Excelsior Directional Hedge Fund Of Funds N-CSRS Certified semi-annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

811-22035

Investment Company Act file number

Excelsior Multi-Strategy Hedge Fund of Funds (TE), LLC

 (Exact name of registrant as specified in charter)

225 High Ridge Road

Stamford, CT 06905

 (Address of principal executive offices) (Zip code)

Steven L. Suss

Bank of America Capital Advisors, LLC

225 High Ridge Road

Stamford, CT 06905

(Name and address of agent for Service)

Registrant's telephone number, including area code: (866) 921-7951

Date of fiscal year end: 3/31/2012

Date of reporting period: 9/30/2011

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

ITEM 1.  REPORTS TO STOCKHOLDERS.

EXCELSIOR MULTI-STRATEGY HEDGE FUND OF FUNDS (TE), LLC

Financial Statements

(Unaudited)

Period from April 1, 2011 to September 30, 2011

Excelsior Multi-Strategy Hedge Fund of Funds (TE), LLC

Financial Statements

(Unaudited)

Period from April 1, 2011 to September 30, 2011

Contents

Statement of Assets, Liabilities and Members’ Capital	1
Statement of Operations	2
Statement of Changes in Members’ Capital	3
Statement of Cash Flows	4
Financial Highlights	5
Notes to Financial Statements	6

The Registrant files its complete schedule of portfolio holdings with the Securities and Exchange Commission (the "Commission") for the first and third quarters of each fiscal year on Form N-Q. The Registrant’s Forms N-Q are available on the Commission’s website at http://www.sec.gov, and may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC.  Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.  Information on Form N-Q is available without charge, upon request, by calling (866) 921-7951.

A description of the policies and procedures that the Registrant uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (866) 921-7951 and on the Commission’s website at http://www.sec.gov.

Information regarding how the Registrant voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request, by calling (866) 921-7951, and on the Commission’s website at http://www.sec.gov.

Excelsior Multi-Strategy Hedge Fund of Funds (TE), LLC

Statement of Assets, Liabilities and Members' Capital (Unaudited)

September 30, 2011

ASSETS
Investment in Excelsior Directional Hedge Fund of Funds, Ltd., at fair value	$	146,671,098
Redemption receivable from investment in Excelsior Directional Hedge Fund of Funds, Ltd.		9,140,098
Cash and cash equivalents		2,355,060
Investment in Excelsior Directional Hedge Fund of Funds, Ltd.  made in advance		2,270,000
Other asset		6,380
Total Assets		160,442,636
LIABILITIES
Repurchase of Members' interests payable		9,566,948
Members' subscriptions received in advance		2,270,000
Management fee payable		196,007
Professional fees payable		31,136
Administration fees payable		5,615
Other liabilities		4,870
Total Liabilities		12,074,576
Net Assets	$	148,368,060
MEMBERS' CAPITAL*	$	148,368,060

* Members’ Capital includes net subscriptions, cumulative net investment income/(loss), cumulative net realized gain/(loss), and accumulated unrealized appreciation from investments in Excelsior Directional Hedge Fund of Funds, Ltd.

The accompanying notes and attached unaudited financial statements of Excelsior Directional Hedge Fund of Funds,

Ltd. and Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC are an integral part of these financial statements.

1

Excelsior Multi-Strategy Hedge Fund of Funds (TE), LLC

Statement of Operations (Unaudited)

Period from April 1, 2011 to September 30, 2011

NET INVESTMENT LOSS ALLOCATED FROM EXCELSIOR DIRECTIONAL  HEDGE FUND OF FUNDS, LTD.:
Interest	$	520
Expenses		(1,147,464	)
Net investment loss allocated from Excelsior Directional Hedge Fund of Funds, Ltd.		(1,146,944	)
Fund Income:
Interest		197
Fund Expenses:
Management fee		392,871
Professional fees		39,316
Insurance fees		38,282
Other fees		22,647
Administration fees		10,750
Total Fund Expenses		503,866
Net Investment Loss		(1,650,613	)
REALIZED AND UNREALIZED LOSS ON INVESTMENTS ALLOCATED FROM EXCELSIOR DIRECTIONAL HEDGE FUND OF FUNDS, LTD.
Net realized loss on investment		(400,261	)
Net change in accumulated unrealized appreciation on investment		(6,125,364	)
Net realized and unrealized loss on investments allocated from Excelsior Directional Hedge Fund of Funds, Ltd.		(6,525,625	)
NET DECREASE IN MEMBERS' CAPITAL RESULTING FROM OPERATIONS	$	(8,176,238	)

The accompanying notes and attached unaudited financial statements of Excelsior Directional Hedge Fund of Funds,

Ltd. and Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC are an integral part of these financial statements

2

Excelsior Multi-Strategy Hedge Fund of Funds (TE), LLC

Statement of Changes in Members’ Capital (Unaudited)

	For the period from
	April 1, 2011 to			Year ended
	September 30, 2011			March 31, 2011
OPERATIONS
Net investment loss	$	(1,650,613	)	$	(3,331,887	)
Net realized gain (loss) on investment		(400,261	)		3,164,330
Net change in accumulated unrealized appreciation on investment		(6,125,364	)		5,374,296
Increase (decrease) in Members' Capital resulting from operations		(8,176,238	)		5,206,739
CAPITAL TRANSACTIONS
Members' subscriptions		21,480,000			19,186,541
Members' interests repurchased		(21,843,401	)		(14,673,495	)
Increase (decrease) in Members' Capital resulting from capital transactions		(363,401	)		4,513,046
Net increase (decrease) in Members' Capital		(8,539,639	)		9,719,785
MEMBERS' CAPITAL AT BEGINNING OF PERIOD		156,907,699			147,187,914
MEMBERS' CAPITAL AT END OF PERIOD	$	148,368,060		$	156,907,699

The accompanying notes and attached unaudited financial statements of Excelsior Directional Hedge Fund of Funds,

Ltd. and Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC are an integral part of these financial statements.

3

Excelsior Multi-Strategy Hedge Fund of Funds (TE), LLC

Statement of Cash Flows (Unaudited)

Period from April 1, 2011 to September 30, 2011

CASH FLOWS FROM OPERATING ACTIVITIES
Net decrease in Members' Capital resulting from operations	$	(8,176,238	)
Adjustments to reconcile net decrease in Members' Capital resulting from operations to net cash used in operating activities:
Net change in accumulated unrealized appreciation on investment allocated from Excelsior Directional Hedge Fund of Funds, Ltd.		6,125,364
Net realized loss on investment allocated from Exclesior Directional Hedge Fund of Funds, Ltd.		400,261
Net investment loss allocated from Excelsior Directional Hedge Fund of Funds, Ltd.		1,146,944
Purchases of investment in Excelsior Directional Hedge Fund of Funds, Ltd.		(22,748,034	)
Proceeds from investment in Excelsior Directional Hedge Fund of Funds, Ltd.		19,843,532
Decrease in other assets		44,087
Increase (decrease) in operating liabilities:
Professional fees payable		(17,867	)
Management fee payable		(5,850	)
Administration fees payable		5,615
Due to Adviser		(4,555	)
Other liabilities		1,041
Net Cash Used in Operating Activities		(3,385,700	)
CASH FLOWS FROM FINANCING ACTIVITIES
Members' subscriptions		23,200,000
Members' interests repurchased		(19,705,668	)
Net Cash Provided by Financing Activities		3,494,332
Net increase in cash and cash equivalents		108,632
Cash and cash equivalents at beginning of period		2,246,428
Cash and Cash Equivalents at End of Period	$	2,355,060

The accompanying notes and attached unaudited financial statements of Excelsior Directional Hedge Fund of Funds,

Ltd. and Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC are an integral part of these financial statements.

4

Excelsior Multi-Strategy Hedge Fund of Funds (TE), LLC

Financial Highlights

The following represents certain ratios to average Members’ Capital, total return, and other supplemental information for the periods indicated:

													For the period from
	For the period from												July 1, 2007
	April 1, 2011 to						For the year ended:						(commencement
	September 30, 2011*												of operations)
	(Unaudited)			March 31, 2011			March 31, 2010			March 31, 2009			to March 31, 2008*
Net assets, end of period	$	148,368,060		$	156,907,699		$	147,187,914		$	122,007,864		$	14,881,101
Ratio of net investment loss to average Members' Capital (a) (b)		(1.06	)%		(2.12	)%		(2.49	)%		(2.23	)%		(0.99	)%
Ratio of total expenses to average Members' Capital (b) (c) (d)		1.06	%		2.13	%		2.50	%		2.30	%		3.92	%
Ratio of net expense to average Members' Capital (b) (c)		1.06	%		2.13	%		2.50	%		2.30	%		1.55	%
Total return (e)		(4.99	)%		3.21	%		13.13	%		(16.63	)%		(3.72	)%

* The ratios and total return are not annualized for the period.

(a) The ratio reflects the income and expenses including the TE Fund’s proportionate share of income and expenses of Excelsior Directional Hedge Fund of Funds, Ltd. and Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC.

(b) Average Members’ Capital is determined using the net assets at the end of each month during the period and net assets at the beginning of the period.

(c) The ratio reflects the direct expenses, excluding placement fees, if any, and includes the TE Fund’s proportionate share of the expenses of Excelsior Directional Hedge Fund of Funds, Ltd. and Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC.

(d) The ratio is before any expense limitation reimbursement per the Expense Limitation Agreement.

(e) Total return assumes a purchase of an interest in the TE Fund on the first day and the sale of an interest on the last day of the period and is calculated using geometrically linked monthly returns.  An individual Member’s return may vary from these returns based on the timing of Member subscriptions and redemptions.

The accompanying notes and attached unaudited financial statements of Excelsior Directional Hedge Fund of Funds,

Ltd. and Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC are an integral part of these financial statements.

5

Excelsior Multi-Strategy Hedge Fund of Funds (TE), LLC

Notes to Financial Statements (Unaudited)

September 30, 2011

1. Organization

Excelsior Multi-Strategy Hedge Fund of Funds (TE), LLC, formerly known as Excelsior Directional Hedge Fund of Funds (TE), LLC (the “TE Fund”), was organized as a limited liability company under the laws of Delaware on February 26, 2007, and commenced operations on July 1, 2007. The TE Fund is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a non-diversified, closed-end management investment company. The TE Fund’s investment objective is to seek capital appreciation. The TE Fund pursues its investment objective by investing substantially all of its assets in Excelsior Directional Hedge Fund of Funds, Ltd. (the “Ltd Fund”), a Cayman Island exempted company. The Ltd Fund pursues its investment objective by investing substantially all of its assets in Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC, formerly known as Excelsior Directional Hedge Fund of Funds Master Fund, LLC (the “Company”), a non-diversified, closed-end management investment company that is registered under the 1940 Act. The Company pursues its investment objective principally through a multi-manager, multi-strategy program of investments in a diverse group of private investment funds (the “Portfolio Funds”) that primarily invest or trade in a wide range of equity and debt securities. There can be no assurance that the investment objectives of the Company, the Ltd Fund or the TE Fund will be achieved. The investment managers of the Portfolio Funds in which the Company invests generally conduct their investment programs through these Portfolio Funds.  The Company invests in the Portfolio Funds as a limited partner or member along with other investors.

The financial statements of the Ltd Fund and the Company, including the Company’s Schedule of Investments, are attached to this report and should be read in conjunction with the TE Fund’s financial statements.  The percentage of the Ltd Fund’s shareholders' capital owned by the TE Fund at September 30, 2011 was 96.58%.  The percentage of the Company’s members’ capital owned directly by the Ltd Fund at September 30, 2011 was 37.85%.

Bank of America Capital Advisors LLC (the “Adviser”) serves as the investment adviser of the Company and the management services provider of the TE Fund. The Adviser is an indirect wholly-owned subsidiary of Bank of America Corporation (“Bank of America”) and is registered under the Investment Advisers Act of 1940, as amended.  Bank of America is a financial holding company which has its principal executive offices at 101 North Tryon Street, Charlotte, North Carolina. The Adviser provides various management and administrative services to the Company, the Ltd Fund and the TE Fund.

The TE Fund’s Board of Managers (the “Board”) has overall responsibility to manage and supervise the operations of the TE Fund, including the exclusive authority to oversee and to establish policies regarding the management, conduct and operation of the TE Fund’s business.  The Board exercises the same powers, authority and responsibilities on behalf of the TE Fund as are customarily exercised by directors of a typical investment company registered under the 1940 Act and organized as a corporation.  The Board has engaged the Adviser to manage the day-to-day operations of the TE Fund.

6

Excelsior Multi-Strategy Hedge Fund of Funds (TE), LLC

Notes to Financial Statements (Unaudited) continued

September 30, 2011

Subscriptions for interests in the TE Fund (“Interests”) by eligible investors may be accepted as of the first day of each month, or at such times as the Board may determine. The TE Fund may, from time to time, offer to repurchase Interests from its members (“Members”) pursuant to written tenders by the Members. These repurchase offers will be made at such times and on such terms as may be determined by the Board, in its sole discretion, subject to the liquidity of the TE Fund’s assets and other factors considered by the Board.  The Adviser expects that it will recommend to the Board that the TE Fund offer to repurchase Interests from Members four times each year, effective as of the last day of each calendar quarter. Members can only transfer or assign Interests under certain limited circumstances.  Member repurchases are recognized as liabilities when the amount becomes fixed.  This generally will occur on the last day of a fiscal period.  As of the last day of each calendar month, the TE Fund allocates net profits or losses for that month to the capital accounts of all Members, in proportion to their respective opening capital account balances for such period (after taking into account any capital contributions deemed to be made as of the first day of such period).

2. Significant Accounting Policies

a. Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management believes that the estimates utilized in preparing the TE Fund’s financial statements are reasonable and prudent; however, actual results could differ from these estimates.

b. Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Codification Accounting Standards Update No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04”).  ASU 2011-04 requires disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy and the reasons for those transfers.  In addition, ASU 2011-04 expands the qualitative and quantitative fair value disclosure requirements for fair value measurements categorized in Level 3 of the fair value hierarchy and requires a description of the valuation processes in place and a description of the sensitivity of the fair value to changes in unobservable inputs and interrelationships between those inputs if a change in those inputs would result in a significantly different fair value measurement. ASU 2011-04 is effective for fiscal years beginning after December 15, 2011 and for interim periodswithin those fiscal years. The adoption of ASU 2011-04 is currently being assessed but is not expected to have a material impact on the TE Fund’s financial statements.

7

Excelsior Multi-Strategy Hedge Fund of Funds (TE), LLC

Notes to Financial Statements (Unaudited) continued

September 30, 2011

c. Fund Expenses

The TE Fund bears its own expenses and, indirectly, bears a pro rata portion of the Ltd Fund’s and the Company’s expenses incurred in the course of business, including, but not limited to, the following: fees paid directly or indirectly to the investment managers of the Portfolio Funds; all costs and expenses directly related to portfolio transactions and positions for the Company’s account; legal fees; accounting and auditing fees; custodial and escrow fees; fees paid to the TE Fund’s, the Ltd Fund’s and the Company’s administrator; costs of insurance; management fees and advisory fees; the fees and travel expenses and other expenses of the TE Fund’s, the Ltd Fund’s and the Company’s Boards; all costs with respect to communications regarding the TE Fund’s, the Ltd Fund’s and the Company’s transactions between the Adviser and any custodian or other agent engaged by the TE Fund; and other types of expenses approved by the TE Fund’s, the Ltd Fund’s or the Company’s Boards.  Expenses, including incentive fees and allocations, allocated to the Company attributable to its investments in the Portfolio Funds are not broken out separately on the accompanying Statement of Operations of the TE Fund, and are not included in the expense ratios shown in the accompanying Financial Highlights of the TE Fund.  The income and expenses of the Portfolio Funds are, however, included in realized and unrealized gains on investments on the accompanying Statement of Operations.

The Adviser and the TE Fund have entered into an expense limitation and reimbursement agreement (the “Expense Limitation Agreement”) under which the Adviser will, subject to possible reimbursement by the TE Fund as described below, waive fees or pay or absorb expenses of the TE Fund (including the TE Fund’s share of the ordinary operating expenses of the Ltd Fund and the Company, but excluding any fees, expenses and incentive allocations of the Portfolio Funds) to the extent necessary to limit the ordinary operating expenses of the TE Fund (including the TE Fund’s share of the ordinary operating expenses of the Ltd Fund and the Company, but excluding taxes, interest and related costs of borrowing, brokerage commissions and any extraordinary expenses of the TE Fund, the Ltd Fund and the Company) to 2.00% per annum of the TE Fund’s average monthly net assets (the “Expense Limitation”). In consideration of the Adviser’s agreement to limit the TE Fund’s expenses, the TE Fund will carry forward the amount of fees waived and expenses paid or absorbed by the Adviser in excess of the Expense Limitation, for a period not to exceed three years from the end of the fiscal year in which the fee was waived or the expense was paid or absorbed, and will reimburse the Adviser such amounts. Reimbursement will be made as promptly as possible, but only to the extent it does not cause the TE Fund’s annualized ordinary operating expenses to exceed the Expense Limitation in effect at the time that the fee was waived or the expensewas paid or absorbed.  The Expense Limitation Agreement was in effect until December 31, 2010 and automatically continues in effect from year to year thereafter unless terminated by the Adviser or the TE Fund.  Neither the Adviser nor the TE Fund has terminated the Expense Limitation Agreement at December 31, 2010.

8

Excelsior Multi-Strategy Hedge Fund of Funds (TE), LLC

Notes to Financial Statements (Unaudited) continued

September 30, 2011

As of September 30, 2011, the TE Fund has not exceeded the Expense Limitation pursuant to the Expense Limitation Agreement.  All prior period expenses have been recouped by the Adviser, and no prior or current period expense reimbursement balances remain.

d. Income Taxes

As a limited liability company that is taxed as a partnership, no provision for the payment of federal, state or local income taxes has been provided by the TE Fund.  Each Member is individually required to report on its own tax return its share of the TE Fund’s taxable income or loss.  The TE Fund has a tax year end of December 31.

Net investment income or loss and net realized and unrealized gain or loss from investments of the TE Fund for each fiscal period are allocated among, and credited to or debited against, the capital accounts of all Members as of the last day of each fiscal period in accordance with each Member’s respective investment percentage for the fiscal period, as defined in the TE Fund’s Limited Liability Company Agreement (the “LLC Agreement”).

The authoritative guidance on accounting for and disclosure of uncertainty in tax positions requires management to determine whether a tax position of the TE Fund is more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position.  For tax positions meeting the “more likely than not” threshold, the tax amount recognized in the financial statements is reduced by the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant taxing authority.

The Adviser is not aware of any tax positions with respect to the TE Fund, for which it is reasonably possible that the total amounts of unrecognized tax benefits or losses will significantly change in the next twelve months.  However, the Adviser’s conclusions may be subject to future review based on changes in, or the interpretation of, the accounting standards or tax laws and regulations. Each of the TE Fund’s Federal tax returns for the prior three fiscal years, or since inception if shorter, remains subject to examination by the Internal Revenue Service.

e. Other

Cash and cash equivalents consist of amounts maintained in a Bank of New York Mellon account.

The TE Fund records its proportionate share of the Ltd Fund’s income, expenses and realized and unrealized gains and losses as allocated by the Ltd Fund.

9

Excelsior Multi-Strategy Hedge Fund of Funds (TE), LLC

Notes to Financial Statements (Unaudited) continued

September 30, 2011

3. Portfolio Valuation

The net asset value of the TE Fund is determined by, or at the direction of, the Adviser as of the close of business at the end of each fiscal period (as defined in the TE Fund’s LLC Agreement), in accordance with the valuation principles set forth below, or as may be determined from time to time, pursuant to valuation procedures established by the Board. Pursuant to the valuation procedures, the Board has delegated to the Adviser the general responsibility for valuation of the investments in the Portfolio Funds subject to the oversight of the Board.

The TE Fund records its investment in the Ltd Fund at fair value.  The TE Fund’s investment in the Ltd Fund is represented by the TE Fund’s proportionate interest in the Ltd Fund’s Shareholders’ Capital at September 30, 2011.  The Ltd Fund records its investment in the Company at fair value.  The Ltd Fund’s investment in the Company is represented by the Ltd Fund’s proportionate interest in the Company’s members’ capital at September 30, 2011.  The valuation of investments held by the Company is discussed in the notes to the Company’s financial statements, attached to this report.

4. Management Fee

The Adviser provides investment advisory services to the Company and incurs research, travel and other expenses related to the selection and monitoring of investment managers.  Further, the Adviser provides certain management and administrative services to the TE Fund, including providing office space and other support services, maintaining files and records, and preparing and filing various regulatory materials.  In consideration for such services, pursuant to a management agreement between the TE Fund and the Adviser (the “Management Agreement”), the TE Fund pays the Adviser a quarterly management fee in arrears at an annual rate of 0.50% based on the TE Fund’s net assets on the first business day of each quarter after adjustment for any subscriptions effective on that date.

For the period from April 1, 2011 to September 30, 2011, the management fee was $392,871, $196,007 of which was payable as of September 30, 2011.

5. Related Party Transactions and Other

As of September 30, 2011, three Members owned approximately 27.27% of the TE Fund's total Members' Capital and were deemed "affiliated persons" (as defined in the 1940 Act) (the "Affiliated Members").  The affiliation between the Affiliated Members and the TE Fund is based solely on the percentage of ownership.

10

Excelsior Multi-Strategy Hedge Fund of Funds (TE), LLC

Notes to Financial Statements (Unaudited) continued

September 30, 2011

Affiliates of the Adviser may have banking, underwriting, lending, brokerage, or other business relationships with the Portfolio Funds in which the Company invests and with companies in which the Portfolio Funds invest.

The Board is made up of five Managers who are not “interested persons”, as defined by Section 2(a)(19) of the 1940 Act, of the TE Fund (the “Disinterested Managers”).  Compensation to the Board is paid and expensed by the Company and allocated pro-rata to the TE Fund.  All Disinterested Managers may be reimbursed for expenses of attendance at each meeting of the Board or of any committee thereof and for their expenses, if any, in connection with any other service or activity they perform or engage in as Managers.

Merrill Lynch, Pierce, Fenner & Smith Incorporated serves as the placement agent of the TE Fund (the “Placement Agent”).  The Placement Agent is an indirect subsidiary of Bank of America and an affiliate of the Adviser.  Investors may be charged a placement fee (the "Placement Fee") on Interests placed by the Placement Agent of up to 1.25% of the investment amount if such amount is less than $500,000 (subject to the minimum investment).  There is no Placement Fee on investments of $500,000 or more.  The Placement Fee is paid to the Placement Agent.  The Placement Fee may be waived for certain investors.

BNY Mellon Investment Servicing Trust Company (formerly, PFPC Trust Company) provides custodial services to the TE Fund.

The TE Fund has retained J. D. Clark & Company (the “Administrator”) to provide accounting and certain administrative and investor services to the TE Fund.  The Administrator is a wholly-owned division of UMB Fund Services, Inc., a subsidiary of UMB Financial Corporation.  The TE Fund pays the Administrator, on a quarterly basis, a fee in an amount equal to $3,000, plus a tax compliance and preparation fee of $1,750 per calendar quarter, plus an audited financial statement preparation fee of $625 per calendar quarter.  For the period from April 1, 2011 to September 30, 2011, the TE Fund incurred $10,750 in expenses related to such administrative services, $5,615 of which was payable as of September 30, 2011.

6. Financial Instruments with Off-Balance Sheet Risk

In the normal course of business, the Portfolio Funds in which the Company invests trade various financial instruments and enter into various investment activities with off-balance sheet risk. These may include, but are not limited to, short selling activities, writing option contracts, contracts for differences and equity swaps. However, as a result of the investments by the Company as a limited partner or member, the Company’s liability with respect to its investments in the Portfolio Funds is generally limited to the net asset value of its interest in each Portfolio Fund.

11

Excelsior Multi-Strategy Hedge Fund of Funds (TE), LLC

Notes to Financial Statements (Unaudited) continued

September 30, 2011

Because the Company is a closed-end investment company, Interests are not redeemable at the option of Members and are not exchangeable for interests of any other fund. Although the Board in its discretion may cause the Company to offer from time to time to repurchase Interests at the Members’ capital account value, Interests are considerably less liquid than shares of funds that trade on a stock exchange or shares of open-end investment companies. With respect to any offer to repurchase Interests by the Company, the aggregate repurchase amount will be determined by the Board in its discretion and such repurchase amount may represent only a small portion of outstanding Interests. Because the Company’s investments in the Portfolio Funds themselves have limited liquidity, the Company may not be able to fund significant repurchases. Members whose Interests are accepted for repurchase also bear the risk that the Company's Members’ capital account value may fluctuate significantly between the time that they submit their request for repurchase and the date as of which Interests are valued for the purpose of repurchase.

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.  Among other things liquidity could be impaired by an inability to access secured and/or unsecured sources of financing, an inability to sell assets or to withdraw capital from the Portfolio Funds, or unforeseen outflows of cash.  This situation may arise due to circumstances outside of the Company's control, such as a general market disruption or an operational problem affecting the Company or third parties, including the Portfolio Funds.  Also, the ability to sell assets may be impaired if other market participants are seeking to sell similar assets at the same time.

The Company’s capital investment in the Portfolio Funds can be withdrawn on a limited basis.  This may limit the ability of the Company to provide liquidity to the Ltd Fund, and the Ltd Fund may not be able to liquidate quickly some of its investment in the Company in order to meet liquidity requirements and the TE Fund may not be able to liquidate quickly some of its investment in the Ltd Fund in order to meet liquidity requirements.

7. Guarantees

In the normal course of business, the TE Fund enters into contracts that provide general indemnifications.  The TE Fund’s maximum exposure under these arrangements is dependent on future claims that may be made against the TE Fund and, therefore, cannot be established; however, based on experience, the risk of loss from any such claims is considered remote.

8. Subsequent Events

The TE Fund has evaluated all subsequent events through November 29, 2011, the date on which these financial statements were available to be issued and, except as noted below, has determined that no additional disclosures are required.

12

Excelsior Multi-Strategy Hedge Fund of Funds (TE), LLC

Notes to Financial Statements (Unaudited) continued

September 30, 2011

On September 29, 2011, the TE Fund announced a tender offer to purchase up to $16,500,000 of outstanding Interests from Members.  The net asset value of the Interests will be calculated for this purpose on December 31, 2011.  The tender offer expired on October 27, 2011.

Prior to October 1, 2011, the TE Fund received and accepted investors' subscriptions for Interests of $2,270,000 which became effective as of October 1, 2011.

On November 7, 2011, the TE Fund paid $8,903,515 for total Interests repurchased from Members on September 30, 2011.

At a meeting held on November 3, 2011, the Board authorized the TE Fund to take the steps necessary to change its tax status and to be taxed as a "regulated investment company" (a "RIC") under Subchapter M of the U.S. Internal Revenue Code of 1986, as amended (the "RIC Conversion").  This change, if implemented as planned, will allow for simplified tax reporting by the TE Fund to Members on IRS Form 1099 instead of the current Schedule K-1 for calendar year 2012 and will result in earlier tax reporting to Members than is currently the case. The TE Fund expects that the RIC Conversion will be effective as of January 1, 2012, assuming the TE Fund determines that it meets applicable RIC qualification requirements.

13

EXCELSIOR DIRECTIONAL HEDGE FUND OF FUNDS, LTD.

Financial Statements

(Unaudited)

Period from April 1, 2011 to September 30, 2011

Excelsior Directional Hedge Fund of Funds, Ltd.

Financial Statements

(Unaudited)

Period from April 1, 2011 to September 30, 2011

Contents

Statement of Assets, Liabilities and Shareholders’ Capital	1
Statement of Operations	2
Statements of Changes in Shareholders’ Capital	3
Statement of Cash Flows	4
Financial Highlights	5
Notes to Financial Statements	6

Excelsior Directional Hedge Fund of Funds, Ltd.

Statement of Assets, Liabilities and Shareholders’ Capital (Unaudited)

September 30, 2011

ASSETS
Investment in Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC, at fair value	$	151,884,448
Redemption receivable from investment in Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC		9,140,098
Investment in Excelsior Multi-Strategy Hedge Fund of Funds Master  Fund, LLC made in advance		2,270,000
Cash and cash equivalents		128,943
Other asset		246
Total Assets		163,423,735
LIABILITIES
Repurchase of Shareholders' shares payable		9,140,098
Member subscriptions received in advance		2,270,000
Accrued foreign withholding tax		105,892
Professional fees payable		21,016
Other liabilities		7,697
Management fee payable		6,768
Administration fees payable		3,625
Total Liabilities		11,555,096
Net Assets	$	151,868,639
SHAREHOLDERS' CAPITAL * (equivalent to $906.0427 per share based on 161,880.995 shares of Class A capital stock outstanding and $882.3675 per share based on 5,890.4536 shares of Class B stock outstanding)	$	151,868,639

* Shareholders’ Capital includes net subscriptions, cumulative net investment income/(loss), cumulative net realized gain/(loss), and accumulated unrealized appreciation from investments in Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC.

The accompanying notes and attached unaudited financial statements of Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC are an integral part of these financial statements.

1

Excelsior Directional Hedge Fund of Funds, Ltd.

Statement of Operations (Unaudited)

Period from April 1, 2011 to September 30, 2011

NET INVESTMENT LOSS ALLOCATED FROM EXCELSIOR MULTI-STRATEGY HEDGE FUND OF FUNDS MASTER FUND, LLC
Interest	$	527
Expenses		(1,131,338	)
Net investment loss allocated from Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC		(1,130,811	)
Fund Income:
Interest		11
Fund Expenses:
Professional fees		24,237
Foreign withholding taxes		13,392
Management fee		13,604
Administration fees		7,250
Other expenses		6,037
Custody fees		5,600
Total Fund Expenses		70,120
Net Investment Loss		(1,200,920	)
REALIZED AND UNREALIZED LOSS ON INVESTMENTS ALLOCATED FROM EXCELSIOR MULTI-STRATEGY HEDGE FUND OF FUNDS MASTER FUND, LLC
Net realized loss on investment		(414,076	)
Net change in accumulated unrealized appreciation on investment		(6,329,223	)
Net realized and unrealized loss on investments allocated from Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC		(6,743,299	)
NET DECREASE IN SHAREHOLDERS' CAPITAL RESULTING FROM OPERATIONS	$	(7,944,219	)

The accompanying notes and attached unaudited financial statements of Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC are an integral part of these financial statements.

2

Excelsior Directional Hedge Fund of Funds, Ltd.

Statement of Changes in Shareholders’ Capital (Unaudited)

				For the period  from April 1,  2011 to  September 30,  2011						Year ended March 31, 2011
OPERATIONS
Net investment loss				$	(1,200,920	)				$	(2,440,775	)
Net realized gain (loss) on investment					(414,076	)					3,289,938
Net change in accumulated unrealized appreciation on investment					(6,329,223	)					5,564,083
Increase (decrease) in Shareholders'  Capital resulting from operations					(7,944,219	)					6,413,246
CAPITAL TRANSACTIONS
Shareholders' capital subscriptions	Shares						Shares
Class A		21,523.018			20,298,034			19,647.855			18,234,747
Class B		-			-			-			-
Shareholders' capital redemptions
Class A		(23,564.342	)		(21,843,401	)		(15,572.188	)		(14,673,495	)
Class B		-			-			(1,117.223	)		(1,012,307	)
Increase (decrease) in Shareholders'
Capital resulting from capital transactions					(1,545,367	)					2,548,945
Net increase (decrease) in Shareholders'     Capital					(9,489,586	)					8,962,191
SHAREHOLDERS' CAPITAL AT BEGINNING OF PERIOD					161,358,225						152,396,034
SHAREHOLDERS' CAPITAL AT END OF PERIOD				$	151,868,639					$	161,358,225

The accompanying notes and attached unaudited financial statements of Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC are an integral part of these financial statements.

3

Excelsior Directional Hedge Fund of Funds, Ltd.

Statement of Cash Flows (Unaudited)

Period from April 1, 2011 to September 30, 2011

CASH FLOWS FROM OPERATING ACTIVITIES
Net decrease in Shareholders' Capital resulting from operations	$	(7,944,219	)
Adjustments to reconcile net decrease in Shareholders' Capital resulting from operations to net cash used in operating activities:
Net change in accumulated unrealized appreciation on investments allocated from Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC		6,329,223
Net realized loss on investments allocated from Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC		414,076
Net investment loss allocated from Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC		1,130,811
Purchases of investment in Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC		(22,562,159	)
Proceeds from investment in Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC		19,843,532
Decrease in other assets		5,111
Increase (decrease) in operating liabilities:
Professional fees payable		(14,934	)
Accrued foreign withholding tax		13,392
Administration fees payable		3,625
Other liabilities		1,882
Mangement fee payable		5
Net Cash Used in Operating Activities		(2,779,655	)
CASH FLOWS FROM FINANCING ACTIVITIES
Shareholders' subscriptions		22,748,034
Shareholders' shares repurchased		(19,894,147	)
Net Cash Provided by Financing Activities		2,853,887
Net increase in cash and cash equivalents		74,232
Cash and cash equivalents at beginning of period		54,711
Cash and Cash Equivalents at End of Period	$	128,943

The accompanying notes and attached unaudited financial statements of Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC are an integral part of these financial statements.

4

Excelsior Directional Hedge Fund of Funds, Ltd.

Financial Highlights

The following represents certain ratios to average Shareholders’ Capital, total return, and other supplemental information for the periods indicated:

	Period from April 1, 2011 to September 30, 2011* (Unaudited)						Year ended March 31, 2011
	Class A			Class B			Class A			Class B
Per share operating performance:
(For a share of capital stock outstanding throughout the period)
Net asset value, beginning of period	$	950.993		$	928.484		$	914.070		$	896.882
Loss from investment operations:
Investment loss, net		(7.026	)		(9.162	)		(13.957	)		(18.142	)
Net realized and unrealized gain (loss) on investments		(37.924	)		(36.955	)		50.880			49.744
Total from investment operations		(44.950	)		(46.117	)		36.923			31.602
Net asset value, end of period	$	906.043		$	882.367		$	950.993		$	928.484
Net assets, end of period		146,671,098			5,197,541		$	155,889,035		$	5,469,190
Total return (a)		(4.73	%)		(4.97	%)		4.04	%		3.52	%
Ratio of net investment loss to average Shareholders' Capital (b)		(0.74	%)		(1.00	%)		(1.54	%)		(2.03	%)
Ratio of total expenses to average Shareholders' Capital (c) (d)		0.74	%		1.00	%		1.54	%		2.03	%
Ratio of net expenses to average Shareholders' Capital (c)		0.74	%		1.00	%		1.54	%		2.03	%

* The ratios and total return are not annualized for the period.

(a) Total return is net of expenses and assumes a purchase of capital stock in the Ltd Fund on the first day, and a redemption of shares on the last day of the period.  An individual Shareholder’s return may vary from these returns based on the timing of Shareholder subscriptions and redemptions.

(b) The ratio reflects the income and expenses  including the Ltd Fund’s proportionate share of income and expenses of  Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC.

(c) The ratio reflects the direct expenses, excluding placement fees, if any, and  includes the Ltd Fund’s proportionate share of the expenses of  Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC.

(d) The ratio is before any expense limitation reimbursement per the Expense Limitation Agreement.

The accompanying notes and attached unaudited financial statements of Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC are an integral part of these financial statements.

5

Excelsior Directional Hedge Fund of Funds, Ltd.

Notes to Financial Statements (Unaudited)

September 30, 2011

1. Organization

Excelsior Directional Hedge Fund of Funds, Ltd. (the “Ltd Fund”) was incorporated as a Cayman Islands exempted company on May 1, 2007 and commenced operations on July 1, 2007.  The Ltd Fund’s investment objective is to seek capital appreciation. The Ltd Fund pursues its investment objective by investing substantially all of its assets in Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC, formerly known as Excelsior Directional Hedge Fund of Funds Master Fund, LLC (the “Company”).  The Company is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a closed-end, non-diversified, management investment company and has the same investment objective as the Ltd Fund. The Company pursues its investment objective principally through a multi-manager, multi-strategy program of investments in a diverse group of private investment funds (the “Portfolio Funds”) that primarily invest or trade in a wide range of equity and debt securities. There can be no assurance that the investment objectives of the Company or the Ltd Fund will be achieved. The investment managers of the Portfolio Funds in which the Company invests generally conduct their investment programs through these Portfolio Funds.  The Company invests in the Portfolio Funds as a limited partner or member along with other investors.

The financial statements of the Company, including the Schedule of Investments, are attached to this report and should be read with the Ltd Fund’s financial statements.  The percentage of the Company’s members’ capital owned by the Ltd Fund at September 30, 2011 was 37.85%.

The Ltd Fund holds substantially all of the assets of Excelsior Multi-Strategy Hedge Fund of Funds (TE), LLC, formerly known as Excelsior Directional Hedge Fund of Funds (TE), LLC (the “TE Fund”), a closed-end, non-diversified management investment company registered under the 1940 Act.  As of September 30, 2011, the TE Fund owned 96.58% of the Ltd Fund’s Shareholders’ Capital.

Bank of America Capital Advisors LLC (the “Adviser”) serves as the investment adviser of the Company and the management services provider of the Ltd Fund. The Adviser is an indirect wholly-owned subsidiary of Bank of America Corporation (“Bank of America”) and is registered under the Investment Advisers Act of 1940, as amended.  Bank of America is a financial holding company which has its principal executive offices at 101 North Tryon Street, Charlotte, North Carolina.  The Adviser provides various management and administrative services to the Company and the Ltd Fund.

The Ltd Fund’s Board of Directors (the “Directors”) has overall responsibility to manage and supervise the operations of the Ltd Fund, including the exclusive authority to oversee and to establish policies regarding the management, conduct and operation of the Ltd Fund’s business.  The Directors have engaged the Adviser to manage the day-to-day operations of the Ltd Fund.

6

Excelsior Directional Hedge Fund of Funds, Ltd.

Notes to Financial Statements (Unaudited) continued

September 30, 2011

2. Significant Accounting Policies

a. Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management believes that the estimates utilized in preparing the Ltd Fund’s financial statements are reasonable and prudent; however, actual results could differ from these estimates.

b. Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Codification Accounting Standards Update No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04”). ASU 2011-04 requires disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy and the reasons for those transfers. In addition, ASU 2011-04 expands the qualitative and quantitative fair value disclosure requirements for fair value measurements categorized in Level 3 of the fair value hierarchy and requires a description of the valuation processes in place and a description of the sensitivity of the fair value to changes in unobservable inputs and interrelationships between those inputs if a change in those inputs would result in a significantly different fair value measurement. ASU 2011-04 is effective for fiscal years beginning after December 15, 2011 and for interim periods within those fiscal years. The adoption of ASU 2011-04 is currently being assessed but is not expected to have a material impact on the Ltd Fund’s financial statements.

c. Fund Expenses

The Ltd Fund bears its own expenses and, indirectly, bears a pro rata portion of the Company’s expenses incurred in its business, including, but not limited to, the following: fees paid directly or indirectly to the investment managers of the Portfolio Funds; all costs and expenses directly related to portfolio transactions and positions for the Company’s account; legal fees; accounting and auditing fees; custodial and escrow fees; fees paid to the Ltd Fund’s and the Company’s administrator; costs of insurance; management fees and advisory fees; the fees and travel expenses and other expenses of the Ltd Fund’s Directors and the Company’s Board of Managers (the “Company’s Board”); all costs with respect to communications regarding the Ltd Fund’s and the Company’s transactions between the Adviser and any custodian or other agent engaged by the Ltd Fund; and other types of expenses approved by the Ltd Fund’s Directors or the Company’s Board. Unless otherwise noted, all operating expenses are allocated on a pro rata basis to Class A and Class B shareholders of the Ltd Fund based on their relative portions of aggregate net assets.  Expenses, including incentive fees and allocations, allocated to the Company attributable to its investments in the Portfolio Funds are not broken out separately on the accompanying Statement of Operations of the Ltd Fund, and are not included in the expense ratios shown in the accompanying Financial Highlights of the Ltd Fund.  The income and expenses of the Portfolio Funds are, however, included in realized and unrealized gains on investments on the accompanying Statement of Operations.

7

Excelsior Directional Hedge Fund of Funds, Ltd.

Notes to Financial Statements (Unaudited) continued

September 30, 2011

The Adviser and the Ltd Fund have entered into an expense limitation and reimbursement agreement (the “Expense Limitation Agreement”), effective June 1, 2007, under which the Adviser has agreed to, subject to possible reimbursement by the Ltd Fund as described below, waive its fees or pay or absorb expenses of the Class B shares of the Ltd Fund (including the Ltd Fund's share of the ordinary operating expenses of the Company, but excluding any fees, expenses and incentive allocations of the Portfolio Funds) to the extent necessary to limit the ordinary operating expenses of the Ltd Fund (including the Ltd Fund's share of the ordinary operating expenses of the Company, but excluding taxes, interest and related costs of borrowing, brokerage commissions and any extraordinary expenses of the Ltd Fund and the Company) to 2.00% per annum of the Ltd Fund's average monthly net assets (the "Expense Limitation").  In consideration of the Adviser's agreement to limit the Ltd Fund’s expenses, the Ltd Fund will carry forward the amount of fees waived and expenses paid or absorbed by the Adviser in excess of the Expense Limitation, for a period not to exceed three years from the end of the fiscal year in which the fee was waived or the expense was paid or absorbed, and will reimburse the Adviser such amounts.

Reimbursement will be made as promptly as possible, but only to the extent it does not cause the Ltd Fund's annualized ordinary operating expenses to exceed the Expense Limitation in effect at the time that the fee was waived or the expense was paid or absorbed.  The Expense Limitation Agreement was initially in effect until December 31, 2010 and automatically continues in effect from year to year thereafter until terminated by the Adviser or the Ltd Fund.  Neither the Adviser nor the Ltd Fund has terminated the Expense Limitation Agreement at December 31, 2010.

During the period from April 1, 2011 to September 30, 2011, the Ltd Fund did not exceed the Expense Limitation per the Expense Limitation Agreement.

d. Income Taxes

The Ltd Fund is not subject to any income, withholding or capital gains taxes in the Cayman Islands.  There is no tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions for the year ended December 31, 2010.  There are no open tax years which are subject to examination by the Cayman Islands.  As a result, no income tax liability or expense has been recorded in the accompanying financial statements.

8

Excelsior Directional Hedge Fund of Funds, Ltd.

Notes to Financial Statements (Unaudited) continued

September 30, 2011

In the event that the Company’s investments earn dividend income from entities based in the United States, such income is subject to a 30% withholding tax at the Ltd Fund level.  For the period from April 1, 2011 to September 30, 2011, the Ltd Fund recorded foreign withholding taxes of $13,392 as shown in the accompanying Statement of Operations.

The Ltd Fund is not subject to any income or capital gains taxes in the United States and does not file income tax returns.  There are no unrecognized tax benefits or liabilities relating to uncertain income tax positions.

e. Other

Cash and cash equivalents consist of amounts maintained in a Bank of New York Mellon account.

The Ltd Fund records its proportionate share of the Company’s investment income, expenses and realized and unrealized gains and losses as allocated by the Company.

3. Portfolio Valuation

The net asset value and net asset value per share of the Ltd Fund is determined by, or at the direction of, the Adviser as of the close of business on the last business day of each month (as defined in the Ltd Fund’s Memorandum and Articles of Association), in accordance with the valuation principles set forth below or as may be determined from time to time, pursuant to valuation procedures established by the Directors.  Pursuant to the valuation procedures, the Directors have delegated to the Adviser the general responsibility for valuation of the investments in the Portfolio Funds subject to the oversight of the Directors.

The Ltd Fund records its investment in the Company at fair value.  The Ltd Fund’s investment in the Company is represented by the Ltd Fund’s proportionate interest in the Company’s members’ capital at September 30, 2011.  The valuation of investments held by the Company is discussed in the notes to the Company’s financial statements, attached to this report.

4. Capital Structure

The Ltd Fund has authorized capital of U.S. $50,000 divided into 5,000,000 shares, par value U.S. $0.01 per share.  The Ltd Fund is offering voting participating Class A shares to investment companies that are registered under the 1940 Act and are entities in which substantially all of the ownership interests are held by tax-exempt U.S. persons within the meaning of the U.S. Internal Revenue Code of 1986, as amended.  Non-voting participating Class B shares are being offered to persons who are not U.S. persons.  The subscription price for shares on the initial subscription date for both Class A and Class B was $1,000 per share.  Class A and Class B commenced operations on July 1, 2007 and January 1, 2008, respectively.  Currently the TE Fund owns 100% of the Class A shares of the Ltd Fund.

9

Excelsior Directional Hedge Fund of Funds, Ltd.

Notes to Financial Statements (Unaudited) continued

September 30, 2011

The Directors have authorized the Ltd Fund to offer shares twelve times each year, generally as of the first business day of each month or at other times in the sole discretion of the Directors.  The Ltd Fund will be authorized to issue shares in one or more different classes, as determined from time to time without approval of existing shareholders, by the Directors in consultation with the Adviser, which may differ in terms of, among other things, the fees charged, voting and redemption rights and minimum and additional subscription amounts.  Shares are currently divided into Class A and Class B shares.  For the period from April 1, 2011 to September 30, 2011, 21,523.018 Class A shares were issued and no Class B shares were issued.

The Ltd Fund may from time to time offer to redeem shares from shareholders.  These redemptions will be made at such times and on such terms as may be determined by the Directors, in their sole discretion, subject to the liquidity of the Company’s assets and other factors considered by the Adviser.  The Adviser expects that, generally, it will recommend to the Directors that the Ltd Fund offer to redeem shares from shareholders four times each year, effective as of the last day of each calendar quarter.  Shareholder redemptions are recognized as liabilities when the amount becomes fixed.  This generally will occur on the last day of a fiscal period.  For the period from April 1, 2011 to September 30, 2011, 23,564.342 Class A shares were redeemed and no Class B shares were redeemed.

5. Management Fee

Pursuant to the fund servicing agreement between the Ltd Fund and the Adviser (the “Servicing Agreement”), the Adviser provides management and administrative services to the Ltd Fund including providing office space and other support services, maintaining files and records, and preparing and filing various regulatory materials.  In consideration for such services under the Servicing Agreement, the Ltd Fund pays the Adviser a quarterly management fee in arrears (the “Management Fee”) at an annual rate of 0.50% of the net asset value of the Ltd Fund’s Class B shares on the first business day of each quarter after adjustments for any subscriptions effective on that date.

For the period April 1, 2011 to September 30, 2011, the Management Fee was $13,604, $6,768  of which was payable as of September 30, 2011.  The Ltd Fund does not pay the Adviser a management fee with respect to Class A shares.

6. Related Party Transactions and Other

Affiliates of the Adviser may have banking, underwriting, lending, brokerage, or other business relationships with the Portfolio Funds in which the Company invests and with the companies in which the Portfolio Funds invest.

10

Excelsior Directional Hedge Fund of Funds, Ltd.

Notes to Financial Statements (Unaudited) continued

September 30, 2011

BNY Mellon Investment Servicing Trust Company (formerly, PFPC Trust Company) provides custodial services to the Ltd Fund.

The Ltd Fund has retained J. D. Clark & Company (the “Administrator”) to provide accounting and certain administrative and investor services to the Ltd Fund.  The Administrator is a wholly-owned division of UMB Fund Services, Inc., a subsidiary of UMB Financial Corporation. The Ltd Fund pays the Administrator, on a quarterly basis, a fee in an amount equal to $3,000, plus an audited financial statement preparation fee of $625 per calendar quarter. For the period from April 1, 2011 to September 30, 2011, the Ltd Fund incurred $7,250 in expenses related to such administrative services, $3,625 of which was payable as of September 30, 2011.

Merrill Lynch International & Co., an affiliate of the Adviser, is the placement agent of the Ltd Fund (the “Placement Agent”). Investors may be charged a placement fee (the "Placement Fee") on Interests placed by the Placement Agent of up to 1.25% of the investment amount if such amount is less than $500,000 (subject to the minimum investment).  There is no Placement Fee on investments of $500,000 or more.  The Placement Fee is paid to the Placement Agent and may be waived for certain investors.

7. Financial Instruments with Off-Balance Sheet Risk

In the normal course of business, the Portfolio Funds in which the Company invests trade various financial instruments and enter into various investment activities with off-balance sheet risk. These may include, but are not limited to, short selling activities, writing option contracts, contracts for differences and equity swaps. However, as a result of the investments by the Company as a limited partner or member, the Company’s liability with respect to its investments in the Portfolio Funds is limited to the net asset value of its interest in each Portfolio Fund.

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.  Among other things liquidity could be impaired by an inability to access secured and/or unsecured sources of financing, an inability to sell assets or to withdraw capital from the Portfolio Funds, or unforeseen outflows of cash.  This situation may arise due to circumstances outside of the Company's control, such as a general market disruption or an operational problem affecting the Company or third parties, including the Portfolio Funds.  Also, the ability to sell assets may be impaired if other market participants are seeking to sell similar assets at the same time.

The Company’s capital investment in the Portfolio Funds can be withdrawn on a limited basis.  This may limit the ability of the Company to provide liquidity to the Ltd Fund, and the Ltd Fund may not be able to liquidate quickly some of its investment in the Company in order to meet liquidity requirements.

11

Excelsior Directional Hedge Fund of Funds, Ltd.

Notes to Financial Statements (Unaudited) continued

September 30, 2011

8. Guarantees

In the normal course of business, the Ltd Fund enters into contracts that provide general indemnifications.  The Ltd Fund’s maximum exposure under these arrangements is dependent on future claims that may be made against the Ltd Fund and therefore, cannot be established; however, based on experience, the risk of loss from any such claims is considered remote.

9. Subsequent Events

The Ltd Fund has evaluated all subsequent events through November 29, 2011, the date on which these financial statements were available to be issued and, except as noted below, has determined that no additional disclosures are required.

On September 29, 2011, the Ltd Fund announced that it will repurchase up to $17,050,000 of outstanding shares from its shareholders.  The net asset value of the shares will be calculated for this purpose on December 31, 2011.  The offer to repurchase shares expired on October 27, 2011.

On November 7, 2011, the Ltd Fund paid $8,903,515 for total shares repurchased from shareholders on September 30, 2011.

12

EXCELSIOR MULTI-STRATEGY HEDGE FUND OF FUNDS MASTER FUND, LLC

Financial Statements

(Unaudited)

Period from April 1, 2011 to September 30, 2011

Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC

Financial Statements

(Unaudited)

Period from April 1, 2011 to September 30, 2011

Contents

Statement of Assets, Liabilities and Members’ Capital	1
Schedule of Investments	2
Statement of Operations	4
Statements of Changes in Members’ Capital	5
Statement of Cash Flows	6
Financial Highlights	7
Notes to Financial Statements	8

The Registrant files its complete schedule of portfolio holdings with the Securities and Exchange Commission (the "Commission") for the first and third quarters of each fiscal year on Form N-Q. The Registrant’s Forms N-Q are available on the Commission’s website at http://www.sec.gov, and may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC.  Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.  Information on Form N-Q is available without charge, upon request, by calling (866) 921-7951.

A description of the policies and procedures that the Registrant uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (866) 921-7951 and on the Commission’s website at http://www.sec.gov.

Information regarding how the Registrant voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request, by calling (866) 921-7951, and on the Commission’s website at http://www.sec.gov.

Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC

Statement of Assets, Liabilities and Members’ Capital (Unaudited)

September 30, 2011

ASSETS
Investments in Portfolio Funds, at fair value (cost $309,325,352)	$	379,407,718
Cash and cash equivalents		30,031,614
Redemptions receivable from investments in Portfolio Funds		15,116,965
Total Assets		424,556,297
LIABILITIES
Repurchase of Members' interests payable		19,270,652
Member subscriptions received in advance		2,670,000
Advisory fee payable		1,075,612
Professional fees payable		95,476
Administration fees payable		82,411
Board of Managers' fees payable		50,000
Other liability		46,475
Total Liabilities		23,290,626
Net Assets	$	401,265,671
MEMBERS' CAPITAL
Represented by:
Net Capital*	$	331,183,305
Net accumulated unrealized appreciation on investments		70,082,366
Members' Capital	$	401,265,671

*Net capital includes net subscriptions, cumulative net investment income/(loss) and cumulative net realized gain/(loss) from investments in the Portfolio Funds.

The accompanying notes are an integral part of these financial statements.

1

Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC

Schedule of Investments (Unaudited)

September 30, 2011

												First
	First					% of			% Ownership			Available
	Acquisition			Fair		Members'			of Portfolio			Redemption
Portfolio Funds *	Date	Cost **		Value **		Capital			Funds			Date ***	Liquidity ****
Event Driven/Relative Value Funds
American Durham L.P.	7/1/2008		2,607,970		262,398		0.07	%		12.65	%	N/A	(1)
Anchorage Capital Partners, L.P.	10/1/2009		13,000,000		13,297,005		3.31	%		0.44	%	N/A	Annually
Aristeia Partners, L.P.	4/1/2008		9,537,502		16,150,719		4.02	%		5.34	%	N/A	Quarterly
Brevan Howard, L.P.	2/1/2009		16,214,798		19,444,721		4.86	%		0.64	%	N/A	Monthly
Canyon Value Realization Fund, L.P.	7/1/2003		-		1,255,908		0.31	%		0.05	%	N/A	(1)
Double Black Diamond, L.P.	8/1/2011		5,000,000		4,755,677		1.19	%		0.30	%	9/30/2012	Quarterly
Drake Global Opportunities Fund, L.P.	4/1/2009		-		43,692		0.01	%		0.56	%	N/A	(2)
DSC Acquisitions, LLC	4/1/2009		37,735		38,018		0.01	%		0.93	%	N/A	(2)
Farallon Capital Partners, L.P.	11/1/2004		14,894,396		19,545,314		4.87	%		0.39	%	N/A	Annually, (3)
Garrison Special Opportunity Fund, L.P.	7/1/2009		3,045,375		3,256,771		0.81	%		0.98	%	N/A	(4)
JANA Partners, L.P.	4/1/2009		133,460		180,322		0.04	%		0.25	%	N/A	(1)
Lydian Partners SPV, Ltd.	4/1/2009		475		475		0.00	%		2.97	%	N/A	(4)
Mast Credit Opporturnities I, L.P.	6/1/2010		16,000,000		16,788,257		4.18	%		11.00	%	N/A	Quarterly
Monarch Debt Recovery Fund, L.P.	7/1/2009		11,000,000		13,993,940		3.49	%		1.73	%	(5)	Annually
Strategic Value Restructuring Fund, L.P.	4/1/2009		954,649		471,823		0.12	%		0.08	%	N/A	(1)
SVRF (Onshore) Holdings LLC	4/1/2009		540,210		245,741		0.06	%		1.57	%	N/A	(4)
Vicis Capital Fund	4/1/2009		2,130,943		538,564		0.13	%		0.12	%	N/A	(2)
Waterfall Eden Fund, L.P.	7/1/2008		7,273,294		4,825,783		1.20	%		6.81	%	N/A	(4)
Strategy Total			102,370,807		115,095,128		28.68	%
Hedged Long/Short Equity Funds
Alydar QP Fund L.P.	4/1/2009		11,877,385		13,151,096		3.28	%		2.86	%	N/A	Quarterly
Prism Partners III Leveraged, L.P.	7/1/2009		5,000,000		5,889,814		1.47	%		1.40	%	N/A	Quarterly
SAB Capital Partners, L.P.	4/1/2001		-		356,586		0.09	%		0.10	%	N/A	(1)
Scopia PX, LLC	9/1/2005		11,000,000		16,158,760		4.02	%		3.84	%	N/A	Quarterly
Strategy Total			27,877,385		35,556,256		8.86	%
Hedged Sector Funds
Coatue Qualified Partners, L.P.	1/1/2002		4,000,000		18,867,926		4.70	%		1.00	%	N/A	Quarterly
Expo Health Sciences Fund, L.P.	8/1/2010		14,000,000		13,632,179		3.40	%		4.40	%	(6)	Quarterly
Longbow Partners, L.P.	5/1/2004		5,200,000		11,423,952		2.85	%		13.28	%	N/A	Quarterly
Seligman Tech Spectrum Fund, LLC	4/1/2009		4,610,345		5,531,707		1.38	%		1.17	%	N/A	Monthly
Tufton Oceanic Hedge Fund, Ltd.	11/1/2009		12,500,000		13,182,284		3.28	%		0.92	%	N/A	Monthly
Strategy Total			40,310,345		62,638,048		15.61	%
Opportunistic Long/Short (Global) Funds
AKO Partners, L.P.	10/1/2005		5,500,000		13,213,078		3.29	%		1.60	%	N/A	Quarterly
Amiya Global Emerging Opportunities Fund, L.P.	8/1/2009		10,000,000		12,005,954		3.00	%		2.67	%	N/A	Quarterly
Artha Emerging Markets Funds, L.P.	4/1/2008		13,720,130		16,577,797		4.13	%		2.38	%	N/A	Quarterly
Egerton Capital Partners, L.P.	10/1/2009		5,000,000		5,635,782		1.40	%		1.39	%	N/A	Quarterly
Henderson Asia Pacific Absolute Return Fund, Ltd.	10/1/2008		12,966,478		12,266,171		3.06	%		3.98	%	N/A	Monthly
Indus Asia Pacific Fund, L.P.	3/1/2004		15,000,000		19,709,594		4.91	%		2.29	%	N/A	Quarterly
Indus Japan Fund, L.P.	3/1/2004		6,000,000		9,080,487		2.26	%		4.13	%	N/A	Quarterly
Meditor European Hedge Fund (B) Limited	7/1/2009		17,000,000		16,889,828		4.21	%		0.87	%	N/A	Monthly
Rohatyn Group Global Opportunity Partners, L.P.	4/1/2009		13,572		46,435		0.01	%		0.05	%	N/A	(1)
Strategy Total			85,200,180		105,425,126		26.27	%
Opportunistic (U.S. Only) Funds
Addison Clark Fund, L.P.	4/1/2008		15,016,635		17,867,674		4.46	%		3.21	%	N/A	Quarterly
Brookside Capital Partners II, L.P.	7/1/2009		15,000,000		13,493,549		3.36	%		2.08	%	N/A	Quarterly
Cadmus Capital Partners (QP), L.P.	7/1/2003		-		168,888		0.04	%		7.04	%	N/A	(2)
Swiftcurrent Partners, L.P.	10/1/2000		10,550,000		15,019,216		3.75	%		1.72	%	12/31/2011	Annually
Valinor Capital Partners, L.P.	7/1/2007		13,000,000		14,143,833		3.52	%		2.19	%	N/A	(7)
Strategy Total			53,566,635		60,693,160		15.13	%
Total Investments in Portfolio Funds		$	309,325,352		379,407,718		94.55	%
Other Assets, less Liabilities					21,857,953		5.45	%
Members’ Capital				$	401,265,671		100.00	%

The accompanying notes are an integral part of these financial statements.

2

Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC

Schedule of Investments (Unaudited) continued

September 30, 2011

The investments in the Portfolio Funds shown above, representing 94.55% of Members' Capital, have been fair valued in accordance with procedures established by the Board of Managers.

The Company's investments on September 30, 2011 are summarized below based on the investment strategy of each specific Portfolio Fund.

Investment Strategy	% Total Investments in Portfolio Funds
Event Driven/Relative Value Funds	30.33%
Hedged Long/Short Equity Funds	9.37%
Hedged Sector Funds	16.51%
Opportunistic Long/Short (Global) Funds	27.79%
Opportunistic (U.S. Only) Funds	16.00%
Total	100.00%

*	Non-income producing investments.  The Company's investments in the Portfolio Funds are considered to be	(1)	All of the Company's remaining interest in the Portfolio Fund is held in side pockets and is illiquid.
	illiquid and may be subject to limitations on redemptions,	(2)	The Portfolio Fund is liquidating its assets and is in the process
	including the assessment of early redemption fees.		of returning capital to its partners.  Due to the liquidation, the
**	See definition in Note 3.		Portfolio Fund has suspended redemption rights. The full
***	From most recent investment date.		liquidation is expected to take two years following the date of
****	Available frequency of redemptions after initial		this  report or longer.
	lock-up period.	(3)	Approximately 35% of the fair value of the Company's interest
N/A	Initial lock-up period has either expired prior to 9/30/2011,		in the Portfolio Fund is held in side pockets.
	or the Portfolio Fund did not have an initial lock-up	(4)	The Portfolio Fund has limited redemption rights by segregating
	period.  However, specific redemption restrictions may		its less liquid assets from the regular (liquid) portfolio and created
	apply.		a liquidating vehicle with the intention of liquidating those assets
			in a reasonable manner.
		(5)	Approximately 17% of the fair value of the Company's interest
			has a lock-up period that expires on 12/31/2011, 24% has a
			lock-up period that expires on 3/31/2012, and 16% has a lock-up
			period that expires on 6/30/2012.
		(6)	Approximately 22% of the fair value of the Company's interest
			in the Portfolio Fund has a lock-up period that expires on
			12/31/2011, and 41% has a lock-up period that expires on 3/31/12.
		(7)	Approximately 46% of the fair value of the Company's interest
			in the Portfolio Fund has tri-annual liquidity and 54% has annual
			liquidity.

The accompanying notes are an integral part of these financial statements.

3

Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC

Statement of Operations (Unaudited)

Period from April 1, 2011 to September 30, 2011

INVESTMENT INCOME
Interest	$	1,443
Total Investment Income		1,443
EXPENSES
Advisory fee		2,181,878
Bank note facility fee		389,280
Administration fees		165,412
Professional fees		136,065
Board of Managers' fees		100,000
Other expenses		91,734
Total Expenses		3,064,369
Net Investment Loss		(3,062,926	)
REALIZED AND UNREALIZED LOSSES ON INVESTMENTS
Net realized loss from investments in Portfolio Funds		(1,124,050	)
Net change in accumulated unrealized appreciation on investments		(16,526,843	)
Net realized and unrealized losses on investments		(17,650,893	)
NET DECREASE IN MEMBERS' CAPITAL RESULTING FROM OPERATIONS	$	(20,713,819	)

The accompanying notes are an integral part of these financial statements.

4

Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC

Statement of Changes in Members’ Capital (Unaudited)

	For the period from
	April 1, 2011 to			Year Ended
	September 30, 2011			March 31, 2011
OPERATIONS
Net investment loss	$	(3,062,926	)	$	(6,344,186	)
Net realized gain (loss) from investments in Portfolio Funds		(1,124,050	)		9,552,062
Net change in accumulated unrealized appreciation on investments		(16,526,843	)		15,279,479
Increase (decrease) in Members' Capital resulting from operations		(20,713,819	)		18,487,355
CAPITAL TRANSACTIONS
Members' subscriptions		23,895,803			86,637,970
Members' interests repurchased		(42,972,197	)		(96,869,366	)
Decrease in Members' Capital resulting from capital transactions		(19,076,394	)		(10,231,396	)
Net increase (decrease) in Members' Capital		(39,790,213	)		8,255,959
MEMBERS' CAPITAL AT BEGINNING OF PERIOD		441,055,884			432,799,925
MEMBERS' CAPITAL AT END OF PERIOD	$	401,265,671		$	441,055,884

The accompanying notes are an integral part of these financial statements.

5

Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC

Statement of Cash Flows (Unaudited)

Period from April 1, 2011 to September 30, 2011

CASH FLOWS FROM OPERATING ACTIVITIES
Net decrease in Members' Capital resulting from operations	$	(20,713,819	)
Adjustments to reconcile net decrease in members' capital resulting from operations to net cash provided by operating activities:
Net change in accumulated unrealized appreciation on investments		16,526,843
Net realized loss from Portfolio Fund redemptions		1,124,050
Purchases of Portfolio Funds		(5,000,000	)
Proceeds from Portfolio Funds		29,041,474
Decrease in other assets		84,435
Increase (decrease) in operating liabilities:
Administration fees payable		82,411
Professional fees payable		(58,255	)
Advisory fee payable		(48,404	)
Other liability		(37,266	)
Net Cash Provided by Operating Activities		21,001,469
CASH FLOWS FROM FINANCING ACTIVITIES
Member subscriptions		26,565,803
Member interests repurchased		(39,379,607	)
Net Cash Used in Financing Activities		(12,813,804	)
Net increase in cash and cash equivalents		8,187,665
Cash and cash equivalents at beginning of period		21,843,949
Cash and Cash Equivalents at End of Period	$	30,031,614

The accompanying notes are an integral part of these financial statements.

6

Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC

Financial Highlights

The following represents certain ratios to average Members’ Capital, total return, and other supplemental information for the periods indicated:

	For the period
	from April 1, 2011
	to September 30,			For the year ended:
	2011 (Unaudited)*			March 31, 2011			March 31, 2010			March 31, 2009			March 31, 2008***
Net assets, end of period	$	401,265,671		$	441,055,884		$	432,799,925		$	343,863,804		$	319,569,861
Ratio of net investment loss to average Members' Capital (a) (b)		(0.71	%)		(1.44	%)		(1.11	%)		(1.16	%)		(1.18	%)
Ratio of expenses to average Members' Capital (a) (b)		0.71	%		1.44	%		1.12	%		1.20	%		1.24	%
Portfolio turnover		1.21	%		11.27	%		23.33	% **		24.20	%		7.37	%
Total return (c)		(4.69	%)		4.15	%		15.04	%		(15.98	%)		0.45	%

* The ratios and total return are not annualized for this period.

** The ratio excludes amounts transferred to the Company pursuant to the acquisition of BACAP Alternative Multi-Strategy Fund, LLC.

*** The Company reorganized into a "master-feeder" structure during this period.

(a) Ratio does not reflect the Company's proportionate share of the net investment income (loss) and expenses, including incentive fees or allocations, of the Portfolio Funds.  The Portfolio Funds' expense ratios, excluding incentive fees or allocations, range from 1.00% to 6.04% (unaudited).  The Portfolio Funds' incentive fees or allocations can be up to 25% of profits earned (unadited).

(b) Average Members' Capital is determined using the net assets at the end of each month during the period and net assets at the beginning of the period.

(c) Total return assumes a purchase of an interest in the Company on the first day and the sale of an interest on the last day of the period and is calculated using geometrically linked monthly returns.  An individual Member's return may vary from these returns based on the timing of Member subscriptions and redemptions.  Total returns for periods less than one year have not been annualized.

The accompanying notes are an integral part of these financial statements.

7

Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC

Notes to Financial Statements (Unaudited)

September 30, 2011

1. Organization

Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC, formerly known as Excelsior Directional Hedge Fund of Funds Master Fund, LLC (the “Company”), was organized as a limited liability company under the laws of Delaware on July 6, 2000, and commenced operations on October 1, 2000. The Company is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a non-diversified, closed-end management investment company. The Company’s investment objective is to seek capital appreciation. The Company pursues its investment objective principally through a multi-manager, multi-strategy program of investments in a diverse group of private investment funds (the “Portfolio Funds”) that primarily invest or trade in a wide range of equity and debt securities. There can be no assurance that the investment objective of the Company will be achieved.  The investment managers of the Portfolio Funds in which the Company invests generally conduct their investment programs through these Portfolio Funds.  The Company invests in the Portfolio Funds as a limited partner or member along with other investors.

Excelsior Multi-Strategy Hedge Fund of Funds (TI), LLC, formerly known as Excelsior Directional Hedge Fund of Funds (TI), LLC (the “TI Fund"), and Excelsior Multi-Strategy Hedge Fund of Funds (TI 2), LLC (the “TI 2 Fund”), each a Delaware limited liability company that is registered under the 1940 Act as a non-diversified, closed-end management investment company, and Excelsior Directional Hedge Fund of Funds, Ltd. (the “Ltd Fund”) and Excelsior Multi-Strategy Hedge Fund of Funds 2, Ltd. (the “Ltd 2 Fund,” and together with the TI Fund, the TI 2 Fund, and the Ltd Fund, the “Feeder Funds”) pursue their investment objectives by investing substantially all of their  assets in the Company.  The Feeder Funds have the same investment objective and substantially the same investment policies as the Company (except that the Feeder Funds pursue their investment objectives by investing in the Company).

Bank of America Capital Advisors LLC (the "Adviser") serves as the investment adviser of the Company.  The Adviser is an indirect wholly-owned subsidiary of Bank of America Corporation (“Bank of America”) and a registered investment adviser.  Bank of America is a financial holding company which has its principal executive offices at 101 North Tryon Street, Charlotte, North Carolina. The Adviser is responsible for developing, implementing and supervising the investment program and providing day-to-day management services.

The Company’s Board of Managers (the “Board”) has overall responsibility to manage and supervise the operations of the Company, including the exclusive authority to oversee and to establish policies regarding the management, conduct and operation of the Company’s business.  The Board exercises the same powers, authority and responsibilities on behalf of the Company as customarily exercised by directors of a typical investment company registered under the 1940 Act and organized as a corporation.  The Board has engaged the Adviser to provide investment advice regarding the selection of the Portfolio Funds and to manage the day-to-day operations of the Company.

8

Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC

Notes to Financial Statements (Unaudited) continued

September 30, 2011

The Company operates as a vehicle for the investment of substantially all of the assets of the Feeder Funds as members of the Company (“Members”).  As of September 30, 2011, the TI Fund’s, TI 2 Fund’s, Ltd Fund’s, and Ltd 2 Fund’s ownership of the Company’s Members’ Capital was 58.35%, 1.72%, 37.85% and 2.08%, respectively.

Interests in the Company (“Interests”) are generally offered only to the Feeder Funds and subscriptions for Interests may be accepted as of the first day of each month, or at such times as the Board may determine. The Company may, from time to time, offer to repurchase Interests from its Members pursuant to written tenders by Members. These repurchase offers will be made at such times and on such terms as may be determined by the Board, in its sole discretion, subject to the liquidity of the Company’s assets and other factors considered by the Board. The Adviser expects that it will recommend to the Board that the Company offer to repurchase Interests from Members four times each year, effective as of the last day of each calendar quarter. Members can only transfer or assign Interests under certain limited circumstances.

2. Significant Accounting Policies

a. Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management believes that the estimates utilized in preparing the Company’s financial statements are reasonable and prudent; however, actual results could differ from these estimates.

b. Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Codification Accounting Standards Update No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04”).  ASU 2011-04 requires disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy and the reasons for those transfers.  In addition, ASU 2011-04 expands the qualitative and quantitative fair value disclosure requirements for fair value measurements categorized in Level 3 of the fair value hierarchy and requires a description of the valuation processes in place and a description of the sensitivity of the fair value to changes in unobservable inputs and interrelationships between those inputs if a change in those inputs would result in a significantly different fair value measurement. ASU 2011-04 is effective for fiscal years beginning after December 15, 2011 and for interim periods within those fiscal years. The adoption of ASU 2011-04 is currently being assessed but is not expected to have a material impact on the Company’s financial statements.

9

Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC

Notes to Financial Statements (Unaudited) continued

September 30, 2011

c. Company Expenses

The Company bears certain expenses incurred in its business, including, but not limited to, the following: fees paid directly or indirectly to the investment managers of the Portfolio Funds; all costs and expenses directly related to portfolio transactions and positions for the Company’s account; legal fees; accounting and auditing fees; custodial fees; fees paid to the Company’s administrator; costs of insurance; advisory fees; the fees and travel expenses and other expenses of the Board; all costs with respect to communications regarding the Company’s transactions among the Adviser and any custodian or other agent engaged by the Company; and other types of expenses approved by the Board. Expenses, including incentive fees and allocations, of the Portfolio Funds are not broken out separately on the accompanying Statement of Operations, and are not included in the expense ratios shown in the accompanying Financial Highlights. The income and expenses of the Portfolio Funds are, however, included in realized and unrealized gains on investments on the accompanying Statement of Operations.

d. Income Taxes

As a limited liability company that is taxed as a partnership, no provision for the payment of federal, state or local income taxes has been provided by the Company.  Each Member is individually required to report on its own tax return its share of the Company’s taxable income or loss.  The Company has a tax year end of December 31.

The cost of the Portfolio Funds for federal tax purposes is based on amounts reported to the Company on Schedule K-1 from the Portfolio Funds. As of September 30, 2011, the Company has not yet received information to determine the current tax cost of the Portfolio Funds.  Based on the amounts reported to the Company on Schedule K-1 as of December 31, 2010, and after adjustment for purchases and sales between December 31, 2010 and September 30, 2011, the estimated cost of the Portfolio Funds at September 30, 2011 for federal tax purposes is $357,298,473.  The resulting estimated unrealized appreciation and unrealized depreciation for tax purposes on the Portfolio Funds at September 30, 2011 are $35,229,302 and $13,120,057, respectively.

The authoritative guidance on accounting for and disclosure of uncertainty in tax positions requires management to determine whether a tax position of the Company is “more likely than not” to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. For tax positions meeting the “more likely than not” threshold, the tax amount recognized in the financial statements is reduced by the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant taxing authority.

10

Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC

Notes to Financial Statements (Unaudited) continued

September 30, 2011

The Adviser is not aware of any tax positions with respect to the Company, for which it is reasonably possible that the total amounts of unrecognized tax benefits or losses will significantly change in the next twelve months. However, the Adviser’s conclusions may be subject to future review based on changes in, or the interpretation of, the accounting standards or tax laws and regulations. Each of the Company’s federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service.

e. Security Transactions

Distributions received from the Portfolio Funds, whether in the form of cash or securities, are applied first as a reduction of the investment’s cost, and any excess is treated as realized gain from investments in the Portfolio Funds.  Realized gains or losses on investments in the Portfolio Funds are measured by the difference between the proceeds from the sale or liquidation and the cost basis of the investment using the specific identification method without regard to unrealized appreciation or depreciation reported in prior years.

f. Other

Net investment income or loss and net realized and unrealized gain or loss from investments of the Company for each fiscal period are allocated between, and credited to or debited against, the capital accounts of Members as of the last day of the fiscal period in accordance with each Member’s respective investment percentage for the fiscal period, as defined in the Company’s Limited Liability Company Agreement (the “LLC Agreement”).

Cash and cash equivalents consist of amounts maintained in a Bank of New York Mellon account.

3. Portfolio Valuation

The net asset value (“NAV”) of the Company is determined by, or at the direction of, the Adviser as of the close of business at the end of each fiscal period (as defined in the LLC Agreement), in accordance with the valuation principles set forth below, or as may be determined from time to time, pursuant to valuation procedures established by the Board.  Pursuant to the valuation procedures, the Board has delegated to the Adviser the general responsibility for valuation of the investments in the Portfolio Funds subject to the oversight of the Board.

The investments in the Portfolio Funds are recorded at fair value, generally at an amount equal to the NAV of the Company's investment in the Portfolio Funds as determined by the Portfolio Fund's general partner or investment manager. If no such information is available or if such information is deemed to be not reflective of fair value, an estimated fair value is determined in good faith by the Adviser pursuant to the valuation procedures. Generally, the NAVs of investments in the Portfolio Funds are determined whereby the Company records the investment and subsequent subscriptions at its acquisition cost which represents its fair value. The investment is adjusted to reflect the Company’s share of net investment income or loss and unrealized and realized gain or loss that reflects the changes in the fair value of the investment for the period.  As of September 30, 2011, a majority of the investments in the Portfolio Funds were fair valued using the NAV of the Portfolio Fund.  The amount of investments that were not fair valued using the NAV of the Portfolio Fund as of September 30, 2011 was immaterial with respect to the overall value of the Company.

11

Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC

Notes to Financial Statements (Unaudited) continued

September 30, 2011

The Portfolio Funds generally record their investments at fair value in accordance with GAAP or International Financial Reporting Standards. The Portfolio Funds generally hold positions in readily marketable securities and derivatives that are valued at quoted market values and/or less liquid nonmarketable securities and derivatives that are valued at estimated fair value. Accordingly, valuations do not necessarily represent the amounts that might be realized from sales or other dispositions of investments, nor do they reflect other expenses or fees that might be incurred upon disposition. The mix and concentration of more readily marketable securities and less liquid nonmarketable securities varies across the Portfolio Funds based on various factors, including the nature of their investment strategy and market forces.

Because of the inherent uncertainty of valuations of the investments in the Portfolio Funds, their estimated values may differ significantly from the values that would have been used had a ready market for the Portfolio Funds existed, and the differences could be material. Net change in accumulated unrealized appreciation on investments in the statement of operations is net of fees and performance-based compensation paid to the investment managers of the Portfolio Funds.

Some of the Portfolio Funds may invest all or a portion of their assets in illiquid securities and may hold a portion or all of these investments independently from the main portfolio. These separate baskets of illiquid securities (“side pockets”) may be subject to additional restrictions on liquidity than the main portfolio of the Portfolio Fund. If the Company withdraws its interest from such a Portfolio Fund, it may be required to maintain its holding in the side pocket investments for an extended period of time and retain this remaining interest in the Portfolio Fund.  In instances where such a Portfolio Fund closes its operations, the Company may receive an “in-kind” distribution of a side pocket’s holdings in liquidation of its entire interest in the Portfolio Fund. The value of side pockets may fluctuate significantly. As of September 30, 2011, the Company’s investments in side pockets represented 3.09% of the Company’s net assets.  Restrictions applicable to individual Portfolio Funds are described in detail on the Company’s Schedule of Investments. Additionally, the governing documents of the Portfolio Funds generally provide that the Portfolio Funds may suspend, limit or delay the right of their investors, such as the Company, to withdraw capital.

The Company uses a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.  The objective of a fair value measurement is to determine 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 (an exit price).  Accordingly, the fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).  The three levels of the fair value hierarchy are as follows:

12

Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC

Notes to Financial Statements (Unaudited) continued

September 30, 2011

· Level 1 – Unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities that the Company has the ability to access at the measurement date;

· Level 2 – Quoted prices which are not considered to be active, or inputs that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and

· Level 3 – Prices, inputs or modeling techniques which are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The preparation of the Schedule of Investments in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Schedule of Investments and accompanying notes.  Management believes that the estimates utilized in preparing the Company’s Schedule of Investments are reasonable and prudent; however, the actual results could differ from these estimates.  The Company complies with the authoritative guidance under GAAP for estimating the fair value of investments in the Portfolio Funds that have calculated the NAV per share in accordance with the specialized accounting guidance for investment companies.  Accordingly, the Company estimates the fair value of an investment in a Portfolio Fund using the NAV of the investment (or its equivalent) without further adjustment unless the Adviser determines that the NAV is deemed to be not reflective of the fair value.

Investments may be classified as Level 2 when market information (observable NAVs) is available, yet the investment is not traded in an active market and/or the investment is subject to transfer restrictions, or the valuation is adjusted to reflect illiquidity and/or non-transferability. Market information, including observable NAVs, subscription and redemption activity at the underlying Portfolio Fund, and the length of time until the investment will become redeemable is considered when determining the proper categorization of the investment’s fair value measurement within the fair valuation hierarchy. The Portfolio Fund investments that have observable market inputs (published NAVs) and that the Company has the ability to redeem within three months of the balance sheet date are classified in the fair value hierarchy as Level 2.

The Company’s investments in the Portfolio Funds that have unobservable inputs and/or from which the Company does not have the ability to redeem within three months are classified in the fair value hierarchy as Level 3. When observable prices are not available for these securities, the Adviser uses the market approach, as defined in the authoritative guidance on fair value measurements, to evaluate or adjust the fair value of such Level 3 instruments.

The Company recognizes transfers into and out of the Levels indicated above at the beginning of the reporting period.  All transfers into Level 2 and out of Level 3 can be found in the Level 2 and Level 3 reconciliation tables.  There were no transfers between Level 1 and Level 2 for the period from April 1, 2011 to September 30, 2011.

13

Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC

Notes to Financial Statements (Unaudited) continued

September 30, 2011

The following table sets forth information about the level within the fair value hierarchy at which the Portfolio Fund investments are measured at September 30, 2011:

	Level 1		Level 2		Level 3		Total
Event Driven/Relative Value Funds	$	-	$	52,383,697	$	62,711,431	$	115,095,128
Hedged Long/Short Equity Funds		-		35,199,670		356,586		35,556,256
Hedged Sector Funds		-		49,005,869		13,632,179		62,638,048
Opportunistic Long/Short (Global) Funds		-		105,378,691		46,435		105,425,126
Opportunistic (U.S. Only) Funds		-		46,380,439		14,312,721		60,693,160
Total	$	-	$	288,348,366	$	91,059,352	$	379,407,718

The level classifications in the table above are not indicative of the risk associated with the investment in each Portfolio Fund.

The following table includes a roll-forward of the amounts for the period from April 1, 2011 to September 30, 2011, for the investments classified within Level 2.  The classification of an investment within Level 2 is based on the significance of the observable inputs to the overall fair value measurement.

								Net change in
					Net realized			accumulated
					gain from			unrealized
	Balance as of		Transfers into		Portfolio Fund			appreciation on			Net purchases			Balance as of
	3/31/2011		Level 2*		redemptions			investments			(sales)			9/30/2011
Event Driven/Relative Value Funds	$	53,121,322	$	-	$	-		$	2,262,375		$	(3,000,000	)	$	52,383,697
Hedged Long/ Short Equity Funds		49,589,741		-		4,771,917			(4,779,551	)		(14,382,437	)		35,199,670
Hedged Sector Funds		53,528,951		-		-			476,918			(5,000,000	)		49,005,869
Opportunistic Long/Short (Global) Funds		109,114,779		-		-			(3,736,088	)		-			105,378,691
Opportunistic (U.S. Only) Funds		34,833,072		33,416,282		(359,208	)		(6,820,107	)		(14,689,600	)		46,380,439
Total	$	300,187,865	$	33,416,282	$	4,412,709		$	(12,596,453	)	$	(37,072,037	)	$	288,348,366

*Transfers represent investments in the Portfolio Funds that were previously categorized as Level 3 investments for the fiscal year ended March 31, 2011. Reclassification is being made as of April 1, 2011 due to the expiration of the lock-up provisions associated with the investments.

14

Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC

Notes to Financial Statements (Unaudited) continued

September 30, 2011

The following table includes a roll-forward of the amounts for the period from April 1, 2011 to September 30, 2011 for the investments classified within Level 3.  The classification of an investment within Level 3 is based on the significance of the unobservable inputs to the overall fair value measurement.

									Net change in
						Net realized			accumulated
						loss from			unrealized
	Balance as of		Transfers out of			Portfolio Fund			appreciation on			Net purchases			Balance as of
	3/31/2011		Level 3*			redemptions			investments			(sales)			9/30/2011
Event Driven/ Relative Value Funds	$	64,216,193	$	-		$	(5,633,864	)	$	2,545,304		$	1,583,798		$	62,711,431
Hedged Long/ Short Equity Funds		359,287		-			-			(2,701	)		-			356,586
Hedged Sector Funds		15,430,787		-			(2,996	)		(1,798,608	)		2,996			13,632,179
Opportunistic Long/Short (Global) Funds		110,289		-			-			(1,546	)		(62,308	)		46,435
Opportunistic (U.S. Only) Funds		52,401,842		(33,416,282	)		100,101			(4,672,839	)		(100,101	)		14,312,721
Total	$	132,518,398	$	(33,416,282	)	$	(5,536,759	)	$	(3,930,390	)	$	1,424,385		$	91,059,352

*Transfers represent investments in the Portfolio Funds that have been reclassified as Level 2 investments for the fiscal year ended March 31, 2011. Reclassification is being made as of April 1, 2011 due to the expiration of the lock-up provisions associated with the investments.

All net realized and unrealized gains (losses) in the table above are reflected in the accompanying Statement of Operations.  The net change in accumulated unrealized appreciation for the period from April 1, 2011 to September 30, 2011, for Level 3 investments held by the Company as of September 30, 2011, was a decrease of $12,388,315 as shown in the table below:

	Net Change in Accumulated Unrealized Appreciation
Event Driven/Relative Value Funds	$	( 3,415,913	)
Hedged Long/Short Equity Funds		(2,701	)
Hedged Sector Funds		(1,798,608	)
Opportunistic Long/Short (Global) Funds		(1,546	)
Opportunistic (U.S. Only) Funds		(7,169,547	)
Total	$	(12,388,315	)

15

Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC

Notes to Financial Statements (Unaudited) continued

September 30, 2011

The Company uses authoritative guidance that permits a reporting entity to measure the fair value of an investment that does not have a readily determinable fair value based on the NAV per share for the investment.  In using NAV, certain attributes of the investment that may impact the fair value of the investment are not considered in measuring fair value. Attributes of those investments include the investment strategies of the investees and may also include, but are not limited to, restrictions on the investor’s ability to redeem its investments at the measurement date and any unfunded commitments. The Company is permitted to invest in alternative investments that do not have a readily determinable fair value, and as such, has determined that the NAV, as calculated by the reporting entity, represents the fair value of the investments.  A listing of the investments held by the Company and their attributes as of September 30, 2011, that may qualify for these valuations are shown in the table below.

				Redemption
				Restrictions and
Investment Class	Fair Value	Redemption Frequency	Notice Period	Terms
Event Driven/Relative Value Funds (a)	$115,095,128	Monthly - Annually	45 - 90 Days	0-1 years
Hedged Long/Short Equity Funds (b)	35,556,256	Quarterly	30 - 60 Days	none
Hedged Sector Funds (c)	62,638,048	Monthly - Quarterly	30 - 90 Days	0-1 years
Opportunistic Long/Short (Global) Funds (d)	105,425,126	Monthly - Quarterly	30 - 90 Days	none
Opportunistic (U.S. Only) Funds (e)	60,693,160	Quarterly - Tri-annually	45 - 90 Days	0-3 years

The information summarized in the preceding table represents the general terms of the specified asset class.  Individual Portfolio Funds may have terms that are more or less restrictive than those terms indicated for the asset class as a whole.  In addition, most of the Portfolio Funds have the flexibility, as provided for in the constituent documents, to modify and waive such terms.  Additional details on the terms and restrictions for each Portfolio Fund are included on the Schedule of Investments included with this report.

The Company’s investments reflect their estimated fair value, which for marketable securities would generally be the last sales price on the primary exchange for such security, and for the Portfolio Funds would generally be NAV as provided by the Portfolio Fund or its administrator. For each of the classes below, the fair value of the Portfolio Funds has been estimated using NAV of the Portfolio Funds.

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Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC

Notes to Financial Statements (Unaudited) continued

September 30, 2011

a) Event Driven/Relative Value Funds This class includes the Portfolio Funds that invest using two primary styles: Event-Driven and Relative Value. Event-Driven strategies typically include investments in common and preferred equities and various types of debt (often based on the probability that a particular event will occur). These may include distressed or Special Situations investments (securities of companies that are experiencing difficult business situations). Relative Value strategies may include long and short positions in common and preferred equity, convertible securities, and various forms of senior and junior (typically unsecured) debt. Investments under this style may also include index options, options on futures contracts, and other derivatives.

b) Hedged Long/Short Equity Funds This class includes the Portfolio Funds that invest primarily in common stocks (short, long and balanced). Management of each Portfolio Fund has the ability to shift investments from value to growth strategies, from small to large capitalization stocks, and from a net long to a net short position. The Portfolio Funds may invest in U.S. and non-U.S. equities and equity-related instruments, short sales, fixed income securities, currencies, futures, forward contracts, swaps, other derivatives and other financial instruments and commodities within the scope of each respective operating agreement.

c) Hedged Sector Funds This class includes the Portfolio Funds that invest primarily in publicly-traded securities issued by companies in specified industry sectors such as technology, healthcare, utility, energy, shipping or transportation. The Portfolio Funds’ holdings may include long and short positions in common and preferred equity.

d) Opportunistic (Global) Funds This class includes the Portfolio Funds that invest in all global markets and across all security types including equities, fixed income, commodities, currencies, futures, and exchange-traded funds. The Portfolio Funds in this class may include global long/ short equity funds, global macro funds, and commodity pools.

e) Opportunistic (U.S.) Only Funds This class includes the Portfolio Funds that invest in domestic markets and across all security types including equities, fixed income, commodities, currencies, futures, and exchange-traded funds. The Portfolio Funds in this class may include global long/short equity funds, global macro funds, and commodity pools.

As of September 30, 2011, the Company had investments in 41 Portfolio Funds.  The Company, as an investor in these Portfolio Funds, pays management fees of up to 2.00% (per annum) of the net asset value of its ownership interest in the Portfolio Funds, as well as incentive fees or allocations of up to 25.00% of net profits earned that are allocable to the Company's ownership interest in such Portfolio Funds.  The Company also generally bears a pro rata share of the other expenses of each Portfolio Fund in which it invests.  Total expenses, including incentive fees or allocations, for the fiscal year ended March 31, 2011, ranged from approximately 1.00% to 7.96% of the Company's average invested capital in the Portfolio Funds.  Incentive fees or allocations for the same fiscal year ranged from approximately 0.00% to 6.11% of the Company's average invested capital in the Portfolio Funds.  These ratios may vary over time depending on the allocation of the Company's assets among the Portfolio Funds and the actual expenses and investment performance of the Portfolio Funds.  Although the foregoing ranges of Portfolio Fund expense ratios are based on audited financial data received from the Portfolio Funds, the ranges were not audited by the Company's independent registered public accounting firm.

17

Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC

Notes to Financial Statements (Unaudited) continued

September 30, 2011

Aggregate purchases and proceeds of interests in the Portfolio Funds for the period from April 1, 2011 to September 30, 2011, were $5,000,000 and $40,647,652, respectively.  There are no unfunded commitments outstanding to the Portfolio Funds.

4. Advisory Fee

The Adviser provides investment advisory services and incurs research, travel and other expenses related to the selection and monitoring of investment managers. Further, the Adviser provides certain management and administrative services to the Company, including providing office space and other support services, maintaining files and records, and preparing and filing various regulatory materials.  In consideration for such services, the Company pays the Adviser a quarterly advisory fee in arrears at an annual rate of 1.0% based on the Company's net assets on the first business day of each quarter after adjustment for any subscriptions effective on that date.  Each of the Feeder Funds pays the Adviser a quarterly management fee at an annual rate of 0.5% based on the Feeder Fund’s net assets on the first business day of each quarter after adjustment for any subscriptions effective on that date.

For the period from April 1, 2011 to September 30, 2011, the Company incurred advisory fees totaling $2,181,878, of which $1,075,612 was payable as of September 30, 2011.

5.  Related Party Transactions and Other

Affiliates of the Adviser may have banking, underwriting, lending, brokerage, or other business relationships with the Portfolio Funds in which the Company invests and with companies in which the Portfolio Funds invest.

The Board is made up of five Managers who are not “interested persons,” as defined by Section 2(a)(19) of the 1940 Act, of the Company (the “Disinterested Managers”). The Disinterested Managers receive an annual retainer of $40,000 for their services to both the Company and the Feeder Funds. The retainer is paid by the Company and allocated pro-rata to the Feeder Funds.  All Disinterested Managers may be reimbursed for expenses of attendance at each regular or special meeting of the Board or of any committee thereof and for their expenses, if any, in connection with any other service or activity they perform or engage in as Managers.  The Company incurred $100,000 of Board-related fees for the period from April 1, 2011 to September 30, 2011, $50,000 of which was payable as of September 30, 2011.

18

Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC

Notes to Financial Statements (Unaudited) continued

September 30, 2011

The Company has retained J. D. Clark & Company (the "Administrator") to provide accounting and certain administrative and investor services to the Company.  The Administrator is a wholly-owned division of UMB Fund Services, Inc., a subsidiary of UMB Financial Corporation. The Company pays the Administrator a quarterly fee equal to the greater of: (i) $10,000; or (ii) .0001875 of the Company’s net assets as of the first day of each calendar quarter on the first $200 million of net assets, plus .0001625 of the Company’s net assets of $200 million to $400 million, plus .0001375 of the Company’s net assets of $400 million to $600 million, plus .0001125 of the Company’s net assets of $600 million to $800 million, plus .0001 of the Company’s net assets in excess of $800 million, plus a tax compliance and preparation fee of $7,500 per calendar quarter, plus an audited financial statement preparation fee of $1,250 per calendar quarter.  For the period from April 1, 2011 to September 30, 2011, the Company incurred $165,412 in expenses related to such administrative services, $82,411 of which was payable as of September 30, 2011.  The Feeder Funds incur direct additional expenses for the services provided by the Administrator.

BNY Mellon Investment Servicing Trust Company (formerly, PFPC Trust Company) serves as custodian of the Company’s assets and provides custodial services to the Company.

6. Bank Note - Line of Credit Facility

On July 23, 2010, the Company entered into a revolving loan credit facility with an unaffiliated financial institution for a line of credit at any one time of up to $70,000,000. The line of credit is secured by the Company's cash and investment securities.  Interest on any outstanding loans accrues at a rate per annum equal to LIBOR plus 2.20% and the Company is required to pay a facility fee at a rate of 1.10% per annum on the unused portion of the line of credit.  For the period from April 1, 2011 to September 30, 2011, the Company incurred approximately $389,280 in facility fees related to the credit facility. As of September 30, 2011, the Company did not have any revolving loans outstanding under the facility. Effective September 30, 2011, at the Company’s request, the line of credit was reduced to $35,000,000.

7. Financial Instruments with Off-Balance Sheet Risk

In the normal course of business, the Portfolio Funds in which the Company invests trade various financial instruments and may enter into various investment activities with off-balance sheet risk. These include, but are not limited to, short selling, writing option contracts, and equity swaps. However, as a result of the investments by the Company as a limited partner or member, the Company’s liability with respect to its investments in the Portfolio Funds is generally limited to the net asset value of its interest in each Portfolio Fund.

Because the Company is a closed-end investment company, Interests are not redeemable at the option of Members and are not exchangeable for interests of any other fund. Although the Board in its discretion may cause the Company to offer from time to time to repurchase Interests at the Members’ capital account value, Interests are considerably less liquid than shares of funds that trade on a stock exchange or shares of open-end investment companies. With respect to any offer to repurchase Interests by the Company, the aggregate repurchase amount will be determined by the Board in its discretion and such repurchase amount may represent only a small portion of outstanding Interests. Because the Company’s investments in Portfolio Funds themselves have limited liquidity, the Company may not be able to fund significant repurchases. Members whose Interests are accepted for repurchase also bear the risk that the Company's Members’ capital account value may fluctuate significantly between the time that they submit their request for repurchase and the date as of which Interests are valued for the purpose of repurchase.

19

Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC

Notes to Financial Statements (Unaudited) continued

September 30, 2011

As described in the footnotes of the Company’s Schedule of Investments and in Note 3, some Portfolio Funds have suspended or restricted withdrawals of capital, which increases the liquidity risk for the Company. Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. Liquidity could be impaired by an inability to access secured and/or unsecured sources of financing, an inability to sell assets or to withdraw capital from the Portfolio Funds, or unforeseen outflows of cash to meet tender demands. This situation may arise due to circumstances outside of the Company’s control, such as a general market disruption or an operational issue affecting the Company or third parties, including the Portfolio Funds. Also, the ability to sell assets may be impaired if other market participants are seeking to sell similar assets at the same time.

The Company's capital invested in the Portfolio Funds can be withdrawn on a limited basis. As a result, the Company may not be able to liquidate quickly some of its investments in the Portfolio Funds in order to meet liquidity requirements.

There are a number of other risks to the Company. Three principal types of risk that can adversely affect the Company’s investment approach are market risk, strategy risk, and manager risk. The Company also is subject to multiple manager risks, possible limitations in investment opportunities, allocation risks, lack of diversification, and other risks for the Company and potentially for each Portfolio Fund.

8. Guarantees

In the normal course of business, the Company enters into contracts that provide general indemnifications. The Company’s maximum exposure under these arrangements is dependent on future claims that may be made against the Company, and therefore, cannot be established; however, based on experience, the risk of loss from any such claim is considered remote.

9. Subsequent Events

The Company has evaluated all subsequent events through November 29, 2011, the date on which these financial statements were available to be issued and, except as noted below, has determined that no additional disclosures are required.

20

Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC

Notes to Financial Statements (Unaudited) continued

September 30, 2011

On September 29, 2011, the Company announced a tender offer to purchase up to $44,350,000 of outstanding Interests from Members.  The NAV of the Interests will be calculated for this purpose on December 31, 2011.  The tender offer expired on October 27, 2011.

Prior to October 1, 2011, the Company received and accepted Members' subscriptions for Interests of $2,670,000 which became effective as of October 1, 2011.

On November 7, 2011, the Company paid $19,270,652 for total Interests repurchased from Members on September 30, 2011.

At a meeting held on November 3, 2011, the Board authorized the Company to take the steps necessary to change its tax status and to be taxed as a "regulated investment company" (a "RIC") under Subchapter M of the U.S. Internal Revenue Code of 1986, as amended (the "RIC Conversion").  This change, if implemented as planned, will allow for simplified tax reporting by the Company to Members on IRS Form 1099 instead of the current Schedule K-1 for calendar year 2012 and will result in earlier tax reporting to Members than is currently the case. The Company expects that the RIC Conversion will be effective as of January 1, 2012, assuming the Company determines that it meets applicable RIC qualification requirements.

21

Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC

Approval of Advisory Agreement (Unaudited)

At a meeting held in person on June 15, 2011, the Board, including a majority of the Disinterested Managers, approved the continuation of the Company's investment advisory agreement (the "Advisory Agreement") with the Adviser for an additional one year period.  The Independent Managers were assisted in their review of this matter by independent legal counsel and met in an executive session with such counsel separate from representatives of the Adviser.

In considering this matter, the Board reviewed various written materials, including: performance information on and expense ratios of comparable registered investment companies, as well as unregistered funds managed by the Adviser; and information relating to the costs and profitability of the Adviser ("Profitability Analysis") from its relationship with the Company.  No single factor reviewed by the Board was identified by the Board as the principal factor in determining whether to approve the Advisory Agreement.

The Board discussed and reviewed the nature, extent and quality of services that the Adviser provides to the Company.  The Board also discussed the structure and capabilities of the Adviser, including technology and operational support, which support the services provided to the Company.  The Board agreed that the Company benefits from these services, and assessed the nature, scope and quality of services provided to the Company by the Adviser as indicated by the materials and information supplied to the Board.  In doing so, the Board considered the Adviser's extensive administrative and compliance infrastructure.  Representatives of the Adviser confirmed that the Adviser has adequate resources to deliver all required services to the Company and noted that the Adviser and Bank of America are committed to registered funds of hedge funds.�� The Board also reviewed and discussed the experience and qualifications of key personnel of the Adviser and reviewed biographical information regarding such personnel.  The Board also reviewed the financial information and other information provided regarding the Adviser and Bank of America included in the materials distributed in connection with the consideration of the continuation of the Advisory Agreement.  The Independent Managers noted their overall satisfaction with the nature, quality and extent of services provided by the Adviser and concluded that the Company was receiving all services required from the Adviser under the Advisory Agreement, and that the quality of these services was satisfactory.

The Board also considered the investment performance of the Company and compared the performance of the Company to that of comparable funds, including other funds managed by the Adviser.  The Board concluded that the Company's performance compared favorably with the performance of similar registered funds.

The Board also considered information comparing  the fees and expenses of the Company to those of other similar registered funds of hedge funds.  In this regard, the Independent Managers determined that the fees and expenses of the Company are within the range of those of similar funds.  The Independent Managers determined that the fee payable to the Adviser is reasonable.

The Board reviewed and discussed the Profitability Analysis.  Representatives of the Adviser noted that the Adviser had not received any significant indirect benefits from its relationship with the Company. After reviewing the information contained in the Profitability Analysis, and other information discussed at the meeting, the Board determined that the current profitability to the Adviser was not excessive.

22

Excelsior Multi-Strategy Hedge Fund of Funds Master Fund, LLC

Approval of Advisory Agreement (Unaudited) continued

With regard to economies of scale, the Board considered the fact that economies of scale are realized when there is a significant increase in a fund's assets.  The Independent Managers accepted management's assertion that, although the net assets of the Company have grown since its inception, the assets of the Company have not reached a size for the Adviser to realize economies of scale that could be shared with the Company's investors.

The Board, including a majority of the Independent Managers, determined that it is in the best interest of the Company and its members to continue in effect the Advisory Agreement for an additional annual period.

23

ITEM 2.   CODE OF ETHICS.

Not applicable for semi-annual reports.

ITEM 3.  AUDIT COMMITTEE FINANCIAL EXPERT.

Not applicable for semi-annual reports.

ITEM 4.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Not applicable for semi-annual reports.

ITEM 5.  AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable.

ITEM 6.  SCHEDULE OF INVESTMENTS.

The Schedule of Investments is included as part of the report to members filed under Item 1 of this form.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable for semi-annual reports.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES

There has been no change, as of the date of this filing, in any of the portfolio managers identified in response to paragraph (a)(1) of this Item in the Registrant's most recently filed annual report on Form N-CSR.

ITEM 9. PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable.

ITEM 10.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There have been no material changes to the procedures by which members may recommend nominees to the Registrant's board of managers that would require disclosure.

ITEM 11.  CONTROLS AND PROCEDURES.

(a) The Registrant's Principal Executive Officer and Principal Financial Officer have concluded that the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act")) were effective as of a date within 90 days prior to he filing date of this report, based on their evaluation of the effectiveness of the Registrant's disclosure controls and procedures, as required by Rule 30a-3(b) of the 1940 Act.

(b) There were no changes in the Registrant's internal control over financial reporting that occurred during the Registrant's second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting.

ITEM 12.  EXHIBITS.

(a) (1) Not applicable for semi-annual reports.

(a) (2) Separate certifications for the Registrant's Principal Executive Officer and Principal Financial Officer, as required by Rule 30a-2(a) under the 1940 Act are filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant): Excelsior Multi-Strategy Hedge Fund of Funds (TE), LLC

By (Signature and Title): /s/ Spencer N. Boggess

                                            Spencer N. Boggess, Principal Executive Officer

Date:  December 9, 2011

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and the capacities and on the dates indicated.

By (Signature and Title): /s/ Spencer N. Boggess

                                            Spencer N. Boggess, Principal Executive Officer

Date:  December 9, 2011

By (Signature and Title): /s/ Steven L. Suss

                                            Steven L. Suss, Principal Financial Officer

Date:  December 9, 2011