value at Risk		Average Value at  Risk*
Currencies	$	251,435		2.34	%	$	731,638	$	171,887	$	422,291
Energy		114,238		1.06	%		825,250		58,419		355,521
Grains		159,794		1.48	%		363,285		94,025		251,672
Indices		800,050		7.44	%		3,659,039		800,050		2,263,556
Interest Rates U.S.		119,982		1.12	%		474,150		54,992		197,251
Interest Rates Non-U.S.		280,646		2.61	%		1,727,471		248,116		767,408
Livestock		4,050		0.04	%		24,000		1,000		9,942
Metals		260,728		2.42	%		1,299,200		203,450		585,994
Softs		89,691		0.83	%		274,063		86,559		193,899
Total	$	2,080,614		19.34	%

* Annual average month-end Values at Risk.

As of December 31, 2013, Principle Master’s total capitalization was $18,598,818. The Partnership owned 100% of Principle Master. As of December 31, 2013, Principle Master’s Value at Risk for its assets (including the portion of the Partnership’s assets allocated to Principle for trading) was as follows:

December 31, 2013

						Twelve Months Ended December 31, 2013
Market Sector	Value at Risk		% of Total Capitalization			High Value at Risk		Low Value at Risk		Average Value at Risk*
Energy	$	398,432		2.14	%	$	1,798,212	$	102,921	$	524,211
Total	$	398,432		2.14	%

* For the period March 1, 2013 (commencement of trading operations) to December 31, 2013 average of month-end Values at Risk.

37

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 Securities Exchange Act of 1934 (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 (the “CFO”) of the General Partner, to allow for timely decisions regarding required disclosure and appropriate SEC filings.

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

The General Partner’s President and CFO have evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as defined in Rules13a-15(e) and15d-15(e) under the Exchange Act) as of September 30, 2014 and, based on that evaluation, the General Partner’s President and CFO have concluded that, at that date, the Partnership’s disclosure controls and procedures were effective.

The Partnership’sinternal control over financial reportingis 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’sinternal control over financial reporting process during the fiscal quarter ended September 30, 2014 that materially affected, or are reasonably likely to materially affect, the Partnership’sinternal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

There are no material legal proceedings pending against the Partnership nor the General Partner.

The following information supplements and amends the discussion set forth under Part I, Item 3 “Legal Proceedings” in the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, as updated by the Partnership’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2014 and June 30, 2014.

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. is a wholly-owned, indirect subsidiary of Morgan Stanley, a Delaware holding company. Morgan Stanley files periodic reports with the SEC as required by the Exchange Act, 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, please refer to the “Legal Proceedings” section of Morgan Stanley’s SEC 10-K filings for 2013, 2012, 2011, 2010, and 2009.

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 National Futures Association.

On May 7, 2009, MS&Co. was named as a defendant in a purported class action lawsuit brought under Sections 11, 12 and 15 of the Securities Act of 1933, as amended, which is now styled In re Morgan Stanley Mortgage Pass-Through Certificates Litigation and is pending in the United States District Court for the Southern District of New York (“SDNY”). The third amended complaint, filed on September 30, 2011, alleges, among other things, that the registration statements and offering documents related to the offerings of certain mortgage pass-

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through certificates in 2006 contained false and misleading information concerning the pools of residential loans that backed these securitizations. The plaintiffs seek, among other relief, class certification, unspecified compensatory and rescissionary damages, costs, interest and fees. On July 22, 2014, the parties reached an agreement in principle to settle the litigation. The settlement is subject to approval by the court, which has set a final approval hearing for December 18, 2014.

On December 23, 2009, the Federal Home Loan Bank of Seattle filed a complaint against MS&Co. and an affiliate and other defendants 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, alleges 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 raises claims under the Washington State Securities Act and seeks, among other things, to rescind the plaintiff’s purchase of such certificates. On October 18, 2010, defendants filed a motion to dismiss the action. By orders dated June 23, 2011 and July 18, 2011, the court denied defendants’ omnibus motion to dismiss plaintiff’s amended complaint and on August 15, 2011, the court denied MS&Co.’s individual motion to dismiss the amended complaint. At June 25, 2014, the current unpaid balance of the mortgage pass-through certificates at issue in these cases was approximately $54 million, and the certificates had not yet incurred actual losses. Based on currently available information, MS&Co. believes it and/or its affiliates could incur a loss for this action up to the difference between the $54 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co. and/or its affiliates, or upon sale, plus pre- and post-judgment interest, fees and costs. MS&Co. and/or its affiliates 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 March 15, 2010, the Federal Home Loan Bank of San Francisco filed two complaints against MS&Co. and other defendants in the Superior Court of the State of California. These actions are styled Federal Home Loan Bank of San Francisco v. Credit Suisse Securities (USA) LLC, et al., and Federal Home Loan Bank of San Francisco v. Deutsche Bank Securities Inc. et al., respectively. Amended complaints filed on June 10, 2010 allege that defendants made untrue statements and material omissions in connection with the sale to plaintiff of a number of mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The amount of certificates allegedly sold to plaintiff by MS&Co. in these cases was approximately $704 million and $276 million, respectively. The complaints raise claims under both the federal securities laws and California law and seek, among other things, to rescind the plaintiff’s purchase of such certificates. On August 11, 2011, plaintiff’s Securities Act of 1933, as amended, claims were dismissed with prejudice. The defendants filed answers to the amended complaints on October 7, 2011. On February 9, 2012, defendants’ demurrers with respect to all other claims were overruled. On December 20, 2013, plaintiff’s negligent misrepresentation claims were dismissed with prejudice. A bellwether trial is currently scheduled to begin in January 2015. MS&Co. is not a defendant in connection with the securitizations at issue in that trial. On May 23, 2014, plaintiff and the defendants in the bellwether trial filed motions for summary adjudication, which were denied. At September 25, 2014, the current unpaid balance of the mortgage pass-through certificates at issue in these cases was approximately $291 million, and the certificates had incurred actual losses of approximately $6 million.

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Based on currently available information, MS&Co. believes it could incur a loss for this action up to the difference between the $291 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.

On October 15, 2010, the Federal Home Loan Bank of Chicago filed a complaint against MS&Co. and its affiliates 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. The complaint 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. The total amount of certificates allegedly sold to plaintiff by MS&Co. and/or its affiliates in this action was approximately $203 million. The complaint raises claims under Illinois law and seeks, among other things, to rescind the plaintiff’s purchase of such certificates. On March 24, 2011, the court granted plaintiff leave to file an amended complaint. MS&Co. and its affiliates filed an answer on December 21, 2012. On December 13, 2013, the court entered an order dismissing all claims related to one of the securitizations at issue. At September 25, 2014, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $55 million and the certificates had not yet incurred actual losses. Based on currently available information, MS&Co. believes it and/or its affiliates could incur a loss in this action up to the difference between the $55 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co. and/or its affiliates, or upon sale, plus pre- and post-judgment interest, fees and costs. MS&Co. and/or its affiliates 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 July 5, 2011, Allstate Insurance Company and certain of its affiliated entities filed a complaint against MS&Co. and certain of its affiliates in the Supreme Court of NY, styled Allstate Insurance Company, et al. v. Morgan Stanley, et al. An amended complaint was filed on September 9, 2011 and alleges 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 and/or sold to plaintiffs by MS&Co. and/or its affiliates was approximately $104 million. The complaint raises common law claims of fraud, fraudulent inducement, aiding and abetting fraud and negligent misrepresentation and seeks, among other things, compensatory and/or recessionary damages associated with plaintiffs’ purchases of such certificates. On March 15, 2013, the court denied in substantial part the defendants’ motion to dismiss the amended complaint, which order MS&Co. and its affiliates appealed on April 11, 2013. On May 3, 2013, MS&Co. and its affiliates filed an answer to the amended complaint. At September 25, 2014, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $82 million, and the certificates had not yet incurred actual losses. Based on currently available information, MS&Co. believes it and/or its affiliates could incur a loss in this action up to the difference between the $82 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co. and/or its affiliates, or upon sale, plus pre- and post-judgment interest, fees and costs. MS&Co. and/or its affiliates may be entitled to an offset for interest received by the plaintiff prior to a judgment.

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On July 18, 2011, the Western and Southern Life Insurance Company and certain affiliated companies filed a complaint against MS&Co. and certain affiliates and other defendants in the Court of Common Pleas in Ohio, styled Western and Southern Life Insurance Company, et al. v. Morgan Stanley Mortgage Capital Inc., et al. An amended complaint was filed on April 2, 2012 and alleges that defendants made untrue statements and material omissions in the sale to plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The amount of the certificates allegedly sold to plaintiffs by MS&Co. and/or its affiliates was approximately $153 million. The amended complaint raises claims under the Ohio Securities Act, federal securities laws, and common law and seeks, among other things, to rescind the plaintiffs’ purchases of such certificates. MS&Co. and its affiliates filed an answer on August 17, 2012. Trial is currently scheduled to begin in July 2015. At September 25, 2014, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $111 million, and the certificates had incurred actual losses of approximately $2 million. Based on currently available information, MS&Co. believes it and/or its affiliates could incur a loss in this action up to the difference between the $111 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co. and/or its affiliates, or upon sale, plus post-judgment interest, fees and costs. MS&Co. and/or its affiliates may be entitled to an offset for interest received by the plaintiff prior to a judgment.

On November 4, 2011, the Federal Deposit Insurance Corporation (“FDIC”), as receiver for Franklin Bank S.S.B., filed two complaints against MS&Co. in the District Court of the State of Texas. Each was styled Federal Deposit Insurance Corporation, as Receiver for Franklin Bank S.S.B. v. Morgan Stanley & Company LLC F/K/A Morgan Stanley & Co. Inc. and alleged that MS&Co. made untrue statements and material omissions in connection with the sale to plaintiff of mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The amount of certificates allegedly underwritten and sold to the plaintiff by MS&Co. in these cases was approximately $67 million and $35 million, respectively. The complaints each raised claims under both federal securities law and the Texas Securities Act and each seeks, among other things, compensatory damages associated with plaintiff’s purchase of such certificates. On March 20, 2012, MS&Co. filed answers to the complaints in both cases. On June 7, 2012, the two cases were consolidated. On January 10, 2013, MS&Co. filed a motion for summary judgment and special exceptions with respect to plaintiff’s claims. On February 6, 2013, the FDIC filed an amended consolidated complaint. On February 25, 2013, MS&Co. filed a motion for summary judgment and special exceptions, which motion was denied in substantial part on April 26, 2013. On May 3, 2013, the FDIC filed a second amended consolidated complaint. On October 7, 2014, the court denied MS&Co.’s motion for reconsideration of the court’s order denying its motion for summary judgment and granted its motion for reconsideration of the court’s order denying permission for interlocutory appeal. On October 22, 2014, MS&Co. filed a petition for permissive interlocutory appeal with the appellate court. Trial is currently scheduled to begin in March 2015. At September 25, 2014, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $44 million, and the certificates had incurred actual losses of approximately $5 million. Based on currently available information, MS&Co. believes it could incur a loss in this action up to the difference between the $44 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.

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On April 25, 2012, The Prudential Insurance Company of America and certain affiliates filed a complaint against MS&Co. and certain affiliates in the Superior Court of the State of New Jersey styled The Prudential Insurance Company of America, et al. v. Morgan Stanley, et al. The complaint alleges that defendants made untrue statements and material omissions in connection with the sale to plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by MS&Co. is approximately $1 billion. The complaint raises claims under the New Jersey Uniform Securities Law, as well as common law claims of negligent misrepresentation, fraud and tortious interference with contract and seeks, among other things, compensatory damages, punitive damages, rescission and rescissionary damages associated with plaintiffs’ purchases of such certificates. On October 16, 2012, plaintiffs filed an amended complaint which, among other things, increases the total amount of the certificates at issue by approximately $80 million, adds causes of action for fraudulent inducement, equitable fraud, aiding and abetting fraud, and violations of the New Jersey Racketeer Influenced and Corrupt Organizations Act, and includes a claim for treble damages. On March 15, 2013, the court denied the defendants’ motion to dismiss the amended complaint. On April 26, 2013, the defendants filed an answer to the amended complaint. On June 5, 2014, the defendants filed a renewed motion to dismiss the amended complaint. At September 25, 2014, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $613 million, and the certificates had not yet incurred actual losses. Based on currently available information, MS&Co. believes it and/or its affiliates could incur a loss in this action up to the difference between the $613 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co. and/or its affiliates, or upon sale, plus pre- and post-judgment interest, fees and costs. MS&Co. and/or its affiliates 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 April 20, 2011, the Federal Home Loan Bank of Boston filed a complaint against MS&Co. and certain affiliates 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 19, 2012 and alleges 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. and/or its affiliates or sold to plaintiff by MS&Co. and/or its affiliates was approximately $385 million. The amended complaint raises claims under the Massachusetts Uniform Securities Act, the Massachusetts Consumer Protection Act and common law and seeks, among other things, to rescind the plaintiff’s purchase of such certificates. On May 26, 2011, defendants removed the case to the United States District Court for the District of Massachusetts. On October 11, 2012, defendants filed motions to dismiss the amended complaint, which was granted in part and denied in part on September 30, 2013. The defendants filed an answer to the amended complaint on December 16, 2013. Plaintiff voluntarily dismissed its claims against MS&Co. and its affiliates with respect to two of the securitizations at issue. At September 25, 2014, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $66 million, and the certificates had

43

not yet incurred actual losses. Based on currently available information, MS&Co. believes it and/or its affiliates could incur a loss in this action up to the difference between the $66 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co. and/or its affiliates, or upon sale, plus pre- and post-judgment interest, fees and costs. MS&Co. and/or its affiliates 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 February 14, 2013, Bank Hapoalim B.M. filed a complaint against MS&Co. and certain affiliates in the Supreme Court of NY, styled Bank Hapoalim B.M. v. Morgan Stanley et al. 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. and/or its affiliates to plaintiff was approximately $141 million. The complaint alleges causes of action against MS&Co. and its affiliates for common law fraud, fraudulent concealment, aiding and abetting fraud, and negligent misrepresentation, and seeks, among other things, compensatory and punitive damages. On April 22, 2014, the defendants’ motion to dismiss was denied in substantial part. On August 29, 2014, the defendants filed an answer to the complaint, and on September 18, 2014, the defendants filed a notice of appeal from the ruling denying their motion to dismiss. At September 25, 2014, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $73 million, and the certificates had not yet incurred actual losses. Based on currently available information, MS&Co. believes it and/or its affiliates could incur a loss in this action up to the difference between the $73 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co. and/or its affiliates, or upon sale, plus pre- and post-judgment interest, fees and costs.

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 alleges 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. and/or its affiliates to plaintiff was approximately $694 million. The complaint alleges causes of action against MS&Co. and its affiliates for common law fraud, fraudulent concealment, aiding and abetting fraud, negligent misrepresentation, and rescission and seeks, among other things, compensatory and punitive damages. On June 10, 2014, the court denied defendants’ motion to dismiss. On July 10, 2014, MS&Co. and its affiliates filed a renewed motion to dismiss with respect to two certificates at issue in the case. On October 13, 2014, MS&Co. filed its answer to the complaint. At September 25, 2014, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $300 million, and the certificates had incurred actual losses of approximately $78 million. Based on currently available information, MS&Co. believes it and/or its affiliates could incur a loss in this action up to the difference between the $300 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co. and/or its affiliates, or upon sale, plus pre- and post-judgment interest, fees and costs. MS&Co. and/or its affiliates may be entitled to be indemnified for some of these losses.

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On September 23, 2013, plaintiffs in National Credit Union Administration Board v. Morgan Stanley & Co. Inc., et al. filed a complaint against MS&Co. and certain affiliates in the United States District Court for the Southern District of New York. The complaint alleges that defendants made untrue statements of material fact or omitted to state material facts in the sale to plaintiffs of certain mortgage pass-through certificates issued by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by MS&Co. and/or its affiliates to plaintiffs was approximately $417 million. The complaint alleges causes of action against MS&Co. and its affiliates for violations of Section 11 and Section 12(a)(2) of the Securities Act of 1933, as amended, violations of the Texas Securities Act, and violations of the Illinois Securities Law of 1953 and seeks, among other things, rescissionary and compensatory damages. The defendants filed a motion to dismiss the complaint on November 13, 2013. On January 22, 2014, the court granted defendants’ motion to dismiss with respect to claims arising under the Securities Act of 1933, as amended, and denied defendants’ motion to dismiss with respect to claims arising under Texas Securities Act and the Illinois Securities Law of 1953. On April 28, 2014, the court granted in part and denied in part plaintiff’s motion to strike certain of the defendants’ affirmative defenses. On July 11, 2014, the defendants filed a motion for reconsideration of the court’s order on the motion to dismiss the complaint or, in the alternative, for certification of interlocutory appeal and a stay of all proceedings, which was denied on September 30, 2014. At September 25, 2014, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $211 million, and the certificates had incurred actual losses of approximately $27 million. Based on currently available information, MS&Co. believes it and/or its affiliates could incur a loss in this action up to the difference between the $211 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co. and/or its affiliates, or upon sale, plus pre- and post-judgment interest, fees and costs. MS&Co. and/or its affiliates 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.

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

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Item 1A. Risk Factors

There have been no material changes to the risk factors set forth under Part 1, Item 1A. “Risk Factors” in the Partnership’s Form 10-K for the fiscal year ended December 31, 2013 and under Part II, Item 1A. “Risk Factors” in the Partnership’s Quarterly Report on Form 10-Q for the quarters ended March 31, 2014 and June 30, 2014.

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

For the three months ended September 30, 2014, there were subscriptions of 525.0650 Class A Redeemable Units totaling $645,260. The Redeemable Units were issued in reliance upon applicable exemptions from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and Section 506 of Regulation D promulgated thereunder. The Redeemable Units were purchased by accredited investors as defined in Regulation D. In determining the applicability of the exemption, the General Partner relied on the fact that the Redeemable Units were purchased by accredited investors in a private offering.

Proceeds from the sale of Redeemable Units are used in the trading of commodity interests including futures contracts, options, forward and swap contracts.

The following chart sets forth the purchases of Redeemable Units by the Partnership.

Period	Class A (a) Total Number of Redeemable Units Purchased*		Class A (b) Average Price Paid per Redeemable Unit**		(c) Total Number of Redeemable Units Purchased as Part of Publicly Announced Plans or Programs		(d) Maximum Number (or Approximate Dollar Value) of Redeemable Units that May Yet Be Purchased Under the Plans or Programs
July 1, 2014- July 31, 2014		4,488.3500	$	1,211.50		N/A		N/A
August 1, 2014- August 31, 2014		4,360.0350	$	1,219.08		N/A		N/A
September 1, 2014- September 30, 2014		3,036.8750	$	1,262.88		N/A		N/A
		11,885.2600	$	1,227.41

* 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 last day of each month at the net asset value per Redeemable Unit as of that day. No fee will be charged for redemptions.

Item 3. Defaults Upon Senior Securities. None.

Item 4. Mine Safety Disclosures. Not Applicable.

Item 5. Other Information. None.

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Item 6. Exhibits

3.1(a)	Certificate of Limited Partnership dated June 30, 2003 (filed as Exhibit 3.1 to the General Form for Registration of Securities on Form 10 filed on April 30, 2008 and incorporated herein by reference).
(b)	Certificate of Amendment of the Certificate of Limited Partnership dated September 21, 2005 (filed as Exhibit 3.1(a) to the General Form for Registration of Securities on Form 10 filed on April 30, 2008 and incorporated herein by reference).
(c)	Certificate of Amendment of the Certificate of Limited Partnership dated September 19, 2008 (filed as Exhibit 3.1(c) to the Quarterly Report on Form 10-Q filed on November 16, 2009 and incorporated herein by reference).
(d)	Certificate of Amendment of the Certificate of Limited Partnership dated September 28, 2009 (filed as Exhibit 99.1 to the Current Report on Form 8-K filed on September 30, 2009 and incorporated herein by reference).
(e)	Certificate of Amendment of the Certificate of Limited Partnership dated June 30, 2010 (filed as Exhibit 3.1(e) to the Current Report on Form 8-K filed on July 2, 2010 and incorporated herein by reference).
(f)	Certificate of Amendment of the Certificate of Limited Partnership dated September 2, 2011 (filed as Exhibit 3.1 to the Current Report on Form 8-K filed on September 7, 2011 and incorporated herein by reference).
(g)	Certificate of Amendment of the Certificate of Limited Partnership dated August 7, 2013 (filed as Exhibit 3.1(g) to the Quarterly Report on Form 10-Q filed on August 14, 2013 and incorporated herein by reference).
3.2	Fourth Amended and Restated Limited Partnership Agreement effective May 1, 2012 (filed as Exhibit 3.2 to the Annual Report on Form 10-K filed on March 27, 2013 and incorporated herein by reference).
10.1	Management Agreement among the Partnership, the General Partner and Waypoint Capital Management LLC (filed as Exhibit 10.4 to the General Form for Registration of Securities on Form 10 filed on April 30, 2008 and incorporated herein by reference).
10.2	Customer Agreement among the Partnership, the General Partner and CGM (filed as Exhibit 10.9 to the General Form for Registration of Securities on Form 10 filed on April 30, 2008 and incorporated herein by reference).
10.3	Form of Subscription Agreement (filed as Exhibit 10.5 to the Quarterly Report on Form 10-Q filed on November 14, 2012 and incorporated herein by reference).

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10.4(a)	Alternative Investment Selling Agent Agreement among the Partnership, the General Partner and Morgan Stanley Wealth Management effective October 1, 2013 (filed as Exhibit 10.6 to the Quarterly Report on Form 10-Q filed on November 14, 2013 and incorporated herein by reference).
(b)	Letter Amendment to the Alternative Investment Selling Agent Agreement among the Partnership, the General Partner and Morgan Stanley Wealth Management, effective April 1, 2014 (filed as Exhibit 10.4(b) to the Quarterly Report on Form 10-Q filed on May 14, 2014 and incorporated herein by reference).
(c)	Letter from the General Partner amending the Alternative Investment Selling Agent Agreement among the Partnership, the General Partner and Morgan Stanley Wealth Management dated as of August 8, 2014 and effective October 1, 2014 (filed as Exhibit 10.4(c) to the Quarterly Report on Form 10-Q filed on August 13, 2014 and incorporated herein by reference).
10.5	Management Agreement among the Partnership, the General Partner and PGR Capital LLP (filed as Exhibit 10.12 to the Quarterly Report on Form 10-Q filed on August 15, 2011 and incorporated herein by reference).
10.6(a)	Management Agreement among the Partnership, the General Partner and Blackwater Capital Management, LLC (filed as Exhibit 10.13 to the Current Report on Form 8-K filed on November 4, 2010 and incorporated herein by reference).
(b)	Amendment to the Management Agreement among the Partnership, the General Partner and Blackwater Capital Management, LLC (filed as Exhibit 10.6(b) to the Quarterly Report on Form 10-Q filed on May 14, 2014 and incorporated herein by reference).
(c)	Letter from the General Partner to Blackwater Capital Management, LLC extending the Management Agreement from June 30, 2013 to June 30, 2014 (filed as Exhibit 10.7(b) to the Annual Report on Form 10-K filed on March 28, 2014 and incorporated herein by reference).
10.7(a)	Management Agreement among the Partnership, the General Partner and J E Moody & Company LLC (filed as Exhibit 10.14 to the Current Report on Form 8-K filed on January 3, 2011 and incorporated herein by reference).
(b)	Letter from the General Partner to J E Moody & Company LLC extending the Management Agreement from June 30, 2013 to June 30, 2014 (filed as Exhibit 10.8(b) to the Annual Report on Form 10-K filed on March 28, 2014 and incorporated herein by reference).
10.8	Management Agreement among the Partnership, the General Partner and Cirrus Capital Management LLC (filed as Exhibit 10.15 to the Current Report on Form 8-K filed on January 3, 2011 and incorporated herein by reference).
10.9(a)	Management Agreement among the Partnership, the General Partner and Willowbridge Associates Inc. (filed herewith).
(b)	Amendment to the Management Agreement among the Partnership, the General Partner and Willowbridge Associates Inc. (filed as Exhibit 10.1 to the Current Report on Form 8-K filed on January 7, 2013 and incorporated herein by reference).
(c)	Letter from the General Partner to Willowbridge Associates Inc. extending the Management Agreement from June 30, 2013 to June 30, 2014 (filed as Exhibit 10.10(c) to the Annual Report on Form 10-K filed on March 28, 2014 and incorporated herein by reference).
10.10	Management Agreement among the Partnership, the General Partner and Rotella Capital Management, Inc. (filed as Exhibit 10.13 to the Quarterly Report on Form 10-Q filed on November 14, 2012 and incorporated herein by reference).
10.11(a)	Management Agreement among the Partnership, the General Partner and The Cambridge Strategy (Asset Management) Limited (filed as Exhibit 10.1 to the Current Report on Form 8-K filed on October 7, 2013 and incorporated herein by reference).
(b)	Letter from the General Partner to The Cambridge Strategy (Asset Management) Limited extending the Management Agreement from June 30, 2013 to June 30, 2014 (filed as Exhibit 10.12(b) to the Annual Report on Form 10-K filed on March 28, 2014 and incorporated herein by reference).
10.12(a)	Management Agreement among the Partnership, the General Partner and Bleecker Street Capital, LLC (filed as Exhibit 10.15 to the Quarterly Report on Form 10-Q filed on November 14, 2012 and incorporated herein by reference).
(b)	Letter from the General Partner to Bleecker Street Capital, LLC extending the Management Agreement from June 30, 2013 to June 30, 2014 (filed as Exhibit 10.13(b) to the Annual Report on Form 10-K filed on March 28, 2014 and incorporated herein by reference).

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10.13(a)	Escrow Agreement among Ceres Managed Futures LLC, Morgan Stanley Smith Barney LLC and The Bank of New York (filed as Exhibit 10.14(a) to the Annual Report on Form 10-K filed on March 27, 2013 and incorporated herein by reference).
(b)	Amendment No. 5 to Escrow Agreement among Ceres Managed Futures LLC, Morgan Stanley Smith Barney LLC and The Bank of New York (filed as Exhibit 10.14(b) to the Annual Report on Form 10-K filed on March 27, 2013 and incorporated herein by reference).
10.14	Management Agreement among the Partnership, the General Partner and SECOR Capital Advisors, LP (filed as Exhibit 10.1 to the Current Report on Form 8-K filed on August 7, 2013 and incorporated herein by reference).
10.15	Commodity Futures Customer Agreement between the Partnership and MS&Co., effective August 21, 2013 (filed as Exhibit 10.17 to the Quarterly Report on Form 10-Q filed on November 14, 2013 and incorporated herein by reference).
10.16(a)	Management Agreement among the Partnership, the General Partner and Principle Capital Management LLC (filed as Exhibit 10.18 to the Quarterly Report on Form 10-Q filed on November 14, 2013 and incorporated herein by reference).
(b)	Letter from the General Partner to Principle Capital Management LLC extending the Management Agreement from June 30, 2013 to June 30, 2014 (filed as Exhibit 10.18(b) to the Annual Report on Form 10-K filed on March 28, 2014 and incorporated herein by reference).
10.17(a)	Management Agreement among the Partnership, the General Partner and 300 North Capital, LLC (filed as Exhibit 10.19 to the Quarterly Report on Form 10-Q filed on November 14, 2013 and incorporated herein by reference).
(b)	Letter from the General Partner to 300 North Capital, LLC extending the Management Agreement from June 30, 2013 to June 30, 2014 (filed as Exhibit 10.19(b) to the Annual Report on Form 10-K filed on March 28, 2014 and incorporated herein by reference).
10.18	Management Agreement among the Partnership, the General Partner and Centurion Investment Management, LLC (filed herewith).
10.19	Management Agreement among the Partnership, the General Partner and Perella Weinberg Partners Capital Management LP (filed herewith).

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

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

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

32.2 — Section 1350 Certification (Certification of Chief Financial Officer) (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 Document.

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SIGNATURES

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

EMERGING CTA PORTFOLIO L.P.
By:	Ceres Managed Futures LLC
	(General Partner)

By:	/s/  Patrick T. Egan
	Patrick T. Egan Director

Date: November 13, 2014

By:	/s/  Steven Ross
	Steven Ross Chief Financial Officer (Principal Accounting Officer)

Date: November 13, 2014

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