UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-21685
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Hatteras Multi-Strategy Fund I, L.P.
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(Exact name of registrant as specified in charter)
8816 Six Forks Road, Suite 107
Raleigh, North Carolina 27615
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(Address of principal executive offices) (Zip code)
David B. Perkins
8816 Six Forks Road, Suite 107
Raleigh, North Carolina 27615
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(Name and address of agent for service)
registrant's telephone number, including area code: (919) 846-2324
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Date of fiscal year end: March 31
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Date of reporting period: March 31, 2006
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
HATTERAS MULTI-STRATEGY FUND I, L.P.
FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31, 2006
HATTERAS MULTI-STRATEGY FUND I, L.P.
FOR THE YEAR ENDED MARCH 31, 2006
TABLE OF CONTENTS
Report of Independent Registered Public Accounting Firm..................... 1
Statement of Financial Condition............................................ 2
Statement of Operations..................................................... 3
Statement of Changes in Partners' Capital................................... 4
Statement of Cash Flows..................................................... 5
Notes to Financial Statements............................................... 6
Board of Directors' (unaudited)............................................. 12
Fund Management (unaudited)................................................. 13
Other Information (unaudited) .............................................. 14
Financial Statements of Hatteras Master Fund, L.P. ......................... I
[GRAPHIC OMITTED]
DELOITTE(C)
DELOITTE & TOUCHE LLP
1700 Market Street
Philadelphia, PA 19103-3984
USA
Tel: +1 215 246 2300
Fax: +1 215 569 2441
www.deloitte.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Partners of
Hatteras Multi-Strategy Fund I, L.P.:
We have audited the accompanying statement of financial condition of Hatteras
Multi-Strategy Fund I, L.P. (the "Fund") as of March 31, 2006, and the related
statements of operations, changes in partners' capital, and cash flows for the
year then ended. These financial statements are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
The Fund is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audit included consideration
of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Fund as of March 31, 2006,
and the results of its operations, changes in partners' capital, and its cash
flows for the year then ended in conformity with accounting principles generally
accepted in the United States of America.
/s/ DELOITTE & TOUCHE LLP
May 26, 2006
Member of
DELOITTE TOUCHE TOHMATSU
HATTERAS MULTI-STRATEGY FUND I, L.P.
STATEMENT OF FINANCIAL CONDITION - MARCH 31, 2006
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ASSETS
Investment in Hatteras Master Fund, L.P., at fair value (cost $39,516,519) $42,203,491
Cash and cash equivalents 100,000
Investment in Hatteras Master Fund, L.P. paid in advance 12,619,865
Interest receivable 342
Due from Investment Manager 10,207
Prepaid registration fees 6,081
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TOTAL ASSETS $54,939,986
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LIABILITIES AND PARTNERS' CAPITAL
Contributions received in advance 12,621,000
Withdrawals payable 8,087
Professional fees payable 31,500
Servicing fees payable 26,433
Accounting and administration fees payable 1,800
Custodian fees payable 1,276
Investor servicing fees payable 4,017
Due to affiliates 1,625
Other accrued expenses 5,600
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TOTAL LIABILITIES 12,701,338
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PARTNERS' CAPITAL $42,238,648
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TOTAL LIABILITIES AND PARTNERS' CAPITAL $54,939,986
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See Notes to Financial Statements
2
HATTERAS MULTI-STRATEGY FUND I, L.P.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2006
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NET INVESTMENT LOSS ALLOCATED FROM HATTERAS MASTER FUND, L.P.
Dividends $ 39,792
Interest 9,206
Interest expense (6,785)
Other expenses (248,887)
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NET INVESTMENT LOSS ALLOCATED FROM HATTERAS MASTER FUND, L.P. (206,674)
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FUND INVESTMENT INCOME
Interest 5,383
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OPERATING EXPENSES
Servicing fees 127,505
Professional fees 51,665
Organization expense 47,704
Registration fees 43,000
Investor servicing fees 11,650
Accounting and administration fees 10,800
Custodian fees 7,762
Other expenses 12,660
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TOTAL OPERATING EXPENSES 312,746
Reimbursement from investment manager (70,914)
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NET OPERATING EXPENSES 241,832
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NET INVESTMENT LOSS (443,123)
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NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ALLOCATED FROM
HATTERAS MASTER FUND, L.P.
Net realized loss on investments (22,066)
Net unrealized appreciation on investments 2,915,712
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NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS ALLOCATED FROM
HATTERAS MASTER FUND, L.P. 2,893,646
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NET INCREASE IN PARTNERS' CAPITAL RESULTING FROM OPERATIONS $2,450,523
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See Notes to Financial Statements
3
HATTERAS MULTI-STRATEGY FUND I, L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEAR ENDED MARCH 31, 2006
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GENERAL LIMITED TOTAL
PARTNER'S PARTNERS' PARTNERS'
CAPITAL CAPITAL CAPITAL
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PARTNERS' CAPITAL, BEGINNING OF YEAR $ -- $ -- $ --
Capital contributions -- 39,869,000 39,869,000
Capital withdrawals (80,875) -- (80,875)
Net investment loss -- (443,123) (443,123)
Net realized loss on investments -- (22,066) (22,066)
Net unrealized appreciation on investments -- 2,915,712 2,915,712
Actual performance allocation from April 1, 2005
to December 31, 2005 80,875 (80,875) --
Accrued performance allocation from January 1, 2006
to March 31, 2006 116,833 (116,833) --
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PARTNERS' CAPITAL, END OF YEAR $116,833 $42,121,815 $42,238,648
=================================================
See Notes to Financial Statements
4
HATTERAS MULTI-STRATEGY FUND I, L.P.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED MARCH 31, 2006
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net increase in partners' capital resulting from operations $ 2,450,523
Adjustments to reconcile net increase in partners' capital from
investment operations to net cash used for operating activites:
Purchases of interests in Hatteras Master Fund, L.P. (52,136,384)
Net investment gain allocated from Hatteras Master Fund, L.P. (2,686,972)
Interest receivable (342)
Due from Investment Manager (10,207)
Prepaid registration fees (6,081)
Professional fees payable 31,500
Servicing fees payable 26,433
Accounting and administration fees payable 1,800
Custodian fees payable 1,276
Investor servicing fees payable 4,017
Due to affiliates 1,625
Other accrued expenses 5,600
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NET CASH USED IN OPERATING ACTIVITIES (52,317,212)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contributions (including contributions received in advance) 52,490,000
Capital withdrawals (including withdrawals payable) (72,788)
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NET CASH PROVIDED BY FINANCING ACTIVITIES 52,417,212
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Net change in cash and cash equivalents 100,000
Cash and cash equivalents at beginning of year --
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Cash and cash equivalents at end of year $ 100,000
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See Notes to Financial Statements
5
HATTERAS MULTI-STRATEGY FUND I, L.P.
NOTES TO FINANCIAL STATEMENTS -MARCH 31, 2006
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1. ORGANIZATION
Hatteras Multi-Strategy Fund I, L.P. (the "Fund") was organized as a
limited partnership under the laws of the State of Delaware on November 23,
2004 and commenced operations on April 1, 2005. The Fund is registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as a
closed-end, non-diversified, management investment company. The Fund's
investment objective is to generate consistent long-term appreciation and
returns across all market cycles. To achieve its objective, the Fund
provides its investors with access to a broad range of investment
strategies and asset categories, trading advisors ("Advisors") and overall
asset allocation services typically available on a collective basis to
larger institutions through an investment of substantially all of its
assets into Hatteras Master Fund, L.P., a Delaware limited partnership (the
"Master Fund"), which is also registered under the 1940 Act. The Master
Fund is managed by Hatteras Investment Partners, LLC (the "Investment
Manager"), a Delaware limited liability company registered as an investment
adviser under the Investment Advisers Act of 1940, as amended. Investors
who acquire interests in the Fund ("Interests") are the Limited Partners
(each, a "Limited Partner" and together, the "Limited Partners") of the
Fund.
Hatteras Investment Management, LLC, a Delaware limited liability company,
serves as the General Partner of the Fund ("General Partner"). The General
Partner has appointed a Board of Directors ("Board") and, to the fullest
extent permitted by applicable law, has irrevocably delegated to the Board
its rights and powers to monitor and oversee the business affairs of the
Fund, including the complete and exclusive authority to oversee and
establish policies regarding the management, conduct and operation of the
Fund's business.
The percentage of the Master Fund's beneficial interests owned by the Fund
at March 31, 2006, was 19.77%.
2. SIGNIFICANT ACCOUNTING POLICIES
These financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America and are
expressed in United States dollars. The following is a summary of
significant accounting and reporting policies used in preparing the
financial statements.
A. VALUATION
Valuation of the Fund's interest in the Master Fund is based on the
investment in underlying securities held by the Master Fund. The Master
Fund will value interests in the Underlying Funds (as defined in attached
Master Fund financial statements) at fair value, which ordinarily will be
the value determined by their respective investment managers, in accordance
with procedures established by the Board. The accounting policies of the
Master Fund, including the valuation of securities held by the Master Fund,
will directly affect the Fund and are discussed in the Notes to Financial
Statements of the Master Fund which are included elsewhere in this report.
6
HATTERAS MULTI-STRATEGY FUND I, L.P.
NOTES TO FINANCIAL STATEMENTS -MARCH 31, 2006 (CONTINUED)
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B. ALLOCATIONS FROM THE MASTER FUND
As required by accounting principles generally accepted in the United
States of America, the Fund records its allocated portion of income,
expense, realized gains and losses and unrealized gains and losses from the
Master Fund.
C. FUND LEVEL INCOME AND EXPENSES
Interest income on any cash or cash equivalents held by a Fund and not
invested into the Master Fund will be recognized on an accrual basis.
Expenses that are specifically attributed to the Fund are charged to the
Fund. In addition, the Fund also bears its proportionate share of the
expenses of the Master Fund. Because the Fund bears its proportionate share
of the management fees of the Master Fund, the Fund does not pay any
additional compensation directly to the Investment Manager.
D. TAX BASIS REPORTING
Because the Master Fund invests primarily in investment funds that are
treated as partnerships for U.S. Federal tax purposes, the tax character of
the Fund's allocated earnings is established dependent upon the tax filings
of the investor partnerships. Accordingly, the tax basis of these allocated
earnings and the related balances are not available as of the reporting
date.
E. CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes amounts held in interest bearing
overnight accounts. At March 31, 2006, the Fund held $100,000 in an
interest bearing cash account at PNC Bank.
F. USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported
amounts of income and expenses during the reported period. Actual results
could differ from those estimates.
3. ALLOCATION OF LIMITED PARTNERS' CAPITAL
Net profits or net losses of the Fund for each Allocation Period
("Allocation Period") will be allocated among and credited to or debited
against the capital accounts of the Limited Partners. Net profits or net
losses will be measured as the net change in the value of the net assets of
the Fund, including any net change in unrealized appreciation or
depreciation of investments and realized income and gains or losses and
expenses during an allocation period, adjusted to exclude any items to be
allocated among the capital accounts of the Limited Partners other than in
accordance with the Limited Partners' respective investment percentages.
7
HATTERAS MULTI-STRATEGY FUND I, L.P.
NOTES TO FINANCIAL STATEMENTS -MARCH 31, 2006 (CONTINUED)
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3. ALLOCATION OF LIMITED PARTNERS' CAPITAL (CONTINUED)
Allocation Periods begin on the day after the last day of the preceding
Allocation Period and end at the close of business on (1) the last day of
each month; (2) the last day of each taxable year; (3) the day preceding
each day on which interests are purchased; (4) the day on which interests
are repurchased; or (5) the day on which any amount is credited to or
debited from the capital account of any Limited Partner other than an
amount to be credited to or debited from the capital accounts of all
Limited Partners in accordance with their respective investment percentages
in the Master Fund.
The Fund will maintain a separate capital account ("Capital Account") on
its books for each Limited Partner. Each Limited Partner's capital account
will have an opening balance equal to the Limited Partner's initial
contribution to the capital of the Fund (i.e., the amount of the investment
less any applicable sales load), and thereafter, will be (i) increased by
the amount of any additional capital contributions by such Limited Partner;
(ii) decreased for any payments upon repurchase or in redemption of such
Limited Partner's interest or any distributions in respect of such Limited
Partner; and (iii) increased or decreased as of the close of each
Allocation Period by such Limited Partner's allocable share of the net
profits or net losses of the Fund.
4. RELATED PARTY TRANSACTIONS AND OTHER
In consideration for investor services, the Fund will pay Hatteras
Investment Partners, LLC (in such capacity, the "Servicing Agent") an
investor servicing fee at the annual rate of 0.75% of the net asset value
of the interests beneficially owned by customers of the Servicing Agent or
any service provider who has entered into a service provider agreement with
the Servicing Agent. The investor servicing fees payable to the Servicing
Agent will be borne by all Limited Partners of the Fund on a pro-rata
basis. The Servicing Agent may waive (to all investors on a pro-rata basis)
or pay to third parties all or a portion of any such fees in its sole
discretion.
The Fund paid a Servicing Fee for the period April 1, 2005 through June 30,
2005, based on the net asset value of each Partners' Capital Accounts as of
the last business day of each fiscal quarter. Effective July 1, 2005, the
Servicing Fee computation has been changed to the aggregate value of
outstanding interests held by Limited Partners of the Fund on the last day
of the month (before repurchase of interests or performance allocation).
The Investment Manager has contractually agreed to reimburse certain
expenses for the period November 1, 2005 through April 1, 2007, so that the
total annual expenses for this period will not exceed 2.35% for the Fund
(the "Expense Limitation"). The Fund will carry forward, for a period not
to exceed (3) three years from the date on which a reimbursement is made by
the Investment Manager, any expenses in excess of the expense limitation
and repay the Investment Manager such amounts, provided the Fund is able to
effect such reimbursement and remain in compliance with the expense
limitation disclosed in the effective confidential memorandum. As of March
31, 2006, the Fund has carried forward expenses of $70,914 which will begin
to expire on March 31, 2009.
8
HATTERAS MULTI-STRATEGY FUND I, L.P.
NOTES TO FINANCIAL STATEMENTS -MARCH 31, 2006 (CONTINUED)
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4. RELATED PARTY TRANSACTIONS AND OTHER (CONTINUED)
The General Partner generally receives an annual performance based
allocation (the "Performance Allocation") with respect to the Capital
Account of each Limited Partner. The Performance Allocation is calculated
generally as of the end of each calendar year. The Performance Allocation
with respect to a Limited Partner's Capital Account is equal to 10% of the
amount by which the excess, if any, of net profit over net loss allocated
to such Limited Partner for the calendar year exceeds (a) any Loss
Carryforward Amount (as defined below) for such Limited Partner plus (b)
the non-cumulative "hurdle amount" (an annualized return on the Capital
Account balance of such Limited Partner as of the last day of the preceding
calendar year at a rate equal to the yield to maturity of the 90-day United
States Treasury Bill as reported by the Wall Street Journal on the last day
of the preceding calendar year). The Performance Allocation with respect to
each applicable Limited Partner's Capital Account shall be deducted from
such Capital Account and allocated to the Capital Account of the General
Partner. If at the end of any calendar year, the Net Losses allocated to a
Limited Partner's Capital Account exceed the Net Profits so allocated, then
a Loss Carryforward Amount shall be established for that Limited Partner.
No Performance Allocation shall be deducted from the Capital Account of any
Limited Partner unless the excess of net profits over net losses
subsequently allocated exceeds any Loss Carryforward Amount for that
Limited Partner. If a Limited Partner withdraws completely from the Fund
other than at the end of a calendar year, a Performance Allocation shall be
made with respect to such Limited Partner's Capital Account as of the date
of complete withdrawal as if such date were the end of a calendar year and
the hurdle amount will be pro rated.
For financial statement purposes, the Master Fund accelerated the
amortization of organization expense at March 31, 2005 in conformity of
accounting principles generally accepted in the United States of America.
The organization expense was allocated to affiliated feeder funds at that
time which the feeder funds absorbed the Fund's proportional allocation of
the Master Fund's organization expense. As of March 31, 2006, the Fund owes
the affiliate feeder funds $1,625 for reimbursement of organization expense
allocated from the Master Fund.
PFPC Inc. serves as administrator, accounting and investor servicing agent
to the Fund and provides certain accounting, recordkeeping and investor
related services. PFPC Trust Company provides custodial services to the
Fund.
5. FEDERAL INCOME TAXES
For Federal income tax purposes, the Fund is treated as a partnership, and
each partner in the Fund is treated as the owner of its proportionate share
of the net assets, income, expenses, and the realized and unrealized gains
(losses) of the Fund. Accordingly, no federal, state or local income taxes
have been provided on profits of the Fund since the partners are
individually liable for the taxes on their share of the Fund's income.
9
HATTERAS MULTI-STRATEGY FUND I, L.P.
NOTES TO FINANCIAL STATEMENTS -MARCH 31, 2006 (CONTINUED)
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6. RISK FACTORS
An investment in the Fund involves significant risks that should be
carefully considered prior to investment and should only be considered by
persons financially able to maintain their investment and who can afford a
loss of a substantial part or all of such investment. The Master Fund
intends to invest substantially all of its available capital in securities
of private investment companies. These investments will generally be
restricted securities that are subject to substantial holding periods or
are not traded in public markets at all, so that the Master Fund may not be
able to resell some of its securities holdings for extended periods, which
may be several years. No guarantee or representation is made that the
investment objective will be met.
7. REPURCHASE OF PARTNERS' INTERESTS
The Fund intends to conduct quarterly repurchase offers for the redemption
of the Interests at their net asset value determined as of approximately
March 31, June 30, September 30 and December 31 of each year beginning
March 31, 2006 (each such date, a "Valuation Date"). A Limited Partner may
participate in a repurchase offer only after 12 consecutive months as
Limited Partner in the Fund. However, the General Partner retains the
discretion to approve such repurchase offers and, therefore, there are no
assurances that the General Partner will, in fact, decide to undertake any
redemption offer. The General Partner may also permit redemptions at other
times, in its sole discretion.
The Fund does not intend to distribute to the Limited Partners any of the
Fund's income, but intends to reinvest substantially all income and gains
allocable to the Limited Partners. A Limited Partner may therefore be
allocated taxable income and gains and not receive any cash distribution.
8. INDEMNIFICATION
In the normal course of business, the Fund enters into contracts that
provide general indemnifications. The Fund's maximum exposure under these
agreements is dependent on future claims that may be made against the Fund,
and therefore cannot be established; however, based on experience, the risk
of loss from such claims is considered remote.
9. FINANCIAL HIGHLIGHTS
The financial highlights are intended to help you understand the Fund's
financial performance for the past period. The total returns in the table
represent the rate that a Limited Partner would be expected to have earned
or lost on an investment in the Fund.
The ratios and total return amounts are calculated based on the Limited
Partner group taken as a whole. The General Partner's interest is excluded
from the calculations. An individual Limited Partner's ratios or returns
may vary from the table below based on performance arrangements and the
timing of capital transactions.
The ratios are calculated by dividing total dollars of income or expenses
as applicable by the average of total monthly Limited Partners' capital.
The ratios include the Fund's proportionate share of the Master Fund's
income and expenses.
10
HATTERAS MULTI-STRATEGY FUND I, L.P.
NOTES TO FINANCIAL STATEMENTS -MARCH 31, 2006 (CONCLUDED)
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9. FINANCIAL HIGHLIGHTS (CONTINUED)
Total return amounts are calculated by geometrically linking returns based
on the change in value during each accounting period.
FOR THE YEAR ENDED
MARCH 31, 2006
--------------
Total return amortizing organizational expenses
and before Performance Allocation* 11.72%
Organization expense (1.17)%
Performance Allocation (0.09)%
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Total return after expensing organizational expenses and Performance Allocation 10.46%
=====
Partners' capital, end of year (000) $42,239
Portfolio Turnover 0.00%
Net investment loss before Performance Allocation (2.79)%
Operating expenses, excluding expense reimbursement and Performance Allocation 3.58%
Performance Allocation 1.24%
-----
Total expense and Performance Allocation before expense reimbursement 4.82%
Expense reimbursement (0.45)%
-----
Net expenses 4.37%
=====
<FN>
*RETURN IS INDICATIVE OF AMORTIZING ORGANIZATIONAL EXPENSES OVER 60 MONTHS FOR TAX PURPOSES.
</FN>
10. SUBSEQUENT EVENTS
During the period from April 1, 2006 through May 1, 2006, the Fund received
$19,427,200 of capital contributions.
11
HATTERAS MULTI-STRATEGY FUND I, L.P.
BOARD OF DIRECTORS (UNAUDITED)
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The identity of the Board Members and brief biographical information is set
forth below.
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Number of
Portfolios in
Fund Complex
Position(s) Term of Office; Overseen by
Held with Length of Time Principal Occupation(s) During Past 5 Years Director or
Name, Address & Age the Fund Served and Other Directorships Held by Director Officer
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INTERESTED DIRECTORS
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David B. Perkins, 43 Chief Executive 3 year term; Mr. Perkins has been Chairman and CEO since 3
1000 Watermeet Lane Officer and Since Inception inception of the Funds. Mr. Perkins became the
Raleigh, NC 27614 Chairman of the President and Managing Principal of the Investment
Board of Manager in September 2003 and became the co-founder
Directors and Managing Partner of CapFinancial Partners, LLC
in April 2003. Prior to that, he was Managing
Partner at Wachovia Securities Financial Network,
Inc. from June 2002 to September 2003 and Managing
Principal of CapTrust Financial Advisors, LLC from
October 1997 to June 2002.
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INDEPENDENT DIRECTORS
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Steve E. Moss, 52 Director: 3 year term; Mr. Moss has been a member of HMKCT Properties, LLC 3
918 Meadow Lane Chairman of the Since December since January 1996
Henderson, NC 27536 Audit Committee 2004
- ----------------------------------------------------------------------------------------------------------------------------------
H. Alexander Holmes, 63 Director: 3 year term; Mr. Holmes founded Holmes Advisory Services, LLC, a 3
3408 Landor Road Audit Since December financial consultation firm, in 1993
Raleigh, NC 27609 Committee Member 2004
- ----------------------------------------------------------------------------------------------------------------------------------
George Y. Ragsdale II*, 40 Director: 3 year term; Mr. Ragsdale has been Investment Research Director 3
111 Radio Circle Audit Committee Since February at Kisco Management Co. since November 1999.
Mount Kisco, NY 10546 Member 2005
- ----------------------------------------------------------------------------------------------------------------------------------
Gregory S. Sellers, 46 Director: Audit 3 year term; Mr. Sellers became the Chief Financial Officer and a 3
2643 Steeplechase Road Committee Member Since December director of Kings Plush, Inc., a fabric
Gastonia, NC 28056 2004 manufacturer, in April 2003. Prior to that, he was
the Vice President of Finance at Parksdale Mills,
Inc., a cotton and cotton blend yarns producer, from
January 1991 to April 2003.
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<FN>
*Mr. Ragsdale resigned his position as a Director of the Fund effective April 12, 2006.
</FN>
12
HATTERAS MULTI-STRATEGY FUND I, L.P.
FUND MANAGEMENT (UNAUDITED)
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Set forth below is the name, age, position with the Fund, length of term of
office, and the principal occupation for the last five years of each of the
persons currently serving as Executive Officers of the Fund. Unless otherwise
noted, the business address of each officer is 8816 Six Forks Road, Suite 107,
Raleigh, NC 27615.
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Number of
Portfolios in
Fund Complex
Position(s) Term of Office; Overseen by
Held with Length of Time Principal Occupation(s) During Past 5 Years Director or
Name, Address & Age the Fund Served and Other Directorships Held by Director Officer
- ----------------------------------------------------------------------------------------------------------------------------------
OFFICERS
- ----------------------------------------------------------------------------------------------------------------------------------
J. Michael Fields, 32 Chief Financial Since Mr. Fields has been the CFO since inception of the N/A
8816 Six Forks Rd. Officer Inception Funds. Mr. Fields became a Director of the Investment
Suite 107 Manager in September 2003. Prior to joining the
Raleigh, NC 27615 Investment Manager, Mr. Fields was employed by
CapTrust Financial Advisors from August 2002 to
September 2003. Prior to joining CapTrust, Mr. Fields
was employed by Morgan Stanley in Atlanta, Georgia
from January 2000 to August 2002.
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Denise Buchanan, 43 Chief Since Ms. Buchanan has been the CCO since inception of the N/A
8816 Six Forks Rd. Compliance Inception Funds. Ms. Buchanan became the Compliance Officer
Suite 107 Officer with CapFinancial Partners, LLC ("CapTrust") in
Raleigh, NC 27615 November 2003. Prior to joining CapTrust, Ms.
Buchanan was President of Broker/Dealer Sales &
Consulting, Inc. from 2001 to November 2003.
Previously, Ms. Buchanan was the Director of
Compliance for Atlantic Capital Management, LLC from
1996 to 2001.
- ----------------------------------------------------------------------------------------------------------------------------------
Vickey Collins, 39 Secretary Since Ms. Collins has been the Secretary of the Funds since N/A
8816 Six Forks Rd. Inception inception. She became the Operations Manager for the
Suite 107 Investment Manager in September 2004. Prior to
Raleigh, NC 27615 joining the Investment Manager, she was employed with
McKinely Capital Management from 1994 to 2004.
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13
HATTERAS MULTI-STRATEGY FUND I, L.P.
OTHER INFORMATION - (UNAUDITED)
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PROXY VOTING
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For free information regarding how the Fund voted proxies during the period
ended June 30, 2005, or to obtain a free copy of the Fund's complete proxy
voting policies and procedures, call 1-800-348-1824 or visit the SEC's website
at http://www.sec.gov.
AVAILABILITY OF QUARTERLY PORTFOLIO SCHEDULES
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The Fund files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The Fund's Form N-Q is
available, without charge and upon request, on the SEC's website at
http://www.sec.gov or may be reviewed and copied at the SEC's Public Reference
Room in Washington, DC. Information on the Public Reference Room may be obtained
by calling 1-800-SEC-0330.
14
ITEM 2. CODE OF ETHICS.
(a) The registrant, as of the end of the period covered by this report, has
adopted a code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant
or a third party.
(c) There have been no amendments, during the period covered by this
report, to a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are employed
by the registrant or a third party, and that relates to any element of
the code of ethics description.
(d) The registrant has not granted any waivers, including an implicit
waiver, from a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are employed
by the registrant or a third party, that relates to one or more of the
items set forth in paragraph (b) of this item's instructions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
As of the end of the period covered by the report, the registrant's board of
directors has determined that Steven E. Moss is qualified to serve as an audit
committee financial expert serving on its audit committee and that he is
"independent," as defined by Item 3 of Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Audit Fees
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(a) The Registrant commenced operations on April 1, 2005. The aggregate
fees billed for the last fiscal year for professional services rendered by
the principal accountant for the audit of the registrant's annual financial
statements or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for the
fiscal year are $8,500.
Audit-Related Fees
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(b) The Registrant commenced operations on April 1, 2005. The aggregate
fees billed in the last fiscal year for assurance and related services by
the principal accountant that are reasonably related to the performance of
the audit of the registrant's financial statements and are not reported
under paragraph (a) of this Item are $900. The fees listed on item 4 (b)
are related to out-of-pocket expense in relations to the annual audit of
the registrant.
Tax Fees
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(c) The Registrant commenced operations on April 1, 2005. The aggregate fees
billed in the last fiscal year for professional services rendered by the
principal accountant for tax compliance, tax advice, and tax planning are
$0.
All Other Fees
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(d) The Registrant commenced operations on April 1, 2005. The aggregate fees
billed in the last fiscal year for products and services provided by the
principal accountant, other than the services reported in paragraphs (a)
through (c) of this Item are $0.
(e)(1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
The Registrant's Audit Committee must pre-approve the audit and non-audit
services of the Auditors prior to the Auditor's engagement.
(e)(2) The percentage of services described in each of paragraphs (b) through
(d) of this Item that were approved by the audit committee pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows:
(b) 0%
(c) 100%
(d) 0%
(f) The percentage of hours expended on the principal accountant's engagement
to audit the registrant's financial statements for the most recent fiscal
year that were attributed to work performed by persons other than the
principal accountant's full-time, permanent employees was less than fifty
percent.
(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under
common control with the adviser that provides ongoing services to the
registrant for each of the last two fiscal years of the registrant was
$0.
(h) The registrant's audit committee of the board of directors has considered
whether the provision of non-audit services that were rendered to the
registrant's investment adviser (not including any sub-adviser whose role
is primarily portfolio management and is subcontracted with or overseen
by another investment adviser), and any entity controlling, controlled
by, or under common control with the investment adviser that provides
ongoing services to the registrant that were not pre-approved pursuant to
paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with
maintaining the principal accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is included as part of the report to shareholders filed
under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
THE PROXY VOTING POLICIES ARE ATTACHED HEREWITH.
HATTERAS INVESTMENT PARTNERS LLC
HATTERAS MASTER FUND, L.P.
HATTERAS MULTI-STRATEGY FUND I, L.P.
HATTERAS MULTI-STRATEGY TEI FUND, L.P.
PROXY VOTING POLICY
This statement sets forth the policy of Hatteras Investment Partners, LLC
("Hatteras") with respect to the exercise of corporate actions and proxy voting
authority of client accounts.
The Funds and other advisory clients of Hatteras invest, directly or indirectly,
substantially all of their assets in securities of pooled investment vehicles or
separate accounts, which are private partnerships, limited liability companies
or similar entities managed by third-party investment managers (collectively,
"Advisor Funds"). These securities do not typically convey traditional voting
rights to the holder and the occurrence of corporate governance or other notices
for this type of investment is substantially less than that encountered in
connection with registered equity securities. To the extent that the we or our
clients receive notices or proxies from Advisor Funds (or receive proxy
statements or similar notices in connection with any other portfolio
securities), Hatteras has proxy voting responsibilities.
With respect to proxies issued by Hatteras Master Fund, L.P. (the "Master
Fund"), the feeder funds which invest in the Master Fund have delegated proxy
voting authority to Hatteras. Hatteras will vote proxies in a manner that it
deems to be in the best interests of the Funds. In general, the Investment
Manager believes that voting proxies in accordance with the policies described
below will be in the best interests of its clients. If an analyst, trader or
partner of the Hatteras believes that voting in accordance with stated
proxy-voting guidelines would not be in the best interests of a client, the
proxy will be referred to Hatteras' Chief Compliance Officer for a determination
of how such proxy should be voted.
Hatteras will generally vote to support management recommendations relating to
routine matters such as the election of directors (where no corporate governance
issues are implicated), the selection of independent auditors, an increase in or
reclassification of common stock, the addition or amendment of indemnification
provisions in the company's charter or by-laws, changes in the board of
directors and compensation of outside directors. Hatteras will generally vote in
favor of management or shareholder proposals that Hatteras believes will
maintain or strengthen the shared interests of shareholders and management,
increase shareholder value, maintain or increase shareholder influence over the
company's board of directors and management and maintain or increase the rights
of shareholders.
On non-routine matters, Hatteras will generally vote in favor of management
proposals for mergers or reorganizations, reincorporation plans, fair-price
proposals and shareholder rights plans so long as such proposals are in the best
economic interests of Hatteras' clients.
If a proxy includes a matter to which none of the specific policies described
above or in Hatteras' stated proxy-voting guidelines is applicable or a matter
involving an actual or potential conflict of interest as described below, the
proxy will be referred to Hatteras' Chief Compliance Officer for a determination
of how such proxy should be voted.
In exercising its voting discretion, Hatteras and its employees will seek to
avoid any direct or indirect conflict of interest presented by the voting
decision. If any substantive aspect or foreseeable result of the matter to be
voted on by Hatteras Master Fund, L.P., Hatteras Multi-Strategy Fund I, L.P. or
Hatteras Multi-Strategy TEI Fund, L.P. (the "Registered Funds") presents an
actual or potential conflict of interest involving Hatteras (or an affiliate of
Hatteras), any issuer of a security for which Hatteras (or an affiliate of
Hatteras) acts as sponsor, advisor, manager, custodian, distributor,
underwriter, broker or other similar capacity or any person with whom Hatteras
(or an affiliate of Hatteras) has an existing material contract or business
relationship not entered into in the ordinary course of business (Hatteras and
such other persons having an interest in the matter being called "Interested
Persons"), Hatteras will make written disclosure of the conflict to the
Independent Directors of the applicable Fund(s) indicating how Hatteras proposes
to vote on the matter and its reasons for doing so. If the Investment Manager
does not receive timely written instructions as to voting or non-voting on the
matter from the applicable Registered Fund's Independent Directors, Hatteras may
take any of the following actions which it deems to be in the best interests of
the Fund: (1) engage an independent third party to determine whether and how the
proxy should be voted and vote or refrain from voting on the matter as
determined by the third party; (2) vote on the matter in the manner proposed to
the Independent Directors if the vote is against the interests of all Interested
Persons; or (3) refrain from voting on the matter.
The Registered Fund each will be required to file Form N-PX, with its complete
proxy voting record for the twelve months ended June 30, no later than August 31
of each year. The first such filing is due no later than August 31, 2005, for
the twelve months ended June 30, 2005. Once filed, each of the Registered Fund's
Form N-PX filing will be available: (1) without charge, upon request, by calling
1-800-390-1560; or (2) by visiting the SEC's website at www.sec.gov.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
The Registrant pursues its investment objective by investing substantially all
of its assets in Hatteras Master Fund, L.P. Accordingly, there is no active
portfolio management with respect to the Registrant.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's board of directors, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR
240.14a-101), or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers, or
persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the "1940
Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days
of the filing date of the report that includes the disclosure required by
this paragraph, based on their evaluation of these controls and
procedures required by Rule
30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or
15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR
240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR
270.30a-3(d)) that occurred during the registrant's second fiscal quarter
of the period covered by this report that has materially affected, or is
reasonably likely to materially affect, the registrant's internal control
over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Code of ethics, or any amendment thereto, that is the subject of
disclosure required by Item 2 is attached hereto.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) Hatteras Multi-Strategy Fund I, L.P.
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By (Signature and Title)* /s/ David B. Perkins
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David B. Perkins, President & Chief Executive Officer
(principal executive officer)
Date June 9, 2006
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ David B. Perkins
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David B. Perkins, President & Chief Executive Officer
(principal executive officer)
Date June 9, 2006
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By (Signature and Title)* /s/ J. Michael Fields
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J. Michael Fields, Chief Financial Officer
(principal financial officer)
Date June 9, 2006
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* Print the name and title of each signing officer under his or her signature.