SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                            SCHEDULE 14A INFORMATION

                           PROXY STATEMENT PURSUANT TO
                              SECTION 14(A) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

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     (as permitted by Rule 14a-6(e)(2))
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[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to section 240.14a-11(c) or section 240.14a-12


                 EXCELSIOR DIRECTIONAL HEDGE FUND OF FUNDS, LLC
                (Name of Registrant as Specified in Its Charter)

    ------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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                 EXCELSIOR DIRECTIONAL HEDGE FUND OF FUNDS, LLC
                               225 HIGH RIDGE ROAD
                               STAMFORD, CT 06905

                               FEBRUARY 23, 2007


Dear Member:

                  On behalf of the Board of Managers  (the "Board") of Excelsior
Directional  Hedge Fund of Funds, LLC (the "Fund"),  it is my pleasure to invite
you to  attend  a  Special  Meeting  (the  "Meeting")  of  Members  of the  Fund
("Members").  The Meeting will be held at 11:00 a.m.  (Eastern Standard time) on
March  29,  2007,  at the  offices  of United  States  Trust  Company,  National
Association, 225 High Ridge Road, Stamford, Connecticut 06905. The formal notice
of the Meeting and related materials are enclosed.

                  As you may know, The Charles Schwab Corporation ("Schwab") has
entered into an agreement to sell its subsidiary,  U.S. Trust Corporation ("U.S.
Trust"), to the Bank of America Corporation ("Bank of America"),  along with all
of U.S. Trust's subsidiaries,  including U.S. Trust Hedge Fund Management, Inc.,
the investment adviser of the Fund (the "Adviser") (the "Sale").

                  The change in control of the Adviser  resulting  from the Sale
will cause the automatic  termination of the Fund's current investment  advisory
agreement  with the Adviser (the "Current  Agreement"),  in accordance  with its
terms. Thus, for the Adviser to continue to provide investment advisory services
to the Fund after the Sale, the Fund must enter into a new  investment  advisory
agreement with the Adviser. On January 11, 2007, the Board unanimously  approved
a new investment  advisory  agreement with the Adviser to become effective upon,
and  subject to, the Sale (the "New  Agreement").  The New  Agreement,  which is
identical in all material  respects to the Current Agreement except for the term
and date of its effectiveness,  also is subject to approval by Members before it
can become effective.

                  In   approving   the  New   Agreement,   the  Board   received
representations  from the Adviser and Bank of America  that no material  adverse
impact on the daily  operations  of the Fund or the  nature  or  quality  of the
investment  advisory  activities provided to the Fund by the Adviser is expected
to arise as a result of being  affiliated  with Bank of  America.  Although  the
ownership of the Adviser will change upon  completion of the Sale, the Board was
advised that the Adviser and Bank of America did not  anticipate  any changes to
the investment  personnel  responsible  for managing the Fund's  portfolio.  The
Fund's investment  objective and investment  program will not be affected by the
Sale,  and your interest in the Fund,  your capital  account and fees payable by
the Fund will not be affected by the transaction.

                  At the Meeting, Members will vote on a proposal to approve the
New  Agreement.  Members  also will vote on  proposals  to elect  four  nominees
proposed  by the Board to serve as Managers  of the Fund and to  reorganize  the
Fund to implement a "master/feeder"  investment structure, in which Members will
own  interests  in a new fund that  will  pursue  its  investment  objective  by
investing  its  assets in the Fund.  The new fund will have the same  investment
objective and the same investment policies as the Fund (except that the new fund
will pursue its




investment  objective by investing in the Fund), and will have the same features
as are currently  offered by the Fund.  The fees payable to the Adviser will not
be increased under this new investment structure.

                  The enclosed Proxy Statement describes in detail the proposals
that will be  considered  at the Meeting and solicits  your proxy to be voted on
those proposals. We urge you to review carefully the enclosed Proxy Statement.

                  The Board unanimously  recommends that you vote "FOR" approval
of the New  Agreement,  and that you also vote  "FOR" each of the  nominees  for
Manager  listed on the enclosed  proxy card to serve as Managers of the Fund and
"FOR" approval of the reorganization of the Fund.

                  You may vote at the  Meeting if you were a Member of record of
the Fund as of the close of  business  on January  12,  2007.  If you attend the
Meeting,  you may vote in  person.  Whether  or not you  intend  to  attend  the
Meeting,  you can vote in one of three ways:  (i) by signing and  returning  the
enclosed proxy card in the enclosed prepaid envelope; (ii) by using the Internet
if you want to vote electronically; or (iii) by using your touch-tone telephone.
(Please see the questions  and answers  below,  as well as your proxy card,  for
additional  instructions  on how to vote.) If you do vote  electronically  or by
telephone,  you do not need to mail your  proxy  card.  However,  if you want to
later change your vote, you may do so by attending the Meeting,  by submitting a
new  proxy  card,  or  submitting  a new  vote by  touch-tone  telephone  or the
Internet.

                  To help you  understand  the  matters  upon which  Members are
being  asked to vote,  we have  attached  the  following  questions  and answers
regarding the proposals. They are designed to help answer questions you may have
and to help you cast your votes,  and are being provided as a supplement to, not
as a substitute for, the Proxy Statement, which we urge you to review carefully.

                  Please feel free to call us at (203)  352-4497 if you have any
questions regarding voting procedures.


                  WHETHER  OR NOT YOU ARE  ABLE TO  ATTEND  THE  MEETING,  IT IS
IMPORTANT THAT YOUR VOTES BE REPRESENTED.  TO ENSURE THAT HAPPENS,  PLEASE MARK,
SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENVELOPE  PROVIDED BY
MAIL OR VOTE OVER THE INTERNET OR BY TOUCH-TONE TELEPHONE.


                  Thank you for your confidence and support.


                                           Very truly yours,

                                           EXCELSIOR DIRECTIONAL
                                           HEDGE FUND OF FUNDS, LLC

                                           /s/ David R. Bailin
                                           -------------------------------------
                                           Name:    David R. Bailin
                                           Title:   Manager






                              QUESTIONS AND ANSWERS

                  AT THE SPECIAL MEETING OF MEMBERS ("MEMBERS") OF EXCELSIOR
DIRECTIONAL HEDGE FUND OF FUNDS, LLC (THE "FUND") TO BE HELD ON MARCH 29, 2007,
MEMBERS WILL HAVE THE OPPORTUNITY TO VOTE ON THREE PROPOSALS RELATING TO THE
FUND. WE RECOMMEND THAT YOU CAREFULLY READ THE ENCLOSED PROXY STATEMENT, WHICH
DESCRIBES THE PROPOSALS IN DETAIL. THE FOLLOWING "QUESTIONS AND ANSWERS" ARE
PROVIDED AS A SUPPLEMENT TO THE PROXY STATEMENT AND TO ANSWER QUESTIONS YOU MAY
HAVE.


WHY IS THE FUND HOLDING A SPECIAL MEETING OF MEMBERS?

                  On  November  20,  2006,   the  Charles   Schwab   Corporation
("Schwab") announced an agreement to sell its subsidiary, U.S. Trust Corporation
("U.S.  Trust"), to the Bank of America  Corporation ("Bank of America"),  along
with  all  of  U.S.  Trust's  subsidiaries,  including  U.S.  Trust  Hedge  Fund
Management,  Inc.,  the  investment  adviser  of the Fund (the  "Adviser")  (the
"Sale").


                  The change in control of U.S.  Trust  resulting  from the Sale
will  result in the  automatic  termination  of the  Fund's  current  investment
advisory  agreement  with the Adviser (the "Current  Agreement"),  in accordance
with its terms. Thus, for the Adviser to continue to provide investment advisory
services to the Fund after the Sale,  the Fund must enter into a new  investment
advisory agreement with the Adviser.


                  On January  11,  2007,  the Board of Managers of the Fund (the
"Board")  unanimously  approved a new  investment  advisory  agreement  with the
Adviser  to  become   effective  upon,  and  subject  to,  the  Sale  (the  "New
Agreement").  The New  Agreement is  identical  in all material  respects to the
Current  Agreement  except for the term and date of its  effectiveness.  The New
Agreement is also subject to approval by Members before it can become effective.
Accordingly,  the Board has  called a Special  Meeting  of Members to be held on
March 29, 2007 (the "Meeting") to seek Member approval for the New Agreement.

                  Members  also will vote on  proposals  to elect four  nominees
proposed  by the Board to serve as Managers  of the Fund and to  reorganize  the
Fund to implement a "master/feeder"  investment structure, in which Members will
own  interests  in a new fund that  will  pursue  its  investment  objective  by
investing its assets in the Fund. The new fund, including its features, fees and
investment  program,  will  be  the  same  as the  current  features,  fees  and
investment  program  of the  Fund,  except  that the new fund  will  pursue  its
investment objective by investing in the Fund.


HOW WILL THE SALE AND THE NEW AGREEMENT AFFECT ME AS A MEMBER OF THE FUND?

                  The Sale will result in a change in ownership  of U.S.  Trust,
the parent of the Adviser.  In approving the New  Agreement,  the Board received
representations  from the Adviser and Bank of America  that no material  adverse
impact on the daily  operations  of the Fund or the  nature  or  quality  of the
investment  advisory  activities provided to the Fund by the Adviser is expected
to arise as a result of being  affiliated  with Bank of  America.  Although  the
ownership of the Adviser will change upon  completion of the Sale, the Board was
advised that the Adviser and Bank of America did not  anticipate  any changes to
the investment personnel responsible for




managing the Fund's portfolio.  The Fund's  investment  objective and investment
program will not be affected by the Sale,  and your  interest in the Fund,  your
capital  account  and fees  payable  by the Fund  will  not be  affected  by the
transaction.

WHY ARE MEMBERS VOTING TO ELECT MANAGERS OF THE FUND?

                  The Board, which is comprised of four Managers, is responsible
for supervising the business and affairs of the Fund. The four nominees proposed
by the Board  currently  are  Managers of the Fund.  One person now serving as a
Manager  was  elected to that  position by action of the Board to fill a vacancy
created by the  resignation of another  Manager.  Under the  requirements of the
Investment  Company  Act of 1940,  as amended  (the "1940  Act"),  if one of the
previously-elected Managers were to resign (or become unable to serve), it would
be necessary to call a special  meeting of Members to elect a person to fill the
vacancy.  Thus,  the  election of the  nominee  Managers at the Meeting may help
avoid the need to call a special  meeting  of  Members  in the  future,  and the
related costs of such a meeting.

WHY IS IT PROPOSED THAT THE FUND BE REORGANIZED TO IMPLEMENT A "MASTER/FEEDER"
STRUCTURE?

                  In  a  master/feeder   investment   structure,   two  or  more
investment  funds having the same  investment  program  ("feeder  funds") pursue
their investment  objectives by investing their assets in a common "master fund"
that has the same  investment  objective and  substantially  the same investment
policies as the feeder funds.  The master fund,  in turn,  invests its assets in
securities and other investments  consistent with the investment policies of the
feeder funds. A master/feeder structure provides a way for feeder funds that are
designed for  different  types of investors  to invest  through a common  master
fund. This structure  allows for  efficiencies in investing and  efficiencies in
operating  costs to the extent that the assets of multiple  funds are pooled for
investing and are able to share certain related costs.

                  This  pooling  of  the   investments  of  the  Fund  with  the
investments  of other  investment  funds will  create  certain  efficiencies  in
investment. In addition, the master/feeder structure will facilitate the ability
of the Adviser to make available a new  investment  fund similar to the Fund for
U.S.  tax-exempt  investors.  Members  who  have or  participate  in  retirement
accounts or employee benefit plans and wish to invest a portion of the assets of
those  accounts or plans in accordance  with the Fund's  investment  program may
have  the  opportunity  to do so  through  the  new  fund  (assuming  they  meet
applicable eligibility requirements).  Consequently, the master/feeder structure
is expected to result in certain cost economies to the extent that certain fixed
(or relatively fixed) expenses of the master fund would be shared by each of the
feeder funds,  which would allow for lower expense ratios of the feeder funds. A
lower expense ratio would benefit Members.

                  However,  there is no  guarantee  that such  other  investment
funds will be successful in raising capital, or that any capital raised would be
significant  enough to result in any cost  economies or lower the expense  ratio
currently borne by the Fund.



HOW WILL THE REORGANIZATION OF THE FUND AFFECT ME?

                  The Fund currently pursues its investment objective of capital
appreciation  by  investing  in a  diverse  group of  private  investment  funds
("Investment  Funds") that  primarily  invest or trade in a wide range of equity
and debt securities. It is proposed that the Fund be reorganized so that Members
holding  interests in the Fund will instead own  interests in a newly  organized
fund (the "New Fund") that would have the same investment objective and the same
investment policies as the Fund (except the New Fund would pursue its investment
objective by investing in the Fund) (the "Reorganization").

                  In the  Reorganization,  the Fund will merge with a subsidiary
of the New Fund, and Members will receive  interests in the New Fund in exchange
for their  interests  in the Fund.  The result will be that  Members will become
members of the New Fund,  which will  initially  own all of the interests in the
Fund.  After the  Reorganization,  the Fund will operate as a "master  fund" and
will  hold  all of the  interests  in the  Investment  Funds  owned  by the Fund
immediately prior to the reorganization,  and the New Fund will become a "feeder
fund"  of the  Fund.  Like  the  Fund,  the New Fund  will be  registered  as an
investment company under the 1940 Act.

                  The investment  objective and  investment  program of the Fund
will not change as a result of the Reorganization.  The only change will be that
Members will own interests in the New Fund (rather than  interests in the Fund),
and that the New Fund will indirectly invest in Investment Funds by investing in
the Fund (rather than invest directly in Investment Funds as is now the case).

                  The   Reorganization   will  not  affect  the  value  of  your
investment  (I.E., the value of your capital account will not change as a result
of the Reorganization).  In addition,  there will be no increase in fees payable
to the Adviser (I.E., the aggregate fees payable by the New Fund and by the Fund
to the Adviser will be the same as the fees currently  payable to the Adviser by
the Fund).  Moreover,  the New Fund will have the same features as are currently
offered by the Fund. If approved by Members,  the  Reorganization  will occur as
soon as practicable after such approval.

                  All costs associated with the Reorganization  will be borne by
the Adviser and not by the Fund or the New Fund.


HOW DOES THE BOARD RECOMMEND THAT I VOTE?

                  THE BOARD HAS CAREFULLY  CONSIDERED EACH OF THE PROPOSALS THAT
WILL BE VOTED ON AT THE MEETING AND  UNANIMOUSLY  RECOMMENDS THAT YOU VOTE "FOR"
APPROVAL OF THE NEW AGREEMENT,  "FOR" EACH OF THE NOMINEES FOR MANAGER LISTED ON
THE ENCLOSED  PROXY CARD TO SERVE AS MANAGERS OF FUND AND "FOR"  APPROVAL OF THE
REORGANIZATION.

HOW CAN I VOTE?

                  Whether or not you attend the  Meeting,  you may vote by using
one of the following options:



               o BY MAIL: Mark, sign and date the enclosed proxy card and return
                 it in the enclosed envelope.
               o BY TELEPHONE: Call toll-free at 1-888-221-0697 to vote by
                 phone. Have the enclosed proxy card available for reference.
                 Follow the recorded instructions. Do not mail the paper proxy
                 card.
               o BY INTERNET: Log on to www.proxyweb.com. Have the enclosed
                 proxy card available for reference. Follow the on-screen
                 instructions. Do not mail the paper proxy card.

                  If you attend the Meeting, you may vote in person.




                 EXCELSIOR DIRECTIONAL HEDGE FUND OF FUNDS, LLC
                               225 HIGH RIDGE ROAD
                               STAMFORD, CT 06905

                      NOTICE OF SPECIAL MEETING OF MEMBERS
                          TO BE HELD ON MARCH 29, 2007

To Members:

                  A  Special   Meeting  of  Members   ("Members")  of  Excelsior
Directional  Hedge  Fund of Funds,  LLC (the  "Fund")  will be held on March 29,
2007,  at 11:00 a.m.  (Eastern  Standard  time) at the offices of United  States
Trust Company, National Association, 225 High Ridge Road, Stamford,  Connecticut
06905 (the "Meeting").

                  The Meeting is called for the following purposes:

                  1. to approve a new  Investment Advisory Agreement between the
                     Fund  and U.S.  Trust  Hedge  Fund  Management,  Inc.  (the
                     "Adviser") to become  effective upon completion of the sale
                     of U.S.  Trust  Corporation  ("U.S.  Trust") to the Bank of
                     America Corporation (the "New Agreement");

                  2. to elect  four  persons to serve as members of the Board of
                     Managers of the Fund (the "Board");

                  3. to  approve  a Plan and  Agreement  of  Reorganization  and
                     Merger to implement a  master/feeder  investment  structure
                     (the "Reorganization"); and

                  4. to transact such other business as may properly come before
                     the Meeting.


                  These  proposals  are  discussed  in  greater  detail  in  the
accompanying Proxy Statement.

                  You may vote at the  Meeting if you were a Member of record of
the Fund as of the close of  business  on January  12,  2007.  If you attend the
Meeting, you may vote in person. Members who do not expect to attend the Meeting
are  urged  to vote in one of three  ways:  (i) by  signing  and  returning  the
enclosed proxy card in the enclosed prepaid envelope; (ii) by using the Internet
if you want to vote electronically; or (iii) by using your touch-tone telephone.
Signed but unmarked proxy cards will be counted in determining  whether a quorum
is present at the Meeting and will be voted "FOR" approval of the New Agreement,
"FOR" each of the persons  nominated to serve as members of the Board, and "FOR"
approval of the Reorganization.

                  The Fund  will  furnish,  without  charge,  copies of its most
recent annual report and subsequent  semi-annual report to Members upon request.
Please  call (203)  352-4497  or write to  Excelsior  Directional  Hedge Fund of
Funds, LLC, 225 High Ridge Road, Stamford,  Connecticut 06905, Attn: Peggy Lynn,
to request copies of these reports.  You may also view or obtain these documents
from the SEC (i) in person:  at the SEC's Public  Reference  Room in Washington,
D.C., (ii) by phone:  1-800-SEC-0330,  (iii) by mail: Public Reference  Section,
Securities and




Exchange Commission, 100 F Street, N.E., Washington, D.C. 20549 (duplicating fee
required), (iv) by e-mail: publicinfo@sec.gov, or (v) by Internet: www.sec.gov.

                  If you have any questions, please call the Fund at (203)
352-4497.

                                                   By Order of the
                                                   Board of Managers


EACH MEMBER'S VOTE IS IMPORTANT. THE MEETING MAY BE ADJOURNED WITHOUT CONDUCTING
ANY BUSINESS IF A QUORUM IS NOT PRESENT.  IN THAT EVENT,  THE FUND WILL CONTINUE
TO SOLICIT PROXIES IN AN ATTEMPT TO OBTAIN A QUORUM.

YOUR VOTE COULD BE CRITICAL TO ENABLE THE FUND TO HOLD THE MEETING AS SCHEDULED,
SO PLEASE VOTE IN ONE OF THREE WAYS:  (I) BY SIGNING AND  RETURNING THE ENCLOSED
PROXY CARD IN THE ENCLOSED PREPAID  ENVELOPE;  (II) BY USING THE INTERNET IF YOU
WANT TO VOTE ELECTRONICALLY; OR (III) BY USING YOUR TOUCH-TONE TELEPHONE. PLEASE
SEE YOUR PROXY CARD, FOR ADDITIONAL INSTRUCTIONS ON HOW TO VOTE.





                        EXCELSIOR DIRECTIONAL HEDGE FUND
                                  OF FUNDS, LLC
                               225 HIGH RIDGE ROAD
                               STAMFORD, CT 06905

                           SPECIAL MEETING OF MEMBERS
                          TO BE HELD ON MARCH 29, 2007


                         -------------------------------
                                 PROXY STATEMENT
                         -------------------------------


                  This Proxy Statement is being furnished to members ("Members")
of Excelsior  Directional  Hedge Fund of Funds, LLC (the "Fund") by the Board of
Managers of the Fund (the "Board").  The Board is requesting  your proxy for use
at a Special  Meeting of Members  (the  "Meeting")  to be held at the offices of
United States Trust Company,  National  Association ("USTC, NA"), 225 High Ridge
Road,  Stamford,  Connecticut  06905 on March 29, 2007,  at 11:00 a.m.  (Eastern
Standard time). Your proxy may also be voted at any adjournment of the Meeting.

                  In addition to  soliciting  proxies by mail,  officers of U.S.
Trust Hedge Fund Management, Inc., the Fund's investment adviser (the "Adviser")
and  personnel  of UST  Advisers,  Inc.  and USTC,  NA, may  solicit  proxies by
telephone or in person,  without special compensation.  The Adviser has retained
ADP, a third party solicitor,  to solicit proxies from Members.  ADP may solicit
proxies in person,  by Internet  or by  telephone.  The  Adviser  expects to pay
approximately  $3,979 to ADP in connection  with the  solicitation.  The fee and
expenses of the proxy solicitor,  as well as all other costs associated with the
solicitation of proxies and of the Meeting, are being paid by the Adviser.

                  At the  Meeting,  Members will vote on a proposal to approve a
new  Investment  Advisory  Agreement  between the Adviser and the Fund (the "New
Agreement"),  to become effective upon the sale of U.S. Trust Corporation ("U.S.
Trust"),  the parent company of the Adviser,  to the Bank of America Corporation
("Bank of  America")  (PROPOSAL  1).  Members  also will be voting to elect four
persons to serve as members of the Board  (PROPOSAL 2). Each of the nominees for
election  currently serves as a member of the Board (a "Manager").  In addition,
Members  will be voting on a proposal  to  reorganize  the Fund to  implement  a
master/feeder  structure, in which Members will own interests in a new fund that
will pursue its  investment  objective by investing its assets in the Fund.  The
new fund will have the same  investment  objective  and  substantially  the same
investment  policies  as the Fund  (except  that the new fund  would  pursue its
investment  objective by investing in the Fund), and will have the same features
as are  currently  offered by the Fund.  The  Adviser  will  continue to provide
investment  advisory  services to both the Fund and the new fund (PROPOSAL 3 and
collectively, the "Proposals").

                  All properly-executed proxies received before the Meeting will
be voted at the  Meeting  and any  adjournment  thereof in  accordance  with the
instructions   marked   thereon  or  otherwise  as  provided   therein.   Unless
instructions  to the contrary are marked,  such  executed  proxies will be voted
"FOR" each of the Proposals. IF NO INSTRUCTIONS ARE MARKED, THE EXECUTED PROXIES
WILL BE VOTED "FOR" EACH OF THE PROPOSALS AND IN ACCORDANCE WITH THE JUDGMENT OF

                                       i


THE PERSONS  APPOINTED AS PROXIES  UPON ANY OTHER MATTER THAT MAY PROPERLY  COME
BEFORE THE MEETING.  Members who execute proxies retain the right to revoke them
in person at the Meeting or by written  notice  received by the Fund at any time
before they are voted.  Proxies  voted by  telephone or over the Internet may be
revoked at any time before they are voted, in the same manner that proxies voted
by mail may be  revoked.  In  addition,  any Member who  attends  the Meeting in
person may vote by ballot at the meeting, thereby canceling any proxy previously
given. See " Voting Information - Revocation of Proxies and Abstentions."

                  If a quorum is not  present at the  Meeting  or if  sufficient
votes have not been  obtained to approve  the  Proposals,  the persons  named as
proxies may propose one or more  adjournments  of the Meeting to permit  further
solicitation of proxies. See "Voting Information - Adjournments."

                  The close of  business  on January  12, 2007 has been fixed as
the record date (the "Record Date") for the determination of Members entitled to
notice of and to vote at the Meeting and any adjournment.

                  Each Member is  entitled to cast a number of votes  equivalent
to such Member's investment percentage(1) as of the Record Date. As of the close
of business on the Record Date,  the total value of the capital  accounts of all
Members was $297,393,180.

                  This Proxy  Statement  is first being  mailed to Members on or
about February 23, 2007.

                  Copies of the Fund's most recent annual report and  subsequent
semi-annual  report to Members are available upon request,  without  charge,  by
calling (203) 352-4497 or writing to Excelsior  Directional Hedge Fund of Funds,
LLC, 225 High Ridge Road, Stamford, Connecticut 06905, Attn: Peggy Lynn. You may
also view or obtain  these  documents  from the SEC (i) in person:  at the SEC's
Public Reference Room in Washington, D.C., (ii) by phone: 1-800-SEC-0330,  (iii)
by mail: Public Reference  Section,  Securities and Exchange  Commission,  100 F
Street, N.E., Washington, D.C. 20549 (duplicating fee required), (iv) by e-mail:
publicinfo@sec.gov, or (v) by Internet: www.sec.gov.


                  As of the Record Date,  there were no Members owning of record
or known by the Fund to own  beneficially 5% or more of the outstanding  limited
liability company interests in the Fund ("Interests").  Two of the Managers hold
outstanding  Interests of the Fund.  As of the Record Date,  the Adviser and its
affiliates (together, the "Adviser Affiliates")  beneficially owned less than 1%
of the outstanding Interests.


-----------------------------
(1) An investment  percentage is established for each Member on the Fund's books
as of the first day of each fiscal  period.  The  investment  percentage of each
Member was most recently established on December 31, 2006, and was determined by
dividing the balance of each Member's capital account as of such date, which was
the commencement of the most recent fiscal period, by the sum of the balances of
capital  accounts  of all  Members  as of that date.  The sum of the  investment
percentages of all Members for each fiscal period equals 100%.  This means that,
if a Member's investment  percentage is 1.1%, such Member will have the right to
vote the  equivalent  of 1.1 votes out of a total of 100  votes  entitled  to be
voted by all Members.

                                      -ii-



                                TABLE OF CONTENTS
                                                                          PAGE

I.    Proposals for Member Approval........................................1

      Proposal 1 -Approval of the New Investment Advisory Agreement........1

      Proposal 2 - Election of Managers....................................9

      Proposal 3 -Reorganization of the Fund..............................18

II.   Voting Information..................................................22

III.  Other Matters and Additional Information............................23

                                     -iii-





I.       PROPOSALS FOR MEMBER APPROVAL

                                   PROPOSAL 1

                APPROVAL OF THE NEW INVESTMENT ADVISORY AGREEMENT

                  INTRODUCTION.

          On November  20,  2006,  the  Charles  Schwab  Corporation  ("Schwab")
announced an agreement to sell U.S. Trust, a wholly-owned  subsidiary of Schwab,
to Bank of America.  The transaction  (the "Sale") is subject to Federal Reserve
Board  and  other  regulatory  approvals,  as well  as,  in the  case of Bank of
America's  obligation  to complete the Sale,  the  approval of a new  investment
advisory  agreement  for the Fund with the Adviser.  If approved,  the Sale will
result  in  Bank of  America  owning  U.S.  Trust  and all of its  subsidiaries,
including the Adviser.


          As required by the  Investment  Company Act of 1940,  as amended  (the
"1940 Act"),  the change in control of the Adviser  resulting from the Sale will
cause the  automatic  termination  of the  Fund's  current  investment  advisory
agreement  with the Adviser (the "Current  Agreement"),  in accordance  with its
terms.  Thus, the Fund must enter into a new investment  advisory agreement with
the Adviser,  for the Adviser to continue to serve as investment  adviser of the
Fund after the Sale.


          On  January  11,  2007,  the  Board  and  the  Managers  who  are  not
"interested  persons," as defined by the 1940 Act (the "Independent  Managers"),
of the Fund or the Adviser approved a new investment advisory agreement with the
Adviser  to become  effective  upon the Sale (the  "New  Agreement").  To become
effective, the New Agreement also must be approved by Members.


          The New Agreement is identical in all material respects to the Current
Agreement except for the term and date of its  effectiveness.  A copy of the New
Agreement is contained in Exhibit 1 to this Proxy Statement.

          1940 ACT REQUIREMENTS.

          As required by the 1940 Act,  the Current  Agreement  provides for its
automatic  termination in the event of its assignment (to the extent required by
the 1940 Act and the rules thereunder),  unless such automatic termination shall
be  prevented  by an  exemptive  order or rule of the  Securities  and  Exchange
Commission (the "SEC").  An  "assignment," as defined by the 1940 Act, is deemed
to include any change of control of the Adviser.  Section  15(a) of the 1940 Act
prohibits  any person  from  serving as an  investment  adviser of a  registered
investment company, such as the Fund, except pursuant to a written contract that
has been approved by the vote of a majority of the outstanding voting securities
of the investment company.

          The Sale will  result in a change in  control of the  Adviser  because
Bank of America will become the owner of U.S. Trust,  the parent of the Adviser.
Therefore,  the Sale will result in a termination of the Current Agreement,  and
the  approval of the New  Agreement  by Members is  required  for the Adviser to
continue to provide investment advice to the Fund after

                                       1


the Sale.  If the New  Agreement  is  approved  by  Members  but the Sale is not
consummated,  the  Adviser  will  serve  as  investment  adviser  under  the New
Agreement,  which would become  effective  upon the later of Member  approval or
termination of the stock purchase  agreement between Schwab and Bank of America.
In the event the New Agreement is not approved and the Sale is consummated,  the
Board will promptly consider what appropriate action to take that is in the best
interests of the Fund and Members.  Such action may include,  but is not limited
to,  seeking a new  investment  adviser  other than the Adviser,  subject to any
required  approval by Members or  liquidating  the Fund. If the New Agreement is
not approved and the Sale is not consummated, the Adviser will continue to serve
as  investment  adviser  to the  Fund  under  the  current  investment  advisory
agreement.

          If the New Agreement is approved by Members,  the New  Agreement  will
become  effective  upon  consummation  of the Sale and will have an initial term
expiring  not  more  than  two  years  from  the  date of  execution  of the New
Agreement.  The New Agreement may continue in effect from year to year after its
initial term,  provided that such  continuance is approved  annually by: (i) the
Board;  or (ii) the  vote of a  majority  (as  defined  by the 1940  Act) of the
outstanding  voting  securities of the Fund;  and,  that, in either event,  such
continuance  also is approved by a majority of the  Independent  Managers of the
Fund,  by vote cast in person at a meeting  called for the  purpose of voting on
such approval.

          In  anticipation  of  the  Sale  and  to  help  assure  continuity  in
investment   advisory   services  provided  to  the  Fund  should  the  Sale  be
consummated, the Board held an in-person meeting on January 11, 2007 to consider
the  potential  implications  of the Sale to the Fund  and to  consider  the New
Agreement  pursuant to which the Adviser  would  continue to provide  investment
advisory  and  other  services  to  the  Fund  after  the  Sale.  After  careful
consideration  of these matters,  and evaluation of the factors  described below
under  "Board  Consideration,"  the  Board and all of the  Independent  Managers
approved the New  Agreement  and directed that the New Agreement be submitted to
Members  for  approval  at the  Meeting.  THE  TERMS  OF THE NEW  AGREEMENT  ARE
IDENTICAL IN ALL MATERIAL  RESPECTS TO THE TERMS OF THE CURRENT AGREEMENT EXCEPT
FOR THE TERM AND DATE OF ITS EFFECTIVENESS.

          In connection with the Sale,  Schwab and Bank of America intend to use
reasonable  best  efforts  to ensure  that they  comply  with the "safe  harbor"
provisions afforded by Section 15(f) of the 1940 Act. Section 15(f) provides, in
substance,  that when a sale of a controlling  interest in an investment adviser
of an investment company occurs, the investment adviser or any of its affiliated
persons may receive any amount or benefit in connection therewith as long as two
conditions are satisfied.  First,  an "unfair burden" must not be imposed on the
investment  company as a result of the transaction  relating to the sale of such
interest,  or  any  express  or  implied  terms,  conditions  or  understandings
applicable  thereto.  The  term  "unfair  burden"  is  defined  to  include  any
arrangement  during  the  two-year  period  after the  transaction  whereby  the
investment  adviser (or  predecessor or successor  adviser),  or any "interested
person,"  as  defined  by the 1940  Act,  of any such  adviser,  receives  or is
entitled  to  receive  any  compensation,   directly  or  indirectly,  from  the
investment  company or the holders of its  securities  (other than fees for bona
fide investment  advisory or other services) or, with certain  exceptions,  from
any  person in  connection  with the  purchase  or sale of  securities  or other
property to, from or on behalf of the investment company. The Board is not aware
of any circumstances  relating to the Sale that might result in an unfair burden
being imposed on the Fund.

                                       2


          The second  condition of Section 15(f) is that,  during the three-year
period following  consummation of a transaction,  at least 75% of the investment
company's board must not be "interested persons," as defined by the 1940 Act, of
the investment adviser or predecessor  adviser of the investment  company.  With
respect to this second condition, three of the four Managers are not "interested
persons" of the Adviser or Bank of America.  Thus, the Board currently satisfies
the 75% requirement.


          Bank of America has agreed with Schwab to use reasonable best efforts,
to the extent  within  its  control or that of its  affiliates,  to comply  with
Section  15(f) of the 1940 Act.  Specifically,  Bank of America  has agreed with
Schwab to use reasonable best efforts to assure that (1) no more than 25% of the
Board are "interested persons" of Bank of America or the Adviser for a period of
not less than three  years after the closing of the Sale and (2) for a period of
not less than two years  after the  closing of the Sale not to impose an "unfair
burden"  (within the meaning of Section  15(f) of the 1940 Act) on the Fund as a
result of the transactions contemplated by the Sale.

                  THE ADVISER.

          The  Adviser  is a  wholly-owned  subsidiary  of  U.S.  Trust  and  is
registered as an investment  adviser under the Investment  Advisers Act of 1940,
as amended. Through its subsidiaries, U.S. Trust provides investment management,
fiduciary,   financial   planning  and  private  banking  services  to  affluent
individuals,  families and  institutions  nationwide.  Headquartered in New York
City, U.S. Trust and its subsidiaries  have thirty-nine  offices  throughout the
United States.

          U.S.  Trust  (114 W.  47th  Street,  New  York,  New York  10036) is a
subsidiary of Schwab (101 Montgomery Street,  San Francisco,  CA 94104) and is a
financial  holding company  registered under Federal law and incorporated in New
York. Charles R. Schwab is the founder,  Chairman and a Director and significant
shareholder  of Schwab.  As a result of his positions and share  ownership,  Mr.
Schwab may be deemed to be a controlling  person of Schwab and its subsidiaries.
Schwab, through its principal brokerage subsidiary,  Charles Schwab & Co., Inc.,
is one of the nation's  largest  financial  services  firms,  serving  investors
through the Internet,  investor  centers,  regional  customer  telephone service
centers and automated telephonic channels.

          The  following  chart  sets  forth the  name,  address  and  principal
occupation of the principal  executive officers and directors of the Adviser and
of each employee of the Adviser who is also an officer or Manager of the Fund:



                                                                              

NAME                                    ADDRESS                                PRINCIPAL OCCUPATION
--------------------------------------- -------------------------------------- -------------------------------------
Robert F. Aufenanger                    225 High Ridge Road                    Chief Financial Officer and
                                        Stamford, CT  06905                    Treasurer
--------------------------------------- -------------------------------------- -------------------------------------
Spencer Boggess                         225 High Ridge Road                    President and Chief Executive
                                        Stamford, CT  06905                    Officer
--------------------------------------- -------------------------------------- -------------------------------------
David R. Bailin                         225 High Ridge Road                    Chairman and Director
                                        Stamford, CT  06905
--------------------------------------- -------------------------------------- -------------------------------------
Leo A. Gardella                         225 High Ridge Road                    Senior Vice President and Director
                                        Stamford, CT  06905
--------------------------------------- -------------------------------------- -------------------------------------






                                                                            

Nicola Knight                           114 W. 47th Street                     Chief Legal Officer
                                        New York, New York 10036
--------------------------------------- -------------------------------------- -------------------------------------
Mohan Badgujar                          225 High Ridge Road                    Vice President
                                        Stamford, CT  06905
--------------------------------------- -------------------------------------- -------------------------------------



          As of October 31, 2006, the Adviser had approximately  $548 million in
aggregate assets under management.

          INFORMATION CONCERNING BANK OF AMERICA.

          Bank of America is a financial services holding company organized as a
Delaware  corporation.  Bank of America  provides a diverse  range of  financial
services  and  products.  Bank of America,  headquartered  in  Charlotte,  North
Carolina,  operates in 29 states and the  District  of Columbia  and has offices
located in 150 foreign  countries.  Bank of America provides a diversified range
of  banking  and  certain  nonbanking   financial  services  and  products  both
domestically and internationally through five business segments, one of which is
Global  Wealth & Investment  Management  ("GWIM)".  The GWIM  division  provides
investment,   fiduciary  and  comprehensive  banking  and  credit  expertise  to
individual  and  institutional  clients  located  across the  United  States and
throughout  the world.  As of December 31, 2006 GWIM's  assets under  management
were approximately $542.9 billion.

          INFORMATION ABOUT THE SALE.

          The Sale is expected to be  consummated  in the third quarter of 2007,
but could occur later  depending upon regulatory  approvals and  satisfaction of
other conditions and is subject to continued  negotiation by Bank of America and
Schwab.  The  closing  of the  Sale  is  subject  to:  (i) the  approval  of new
investment  advisory  agreements by the boards and  shareholders  of each of the
mutual funds advised by USTC, NA or UST Advisers,  Inc.; (ii) certain regulatory
approvals; and (iii) other customary closing conditions. The Sale will result in
Bank of America  controlling U.S. Trust and each of its subsidiaries,  including
the Adviser.

          DESCRIPTION OF THE NEW AGREEMENT AND CURRENT AGREEMENT.

          The  Adviser  has served as  investment  adviser of the Fund since its
inception pursuant to the Current Agreement, which is dated October 1, 2000. The
Current  Agreement  was  approved  by the Board at a meeting  held on August 23,
2000,  and a written  consent was executed by the  organizational  member of the
Fund (who was then the sole  securityholder  of the Fund)  approving the Current
Agreement on August 23, 2000. After its initial term, the Current  Agreement has
been continued in effect annually by action of the Board.  Such  continuance was
last approved at a meeting held on June 7, 2006.

          The terms of the Current Agreement and the New Agreement are described
generally below.

          ADVISORY  SERVICES.  Under  the  Current  Agreement,  the  Adviser  is
responsible for managing the investment  activities of the Fund,  subject to the
supervision  of the Board,  in a manner  consistent  with the Fund's  investment
objective, policies and restrictions, and for

                                       4


determining  the  investments  to be purchased and sold by the Fund. The Current
Agreement  also  requires  the  Adviser  to  provide   various  other  services,
including,   among  others:  to  supervise  the  entities  retained  to  provide
accounting,  custody and other  services to the Fund; to respond to inquiries of
Members  regarding their investment and capital account  balances;  to assist in
the preparation and mailing of subscription  materials to prospective  investors
and of reports and other information to Members; to assist in the preparation of
regulatory filings; to monitor compliance with regulatory filings; to review the
accounting  records of the Fund and to assist in the  preparation  of and review
financial  reports of the Fund;  to review and  arrange  for the payment of Fund
expenses;  to  coordinate  and  organize  meetings of the Board and  meetings of
Members,  and to prepare materials and reports for use at meetings of the Board;
to assist the Fund in conducting  repurchase offers; and to review  subscription
documents and to assist in the processing of  subscriptions  for Interests.  The
New Agreement  requires that the Adviser  provide the same services.  Under both
the Current  Agreement and the New  Agreement,  the Adviser is  responsible  for
bearing  all  costs and  expenses  associated  with its  provision  of  services
(including,  but  not  limited  to:  expenses  relating  to  the  selection  and
monitoring of  investments;  fees of  consultants  retained by the Adviser;  and
expenses relating to qualifying  potential investors and reviewing  subscription
documents),  and is required,  at its own expense, to maintain such staff and to
employ or retain such  personnel  and consult with such other  persons as may be
necessary to render the services required to be provided by the Adviser.

ADVISORY  FEE. In  consideration  of services  provided by the Adviser under the
Current Agreement, the Fund pays the Adviser a quarterly management fee computed
at the annual rate of 1.50% of the Fund's net assets  determined  as of start of
business on the first business day of each calendar  quarter,  after  adjustment
for any  subscriptions  effective on such date. The management fee is payable in
arrears and is pro rated in the event capital  contributions  or  withdrawals of
capital are made other than at the beginning or end of the quarter. The same fee
is payable to the Adviser under the New  Agreement,  subject to reduction in the
manner  described in Proposal 3, if such  proposal is  approved.  For the fiscal
year ended March 31, 2006, the Adviser received $3,997,622 in advisory fees from
the Fund.  Under the  Current  Agreement,  the  Adviser  may  charge a  one-time
administrative  fee in an amount (which is subject to approval by the Board) not
to exceed  $10,000 to each person who becomes a Member as  compensation  for the
services  of the  Adviser  and  costs  incurred  by  the  Adviser  in  reviewing
subscription  documents submitted by and establishing an account for the Member.
Although the Adviser will be entitled to impose a similar fee under the terms of
the New Agreement, it has no current intention to impose such a fee.

          LIABILITY AND  INDEMNIFICATION.  The Current  Agreement  requires that
Adviser use its best efforts in the supervision and management of the investment
activities  of the Fund and in providing  services,  but provides  that,  in the
absence  of  willful  misfeasance,  bad  faith,  gross  negligence  or  reckless
disregard  of its  obligations,  the Adviser  (and its  directors,  officers and
employees and its affiliates,  successors or other legal  representatives) shall
not be liable to the Fund for any error of judgment, for any mistake of law, for
any act or  omission  by the  Adviser or any of its  affiliates  or for any loss
suffered by the Fund. In addition,  the Current Agreement requires that the Fund
indemnify  the  Adviser  and its  directors,  officers  or  employees  and their
respective  affiliates,  executors,  heirs,  assigns,  successors or other legal
representatives   against  any  and  all  costs,  losses,   claims,  damages  or
liabilities,  joint  or  several,  including,  without  limitation,   reasonable
attorneys' fees and disbursements,  resulting in any way from the performance or
non-performance of any their duties with respect to the Fund, except those

                                       5



resulting from their willful malfeasance, bad faith or gross negligence or their
reckless  disregard  of such  duties,  and in the case of criminal  proceedings,
unless  they had  reasonable  cause  to  believe  their  actions  unlawful.  The
provisions of the New Agreement relating to the liability of the Adviser and the
Fund's  obligation to indemnify the Adviser are the same as those of the Current
Agreement.


          EFFECTIVE  DATE AND TERM.  The Current  Agreement  had an initial term
expiring  September 30, 2002, and provides for its continuance from year to year
thereafter;  provided that such continuance is approved at least annually by the
vote of a majority of the outstanding  voting securities of the Fund, as defined
by the 1940 Act and the rules  thereunder,  or by the Board;  and provided  that
such  continuance  is also  approved by a majority of the  Managers  who are not
parties to the agreement or "interested persons" (as defined by the 1940 Act and
the rules  thereunder)  of any such  party,  by vote cast in person at a meeting
called for the purpose of voting on such  approval.  The  provisions  of the New
Agreement  relating to the term of  effectiveness  of the New  Agreement are the
same as those of the  Current  Agreement,  except  that the New  Agreement  will
become  effective  upon the Sale and will have an initial term expiring not more
than two years from the date of execution of the New Agreement.


          TERMINATION.  The Fund has the right,  at any time and without payment
of any  penalty,  to  terminate  the  Current  Agreement  upon sixty days' prior
written  notice to the Adviser,  either by majority  vote of the Board or by the
vote of a majority of the outstanding  voting securities of the Fund (as defined
by the 1940 Act and the rules  thereunder).  The Adviser has a similar  right to
terminate the Current  Agreement  upon sixty days' prior  written  notice to the
Fund. In addition,  the Current Agreement provides for its automatic termination
in the event of its assignment  (to the extent  required by the 1940 Act and the
rules thereunder) unless such automatic termination is prevented by an exemptive
order or rule of the SEC. The New Agreement has the same termination provisions.

          BOARD CONSIDERATION.

          The New  Agreement  was  unanimously  approved by the Board and by the
Independent  Managers  at a meeting  held on  January  11,  2007.  In making its
determination  to approve the New  Agreement  and to  recommend  its approval by
Members,  the Board considered all information it deemed reasonably necessary to
evaluate  the terms of the New  Agreement  and the  ability  of the  Adviser  to
continue  after the Sale to provide  services  to the Fund of the same scope and
quality  as are  now  provided.  The  Independent  Managers  reviewed  materials
furnished by the  Adviser,  including  information  regarding  the Adviser,  its
affiliates and personnel,  operations and financial  condition,  and information
regarding   Bank  of  America.   At  the  meeting,   the  Board  also  met  with
representatives  of the Adviser and with  representatives of Bank of America and
discussed  various  matters  relating  to:  the  operations  of the Fund and the
Adviser; the commitment of Bank of America to support the Adviser's business and
operations; and Bank America's plans with respect to the management and offering
of alternative investment products,  including the Fund. Representatives of Bank
of America assured the Board that Bank of America does not anticipate that there
will be any  reduction or  significant  adverse  change in the scope,  nature or
quality of the investment advisory or other services provided to the Fund by the
Adviser under the New Agreement.  These  representatives noted that a plan would
be put into place  designed  to provide  for the  continuity  of the  investment
advisory  services  under the New  Agreement.  They stated that no departures of
personnel of the Adviser material to the Fund's

                                       6


operations are  anticipated  and that Bank of America's  intention is to utilize
the strengths and personnel of both  organizations  to develop a cohesive  team.
The Board was also advised that the Adviser will continue to provide  investment
advice with no material changes in operating conditions and, in particular, that
the Sale will not  adversely  affect the  ability of the  Adviser to fulfill its
obligations to the Fund. The  representatives of Bank of America also noted that
after the Sale,  the Fund will be sold through new  distribution  channels,  and
that the Sale is being  viewed by Bank of America as an  opportunity  to enhance
Bank of America's offerings of alternative investment funds.  Additionally,  the
Board was  assured  that  Schwab and Bank of America  intend to comply  with the
"safe harbor" provisions afforded by Section 15(f) of the 1940 Act.

          Based on its review,  and after careful  consideration  of the factors
discussed  below,  the  Board  (including  each  of  the  Independent  Managers)
unanimously determined that continuity and efficiency of advisory services after
the Sale can best be assured by approving the New Agreement.  In connection with
the Board's review, the Independent Managers met in an executive session, during
which they were advised by and had the  opportunity to discuss with  independent
legal counsel  various matters  relating to the Sale and the New Agreement.  The
Board  believes  that the New  Agreement  will  enable  the Fund to obtain  high
quality  investment   advisory  services  at  a  cost  that  is  reasonable  and
appropriate  and that approval of the New Agreement is in the best  interests of
the Fund and Members. No single factor was considered in isolation,  nor was any
single factor  considered to be determinative to the decision to approve the New
Agreement.

          In connection with its deliberations,  the Independent Managers,  with
the assistance of independent  legal counsel,  requested,  received and reviewed
information  regarding the New Agreement and relevant materials furnished by the
Adviser,  U.S. Trust and Bank of America.  These materials included  information
regarding  Bank  of  America  and  its  management,   history,   qualifications,
personnel,  operations and financial condition and other pertinent  information.
In addition, the representations made by representatives of Bank of America were
considered.

          In  considering  the New Agreement,  the Board  considered the nature,
extent and quality of operations and services to date provided by the Adviser to
the Fund,  which are expected to continue to be provided after the Sale. It also
considered the fact that the Current Agreement and the New Agreement,  including
the terms relating to the services to be performed by the Adviser,  and the fees
payable  by the  Fund,  are  identical  except  for  the  term  and  date of its
effectiveness.  With respect to the fees payable  under the New  Agreement,  the
Board  compared  the fees and  overall  expense  levels  of the Fund to those of
competitive funds and other funds with similar investment  objectives (including
other funds  advised by the  Adviser  and its  affiliates).  In  evaluating  the
advisory fee, the Board also took into account the complexity and quality of the
investment  management  services required by the Fund. The Board also considered
the  investment  performance  of the Fund,  including  comparisons of the Fund's
performance to that of similar funds, and the costs of services provided and the
profits realized by the Adviser from its  relationship  with the Fund. The Board
considered the extent to which economies of scale in costs of providing services
would be realized as the Fund grows and whether the fees  payable to the Adviser
pursuant to the New Agreement properly reflects these economies of scale for the
benefit of investors.  The benefits to the Adviser of its relationship  with the
Fund

                                       7


were also  considered.  The Board  viewed as  significant  the fact that the key
personnel of the Adviser who provide  investment  advisory  services to the Fund
will continue to provide services to the Fund after the Sale, and the commitment
of Bank of America to maintain the  continuity of  management  functions and the
services  provided  to the  Fund.  In  addition  to  the  foregoing,  the  Board
considered  the  expected  financial  condition  and  resources  of the  Adviser
following the Sale in light of the business  reputation and financial  condition
of Bank of America,  and  considered  whether  there are any aspects of the Sale
likely to affect  adversely  the  ability of the  Adviser to retain and  attract
qualified  personnel following the Sale and to otherwise provide services to the
Fund.

          Possible  alternatives  to  approval  of the New  Agreement  were also
considered  by the  Board.  During  its  review  and  deliberations,  the  Board
evaluated the potential  benefits,  detriments and costs to the Fund and Members
of the Sale.  The Board  determined  that Members  will likely  benefit from the
expected retention and the continued availability of the management expertise of
the key personnel of the Adviser who now provide  investment advice to the Fund.
In addition,  the Board deemed it beneficial  to the Fund to be affiliated  with
Bank of  America  for  several  reasons,  including  the  expanded  distribution
capabilities  that  can  be  offered  by  Bank  of  America  and  the  extensive
investment, compliance and operations infrastructure that will be available as a
result of the Sale.

          After  consideration,  the Managers  noted their overall  satisfaction
with the  nature,  quality  and extent of  services  provided by the Adviser and
concluded that the Fund was  receiving,  and would continue to receive under the
New  Agreement,  all services  required from the Adviser and that these services
were of high quality.  The Managers also concluded  that the Fund's  performance
compared  favorably  with the  performance  of  similar  registered  funds,  and
determined  that the fees and expense ratios of the Fund are within the range of
the fees and  expense  ratios of similar  funds.  They also  concluded  that the
profitability  to the  Adviser  from  its  relationship  with  the  Fund was not
disproportionately  large  so that it bore  no  reasonable  relationship  to the
services rendered and determined that, given the overall performance of the Fund
and superior service levels, the current profitability was not excessive.

          One of the  Managers  has an  interest  in  the  approval  of the  New
Agreement as a result of his financial interest in and position with the Adviser
or its affiliates, as described above under the heading "The Adviser."

          REQUIRED VOTE.

          Approval of the New Agreement by Members requires the affirmative vote
of a "majority of the outstanding  voting  securities" of the Fund,  which,  for
this  purpose,  means  the  affirmative  vote  of  the  lesser  of  (1)  Members
representing  more than 50% in  interest  of the  outstanding  Interests  or (2)
Members  representing  67% or  more in  interest  of the  outstanding  Interests
present at a meeting  called  for the  purpose  of voting on such  approval,  if
Members  holding  more than 50% in interest  of the  outstanding  Interests  are
represented  at such meeting in person or by proxy.  If the New Agreement is not
approved,  the Managers will take such further  action as they deem to be in the
best interests of the Fund and Members.

          ADDITIONAL INFORMATION.

                                        8


          UST Securities Corp. ("UST Securities") serves as the Fund's placement
agent  and,  in such  capacity,  offers  Interests  to  investors  in a  private
placement.  Like the Current Agreement,  and consistent with the requirements of
the 1940 Act, the Fund's  agreement with UST Securities also will terminate upon
the  Sale.  At its  meeting  on  January  11,  2007,  the  Board  and all of the
Independent  Managers  approved a new placement agent agreement between the Fund
and UST Securities, which is the same as the currently effective placement agent
agreement except for the term and date of its effectiveness.  This new agreement
is not  subject  to  approval  by Members  and will  become  effective  upon the
consummation  of the Sale if the New  Agreement  is  approved  by  Members.  UST
Securities  is not  compensated  by the Fund or the Adviser for its  services as
placement agent.

          J.D. Clark & Co., located at 2425 Lincoln Avenue,  Ogden,  Utah 84401,
provides   various   administrative   services  to  the  Fund   pursuant  to  an
administrative, accounting and investor services agreement.

              THE BOARD, INCLUDING ALL OF THE INDEPENDENT MANAGERS,
           UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE
                                 NEW AGREEMENT

  -----------------------------------------------------------------------------

                                   PROPOSAL 2

                              ELECTION OF MANAGERS

          At the Meeting,  Members will vote on a proposal to elect four persons
nominated  by the Board to serve as  Managers,  all of whom  currently  serve as
Managers.  The nominees  are:  David R. Bailin,  Gene M.  Bernstein,  Stephen V.
Murphy and Victor F. Imbimbo, Jr. Messrs. Bernstein, Murphy and Imbimbo, who are
Independent  Managers,  have served as Managers  since the Fund's  inception and
were elected to their  positions by the  organizational  member of the Fund. The
other nominee,  Mr. Bailin,  has served as a Manager since September 7, 2006 and
was  appointed  by the Board to fill a vacancy  created  by the  resignation  of
another Manager.

          The Board has  determined to have each of the present  Managers  stand
for election by Members at the Meeting to help assure continued  compliance with
1940 Act provisions regarding the election of Managers. These provisions require
that a majority of the Managers be elected by Members and allow the  appointment
of a new Manager by the Board to fill a vacancy on the Board only if, after such
appointment,  at least  two-thirds of the Managers have been elected by Members.
Because Mr. Bailin has not been elected by Members, if one of the other Managers
now serving were to resign (or become unable to serve as a Manager), it would be
necessary to call a special meeting of Members if the Board  determined to elect
a person to fill the vacancy (since under those  circumstances  only two of four
Managers  would have been  elected by Members,  which is less than the  required
two-thirds  specified by the 1940 Act).  The election of Managers at the Meeting
will thus help avoid the need to call a special meeting of Members in the future
and the related costs of such a meeting.

          The persons named as proxies on the accompanying proxy card intend, in
the absence of contrary  instructions,  to vote all proxies they are entitled to
vote in favor of the

                                       9


election of the four nominees  named above.  The nominees each have consented to
stand for election and to serve if elected. If elected, a nominee will serve for
a term of indefinite  duration until his successor is elected and qualified,  or
his  earlier  death,  resignation  or  removal,  or until  declared  bankrupt or
incompetent  by a court of  appropriate  jurisdiction.  If any nominee should be
unable to serve,  an event that is not now  anticipated,  the  persons  named as
proxies  will vote for such  replacement  nominee  as may be  designated  by the
Board.

          Information  regarding  the  nominees,  including  brief  biographical
information, is set forth below.




                                                                                               

                                             INDEPENDENT MANAGER NOMINEES
-----------------------------------------------------------------------------------------------------------------------

                               (2)          (3)
                           POSITION(S)    TERM OF                (4)                                      (5)
                               HELD        OFFICE/        PRINCIPAL OCCUPATION(S)                  NUMBER OF PORTFOLIOS
        (1)                 WITH THE    LENGTH OF     DURING PAST 5 YEARS AND OTHER                IN FUND COMPLEX*
NAME, ADDRESS AND AGE         FUND      TIME SERVED       DIRECTORSHIPS HELD                           OVERSEEN
-----------------------------------------------------------------------------------------------------------------------

Gene M. Bernstein             Manager    Term              Mr. Bernstein is Director of NIC                4
c/o Excelsior Directional                Indefinite/       Holding Corp. He was Dean of the
Hedge Fund of Funds, LLC                 Length- since     Skodneck Business Development
225 High Ridge Road                      October 2000      Center at Hofstra University from
Stamford, CT 06905                                         2000-2001. Prior to that, Mr.
                                                           Bernstein was President and Vice
                                                           Chairman at Northville Industries,
Age  59                                                    a petroleum marketing,
                                                           distribution, trading and storage
                                                           company and wholly-owned subsidiary
                                                           of NIC Holding Corp.

Victor F. Imbimbo, Jr.        Manager    Term-Indefinite/  Mr. Imbimbo is the President and                4
c/o Excelsior Directional                Length- since     CEO of Caring Today, LLC., the
Hedge Fund of Funds, LLC                 October 2000      publisher of Caring Today Magazine,
225 High Ridge Road                                        the leading information resource
Stamford, CT 06905                                         within the family caregivers
                                                           market. Prior to this, Mr. Imbimbo,
Age  54                                                    was Executive Vice President of
                                                           TBWA\New York and President for
                                                           North America with
                                                           TBWA/WorldHealth, a division of
                                                           TBWA Worldwide where he directed
                                                           consumer marketing program
                                                           development for healthcare
                                                           companies primarily within the
                                                           pharmaceutical industry.

Stephen V. Murphy             Manager    Term-Indefinite/  Mr. Murphy is President of S.V.                 4
c/o Excelsior Directional                Length- since     Murphy & Co., an investment banking
Hedge Fund of Funds, LLC                 October 2000      firm. Mr. Murphy serves as a
225 High Ridge Road                                        director or manager of Excelsior
Stamford, CT 06905                                         Private Equity Fund II, Inc.,
                                                           Excelsior Venture Partners III,
Age  61                                                    LLC, Excelsior Venture Investors
                                                           III, LLC and Excelsior Directional
                                                           Hedge Fund of Funds, LLC. He also
                                                           serves on the board of directors of
                                                           The First of Long Island
                                                           Corporation, The First National
                                                           Bank of Long Island and Bowne &
                                                           Co., Inc.

                                       10







                                                                                               

                                             INTERESTED MANAGER NOMINEE
-----------------------------------------------------------------------------------------------------------------------

                               (2)          (3)
                           POSITION(S)    TERM OF                (4)                                      (5)
                               HELD        OFFICE/        PRINCIPAL OCCUPATION(S)                  NUMBER OF PORTFOLIOS
        (1)                 WITH THE    LENGTH OF     DURING PAST 5 YEARS AND OTHER                IN FUND COMPLEX*
NAME, ADDRESS AND AGE         FUND      TIME SERVED       DIRECTORSHIPS HELD                           OVERSEEN
-----------------------------------------------------------------------------------------------------------------------

David R. Bailin**             Manager      Since           Managing Director of U.S. Trust's               1
United States Trust                        September 2006  Alternative Investment Division
Company, National                                          (since 9/06); co-founder of
Association                                                Martello Investment Management, a
114 W. 47th Street                                         hedge fund-of-funds specializing in
New York, NY 10036                                         trading strategies (2/02  to 9/06);
                                                           Chief Operating Officer and Partner
Age 47                                                     of Violy, Byorum and Partners, LLC,
                                                           an investment banking firm focusing
                                                           on Latin America (1/00 to 1/02).

* The "Fund  Complex"  consists of the Fund,  Excelsior  Private Equity Fund II,
Inc.,  Excelsior  Venture Partners III, LLC and Excelsior Venture Investors III,
LLC.

**An "interested person," as defined by the 1940 Act, of the Fund because of his
affiliation with the Adviser and its affiliates.

     In  addition  to Mr.  Bailin,  set  forth  below is the  name  and  certain
biographical  information  for each of the Fund's other executive  officers,  as
reported by them to the Fund.


                                                 OFFICERS OF THE FUND
-----------------------------------------------------------------------------------------------------------------------


                               (2)          (3)
                           POSITION(S)    TERM OF                (4)                                      (5)
                               HELD        OFFICE/        PRINCIPAL OCCUPATION(S)                  NUMBER OF PORTFOLIOS
        (1)                 WITH THE    LENGTH OF     DURING PAST 5 YEARS AND OTHER                IN FUND COMPLEX*
NAME, ADDRESS AND AGE         FUND      TIME SERVED       DIRECTORSHIPS HELD                           OVERSEEN
-----------------------------------------------------------------------------------------------------------------------
Spencer Boggess               Chief         Term -         President and Chief Executive                  N/A
United States Trust           Executive     Indefinite     Officer of U.S. Trust Hedge Fund
Company, National             Officer       Length -       Management, Inc. and Portfolio
Association                                 Since March    Manager of the Company (7/03 to
114 W. 47th Street                          2006           present); Senior V.P. and Director
New York, NY 10036                                         of Research, CTC Consulting, Inc.
                                                           (10/00 to 6/03).

Age 39


Mohan Badgujar                Chief         Term  -        Vice President of USTCNA (10/05 to             N/A
United States Trust           Operating     Indefinite     present); Managing Partner of Blue
Company, National             Officer       Length -       Hill Capital Partners LLC (10/03 to
Association                                 Since March    10/05) (Registered Investment
114 W. 47th Street                          2006           Adviser); Financial Advisor at UBS
New York, NY 10036                                         Financial Services, Inc. (1/02 to
                                                           9/03); Principal of Columbia
Age: 47                                                    Software Consultants, Inc. (2001 to
                                                           2002).


                                       11



Robert F. Aufenanger          Chief         Term -         President and Director, UST                    N/A
United States Trust           Financial     Indefinite     Advisers, Inc.  (12/05 to present);
Company, National             Officer and   Length -       Senior Vice President, Alternative
Association                   Treasurer     Since July     Investments Division,  USTCNA (4/06
114 W. 47th Street                          2003           to present); Senior Vice President,
New York, NY 10036                                         Chief Financial Officer and
                                                           Treasurer, Alternative Investments
Age: 53                                                    Division, USTCNA (4/03 to 3/06);
                                                           Chief Financial Officer, Treasurer
                                                           and Director, U.S. Trust Hedge Fund
                                                           Management, Inc. (7/03 to present);
                                                           Consultant to private equity funds
                                                           (1/02 to 3/03); Chief Financial
                                                           Officer, Icon Holding Corp. (12/99
                                                           to 12/01).

Joan E. Hoffman               Chief         Since          Managing Director and Head of                  N/A
United States Trust           Compliance    January        Compliance, USTCNA (8/04 to
Company, National             Officer       2007           present) and Chief Compliance
Association                                                Officer of the Excelsior
114 W. 47th Street                                         Investment Funds; Managing
New York, NY 10036                                         Director, Regulatory
                                                           Relationships, Operational Risk
Age: 51                                                    Management and Cross Product
                                                           Service (3/02 to 7/04) and Global
                                                           Risk Manager (7/98 to 3/02),
                                                           Deutsche Bank.



                  BOARD MEETINGS AND COMMITTEES.

          The only standing  committee of the Board is the Audit Committee.  The
members of the Audit Committee are: Gene M. Bernstein,  Victor F. Imbimbo,  Jr.,
and  Stephen  V.  Murphy,  constituting  all of the  Independent  Managers.  Mr.
Bernstein has been designated as the chair of the Audit Committee. The Board has
adopted a written charter for the Audit  Committee,  a copy of which is attached
to this Proxy Statement as Exhibit 2.

          The function of the Audit  Committee,  pursuant to its adopted written
charter,  most recently  revised and approved by the Board on September 8, 2005,
is to provide oversight  responsibility with respect to: (a) the adequacy of the
Fund's accounting and financial reporting processes, policies and practices; (b)
the  integrity of the Fund's  financial  statements  and the  independent  audit
thereof; (c) the adequacy of the Fund's overall system of internal controls and,
as  appropriate,  the internal  controls of certain service  providers;  (d) the
Fund's   compliance  with  certain  legal  and  regulatory   requirements;   (e)
determining  the  qualification  and  independence  of  the  Fund's  independent
auditors; and (f) the Fund's internal audit function.

          During the most recent  fiscal year of the Fund,  which ended on March
31, 2006, the Board held four regular  meetings and two special meetings and the
Audit  Committee held five meetings.  Each Manager  attended at least 75% of the
total  number of meetings of the Board and, if a member of the Audit  Committee,
of the Audit  Committee,  held during the fiscal  year (or during the  Manager's
period of service if not a Manager for the full fiscal year).

          AUDIT COMMITTEE REPORT

          In  discharging  its  duties,  during the 2006  fiscal  year the Audit
Committee has met with and held  discussions  with Fund  management and with the
Fund's  then-serving  independent  registered public accounting firm, Deloitte &
Touche LLP ("D&T"). D&T has represented that

                                       12


the Fund's  financial  statements  were  prepared in accordance  with  generally
accepted accounting principles.  The Audit Committee also discussed with D&T the
matters  required to be  discussed by  Statement  on Auditing  Standards  No. 61
(Communications with Audit Committees).  D&T provided to the Audit Committee the
written  disclosure  required by  Independent  Standards  Board  Standard  No. 1
(Independent  Discussions  with  Audit  Committees),  and  the  Audit  Committee
discussed with  representatives of D&T their firm's independence with respect to
the Fund.

          Members are reminded, however, that the members of the Audit Committee
are not  professionally  engaged in the  practice  of  auditing  or  accounting.
Members of the Audit  Committee  rely without  independent  verification  on the
information  provided to them and on the representations  made by management and
D&T.   Accordingly,   the  Audit  Committee's  oversight  does  not  provide  an
independent  basis to  determine  that  management  has  maintained  appropriate
accounting and financial  reporting  principles or appropriate  internal control
and  procedures  designed to assure  compliance  with  accounting  standards and
applicable   laws  and   regulations.   Furthermore,   the   Audit   Committee's
considerations and discussions referred to above do not assure that the audit of
the  Fund's  financial  statements  has  been  carried  out in  accordance  with
generally  accepted  auditing  standards,  that  the  financial  statements  are
presented in accordance with generally  accepted  accounting  principles or that
the Fund's auditors are, in fact, "independent."

          Based on the Audit  Committee's  review and discussions of the audited
financial  statements  of the Fund for the fiscal year ended March 31, 2006 with
Fund  management  and D&T, the Audit  Committee  approved  the  inclusion of the
audited  financial  statements  of the Fund for the fiscal  year ended March 31,
2006 in the Fund's Annual Report.

          The  Board  does  not  have  a  standing  nominating  committee  or  a
nominating  committee  charter,  because the Board does not  generally  consider
nominations for Independent Managers,  except in special circumstances,  such as
the nomination of a candidate by a Member (as described  below), or in the event
of a vacancy or other inability to serve by an existing  Independent Manager. In
such circumstances, all of the Independent Managers will serve as the nominating
committee and will identify potential nominees through their network of contacts
and may also engage, if they deem appropriate,  a professional  search firm. The
Independent  Managers  will  meet  to  discuss  and  consider  such  candidates'
qualifications  and then choose a candidate by majority  vote.  The  Independent
Managers will  consider,  among other  factors:  whether or not the person is an
"interested  person," as defined in the 1940 Act,  of the Fund,  and whether the
person is otherwise  qualified under applicable laws and regulations to serve as
a Manager; whether or not the person has any relationships that might impair his
or her  independence,  such as any business,  financial or family  relationships
with Fund management,  the Adviser,  service providers or their affiliates;  the
contribution  which the person can make to the Board, with  consideration  being
given to the person's business and professional  experience,  education and such
other  factors  as the  Independent  Managers  may  consider  relevant;  and the
character and integrity of the person.

          As noted above, the nominating committee (when assembled) may consider
nominees recommended by Members. Members who wish to recommend a nominee should
send such recommendations to the Fund's Secretary that include all information
relating to such person that is required to be disclosed in solicitations of
proxies for the election of Managers. A

                                       13


recommendation  must be  accompanied  by a written  consent of the individual to
stand for election if nominated by the Board and to serve if elected by Members.


          MANAGER COMPENSATION.

          The  following  table sets forth  certain  information  regarding  the
compensation  received  by the  Independent  Managers  for the fiscal year ended
March 31,  2006 from the Fund and from all  investment  companies  for which the
Adviser or an affiliated person of the Adviser serves as investment adviser (the
"Fund  Complex").  No  compensation  is paid by the  Fund  to  Managers  who are
"interested persons," as defined by the 1940 Act, of the Fund.

                                       14






                                                                                              

                               COMPENSATION TABLE


                                                                                                           (5)
                                   (2)                   (3)                      (4)            TOTAL COMPENSATION
          (1)                  AGGREGATE        PENSION OR RETIREMENT       ESTIMATED ANNUAL        FROM FUND AND FUND
NAME OF PERSON,            COMPENSATION FROM     BENEFITS ACCRUED AS         BENEFITS UPON             COMPLEX PAID TO
   POSITION                      FUND            PART OF FUND EXPENSES         RETIREMENT              MANAGERS*
-----------------------------------------------------------------------------------------------------------------------------------
Gene M. Bernstein,               $17,750                    0                       0                  $80,750 (4)
Manager
Victor F. Imbimbo, Jr.,          $17,750                    0                       0                  $79,750 (4)
Manager
Stephen V. Murphy,               $17,750                    0                       0                  $81,750 (4)
Manager

* The total compensation paid to such persons by the Fund and Fund Complex for
the calendar year ended December 31, 2006. The parenthetical number represents
the number of investment companies (including the Fund) from which such person
receives compensation.
-----------------------------------------------------------------------------------------------------------------------------------



          Currently,  the Independent  Managers are each paid an annual retainer
of $10,000  ($11,000 for the Chairman of the Audit  Committee)  and  per-meeting
fees of:  $2,000 for in-person  attendance  at quarterly  meetings of the Board;
$1,000  for  telephone  participation  at  a  quarterly  Board  meeting  or  for
participation at a telephonic  special meeting of the Board; and $1,000 for each
Audit  Committee   meeting  (whether  held  in-person  or  by  telephone).   The
Independent Managers are also reimbursed for travel-related  expenses. The Board
does not have a compensation committee.

          NOMINEE EQUITY OWNERSHIP.


          The following  table sets forth, as of December 31, 2006, with respect
to each  nominee,  certain  information  regarding the  beneficial  ownership of
equity  securities  of  the  Fund  and of all  registered  investment  companies
overseen by the nominee  within the same family of  investment  companies as the
Fund.



                                                                                           
                                                                                                 (3)
                                                          (2)                     AGGREGATE DOLLAR RANGE OF EQUITY
                                                    DOLLAR RANGE OF              SECURITIES OF ALL FUNDS OVERSEEN OR
     (1)                                           EQUITY SECURITIES            TO BE OVERSEEN BY NOMINEE IN FAMILY
NAME OF NOMINEE                                       OF THE FUND                    OF INVESTMENT COMPANIES

Gene M. Bernstein                                    Over $100,000                          Over $100,000
Victor F. Imbimbo, Jr.                                   None                             $10,001 - 50,000
Stephen V. Murphy                                    Over $100,000                          Over $100,000
David R. Bailin                                          None                                   None


          As of December 31, 2006,  none of the  Independent  Managers,  nor the
immediate  family members of the  Independent  Managers,  beneficially  owned or
owned  of  record  securities  of the  Adviser  or of any  persons  directly  or
indirectly controlling, controlled by or under common control with the Adviser.

                                       15


          SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.

          Section  16(a) of the  Securities  Exchange Act of 1934 Act (the "1934
Act") and Section 30(h) of the 1940 Act, taken  together,  require the Managers,
beneficial  owners of more than 10% of the equity  securities  of the Fund,  the
Adviser  and  officers  of the  Fund  ("Reporting  Persons")  to file  with  the
Securities  and  Exchange  Commission  ("SEC")  reports of their  ownership  and
changes in their ownership of the Fund's securities. The Fund believes that each
of the Reporting Persons who was a Reporting Person during the fiscal year ended
March 31, 2006 has complied with  applicable  filing  requirements,  except that
reports filed by Spencer Boggess and the Adviser were not timely filed.


          INDEPENDENT PUBLIC ACCOUNTANTS.

          The engagement of D&T as the independent  registered public accounting
firm  ("Independent  Auditors") of the Fund for the fiscal year ending March 31,
2007,  was  approved  by the  Audit  Committee,  and  the  selection  of D&T was
unanimously  approved by the Board,  including  the separate  vote of all of the
Independent  Managers,  at meetings of the Audit Committee and the Board held on
June 7, 2006.  D&T, with offices at Two World  Financial  Center,  New York, New
York, 10281, has served in such capacity since October 28, 2004.

          The Fund was  advised by D&T in a letter  received  December  11, 2006
that, effective upon the closing date of the Sale, D&T will no longer be able to
serve as the Fund's  Independent  Auditors or provide any attest services to the
Fund. In view of this,  the Fund  requested,  and received a  presentation  from
PricewaterhouseCoopers  ("PwC") on  January  11,  2007.  The Board and the Audit
Committee requested that the officers of the Fund continue to work and negotiate
with PwC, pending the outcome of the Sale.

          On January 29, 2007 the Board  received a letter of  resignation  from
D&T  indicating  that  D&T  will  no  longer  serve  as the  Fund's  independent
registered  public  accounting  firm.  D&T's  audit  reports  on  the  financial
statements  of the Fund as of and for the fiscal  years ended March 31, 2006 and
2005 did not contain an adverse  opinion or a  disclaimer  of opinion,  nor were
they  qualified  or  modified  as to  uncertainty,  audit  scope  or  accounting
principles.

          During the fiscal  years ended March 31, 2006 and 2005 and through the
date hereof, there were no disagreements  between the Fund and D&T on any matter
of accounting principle or practice, financial statement disclosure, or auditing
scope or procedure, which disagreements,  if not resolved to the satisfaction of
D&T,  would  have  caused D&T to make  reference  to the  subject  matter of the
disagreements  in  connection  with its  reports;  and there were no  reportable
events as defined in Item 304(a)(1)(iv) of Regulation S-K.

          On January 29, 2007,  the Fund  engaged PwC as the Fund's  independent
registered  public  accounting  firm for the fiscal year ending  March 31, 2007,
replacing  D&T.  This  action was taken  pursuant to  resolutions  of the Board,
including the separate vote of all of the  Independent  Managers,  acting on the
recommendation of the Audit Committee.

          The Fund did not consult  with PwC during its fiscal years ended March
31, 2006 and 2005 on the  application  of  accounting  principles to a specified
transaction,  the type of opinion that might be rendered on the Fund's financial
statements, any accounting, auditing or

                                       16


financial  reporting  issue,  or  any  item  that  was  either  the  subject  of
disagreement or a reportable event as defined in Item 304 of Regulation S-K.

          Since the Fund complies with the  provisions of Rule 32a-4 of the 1940
Act, it is not required to submit the  selection of its  independent  registered
public accounting firm to members for  ratification.  PwC has its offices at 300
Madison Avenue, New York, New York 10017.

          Representatives  of PwC or D&T are not  expected  to be present at the
Meeting,  but have been  given an  opportunity  to make a  statement  if they so
desire and will be available should any matter arise requiring their presence.

          AUDIT FEES.

          For the fiscal  years  ended March 31,  2005 and March 31,  2006,  the
aggregate fees billed by D&T for professional  services  rendered for the annual
audit of the Fund's financial statements were $56,000 and $80,862, respectively.

          AUDIT-RELATED FEES.

          For the fiscal  years ended March 31, 2005 and March 31,  2006,  there
were no fees billed by D&T for assurance and related services reasonably related
to the performance of the annual audit of the Fund's financial statements.

          During its regularly-scheduled  periodic meetings, the Audit Committee
of the Fund pre-approves all audit, audit-related,  tax and other services to be
provided  by the  Independent  Auditor  to the  Fund.  The Audit  Committee  has
delegated  pre-approval  authority  to  its  chairman  for  any  subsequent  new
engagements that arise between regularly scheduled meeting dates,  provided that
any such  pre-approved  fees are  presented  to the Audit  Committee at its next
regularly scheduled meeting.

          TAX FEES.

          For the fiscal  years ended March 31, 2005 and March 31,  2006,  there
were no fees  billed by D&T for tax  return  preparation  and other  tax-related
services with respect to the Fund.

          ALL OTHER FEES.

          For the fiscal  years ended March 31, 2005 and March 31,  2006,  there
were no fees  billed by D&T for  services  provided to the Fund other than those
described above.

          AGGREGATE NON-AUDIT FEES.

          For the fiscal  years  ended March 31,  2005 and March 31,  2006,  the
non-audit fees billed by D&T for services  rendered to: the Fund and the Adviser
and any control person of the Adviser that provides ongoing services to the Fund
were $618,675 and  $754,000,  respectively.  All such  services  provided to the
Adviser and any such control person were pre-approved by the Audit Committee.

                                       17


                    THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU
                         VOTE "FOR" EACH OF THE NOMINEES

  -----------------------------------------------------------------------------

                                   PROPOSAL 3

                           REORGANIZATION OF THE FUND

          At the Meeting,  Members will vote on a proposal to approve a Plan and
Agreement of Reorganization and Merger (the "Merger  Agreement") under which the
Fund will be reorganized to implement a "master/feeder" investment structure, in
which Members will own  interests in a new fund that will pursue its  investment
objective by investing  its assets in the Fund (the  "Reorganization").  The new
fund will have the same investment objective and the same investment policies as
the Fund, except the new fund would pursue its investment objective by investing
in the Fund. In a  master/feeder  investment  structure,  two or more investment
funds having the same investment program ("feeder funds") invest their assets in
a common "master fund" that has the same investment  objective and substantially
the same  investment  policies as the feeder  funds.  The master fund,  in turn,
invests  its assets in  securities  and other  investments  consistent  with the
investment policies of the feeder funds.

          The Board,  including all of the  Independent  Managers,  approved the
Merger Agreement at its meeting on January 11, 2007, and recommends that Members
vote to  approve  the Merger  Agreement.  The Board  believes  that the Fund and
Members will benefit if the Fund is reorganized in the manner  proposed.  A copy
of the Merger  Agreement is contained in Exhibit 3 to this Proxy  Statement.  If
approved by Members,  the Reorganization will occur as soon as practicable after
such approval.

          The Reorganization will not affect the value of your investment,  will
not  involve  any  change  in the  investment  program  in which  you  currently
participate  through the Fund,  and there will be no increase in fees payable to
the Adviser. In addition,  the Reorganization will not result in the recognition
of any gain or loss to Members for tax purposes.

          BENEFITS OF A MASTER/FEEDER STRUCTURE.

          A  master/feeder  structure  provides a way for feeder  funds that are
designed for  different  types of investors  to invest  through a common  master
fund. This structure  allows for  efficiencies in investing and  efficiencies in
operating  costs to the extent that the assets of multiple  funds are pooled for
investing and are able to share certain related costs.

          The  Fund  is  designed  for  investment  primarily  by  U.S.  taxable
investors (such as individuals  and entities  subject to federal income tax). If
the Reorganization is approved and implemented, the Adviser contemplates that it
will organize one or more new  investment  funds designed for investment by U.S.
tax-exempt investors (such as individual  retirement accounts,  employee benefit
plans or charitable  organizations)  and for  investment  by foreign  investors,
which would have the same  investment  program as the Fund.  In a  master/feeder
structure these

                                       18


investment funds and the new fund in which Fund investors will invest would each
pursue its  investment  objective  by investing  in a single  master fund.  This
pooling of the investments of the Fund with the investments of other  investment
funds will create certain  efficiencies  in investment and is expected to result
in certain cost economies to the extent that certain fixed (or relatively fixed)
expenses  of the  master  fund  would  be  shared  by each of the  feeder  funds
(including the Fund), which would allow for lower expense ratios.

          A lower Fund expense ratio would  benefit  Members.  In addition,  the
master/feeder  structure  will  facilitate  the  ability of the  Adviser to make
available  a new  investment  fund  similar  to the  Fund  for  U.S.  tax-exempt
investors.  Members who have or participate  in retirement  accounts or employee
benefit  plans and wish to invest a portion of the assets of those  accounts  or
plans in accordance with the Fund's investment  program may have the opportunity
to do so  through  the new  fund  (assuming  they  meet  applicable  eligibility
requirements).

          However,  there is no guarantee that such other  investment funds will
be  successful  in  raising  capital,  or  that  any  capital  raised  would  be
significant  enough to result in any cost  economies or lower the expense  ratio
currently borne by the Fund.

          RISKS OF A MASTER/FEEDER STRUCTURE

          In addition to providing  benefits,  a  master/feeder  structure  also
entails  certain  risks.  A feeder fund does not have the right to withdraw  its
investment  in the master  fund.  Instead,  it may do so only  through  periodic
repurchases  by the master fund of its  interests in the master  fund.  This may
limit the ability of the feeder fund to make offers to  repurchase  interests of
its members.  Because  multiple  feeder funds may tender their  interests in the
master  fund for  repurchase  on a given  date,  this may  limit  the  amount of
interests  in the master fund a feeder fund may  tender,  and,  correspondingly,
limit repurchases of interests of its investors by the feeder fund. In addition,
a feeder fund may receive  securities and other investments from the master fund
in lieu of cash when it  withdraws  capital  from the master fund. A feeder fund
will incur expenses in liquidating  investments  received in connection with any
in-kind  distributions.  A  change  in the  investment  objective,  policies  or
restrictions  of the  master  fund may  cause a feeder  fund to seek to have its
interests  repurchased  by the master fund.  Alternatively,  a feeder fund could
seek to change its investment objective,  policies or restrictions to conform to
those of the master fund.  Although not anticipated,  if the  Reorganization  is
approved,  the investment objectives and certain investment  restrictions of the
master fund may be changed without the approval of investors in the master fund.
These investors may include other types of pooled  investment  vehicles that may
or may not be investment companies registered under the 1940 Act.

          DESCRIPTION OF THE REORGANIZATION.

          The  Fund  currently  pursues  its  investment  objective  of  capital
appreciation  by  investing  in a  diverse  group of  private  investment  funds
("Investment  Funds") that  primarily  invest or trade in a wide range of equity
and  debt  securities.   If  the  Reorganization  is  approved  by  Members  and
consummated,  Members  who now hold  Interests  in the  Fund  will  instead  own
interests  in a newly  organized  fund (the "New Fund") that would have the same
investment  objective and the same  investment  policies as the Fund (except the
New Fund would pursue its investment objective by investing in the Fund).

                                       19


          The Reorganization  will be effected pursuant to the Merger Agreement.
The structure of the Reorganization is designed to avoid a transfer of assets of
the Fund that would  otherwise  require the consent of the  underlying  funds in
which the Fund invests,  which consent may not be timely or given at all. As set
forth in the Merger Agreement, the Reorganization will involve the merger of the
Fund  with a  wholly-owned  subsidiary  of the New  Fund.  The Fund  will be the
surviving  company of the merger.  At the effective time of the  Reorganization,
the Fund will merge  with the  subsidiary  and the New Fund will  issue  limited
liability  company  interests  in the New Fund to  Members in  exchange  for the
interests of Members in the Fund.  The interest in the New Fund received by each
Member  will have a value  equal to the value of such  Member's  interest in the
Fund as of the effective time of the Reorganization.

          The result of the transactions contemplated by the Reorganization will
be that: (i) Members will become  members of the New Fund,  which will initially
own all of the  interests  in the Fund;  (ii) the New Fund will become a "feeder
fund" of the Fund;  and (iii) the Fund will become a "master  fund" (the "Master
Fund") and hold all of the interests in the  Investment  Funds owned by the Fund
immediately  prior to the  reorganization.  Like the Fund,  the New Fund will be
registered as an investment company under the 1940 Act. The Adviser  anticipates
that, subsequent to the Reorganization,  one or more additional investment funds
will be formed that will pursue their investment  objectives by investing in the
Fund.

          The New Fund,  like the  Fund,  is  organized  as a  Delaware  limited
liability company. It will have the same investment  objective and substantially
the same  investment  policies as the Fund (except the New Fund would pursue its
investment objective by investing in the Fund) and operate pursuant to the terms
of a limited  liability  company  agreement  that is that  same in all  material
respects as the limited liability company agreement of the Fund.

          All  costs  associated  with the  Reorganization  will be borne by the
Adviser, and not by the Fund or the New Fund.

          EFFECT OF THE REORGANIZATION.

          There will be no material change in your investment as a result of the
Reorganization.  The  investment  objective  of the New Fund and its  investment
policies and  restrictions  will be identical to those of the Fund,  except that
the New Fund will pursue its  investment  object by  investing  in the Fund.  In
addition,  the features and operations of the New Fund will be the same as those
of the Fund, and the rights of members of the New Fund will be the same as those
of Members of the Fund, in all material  respects.  The only substantive  change
will be that Members will own  interests in the New Fund (rather than  Interests
in the Fund),  and that the New Fund will indirectly  invest in Investment Funds
by investing in the Fund (rather than by investing directly in Investment Funds,
as is now the  case).  Like the  Fund,  the New Fund will from time to time make
offers  to  repurchase  interests  from its  members  so that  members  have the
opportunity to withdraw capital from the New Fund.

          The Reorganization will not affect the value of your investment (I.E.,
the  value  of  your  capital  account  will  not  change  as a  result  of  the
Reorganization).  The initial  value of your capital  account as a member of the
New Fund will be  identical  to the value of your  capital in the Fund as of the
date of the  Reorganization.  There also will be no increase in fees  payable to
the Adviser (I.E.,  the aggregate fees payable by the New Fund and by the Master
Fund to the Adviser

                                       20


will be the same as the fees currently  payable to the Adviser by the Fund).  In
this  regard,  the Adviser  expects that it will request that the New Fund enter
into a management  agreement with the Adviser pursuant to which the Adviser will
provide   the  New  Fund   various   non-investment   related   management   and
administrative  services  necessary for the  operations of the New Fund. At such
time, the current advisory  agreement between the Fund (now the Master Fund) and
the Adviser will be amended to reduce the fees payable  under that  agreement to
offset fully the amount of any management fees charged to the New Fund under the
management agreement.  The fees payable under the advisory agreement between the
Master Fund and the Adviser can be changed  only with the  approval of the board
of managers of the Master Fund.  The  management  agreement  for the New Fund is
subject to approval by the board of managers of the New Fund and by the managers
of the New Fund who are not "interested persons," as defined by the 1940 Act, of
the New Fund or the Adviser, and does not require the approval of Members of the
New Fund.  Effective  upon the  consummation  of the Sale,  the terms of the New
Agreement,  with  respect  to  fees  payable  thereunder,  will be  amended,  if
necessary,  to  conform  to the  corresponding  terms  of the  current  advisory
agreement, as the same may have been amended.

          In  connection  with  the  Reorganization,  and to  help  assure  that
implementation  of a master/feeder  structure does not result in higher expenses
to Members,  the Adviser will enter into an expense limitation and reimbursement
agreement (the "Expense  Limitation  Agreement") with the New Fund.  Pursuant to
the Expense  Limitation  Agreement,  the Adviser will waive its fees,  or pay or
absorb  ordinary  operating  expenses  of  the  New  Fund  (including   expenses
associated with the  organization and offering of interests in the New Fund, and
the New  Fund's  pro rata share of  expenses  of the Master  Fund) to the extent
necessary to limit the ordinary  operating expenses of the New Fund to 1.84% per
annum of the New Fund's average monthly net assets for three years (the "Expense
Limitation").  In  consideration  of the  Adviser's  agreement  to limit the New
Fund's expenses,  the New Fund will carry forward the amount of expenses waived,
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 they were
incurred 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 New Fund's
ordinary   operating  expenses  for  any  fiscal  year  to  exceed  the  Expense
Limitation.  After the three years, total operating expenses of the New Fund may
be higher than in the preceding  years.  The Expense  Limitation  Agreement will
remain in effect until terminated by the Adviser or the New Fund.

          SUMMARY OF NEW FUND EXPENSES

          The  following  table  illustrates  the expenses and fees that the New
Fund expects to incur and that investors can expect to bear.



                                                                                              
                                                                                     Current   Pro Forma
Investor Transaction Expenses
     Maximum Sales Load (as a percentage of offering price)                             0%         0%

Annual Expenses (as a percentage of net assets attributable to Interests)
     Management Fee                                                                    1.50%     1.50%(1)
     Interest Payments on Borrowed Funds                                               0.02%     0.02%
     Other Expenses                                                                    0.34%     0.38%(2)
     Total Annual Expenses                                                             1.86%     1.90%(3)
              Amount Waived Under Expense Limitation Agreement                          0%       0.06%%(3)
     Net Annual Expenses After Expense Limitation                                      1.86%     1.84%(3)


                                       21


       (1)    Includes  the  investment  advisory fee of the Master Fund and the
              management fee of the New Fund.

       (2)    Based on expected expenses for the 2008 fiscal year.  Includes the
              New Fund's  expenses  (other than the management  fee) and the New
              Fund's share of the Master Fund's  operating  expenses (other than
              the  investment  advisory  fee).  Does  not  include  the fees and
              expenses of the funds ("Portfolio Funds") in which the Master Fund
              is  already  invested  in and  intends to invest in based upon the
              anticipated net proceeds from this offering.

       (3)    As noted above,  the New Fund is subject to an expense  limitation
              agreement capping expenses at 1.84%.


          FEDERAL INCOME TAX CONSEQUENCES OF THE REORGANIZATION.

          As a condition to the consummation of the Reorganization, Fund counsel
will  render  an  opinion  to the Fund  that  consummation  of the  transactions
contemplated by the Merger  Agreement should not be a taxable event to the Fund,
the New Fund or members of the Fund.

          REQUIRED VOTE AND MANAGERS' RECOMMENDATION.

          Approval of the Merger  Agreement  requires  the  affirmative  vote of
Members  holding a majority of the total number of votes  eligible to be cast by
those Members who are present in person or by proxy at the Meeting.

                          THE BOARD RECOMMENDS THAT YOU
     VOTE "FOR" APPROVAL OF THE REORGANIZATION AND MERGER PLAN AND AGREEMENT

  -----------------------------------------------------------------------------

                                       22


II.      VOTING INFORMATION.

          REVOCATION OF PROXIES AND ABSTENTIONS.

          A Member  giving  a proxy  may  revoke  it at any  time  before  it is
exercised by: (i) submitting to the Fund a written  notice of  revocation;  (ii)
submitting  to the Fund a  subsequently  executed  proxy;  (iii)  attending  the
Meeting  and voting in person;  or (iv)  notifying  the Fund of  revocation  via
Internet or by touch-tone telephone.

          If a proxy  (i) is  properly  executed  and  returned  marked  with an
abstention  (with  respect to  Proposal 1 or Proposal  3) or is  accompanied  by
instructions to withhold authority to vote (with respect to Proposal 2), or (ii)
represents  a  nominee  "non-vote"  (that is, a proxy  from a broker or  nominee
indicating  that such person has not received  instructions  from the beneficial
owner or other person  entitled to vote on a  particular  matter with respect to
which  the  broker  or  nominee  does  not  have  discretionary  power  to vote)
(collectively,   "abstentions"),   the  Interest  represented  thereby  will  be
considered  to be  present  at the  Meeting  for  purposes  of  determining  the
existence of a quorum for the  transaction  of business.  If a proxy is properly
executed and returned  and is marked with an  abstention,  the proxy will not be
voted on any matter as to which the abstention  applies.  Abstentions  will have
the effect of a vote  "AGAINST"  approval of Proposal 1 and Proposal 3, but will
have no effect on the outcome of voting on Proposal 2.

          QUORUM REQUIREMENTS.

          A quorum of Members is necessary to hold the valid Meeting. If Members
holding Interests  representing a majority of the total number of votes eligible
to be cast by all  Members  as of the  Record  Date are  present in person or by
proxy at the Meeting, a quorum will exist.

          ADJOURNMENTS.

          If a quorum is not present at the  Meeting,  or if a quorum is present
but  sufficient  votes to approve the Proposals  are not  received,  the persons
named as proxies may propose one or more  adjournments  of the Meeting to permit
further   solicitation  of  proxies.   In  determining  whether  to  propose  an
adjournment in such event, the following  factors may be considered:  the nature
of the  Proposals,  the  percentage of votes  actually  cast,  the percentage of
negative votes actually  cast,  the nature of any further  solicitation  and the
information  to be  provided  to Members  with  respect to the  reasons  for the
solicitation. Any adjournment will require the affirmative vote of a majority of
Members present in person or by proxy at the Meeting. If a quorum is present and
an adjournment is proposed, the persons named as proxies will vote those proxies
which  they  are  entitled  to  vote  "FOR"  the  Proposals  in  favor  of  such
adjournment,  and will vote those  proxies  required to be voted  "AGAINST"  the
Proposals against such  adjournment.  At any adjourned Meeting at which a quorum
is present,  any business may be transacted  which might have been transacted at
the  Meeting  originally  called.  An  abstention  will be treated as a vote for
adjournment.

                                       23


III.     OTHER MATTERS AND ADDITIONAL INFORMATION

          OTHER BUSINESS AT THE MEETING.

          The Board does not  intend to bring any  matters  before  the  Meeting
other  than as stated in this  Proxy  Statement  and is not aware that any other
matters  will be  presented  for  action at the  Meeting.  If any other  matters
properly  come before the Meeting,  it is the  intention of the persons named as
proxies to vote on such matters in accordance  with their best judgment,  unless
specific restrictions have been given.

          FUTURE MEMBER PROPOSALS.

          Pursuant to rules  adopted by the SEC under the 1934 Act,  Members may
request inclusion in the Fund's proxy statement for a meeting of Members certain
proposals for action which they intend to introduce at such meeting.  Any Member
proposals must be presented a reasonable time before the proxy materials for the
next  meeting  are  sent to  Members.  The  submission  of a  proposal  does not
guarantee  its inclusion in the proxy  statement  and is subject to  limitations
under the 1934 Act.  Because the Fund does not hold regular meetings of Members,
no anticipated date for the next meeting can be provided.  Any Member wishing to
present a proposal for inclusion in the proxy  materials for the next meeting of
Members  should  submit such  proposal to the Fund at c/o the Adviser,  225 High
Ridge Road, Stamford, Connecticut 06905.

          COMMUNICATION WITH THE BOARD.

          Members wishing to submit written  communications  to the Board should
send their  communications to the Secretary of the Fund at its principal office.
Any such  communications  received  will be  reviewed  by the  Board at its next
regularly scheduled meeting.

          APPRAISAL RIGHTS.

          Members  do not have  any  appraisal  rights  in  connection  with the
Proposals.

          RESULTS OF VOTING.

          Members  will be  informed  of the results of voting at the Meeting in
the Fund's  next annual  report,  which will be sent to Members on or before May
30, 2007.

         EXPENSES.

          All  of  the  expenses  of  the  Meeting,   including   the  costs  of
solicitation  and the  expenses of  preparing,  printing  and mailing this Proxy
Statement and its enclosures,  and the fee and expenses of the proxy  solicitor,
are being paid by the Adviser.

                                       24




MEMBERS ARE REQUESTED TO MARK,  DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN
IT IN THE  ENCLOSED  ENVELOPE,  WHICH  NEEDS NO  POSTAGE IF MAILED IN THE UNITED
STATES.  ADDITIONAL PROCEDURES YOU MAY USE TO VOTE ARE DESCRIBED ON THE ENCLOSED
PROXY CARD.

                        By Order of the Board of Managers



                        /S/ David R. Bailin
                        --------------------------------------------
                        Name:  David R. Bailin
                        Title: Manager

                                            Dated:  February 23, 2007

                                       25


                                    EXHIBIT 1

                          INVESTMENT ADVISORY AGREEMENT


          THIS INVESTMENT  ADVISORY AGREEMENT is made and executed the __ day of
_________,  2007, by and between Excelsior Directional Hedge Fund of Funds, LLC,
a Delaware  limited  liability  company (the "Fund"),  and U.S. Trust Hedge Fund
Management, Inc., a North Carolina corporation (the "Adviser").

          WHEREAS,  the Fund  intends  to engage in  business  as a  closed-end,
non-diversified  management  investment  company and is registered as such under
the Investment Company Act of 1940, as amended (the "1940 Act"); and

          WHEREAS,  the Adviser is registered as an investment adviser under the
Investment  Advisers  Act of 1940,  as amended,  and engages in the  business of
acting as an investment adviser; and

          WHEREAS,  the Fund desires to retain the Adviser to render  investment
advisory services and to provide certain administrative  services to the Fund in
the manner and on the terms and conditions hereinafter set forth; and

          WHEREAS,  the Adviser  desires to be retained to perform such services
on said terms and conditions;

          NOW,   THEREFORE,   in  consideration  of  the  terms  and  conditions
hereinafter contained, the Fund and the Adviser agree as follows:

          1. The Fund hereby retains the Adviser to:

              (a) act as its investment  adviser and, subject to the supervision
and  control  of the Board of  Managers  of the Fund (the  "Board"),  manage the
investment activities of the Fund as hereinafter set forth. Without limiting the
generality  of the  foregoing,  the  Adviser  shall:  obtain and  evaluate  such
information  and  advice  relating  to  the  economy,  securities  markets,  and
securities as it deems  necessary or useful to discharge  its duties  hereunder;
continuously  manage  the  assets  of the Fund in a manner  consistent  with the
investment objective, policies and restrictions of the Fund, as set forth in the
Confidential  Memorandum  of the Fund and as may be adopted from time to time by
the Board, and applicable laws and  regulations;  determine the securities to be
purchased,  sold or  otherwise  disposed  of by the Fund and the  timing of such
purchases, sales and dispositions; invest discrete portions of the Fund's assets
(which  may  constitute,  in  the  aggregate,  all  of  the  Fund's  assets)  in
unregistered  investment  funds  or other  investment  vehicles  and  registered
investment  companies  ("Investment  Funds"),  which are  managed by  investment
managers  ("Investment  Managers"),  including  Investment  Managers  for  which
separate  investment vehicles have been created in which the Investment Managers
serve as general  partners or managing members and the Fund is the sole investor
("Sub-Funds")  and  Investment  Managers  who are  retained to manage the Fund's
assets  directly  through  separate  managed  accounts  (Investment  Managers of
Sub-Funds   and  of  managed   accounts   are   collectively   referred   to  as
"Subadvisors"), and take such further action, including the placing of

                                 Exhibit 1 - 1



purchase and sale orders and the voting of  securities on behalf of the Fund, as
the Adviser shall deem necessary or appropriate. The Adviser shall furnish to or
place at the disposal of the Fund such of the information, evaluations, analyses
and  opinions  formulated  or obtained by the  Adviser in the  discharge  of its
duties as the Fund may, from time to time, reasonably request; and

              (b) provide,  and the Adviser  hereby  agrees to provide,  certain
management,  administrative and other services to the Fund.  Notwithstanding the
appointment of the Adviser to provide such services  hereunder,  the Board shall
remain responsible for supervising and controlling the management,  business and
affairs of the Fund.  The  management,  administrative  and other services to be
provided by the Adviser shall include:

              (i)   the provision of office space, telephone and utilities;

              (ii)  the provision of  administrative  and secretarial,  clerical
                    and other  personnel  as  necessary  to provide the services
                    required to be provided under this Agreement;

              (iii) the general  supervision  of the entities which are retained
                    by the Fund to  provide  administration,  custody  and other
                    services to the Fund;

              (iv)  the handling of investor  inquiries  regarding  the Fund and
                    providing them with information concerning their investments
                    in the Fund and capital account balances;

              (v)   monitoring  relations and  communications  between investors
                    and the Fund;

              (vi)  assisting  in  the  drafting  and  updating  of   disclosure
                    documents   relating  to  the  Fund  and  assisting  in  the
                    preparation of offering materials;

              (vii) maintaining  and  updating  investor  information,  such  as
                    change of address and employment;

              (viii)assisting  in  the   preparation  and  mailing  of  investor
                    subscription  documents and  confirming  the receipt of such
                    documents and funds;

              (ix)  assisting in the preparation of regulatory  filings with the
                    Securities  and  Exchange  Commission  and state  securities
                    regulators   and  other   Federal   and   state   regulatory
                    authorities;

              (x)   preparing reports to and other  informational  materials for
                    members and assisting in the preparation of proxy statements
                    and other member communications;

                                 Exhibit 1 - 2



              (xi)  monitoring compliance with regulatory  requirements and with
                    the Fund's investment  objective,  policies and restrictions
                    as established by the Board;

              (xii) reviewing  accounting  records and financial  reports of the
                    Fund,  assisting  with  the  preparation  of  the  financial
                    reports of the Fund and  acting as  liaison  with the Fund's
                    accounting agent and independent auditors;

              (xiii)assisting in preparation and filing of tax returns;

              (xiv) coordinating  and  organizing  meetings  of  the  Board  and
                    meetings  of the  members  of the  Fund,  in each  case when
                    called by such persons;

              (xv)  preparing  materials and reports for use in connection  with
                    meetings of the Board;

              (xvi) maintaining  and  preserving  those books and records of the
                    Fund not  maintained by any  subadvisers  of the Fund or the
                    Fund's administrator, accounting agent or custodian;

              (xvii) reviewing and arranging for payment of the expenses of the
                     Fund;

              (xviii)assisting  the Fund in conducting  offers to members of the
                     Fund to repurchase member interests;

              (xix) reviewing and approving all  regulatory  filings of the Fund
                    required under applicable law; and

              (xx)  reviewing    investor    qualifications   and   subscription
                    documentation  and  otherwise  assisting  in  administrative
                    matters  relating to the  processing  of  subscriptions  for
                    interests in the Fund.

          2. Without limiting the generality of paragraph 1 hereof,  the Adviser
shall be  authorized  to open,  maintain  and close  accounts in the name and on
behalf of the Fund with brokers and dealers as it determines are appropriate; to
select and place orders with brokers,  dealers or other financial intermediaries
for the execution,  clearance or settlement of any transactions on behalf of the
Fund on such terms as the Adviser considers  appropriate and that are consistent
with the policies of the Fund; and, subject to any policies adopted by the Board
and to the provisions of applicable law, to agree to such commissions,  fees and
other  charges  on  behalf  of the  Fund  as it  shall  deem  reasonable  in the
circumstances  taking  into  account  all  such  factors  as it  deems  relevant
(including  the quality of research and other services made available to it even
if such services are not for the  exclusive  benefit of the Fund and the cost of
such services does not represent the lowest cost  available)  and shall be under
no  obligation  to  combine or arrange  orders so as to obtain  reduced  charges
unless  otherwise  required  under the federal  securities  laws;  to pursue and
implement  the   investment   policies  and  strategies  of  the  Fund  using  a
multi-manager strategy whereby some or all of the Fund's assets may be committed
from time

                                 Exhibit 1 - 3



to  time  by  the  Adviser  to the  discretionary  management  of  one  or  more
Subadvisors,  the  selection  of which  shall be subject to the  approval of the
Board  of  Managers  in  accordance  with  requirements  of the 1940 Act and the
approval of a majority  (as  defined in the 1940 Act) of the Fund's  outstanding
voting securities,  unless the Fund receives an exemption from the provisions of
the 1940 Act  requiring  such  approval  by  security  holders;  and to identify
appropriate  Subadvisors,   assess  the  most  appropriate  investment  vehicles
(general or limited partnerships,  separate managed accounts or other investment
vehicles (pooled or otherwise), and determine the assets to be committed to each
Subadvisor. The Adviser may, subject to such procedures as may be adopted by the
Board, use affiliates of the Adviser as brokers to effect the Fund's  securities
transactions  and the Fund  may pay such  commissions  to such  brokers  in such
amounts as are permissible under applicable law.

          3. MANAGEMENT FEE; EXPENSES; ADMINISTRATIVE FEE

              (a) In  consideration  for the  provision  by the  Adviser  of its
services hereunder and the Adviser's bearing of certain expenses,  the Fund will
pay the Adviser a quarterly fee of 0.375% (1.50% on an annualized  basis) of the
Fund's "net assets" (the "Management  Fee").  "Net assets" shall equal the total
value of all  assets of the Fund,  less an amount  equal to all  accrued  debts,
liabilities and  obligations of the Fund calculated  before giving effect to any
repurchases of interests.

              (b) The Management Fee will be computed based on the net assets of
the Fund as of the start of business on the first  business day of each calendar
quarter, after adjustment for any subscriptions effective on such date, and will
be due and payable in arrears  within five  business  days after the end of such
calendar quarter.  In the event that the Management Fee is payable in respect of
a partial quarter, or in the event of contributions or withdrawals of capital to
the Fund  other  than at the  beginning  or end of a  quarter,  such fee will be
appropriately PRO-RATED.

              (c)  The  Adviser  is  responsible  for  all  costs  and  expenses
associated  with the  provision of its  services  hereunder  including,  but not
limited to:  expenses  relating to the  selection  and  monitoring of Investment
Managers;  fees of consultants retained by the Adviser; and expenses relating to
qualifying potential investors and reviewing subscription documents. The Adviser
shall,  at its own  expense,  maintain  such  staff and  employ  or retain  such
personnel  and consult with such other persons as may be necessary to render the
services  required to be provided by the Adviser or  furnished to the Fund under
this Agreement.  Without limiting the generality of the foregoing, the staff and
personnel  of the  Adviser  shall be  deemed  to  include  persons  employed  or
otherwise retained by the Adviser or made available to the Adviser.

              (d)  The   Adviser   shall  be   entitled  to  charge  a  one-time
administrative  fee in an amount, as may be approved by the Board, not to exceed
$10,000 to each person who becomes a member as compensation  for the services of
the  Adviser  and  costs  incurred  by the  Adviser  in  reviewing  subscription
documents  submitted by and  establishing  an account for such member;  provided
that such fee may be waived,  in whole or in part, in the sole discretion of the
Adviser, with respect to a member who has established multiple related accounts.

                                  Exhibit 1 - 4



          4.  The Fund  will,  from  time to time,  furnish  or  otherwise  make
available to the Adviser such financial reports, proxy statements,  policies and
procedures  and other  information  relating to the  business and affairs of the
Fund as the Adviser may reasonably  require in order to discharge its duties and
obligations hereunder.

          5. Except as provided herein or in another  agreement between the Fund
and the Adviser,  the Fund shall bear all of its own  expenses,  including:  all
investment related expenses  (including,  but not limited to, fees paid directly
or indirectly to Investment Managers, all costs and expenses directly related to
portfolio  transactions  and positions for the Fund's account such as direct and
indirect  expenses  associated  with  the  Fund's  investments,   including  its
investments in Investment Funds, transfer taxes and premiums,  taxes withheld on
foreign  dividends  and,  if  applicable  in  the  event  the  Fund  utilizes  a
Subadvisor,  brokerage  commissions,  interest and commitment  fees on loans and
debit  balances,  borrowing  charges on  securities  sold  short,  dividends  on
securities  sold but not yet purchased and margin fees);  all costs and expenses
associated with the  establishment  of Investment  Funds managed by Subadvisors;
any non-investment  related interest expense;  attorneys' fees and disbursements
associated  with updating the Fund's  Confidential  Memorandum and  subscription
documents;  fees and  disbursements of any attorneys and accountants  engaged by
the Fund;  expenses  related to the annual  audit of the Fund;  fees paid to the
Fund's  administrator;  custody and escrow expenses;  the costs of an errors and
omissions/directors and officers liability insurance policy and a fidelity bond;
the fee payable to the Adviser; fees and travel expenses of Managers;  all costs
and  charges  for  equipment  or  services  used  in  communicating  information
regarding the Fund's  transactions  among the Adviser and any custodian or other
agent engaged by the Fund; and any extraordinary expenses.

          6. The compensation provided to the Adviser pursuant to paragraph 3(a)
hereof shall be full  compensation for the services provided to the Fund and the
expenses assumed by the Adviser under this Agreement.

          7. The  Adviser  will  use its best  efforts  in the  supervision  and
management of the  investment  activities of the Fund and in providing  services
hereunder,  but  in  the  absence  of  willful  misfeasance,  bad  faith,  gross
negligence or reckless disregard of its obligations hereunder,  the Adviser, its
directors,  officers or employees and its affiliates,  successors or other legal
representatives (collectively, the "Affiliates") shall not be liable to the Fund
for any error of  judgment,  for any mistake of law,  for any act or omission by
the Adviser or any of the Affiliates or for any loss suffered by the Fund.

          8.  (a) The  Fund  shall  indemnify  the  Adviser  and its  directors,
officers  or  employees  and  their  respective  affiliates,  executors,  heirs,
assigns,  successors  or  other  legal  representatives  (each  an  "Indemnified
Person")  against any and all costs,  losses,  claims,  damages or  liabilities,
joint or several, including, without limitation,  reasonable attorneys' fees and
disbursements,  resulting in any way from the performance or  non-performance of
any Indemnified Person's duties with respect to the Fund, except those resulting
from the willful  malfeasance,  bad faith or gross  negligence of an Indemnified
Person or the Indemnified Person's reckless disregard of such duties, and in the
case of criminal  proceedings,  unless such  Indemnified  Person had  reasonable
cause to believe  its  actions  unlawful  (collectively,  "disabling  conduct").
Indemnification shall be made following: (i) a final decision on the merits by a
court or other body before which the proceeding was brought that the Indemnified
Person was not

                                 Exhibit 1 - 5



liable by reason of disabling conduct or (ii) a reasonable determination,  based
upon a review of the  facts and  reached  by (A) the vote of a  majority  of the
members of the Board (the  "Managers")  who are not parties to the proceeding or
(B) legal  counsel  selected  by a vote of a majority  of the Board in a written
advice,  that the Indemnified Person is entitled to  indemnification  hereunder.
The Fund shall  advance  to an  Indemnified  Person  (to the extent  that it has
available  assets and need not borrow to do so) reasonable  attorneys'  fees and
other costs and expenses  incurred in  connection  with defense of any action or
proceeding  arising  out of such  performance  or  non-performance.  The Adviser
agrees,  and each other Indemnified Person will agree as a condition to any such
advance, that in the event the Indemnified Person receives any such advance, the
Indemnified Person shall reimburse the Fund for such fees, costs and expenses to
the  extent  that it shall be  determined  that the  Indemnified  Person was not
entitled to indemnification under this paragraph 9.

              (b)  Notwithstanding  any of the  foregoing to the  contrary,  the
provisions  of this  paragraph  9 shall not be  construed  so as to relieve  the
Indemnified Person of, or provide indemnification with respect to, any liability
(including  liability  under  Federal  Securities  laws,  which,  under  certain
circumstances,  impose  liability  even on persons who act in good faith) to the
extent (but only to the extent) that such  liability may not be waived,  limited
or  modified  under  applicable  law or that  such  indemnification  would be in
violation of  applicable  law, but shall be  construed so as to  effectuate  the
provisions of this paragraph 9 to the fullest extent permitted by law.

          9. Nothing  contained in this  Agreement  shall prevent the Adviser or
any  affiliated  person of the  Adviser  from  acting as  investment  adviser or
manager for any other person,  firm or  corporation  and,  except as required by
applicable law (including  Rule 17j-1 under the 1940 Act),  shall not in any way
bind or restrict the Adviser or any such affiliated person from buying,  selling
or trading  any  securities  or  commodities  for their own  accounts or for the
account of others for whom they may be acting.  Nothing in this Agreement  shall
limit or restrict the right of any member, officer or employee of the Adviser to
engage in any other  business or to devote his or her time and attention in part
to the management or other aspects of any other business whether of a similar or
dissimilar nature.

          10. This Agreement  shall become  effective as of the date first noted
above, shall remain in effect for an initial term expiring two years thereafter,
and  shall  continue  in  effect  from  year to year  thereafter  provided  such
continuance  is  approved  at least  annually  by the vote of a majority  of the
outstanding  voting  securities  of the Fund, as defined by the 1940 Act and the
rules  thereunder,  or by the  Board;  and  provided  that in either  event such
continuance  is also  approved by a majority of the Managers who are not parties
to this  Agreement or  "interested  persons" (as defined by the 1940 Act and the
rules thereunder) of any such party (the "Independent  Managers"),  by vote cast
in person at a meeting  called for the purpose of voting on such  approval.  The
Fund may at any time,  without payment of any penalty,  terminate this Agreement
upon sixty days' prior written notice to the Adviser, either by majority vote of
the Board or by the vote of a majority of the outstanding  voting  securities of
the Fund (as defined by the 1940 Act and the rules thereunder).  The Adviser may
at any time,  without  payment of penalty,  terminate  this Agreement upon sixty
days' prior  written  notice to the Fund.  This  Agreement  shall  automatically
terminate in the event of its assignment (to the extent required by

                                 Exhibit 1 - 6



the 1940 Act and the rules thereunder)  unless such automatic  termination shall
be  prevented  by an  exemptive  order or rule of the  Securities  and  Exchange
Commission.

          11. Any  notice  under this  Agreement  shall be given in writing  and
shall be deemed to have been duly given when  delivered  by hand or facsimile or
five days after mailed by certified mail, post-paid, by return receipt requested
to the other party at the principal office of such party.

          12. This Agreement may be amended only by the written agreement of the
parties.  Any  amendment  shall be required to be approved by the Board and by a
majority  of the  Independent  Managers in  accordance  with the  provisions  of
Section 15(c) of the 1940 Act and the rules thereunder.  If required by the 1940
Act, any amendment shall also be required to be approved by such vote of members
of the Fund as is required by the 1940 Act and the rules thereunder.

          13. This Agreement  shall be construed in accordance  with the laws of
the State of North  Carolina and the  applicable  provisions of the 1940 Act. To
the  extent the  applicable  law of the State of North  Carolina,  or any of the
provisions herein,  conflict with the applicable provisions of the 1940 Act, the
latter shall control.

          14. The Fund  represents that this Agreement has been duly approved by
the Board,  including a majority of the  Independent  Managers,  and by the sole
initial member of the Fund, in accordance with the  requirements of the 1940 Act
and the rules thereunder.

          15. The parties to this  Agreement  agree that the  obligations of the
Fund under this Agreement shall not be binding upon any of the Managers, members
of the Fund or any  officers,  employees  or agents,  whether  past,  present or
future,  of the Fund,  individually,  but are  binding  only upon the assets and
property of the Fund.

          16. This Agreement embodies the entire understanding of the parties.

         {THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK}


                                 Exhibit 1 - 7




          IN WITNESS  WHEREOF,  the parties  hereto have  executed and delivered
this Agreement on the day and year first above written.


                                     EXCELSIOR DIRECTIONAL HEDGE FUND OF
                                     FUNDS, LLC



                                     By:
                                         -------------------------------------
Attest:                                  Name:
                                         Title:
-------------------------------------


                                     U.S. TRUST HEDGE FUND MANAGEMENT, INC.



                                     By: -------------------------------------
                                         Name:
                                         Title:



                                 Exhibit 1 - 8






                                    EXHIBIT 2

                             AUDIT COMMITTEE CHARTER

                 EXCELSIOR DIRECTIONAL HEDGE FUND OF FUNDS, LLC

                   June 3, 2003, as amended September 8, 2005

          This charter sets forth the purpose, authority and responsibilities of
the  Audit  Committee  of the  Board of  Managers  (the  "Board")  of  Excelsior
Directional  Hedge  Fund of  Funds,  LLC (the  "Company"),  a  Delaware  limited
liability company.

PURPOSES

          The Audit Committee of the Board (the "Committee") has, as its primary
purpose,  oversight  responsibility  with  respect  to: (a) the  adequacy of the
Company's accounting and financial reporting processes,  policies and practices;
(b) the  integrity of the Company's  financial  statements  and the  independent
audit  thereof;  (c) the adequacy of the  Company's  overall  system of internal
controls  and,  as  appropriate,   the  internal  controls  of  certain  service
providers;  (d) the  Company's  compliance  with  certain  legal and  regulatory
requirements;   (e)  determining  the  qualification  and  independence  of  the
Company's independent auditors; and (f) the Company's internal audit function.

AUTHORITY

          The  Committee has been duly  established  by the Board and shall have
the  resources  and authority  appropriate  to discharge  its  responsibilities,
including the authority to retain  counsel and other experts or  consultants  at
the expense of the Company.  The Committee has the authority and  responsibility
to retain and  terminate  the  Company's  independent  auditors.  In  connection
therewith,  the  Committee  must  evaluate  the  independence  of the  Company's
independent  auditors and receive the auditors'  specific  representations as to
their independence.

COMPOSITION AND TERM OF COMMITTEE MEMBERS

          The Committee shall be comprised of the Managers who are  "Independent
Managers,"  which  term shall mean each  Manager  (i) who is not an  "interested
person," as defined in the  Investment  Company Act of 1940, as amended,  of the
Company;  and (ii) who has not accepted  directly or indirectly any  consulting,
advisory,  or other  compensatory  fee from the  Company  (other  than  fees for
serving as a Manager or member of a Company's Audit  Committee).  The members of
the Committee  shall designate one member to serve as Chairman of the Committee,
with Mr. Gene M. Bernstein serving as the initial Chairman of the Committee.

          Each  member  of the  Committee  shall  serve  until  a  successor  is
appointed.

          The Board  shall  determine  whether  the  Committee  has at least one
member who is an "audit committee  financial  expert,"  ("ACFE") as such term is
defined in the rules  adopted  under  Section 407 of the  Sarbanes-Oxley  Act of
2002.  The  designation  of a person as an ACFE is not  intended  to impose  any
greater responsibility or liability on that person than the

                                 Exhibit 2 - 1



responsibility  and  liability  imposed  on  such  person  as a  member  of  the
Committee,  nor does it decrease the duties and  obligations of other  Committee
members or the Board.

MEETINGS

          The  Committee  shall meet on a regular  basis and no less  frequently
than  semi-annually.  Periodically,  the  Committee  shall meet to discuss  with
management the annual audited  financial  statements and  semi-annual  financial
statements.  Periodically, the Committee should meet separately with management,
the Company's administrator and independent auditors to discuss any matters that
the  Committee  or any of these  persons or firms  believe  should be  discussed
privately.  The  Committee  may request any officer or employee of the Company's
investment adviser or the Company's legal counsel (or counsel to the Independent
Managers  of the  Board) or  independent  auditors  to  attend a meeting  of the
Committee or to meet with any members of, or consultants to, the Committee.

          Minutes of each meeting will be taken and circulated to all members of
the Committee in a timely manner.

          Any action of the  Committee  requires  the vote of a majority  of the
Committee  members  present,  whether in person or otherwise,  at the meeting at
which such action is considered. At any meeting of the Committee, two members of
the Committee shall constitute a quorum for the purpose of taking any action.

DUTIES AND POWERS AND OF THE COMMITTEE

          The duties and powers of the  Committee  include,  but are not limited
to, the following:

          o    bear direct  responsibility  for the  appointment,  compensation,
               retention and oversight of the work of the Company's  independent
               auditors   (including   resolution   of   disagreements   between
               management and the auditor regarding financial reporting) for the
               purpose of  preparing  or issuing an audit  report or  performing
               other audit,  review or attest services for the Company,  and the
               independent auditors must report directly to the Committee;

          o    set the compensation of the independent auditors,  such amount to
               be paid by the Company;

          o    evaluate the independence of the Company's  independent  auditors
               and receive the auditors'  specific  representations  as to their
               independence;

          o    to the extent  required by applicable law,  pre-approve:  (i) all
               audit  and  non-audit  services  that the  Company's  independent
               auditors provide to the Company,  and (ii) all non-audit services
               that the Company's  independent auditors provide to the Company's
               investment adviser and any entity controlling,  controlled by, or
               under common  control with the  investment  adviser that provides
               ongoing  services  to  the  Company,  if the  engagement  relates
               directly  to  the  operations  and  financial  reporting  of  the
               Company;

          o    meet with the Company's independent  auditors,  including private
               meetings,  as  necessary to (i) review the  arrangements  for and
               scope of the annual audit and any special audits;

                                 Exhibit 2 - 2



               (ii)  discuss  any matters of concern  relating to the  Company's
               financial   statements,   including  any   adjustments   to  such
               statements  recommended by the auditors,  or other results of the
               audit;  (iii) consider the auditor's comments with respect to the
               Company's financial policies,  procedures and internal accounting
               controls and management's  responses thereto; and (iv) review the
               form of opinion the  auditors  propose to render to the  Managers
               and the members of the Company;

          o    review  reports  prepared by the Company's  independent  auditors
               detailing  the fees paid to the  Company's  independent  auditors
               for:  (i) audit  services  (includes  all  services  necessary to
               perform an audit,  services provided in connection with statutory
               and  regulatory   filings  or  engagements   and  other  services
               generally  provided  by  independent  auditors,  such as  comfort
               letters,   statutory  audits,   attest  services,   consents  and
               assistance   with,  and  review  of,  documents  filed  with  the
               Securities and Exchange  Commission  "SEC");  (ii)  audit-related
               services (covers assurance and due diligence services, including,
               employee  benefit plan audits,  due diligence  related to mergers
               and  acquisitions,  consultations  and audits in connection  with
               acquisitions,   internal   control   reviews  and   consultations
               concerning financial accounting and reporting  standards);  (iii)
               tax services  (services  performed by a professional staff in the
               accounting firm's tax division,  except those services related to
               the  audit,  including  tax  compliance,  tax  planning  and  tax
               advice); and (iv) other services (includes financial  information
               systems implementation and design);

          o    ensure  that  the  Company's  independent  auditors  prepare  and
               deliver  annually  to the  Committee  a  written  statement  (the
               "Auditors'  Statement")  describing:  (i) the auditors'  internal
               quality  control  procedures;  (ii) any material issues raised by
               the most recent internal quality control review or peer review of
               the auditors,  or by any inquiry or investigation by governmental
               or  professional  authorities  within  the  preceding  five years
               respecting  one or more  independent  audits  carried  our by the
               auditors,  and any steps taken to deal with any such issues;  and
               (iii) all relationships  between the independent auditors and the
               Company, including each non-audit service provided to the Company
               and the matters set forth in Independence Standards Board No. 1;

          o    receive and review a written report (or update, with respect to a
               semi-annual  filing),  as of a date 90 days or less  prior to the
               filing of the Company's annual (or  semi-annual)  report with the
               SEC, to the  Committee  from the Company's  independent  auditors
               regarding any: (i) critical  accounting policies to be used; (ii)
               alternative  accounting  treatments that have been discussed with
               the  Company's   management  along  with  a  description  of  the
               ramifications of the use of such  alternative  treatments and the
               treatment preferred by the independent  auditors;  (iii) material
               written  communications between the auditor and management of the
               Company;  and (iv) all non-audit  services provided to any entity
               in  the  Company's  investment  company  complex  that  were  not
               pre-approved by the Committee;

          o    oversee  the   Company's   internal   controls   and  annual  and
               semi-annual financial reporting process, including results of the
               annual audit.  Oversee internal  accounting  controls relating to
               the activities of the Company's custodian, investment adviser and
               administrator through the periodic review of reports, discussions
               with appropriate  officers and  consideration of reviews provided
               by internal audit staff;

                                 Exhibit 2 - 3



          o    meet  with the  Fund's  internal  auditors  (or  other  personnel
               responsible  for  the  internal  audit  function)   following  an
               internal  audit of the Company to discuss  significant  risks and
               exposures,  if any, to the Fund's risk  management  processes and
               system of internal  controls,  and the steps taken to monitor and
               minimize such risks;

          o    review of any issues  brought  to the  Committee's  attention  by
               independent auditors or the Company's management, including those
               relating  to any  deficiencies  in the  design  or  operation  of
               internal  controls  which could  adversely  affect the  Company's
               ability to record, process,  summarize and report financial data,
               any  material  weaknesses  in  internal  controls  and any fraud,
               whether  or not  material,  that  involves  management  or  other
               employees who have a significant  role in the Company's  internal
               controls;

          o    review  and  evaluate   the   qualifications,   performance   and
               independence  of the lead  partner of the  Company's  independent
               auditors;

          o    require the Company's independent auditors to report any instance
               of an  audit  partner  of those  auditors  earning  or  receiving
               compensation based on that partner procuring engagements with the
               Company to provide  any  services  other  than  audit,  review or
               attest services;

          o    resolve any  disagreements  between the Company's  management and
               independent   auditors   concerning   the   Company's   financial
               reporting;

          o    to the  extent  there are  Managers  who are not  members  of the
               Committee,  report its  activities to the full Board on a regular
               basis and make such recommendations with respect to the above and
               other matters as the Committee may deem necessary or appropriate;

          o    review the  Committee's  charter at least  annually and recommend
               any  material  changes  to the  Board;  and

          o    review  such  other matters as may be appropriately delegated to
               the Committee by the Board.

                                 Exhibit 2 - 4



                                    EXHIBIT 3

                 PLAN AND AGREEMENT OF REORGANIZATION AND MERGER

          This Plan and  Agreement of  Reorganization  and Merger (the "Plan" or
"Agreement")  is  made  and  entered  into  effective  as of  this  [__]  day of
[___________] 2007, by and among Excelsior Directional Hedge Fund of Funds, LLC,
a  Delaware  limited  liability   company   ("Directional   Fund"),   [Excelsior
Directional Hedge Fund of Funds (TI), LLC], a Delaware limited liability company
[("Directional  Feeder  Fund")] and [Excelsior  Directional  Hedge Fund of Funds
NewSub,  LLC],  a  Delaware  limited  liability  company  [("Directional  NewSub
Fund")](collectively, the "Funds").

          WHEREAS,  each of the Funds has its  registered  office in Delaware at
[615 South DuPont Highway,  Dover,  Delaware 19901] and has [National  Corporate
Research, Ltd.] as its registered agent for service of process in Delaware; and

          WHEREAS,  Directional Fund is registered under the Investment  Company
Act of 1940,  as amended (the "1940  Act"),  as a  non-diversified,  closed-end,
management investment company; and

          WHEREAS,  as of the  effective  date  of this  Agreement,  Directional
Feeder Fund is the sole member of Directional NewSub Fund and the sole owner  of
an interest therein; and

          WHEREAS,  Directional  Fund and Directional  Feeder Fund have the same
investment objective and have the substantially the same investment policies and
investment restrictions; and

          WHEREAS,  the Board of Managers of Directional Fund (the  "Directional
Fund  Board")  has  determined  that  it  would  be in  the  best  interests  of
Directional  Fund and its members to effect a  reorganization  in which  members
would invest in a new investment fund that would pursue its investment objective
by investing in Directional Fund; and

          WHEREAS, the Board of Managers of Directional Feeder Fund (the "Feeder
Fund  Board")  has  determined  that  it  would  be in  the  best  interests  of
Directional  Feeder Fund and its members to pursue the  investment  objective of
Directional  Feeder Fund by investing in another  investment  company having the
same investment  objective and  substantially  the same investment  policies and
investment restrictions as Directional Feeder Fund; and

          WHEREAS,  the  Directional  Fund Board and the Feeder  Fund Board have
made  the  findings  required  by  Rule  17a-8  under  the  1940  Act  that  the
participation by Directional Fund and Directional Feeder Fund, respectively,  in
the transactions  described in this Plan, is advisable and in the best interests
of its members, and that the interests of their respective existing members will
not be diluted as a result of such transactions; and

          WHEREAS,  the  Directional  Fund Board and the Feeder  Fund Board have
each approved this Agreement; and




          WHEREAS,  Section  18-209(b) of the Delaware Limited Liability Company
Act (the "DLLCA")  permits the merger of a Delaware  limited  liability  company
with and into another Delaware limited liability company; and

          WHEREAS,  the  Directional  Fund Board and the Feeder  Fund Board have
each  determined  that it would be desirable for  Directional  NewSub Fund to be
merged with and into Directional Fund, and in connection therewith,  for members
of Directional  Fund ("Members")  holding limited  liability  company  interests
("Interests")  in Directional  Fund to receive  Interests in Directional  Feeder
Fund in exchange for their  Interests in  Directional  Fund,  upon the terms and
conditions hereinafter set forth;

          NOW,  THEREFORE,  in  consideration  of the premises and of the mutual
agreements of the parties hereto, being thereunto duly entered into by and among
the Directional Fund,  Directional  Feeder Fund and Directional  NewSub Fund and
approved by  resolutions  adopted by the  Directional  Fund Board and the Feeder
Fund Board,  this Agreement and the terms and conditions  hereof and the mode of
carrying the same into effect, are hereby determined and agreed upon as follows:

          1. Pursuant to section  18-209(b) of the DLLCA,  Directional  Fund and
Directional NewSub Fund shall be merged with and into a single limited liability
company,  to wit Directional  Fund, which shall be the surviving  company of the
merger, and which is sometimes  hereinafter referred to as the "Surviving Fund,"
and which shall  continue to exist as the  surviving  company  under its present
name pursuant to the provisions of the DLLCA.  The merger shall become effective
at the time and on the date of the filing by the Surviving Fund of a Certificate
of Merger with the Secretary of State of the State of Delaware  (the  "Secretary
of State) under the applicable  requirements of Delaware law, or such later time
and date as may be set  forth  in the  Certificate  of  Merger  (the  "Effective
Time").  The separate  existence of  Directional  NewSub Fund shall cease at the
Effective  Time in  accordance  with  the  provisions  of the  DLLCA.  Upon  the
effectiveness of the merger, all of the assets, rights, privileges and powers of
Directional Fund and of Directional NewSub Fund, and all property of Directional
Fund and of Directional  NewSub Fund, and all debts due to Directional  Fund and
to  Directional  NewSub  Fund,  as well as all other things and causes of action
belonging to each of  Directional  Fund and  Directional  NewSub Fund,  shall be
vested in the Surviving Fund.

          2. Prior to the Effective Time,  Directional  Fund shall have received
an  opinion  from  counsel  to  Directional   Fund  that   consummation  of  the
transactions  contemplated  by this  Agreement  should not be a taxable event to
Directional Fund, Directional Feeder Fund or the Members.

          3. Prior to the Effective Time, each of Directional Fund,  Directional
Feeder Fund and Directional  NewSub Fund will be registered  under the 1940 Act,
as a non-diversified, closed-end, management investment company.

          4. At the Effective  Time, and as an inducement to Directional  Fund's
willingness to enter into this  Agreement,  Directional  Feeder Fund shall issue
Interests  in  Directional  Feeder Fund  ("Feeder  Fund  Interests")  to Members
holding  Interests in Directional Fund at the Effective Time in exchange for and
in cancellation of the Interests of such

                                 Exhibit 3 - 2



Members in Directional  Fund.  The Feeder Fund  Interests  issued to each Member
shall have a value equal to the value of such Member's  Interest in  Directional
Fund determined as of the last  determination  of the values of capital accounts
of Members in Directional Fund as of or prior to the Effective Time.

          5.  Annexed  hereto  and made a part  hereof is a copy of the  Limited
Liability  Company Agreement ("LLC Agreement") of the Surviving Fund as the same
shall be in force and effect at the Effective Time, and said LLC Agreement shall
continue to be the LLC Agreement of the Surviving Fund until amended and changed
pursuant to the  provisions  of such LLC  Agreement  and the  provisions  of the
DLLCA.

          6. The name of the  Surviving  Fund  shall be  "Excelsior  Directional
Hedge Fund of Funds Master Fund, LLC".

          7. As the  Surviving  Fund,  Directional  Fund  shall  retain  written
records that  describe the merger as required by paragraph  (a)(5) of Rule 17a-8
under the 1940 Act, and the determinations of the Directional Fund Board and the
Feeder Fund Board and the bases thereof, including the factors considered by the
Directional Fund Board and the Feeder Fund Board, shall be recorded fully in the
minute books of the Surviving Fund and Directional Feeder Fund, respectively.

          8. The members of the Board of Managers  and  officers of  Directional
Fund at the  Effective  Time shall be the members of the Board of  Managers  and
officers  of the  Surviving  Fund,  all of  whom  shall  hold  their  respective
positions  until  the  due  election  and   qualification  of  their  respective
successors or until their tenure is otherwise  terminated in accordance with the
LLC Agreement of the Surviving Fund.

          9. As soon as  practicable  after the Effective  Time,  the Surviving
Fund shall on behalf of  Directional  NewSub Fund file an  application  with the
Securities and Exchange  Commission pursuant to Section 8(f) of the 1940 Act for
an order declaring that  Directional  NewSub Fund has ceased to be an investment
company.

          10. Consummation of the merger and other transactions  contemplated by
this Agreement is subject to the condition  that this agreement  shall have been
approved by Members and by  Directional  Feeder  Fund,  as the sole holder of an
Interest in Directional NewSub Fund.

          11. In the event that this Agreement shall have been duly approved and
adopted as set forth in Section 10 above,  the  parties  hereto  agree that they
will cause to be executed  and filed and  recorded  any  document  or  documents
prescribed  by the laws of the State of Delaware  and that they will cause to be
performed  all  necessary  acts within the State of Delaware  and  elsewhere  to
effectuate the merger and reorganization herein provided for.

                                 Exhibit 3 - 3



          12.  The  Directional  Fund  Board and the  Feeder  Fund Board and the
proper  officers  of  Directional  Fund and  Directional  Feeder Fund are hereby
authorized,  empowered,  and directed to do any and all acts and things,  and to
make,  execute,  deliver,  file, and record any and all instruments,  papers and
documents which shall be or become necessary, proper, or convenient to carry out
or put into effect any of the  provisions of this Agreement or of the merger and
reorganization herein provided for.

          13.  Notwithstanding the full approval and adoption of this Agreement,
this Agreement and the transactions contemplated hereby may be terminated at any
time prior to the filing of the  Certificate  of Merger  with the  Secretary  of
State by the  Directional  Fund Board or by the  Feeder  Fund Board in the event
that such Board of Managers determines that the merger and reorganization herein
provided  for  is no  longer  in the  best  interests  of  Directional  Fund  or
Directional Feeder Fund, respectively.


         {THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK}


                                 Exhibit 3 - 4




          IN WITNESS  WHEREOF,  the  parties  hereto  have  caused this Plan and
Agreement of  Reorganization  and Merger to be duly executed and delivered as of
the date first above written.

                       Excelsior Directional Hedge Fund of Funds, LLC


                        By:
                            -------------------------------------
                        Name
                        Title



                        [Excelsior Directional Hedge Fund of Funds (TI), LLC]


                        By:
                            -------------------------------------
                        Name
                        Title


                    [Excelsior Directional Hedge Fund of Funds NewSub, LLC]


                        By:
                            -------------------------------------
                        Name
                        Title


                                 Exhibit 3 - 5



PROXY TABULATOR
P.O. BOX 9112
FARMINGDALE, NY 11735





                                                                                     
TO VOTE BY INTERNET                           TO VOTE BY TELEPHONE                         TO VOTE BY MAIL
O Read the Proxy Statement and have           O Read the Proxy Statement and have          O Read the Proxy Statement
  this card at hand                             this card at hand                          O Check the appropriate boxes on this
O Log on to WWW.PROXYWEB.COM                  O Call toll-free at 1-888-221-0697             proxy card
O Follow the on-screen instructions           O Follow the recorded instructions           O Sign, date and return this proxy card
O Do NOT mail this proxy card                 O Do NOT mail this proxy card                O Mail your completed proxy card in the
                                                                                             enclosed envelope


                 PLEASE DO NOT VOTE USING MORE THAN ONE METHOD
       DO NOT MAIL YOUR PROXY CARD IF YOU VOTE BY INTERNET OR TELEPHONE.





                 EXCELSIOR DIRECTIONAL HEDGE FUND OF FUNDS, LLC


                        PROXY SOLICITED ON BEHALF OF THE
                            BOARD OF MANAGERS FOR THE
             SPECIAL MEETING OF MEMBERS TO BE HELD ON MARCH 29, 2007


The  undersigned  hereby  appoints  Ralph A.  Pastore and Robert F.  Aufenanger,
jointly and severally, as proxies ("Proxies"), with full power to appoint one or
more  substitutes,  and hereby  authorizes  them to  represent  and to vote,  as
designated below, the interest in Excelsior Directional Hedge Fund of Funds, LLC
(the  "Fund")  held of record by the  undersigned  on  January  12,  2007 at the
Special Meeting (the "Meeting") of Members of the Fund to be held at the offices
of United  States  Trust  Company,  National  Association,  225 High Ridge Road,
Stamford,  Connecticut  06905 on March 29, 2007 at 11:00 a.m.  (Eastern Standard
time)  and at any  and  all  adjournments  thereof,  with  all  the  powers  the
undersigned  would  possess if personally  present at such  Meeting,  and hereby
revokes any proxies that may previously have been given by the undersigned  with
respect to the interest in the Fund covered hereby. I acknowledge receipt of the
Notice of Special  Meeting of Members and the Proxy Statement dated February 23,
2007.

ONLY PROPERLY-EXECUTED  PROXIES RECEIVED BEFORE THE MEETING WILL BE VOTED AT THE
MEETING OR ANY ADJOURNMENT THEREOF.


                                                         Date
                                                              ------------------


               Signature(s) (Title(s), if applicable)          (SIGN IN THE BOX)
               -----------------------------------------------------------------
               |                                                               |
               |                                                               |
               |                                                               |
               -----------------------------------------------------------------
              PLEASE DATE AND SIGN  EXACTLY AS NAME  APPEARS ON THIS PROXY CARD.
              INDIVIDUALS,  JOINT TENANTS AND IRA INVESTORS, PLEASE SIGN EXACTLY
              AS NAME  APPEARS  ON THIS  PROXY  CARD.  WITH  RESPECT  TO  ENTITY
              INVESTORS,  EACH  PERSON  REQUIRED  TO SIGN  UNDER THE  INVESTOR'S
              GOVERNING   DOCUMENTS   MUST  SIGN.   EXECUTORS,   ADMINISTRATORS,
              TRUSTEES,  ETC.  SHOULD  GIVE THEIR FULL  TITLE.  IF MORE THAN ONE
              AUTHORIZED  SIGNATORY IS REQUIRED,  EACH SIGNATORY SHOULD SIGN. IF
              INTERESTS IN THE FUND ARE HELD JOINTLY, EACH HOLDER SHOULD SIGN.

                                                                      rv-edh-f R



If this  proxy is  properly  executed  and  received  by the  Fund  prior to the
Meeting,  the  interests  in the Fund  represented  hereby  will be voted in the
manner directed on this proxy card. IF NO DIRECTIONS ARE GIVEN,  THIS PROXY WILL
BE VOTED "FOR"  PROPOSAL 1 AND PROPOSAL 3 AND "FOR ALL" NOMINEES FOR ELECTION AS
MANAGERS.

                            PLEASE  FILL IN BOX(ES) AS SHOWN USING BLACK OR BLUE
                            INK OR  NUMBER 2 PENCIL.  X
                            PLEASE DO NOT USE FINE POINT PENS.



The Board of Managers recommends a vote "FOR" Proposal 1 and Proposal 3 and "FOR
ALL" of the nominees.



                                                                                          
                                                                                FOR     AGAINST    ABSTAIN
1. APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENT                                 !         !          !

                                                                                FOR     WITHHOLD   FOR ALL
                                                                                ALL     AUTHORITY  EXCEPT*
2. ELECTION OF MANAGERS

   NOMINEES: (01) David R. Bailin       (03) Victor F. Imbimbo, Jr.
             (02) Gene M. Bernstein     (04) Stephen V. Murphy
                                                                                 !         !          !

* To  withhold  authority  to vote  for any  individual,  mark  the box "FOR
ALL EXCEPT" and write the Nominee's number on the line below.

--------------------------------------------------------------------------------

                                                                                FOR     AGAINST    ABSTAIN
3. APPROVAL OF REORGANIZATION OF THE FUND                                        !         !          !

4. IN THEIR  DISCRETION  ON SUCH OTHER  BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.



        PLEASE MARK, SIGN AND DATE AND RETURN THIS PROXY CARD PROMPTLY,
                          USING THE ENCLOSED ENVELOPE.