UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-CSR
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CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANY ACT FILE NUMBER 811-21911
OLD MUTUAL 2100 ABSOLUTE RETURN MASTER FUND, L.L.C.
(Exact name of registrant as specified in charter)
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800 Westchester Avenue, S-618
Rye Brook, New York 10573
(Address of principal executive offices) (Zip code)
SEI Investments Distributors
One Freedom Valley Drive
Oaks, PA 19456
(Name and address of agent for service)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 1-888-266-2200
DATE OF FISCAL YEAR END: MARCH 31
DATE OF REPORTING PERIOD: MARCH 31, 2007
ITEM 1. REPORTS TO STOCKHOLDERS.
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Financial Statements
For the period November 1, 2006 (commencement of
operations) to March 31, 2007
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Table of Contents
Financial Statements:
Report of Independent Registered Public Accounting Firm........................1
Schedule of Investments........................................................2
Statement of Assets and Liabilities............................................4
Statement of Operations........................................................5
Statements of Changes in Members' Capital......................................6
Statement of Cash Flows........................................................7
Financial Highlights...........................................................8
Notes to Financial Statements..................................................9
Board of Managers and Officers of the Fund (unaudited)........................22
Investment Management Agreement Approval (unaudited)..........................24
The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission (the "Commission") for the first and third quarters of
each fiscal year on Form N-Q. The Fund's Forms N-Q are available on the
Commission's website at HTTP://WWW.SEC.GOV, and may be reviewed and copied at
the Commission's Public Reference Room in Washington, DC. Information on the
operation of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to portfolio securities, as well as information
relating to how the Fund voted proxies relating to portfolio securities during
the most recent 12-month period ended June 30, is available (i) without charge,
upon request, by calling toll free (888) 266-2200; and (ii) on the Commission's
website at HTTP://WWW.SEC.GOV.
[ABA LOGO OMITTED]
ESTABLISHED 1923
Anchin, Block & Anchin LLP
Accountants and Consultants
1375 Broadway
New York, New York 10018
(212) 840-3456
FAX (212) 840-7066
Report of Independent Registered Public Accounting Firm
To the Board of Managers and Members
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
We have audited the accompanying statement of assets and liabilities of
Old Mutual 2100 Absolute Return Master Fund, L.L.C. as of March 31, 2007 and the
related statements of operations, changes in member's capital, cash flows and
financial highlights for the period November 1, 2006 (commencement of
operations) through March 31, 2007. 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 auditing standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
investments owned as of March 31, 2007, by correspondence with custodian and
portfolio funds. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides 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 Old Mutual 2100
Absolute Return Master Fund, L.L.C. as of March 31, 2007, and the results of its
operations, the changes in member's capital, cash flows and financial highlights
for the period November 1, 2006 (commencement of operations) through March 31,
2007 in conformity with accounting principles generally accepted in the United
States of America.
/s/ Anchin, Block & Anchin LLP
New York, N. Y.
May 23, 2007
1
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Schedule of Investments
March 31, 2007
Investment Strategies as a Percentage of Total Investments
[Pie Chart Omitted]
Plot points are as follows:
Capital Structure Arbitrage - 12.0%
Commodity Trading Advisor - 9.3%
Equity Long Bias - 16.7%
Equity Market Neutral - 16.9%
Equity Variable Bias - 18.1%
Event Driven - 17.6%
Relative Value - 9.4%
%* OF
MEMBERS'
Portfolio Fund COST VALUE CAPITAL LIQUIDITY
- -------------------------------------------------------------------------------------------------
CAPITAL STRUCTURE ARBITRAGE:
BAM Opportunity Fund, L.P. $ 339,000 $ 346,542 3.15% Quarterly
Linden Investors, L.P. 479,000 505,617 4.59% Quarterly
Tenor Opportunity Fund, L.P. 415,000 438,752 3.98% Quarterly
---------------------------------------
TOTAL CAPITAL STRUCTURE ARBITRAGE 1,233,000 1,290,911 11.72%
---------------------------------------
COMMODITY TRADING ADVISOR:
Tudor Tensor Fund, L.P. 1,000,000 1,003,212 9.11% Monthly
---------------------------------------
TOTAL COMMODITY TRADING ADVISOR 1,000,000 1,003,212 9.11%
---------------------------------------
EQUITY LONG BIAS:
JANA Partners Qualified, L.P. 448,000 500,627 4.54% Quarterly
Quadrangle Equity Investors, L.P. 415,000 456,268 4.14% Quarterly
Renaissance Institutional Equities Fund, LLC 800,000 832,559 7.56% Monthly
---------------------------------------
TOTAL EQUITY LONG BIAS 1,663,000 1,789,454 16.24%
---------------------------------------
2
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Schedule of Investments (concluded)
March 31, 2007
%* OF
MEMBERS'
Portfolio Fund COST VALUE CAPITAL LIQUIDITY
- -------------------------------------------------------------------------------------------------
Equity Market Neutral:
ACI U.S. Market Neutral Fund, L.P. $ 269,000 $ 283,346 2.57% Monthly
The Black Mesa Fund 415,000 462,998 4.20% Monthly
Two Sigma Spectrum U.S. Fund, L.P. 1,000,000 1,066,379 9.68% Quarterly
----------------------------------
TOTAL EQUITY MARKET NEUTRAL 1,684,000 1,812,723 16.45%
----------------------------------
EQUITY VARIABLE BIAS:
7x7 Institutional Partners, L.P. 458,000 476,019 4.32% Monthly
Cedar Hill Capital Partners Onshore, L.P. 449,000 475,694 4.32% Quarterly
Enso Global Equities Partnership, L.P. 468,000 508,326 4.62% Quarterly
Rosen Real Estate Securities Value Fund II, L.P. 468,000 480,504 4.36% Quarterly
----------------------------------
TOTAL EQUITY VARIABLE BIAS 1,843,000 1,940,543 17.62%
----------------------------------
EVENT DRIVEN:
Claren Road Credit Partners, L.P. 458,000 481,478 4.37% Quarterly
GoldenTree Partners, L.P. 458,000 494,686 4.49% Quarterly
Greywolf Capital Partner II, L.P. 458,000 489,336 4.44% Annually
Jefferies Buckeye Fund, LLC 415,000 429,771 3.90% Quarterly
----------------------------------
TOTAL EVENT DRIVEN 1,789,000 1,895,271 17.20%
----------------------------------
RELATIVE VALUE:
Ellington Mortgage Partners, L.P. 1,000,000 1,014,498 9.21% Quarterly
----------------------------------
TOTAL RELATIVE VALUE 1,000,000 1,014,498 9.21%
----------------------------------
TOTAL PORTFOLIO FUNDS $10,212,000 $10,746,612 97.55%
==================================
*Percentages are based on Members' Capital at end of period of $11,016,521.
The aggregate cost of investments for tax purposes was $10,212,000. Net
unrealized appreciation on investments for tax purposes was $534,612 consisting
of $534,612 of gross unrealized appreciation and ($0) of gross unrealized
depreciation.
The investments in Portfolio Funds shown above, representing 97.55% of Members'
Capital, have been fair valued as described in Note 2.B.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
3
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Statement of Assets and Liabilities
March 31, 2007
ASSETS
Investments in Portfolio Funds, at fair value (cost $10,212,000) $ 10,746,612
Cash 394,860
Receivable for Investment sold 244,082
Deferred offering costs 8,590
Interest receivable 1,970
-------------
TOTAL ASSETS 11,396,114
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LIABILITIES
Payable to Advisor 109,625
Due to OldMutual 2100 Funds
Emerging Managers Master Fund, L.L.C. 99,000
Professional fees payable 89,409
Redemption payable 50,341
Administration fees payable 2,083
Board of Managers' fees payable 1,042
Other accrued expenses 28,093
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TOTAL LIABILITIES 379,593
-------------
NET ASSETS $ 11,016,521
=============
MEMBERS' CAPITAL
Net capital $ 10,598,002
Accumulated net investment loss (111,175)
Accumulated net realized loss on Portfolio Funds (4,918)
Net unrealized appreciation on investments in Portfolio Funds 534,612
-------------
MEMBERS' CAPITAL $ 11,016,521
=============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
4
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Statement of Operations
For the period from November 1, 2006 (commencement
of operations) to March 31, 2007
INVESTMENT INCOME:
Interest $ 18,052
----------
EXPENSES:
Professional fees 89,409
Offering costs 6,135
Board of Managers' fees 3,125
Administration fee 2,466
Custody fee 625
Other expenses 27,467
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Total expenses 129,227
----------
NET INVESTMENT LOSS (111,175)
----------
NET REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS IN PORTFOLIO FUNDS
Net Realized Loss on
Investments in Portfolio Funds (4,918)
Net Change in Unrealized Appreciation on
Investments in Portfolio Funds 534,612
----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS IN PORTFOLIO FUNDS 529,694
----------
NET INCREASE IN MEMBERS' CAPITAL DERIVED
FROM INVESTMENT ACTIVITIES $ 418,519
==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
5
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Statements of Changes in Members' Capital
November 1, 2006*
to
March 31, 2007
-----------------
FROM INVESTMENT ACTIVITIES:
Net investment loss** $ (111,175)
Net realized loss on investments
in Portfolio Funds (4,918)
Net change in unrealized appreciation on
investments in Portfolio Funds 534,612
------------
Net increase in Members' Capital
derived from investment activities 418,519
------------
MEMBERS' CAPITAL TRANSACTIONS :
Proceeds from sales of Interests 10,696,310
Redemptions of Interests (103,408)
------------
10,592,902
------------
NET INCREASE IN MEMBERS' CAPITAL: 11,011,421
Members' Capital at Beginning of Period 5,100
------------
Members' Capital at End of Period $11,016,521
============
ACCUMULATED NET INVESTMENT LOSS $ (111,175)
============
* Commencement of operations
** Investment income less net expenses.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
6
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Statement of Cash Flows
For the period from November 1, 2006 (commencement
of operations) to March 31, 2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net increase in Members' Capital derived from investment activities $ 418,519
Adjustments to reconcile net increase in Members' Capital derived
from investment activities to net cash used in operating activities:
Purchases of Portfolio Funds (10,461,000)
Proceeds from sales of Portfolio Funds 244,082
Net realized loss on
investments in Portfolio Funds 4,918
Net change in unrealized appreciation
on investments in Portfolio Funds (534,612)
Increase in receivable for investments sold (244,082)
Decrease in deferred offering costs 6,135
Increase in interest receivable (1,970)
Increase in due to Emerging Managers Master Fund, L.L.C. 99,000
Increase in professional fees payable 89,409
Increase in administration fee payable 2,083
Increase in Board of Managers' fees payable 1,042
Increase in other accrued expenses 28,093
-------------
Net cash used in operating activities (10,348,383)
-------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Sale of Interests 10,696,310
Redemptions of Interests (53,067)
-------------
Net cash provided by financing activities 10,643,243
-------------
NET INCREASE IN CASH 294,860
Cash, beginning of period 100,000
-------------
CASH, END OF PERIOD $ 394,860
=============
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES
Redemptions payable $ 50,341
=============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
7
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Financial Highlights
November 1, 2006*
to
March 31, 2007
---------------------
Total Return (1) 3.95 %
Net assets, end of period (000's) $ 11,017
Ratio to average net assets:
Expenses (2) 2.93 % (3)
Net investment loss (2.52)% (3)
Portfolio turnover rate 2.52 % (4)
* Commencement of operations
(1) Total return is for the period indicated and has not been annualized.
(2) Expenses of Portfolio Funds are not included in the expense ratio.
(3) Annualized.
(4) Not annualized.
Note: The expense ratios, the net investment loss ratio, and the total return
percentages are calculated for the Members taken as a whole. The computation of
such ratios and return based on the amount of expenses charged to any specific
Member may vary from the overall ratios presented in the financial statements as
a result of the timing of capital transactions.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
8
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Notes to Financial Statements
March 31, 2007
1. ORGANIZATION
Old Mutual 2100 Absolute Return Master Fund, L.L.C. (the "Fund") is a Delaware
limited liability company that is registered under the Investment Company Act of
1940, as amended (the "1940 Act") as a non-diversified, closed-end, management
investment company, which was formed on April 25, 2006 and commenced operations
on November 1, 2006. The Fund is a master fund in a master/feeder structure into
which its feeder funds, Old Mutual 2100 Absolute Return Fund, L.L.C. (the
"Feeder Fund") and Old Mutual 2100 Absolute Return Institutional Fund, L.L.C.
(the "Institutional Feeder Fund") (collectively, the "Feeders" or "Members"),
invest substantially all of their assets. As of March 31, 2007, the Feeder
Fund's investment in the Fund represents 90.6% of Members' Capital, and an
affiliate of the Adviser (as defined in Note 3) had an investment in the Fund
which represents 9.4% of Members' Capital. As of March 31, 2007, the
Institutional Feeder Fund had not yet commenced operations.
The Fund employs a "fund of funds" investment program that enables eligible
investors, through one investment, to participate in the investment programs of
a professionally selected group of asset managers without being subject to the
high minimum investment requirements that many asset managers typically impose.
The Fund is similar to a private investment fund in that it is actively managed
and interests in the Feeders ("Interests") are sold solely to high net worth
individual and institutional investors, but differs from a typical private
investment fund in that it has registered as an investment company under the
1940 Act.
The Fund's investment objective is to seek to generate attractive returns while
attempting to reduce volatility. The Fund invests its assets primarily in
private investment funds, joint ventures, investment companies and other similar
investment vehicles ("Portfolio Funds") that are managed by a select group of
portfolio managers ("Portfolio Managers") that invest in a variety of financial
markets and utilize a broad range of alternative investment strategies.
2. SIGNIFICANT ACCOUNTING POLICIES
The Fund's financial statements are prepared in conformity with accounting
principles generally accepted in the United States of America. The following is
a summary of the significant accounting policies followed by the Fund:
A. Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires the Adviser to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from these
estimates.
9
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Notes to Financial Statements (continued)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B. Portfolio Valuation and Investment Transactions
The net asset value of the Fund is determined by or at the discretion of the
Adviser as of the close of business as of the end of each month in accordance
with the valuation principles as may be determined from time to time pursuant to
policies established by the Fund's Board of Managers (the "Board"). The net
asset value of the Fund is based primarily on the fair value of each of its
interests in Portfolio Funds. Ordinarily, these values are determined by the
Portfolio Managers of the Portfolio Funds in accordance with the Portfolio
Funds' valuation policies and as reported by the Portfolio Managers. As a
general matter, the fair value of the Fund's interest in a Portfolio Fund
represents the amount that the Fund could reasonably expect to receive from the
Portfolio Fund if the Fund's interest were redeemed at the time of valuation,
based on information reasonably available at the time the valuation is made and
that the Fund believes to be reliable.
The Fund's valuation procedures require the Adviser to consider all relevant
information available at the time the Fund values its assets. The Adviser or, in
certain cases, the Fund's Board, will consider such information, and may
conclude in certain circumstances that the information provided by a Portfolio
Manager does not represent the fair value of the Fund's interests in a Portfolio
Fund. Following procedures adopted by the Board, in the absence of specific
transaction activity in interests in a particular Portfolio Fund, the Fund could
consider whether it was appropriate, in light of all relevant circumstances, to
value such a position at the Portfolio Fund's net asset value as reported at the
time of valuation, or whether to adjust such value to reflect a premium or
discount to net asset value. Any such decision must be made in good faith, and
subject to the review and supervision of the Board.
As of December 31, 2006 the financial statements of Ellington Mortgage Partners,
L.P. included investments valued at $1,129,829 (which represents the funds
proportionate ownership of 0.1779%) whose fair values have been estimated by the
investment manager in the absence of readily determinable fair values. Those
estimated values may differ significantly from the value that would have been
used had a ready market for the investments existed, and differences could be
material. Information as of March 31, 2007 was not available.
Realized gains and losses from Portfolio Fund transactions are calculated on the
identified cost basis. Investments are recorded on the effective date of the
subscription to or redemption from the Portfolio Fund.
Interest income is recorded on an accrual basis and consists of interest earned
on cash.
C. Income Taxes
Counsel to the Fund rendered an opinion that the Fund will be classified as a
partnership and not as an association taxable as a corporation for Federal tax
purposes. Counsel to the Fund also rendered its opinion that, under a "facts and
circumstances" test, the Fund will not be treated as a "publicly traded
partnership" taxable as a corporation. Accordingly, the Fund should not be
subject to Federal income tax, and each Member will be required to report on its
own annual tax return such Member's distributive share of the Fund's taxable
income or loss.
10
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Notes to Financial Statements (continued)
2. SIGNIFICANT ACCOUNTING POLICIES (CONCLUDED)
D. Distribution Policy
The Fund has no present intention of making periodic distributions of its net
investment income or capital gains, if any, to Members. The amount and frequency
of distributions, if any, will be determined in the sole discretion of the
Board.
E. Distributions from Portfolio Funds
Distributions from Portfolio Funds will be classified as investment income or
realized gains in the Statements of Operations, or alternatively, as a decrease
to the cost of the investments based on the U.S. income tax characteristics of
the distribution if such information is available. In cases where the tax
characteristics are not available, such distribution will be classified as
investment income.
F. Cash
As of March 31, 2007, cash consists of an investment in a money market fund
affiliated with the Administrator (as defined in Note 3). The investment is
carried at cost, which approximates market value.
3. MANAGEMENT FEE, RELATED PARTY TRANSACTIONS AND OTHER
2100 Larch Lane LLC (the "Adviser"), a Delaware limited liability company,
serves as the investment adviser of the Fund pursuant to an agreement dated
October 13, 2006. The initial term of the agreement expires on October 13, 2008
and may be continued in effect from year to year thereafter if its continuance
is approved annually. The Adviser is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended (the "Advisers Act"). LLA
Holdings, LLC, the special member of the Adviser, owns 75% of the Adviser and is
an indirect majority-owned subsidiary of Old Mutual (US) Holdings, Inc.
("OMUSH"), which is a wholly-owned subsidiary of Old Mutual plc, a London
exchange listed international financial services firm. OMUSH is also a member of
the Fund and contributed $1,000,000 during the period and has members' capital
of $1,039,387 as of March 31, 2007. The Adviser is responsible for developing,
implementing and supervising the Fund's investment program and providing
day-to-day management services to the Fund.
Under the agreement with the Adviser, the Fund does not pay any investment
management fee to the Adviser. However, under the agreement, in the event the
Adviser ceases to serve as the Adviser to each fund that invests substantially
all of its assets in the Fund (a "Feeder"), the Master Fund would then be
subject to a fee that is calculated and payable in accordance with the lowest
annual rate that had most recently been charged by the Adviser to a Feeder.
11
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Notes to Financial Statements (continued)
3. MANAGEMENT FEE, RELATED PARTY TRANSACTIONS AND OTHER (CONCLUDED)
The Fund and the Feeder Fund have entered into a Master/Feeder Agreement dated
October 13, 2006 and the Fund and the Institutional Feeder Fund have entered
into a Master/Feeder Agreement dated February 8, 2007. Pursuant to the
agreement, the Fund and the Feeders will each have the same investment objective
and substantially the same investment policies. The Feeders will pursue their
investment objectives by investing on an ongoing basis substantially all of
their investable assets in the Fund in exchange for limited liability company
interests in the Fund. The Master/Feeder Argreements will remain in effect
unless terminated by the Fund or the Feeders.
The Fund is managed by the Board of Managers (the "Board") and each member of
the Board who is not an "interested manager" of the Fund, as defined by the 1940
Act (the "Independent Managers"), is entitled to an annual retainer of $2,500
and will be reimbursed by the Fund for travel-related expenses. The Independent
Managers of the Board are Gerald Hellerman, Paul D. Malek, and George W.
Morriss.
Pursuant to an administrative services agreement dated October 13, 2006 and
amended February 8, 2007, SEI Investments Global Funds Services (the
"Administrator"), provides various administrative services to the Fund and the
Feeders, including fund accounting, investor accounting and taxation services,
maintaining the register of the Fund and generally performing all actions
related to the issuance and transfer of Interests; reviewing and, subject to
approval by the Fund, accepting subscriptions for Interests and accepting
payment therefore; performing all acts related to the repurchase of Interests;
and performing all other clerical services necessary in connection with the
administration of the Fund. The initial term of the agreement expires on
November 1, 2009 and may be continued in effect from year to year thereafter if
its continuance is approved annually.
In consideration for the services provided by the Administrator, the Fund pays
the Administrator a monthly fee calculated and assessed monthly in arrears at an
annualized rate of 0.01% of the Fund's net assets, subject to a minimum annual
fee of $5,000.
SEI Private Trust Company (the "Custodian") serves as the custodian for the
assets of the Fund pursuant to an agreement dated October 13, 2006. In
consideration for the services provided by the Custodian, the Fund pays the
Custodian a monthly fee at an annualized rate of 0.0075% of the Fund's net
assets, subject to a minimum annual fee of $1,500. The agreement will remain in
effect unless terminated by the Fund or the Custodian.
4. FUND EXPENSES
The Fund bears its own operating expenses. These operating expenses include, but
are not limited to: all investment-related expenses (including, but not limited
to, fees paid directly or indirectly to Portfolio Managers, investment-related
interest expenses, all costs and expenses directly related to portfolio
transactions and positions, transfer taxes and premiums and taxes withheld on
foreign dividends); any non-investment related interest expense; fees and
disbursements of any attorneys or accountants
12
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Notes to Financial Statements (continued)
4. FUND EXPENSES (CONCLUDED)
engaged on behalf of the Fund; entity-level taxes, audit and tax preparation
fees and expenses; administrative expenses and fees of the Fund; custody
expenses of the Fund; the costs of an errors and omissions/directors and
officers liability insurance and a fidelity bond for the Fund; fees and
travel-related expenses of the Board of the Fund who are not employees of the
Adviser or any affiliate of the Adviser; all costs and charges for equipment or
services used in communicating information regarding the Fund's transactions
among the sub-Adviser and any custodian or other agent engaged by the Fund; any
extraordinary expenses; and such other expenses as may be approved from time to
time by the Board.
The Fund also indirectly bears fees and expenses of the Portfolio Funds. Each
Portfolio Manager generally receives a management fee and a performance fee or
allocation with respect to the assets of Portfolio Funds that it manages. The
amount of these fees and allocations varies among Portfolio Managers, but the
management fees are generally expected to be between 1.0%-2.0%, on an annual
basis, of the total assets managed by a Portfolio Manager, and the performance
fees or allocations are generally expected to be between 15%-25% of the net
capital appreciation (if any) in the assets managed by a Portfolio Manager.
5. INITIAL OFFERING COSTS AND ORGANIZATION EXPENSES
The Fund incurred initial offering costs totaling approximately $14,725
comprised principally of legal costs pertaining to the preparation of the Fund's
offering documents. These costs are being amortized over the initial
twelve-month period which expires on October 31, 2007.
Costs incurred in connection with the organization of the Fund were expensed at
April 25, 2006, the inception date. The Adviser paid the costs in connection
with the organization of the Fund and agreed to absorb $15,000 of the
organization costs. The Fund incurred $109,900 in organization costs and will
repay the Adviser.
6. BORROWINGS
The Fund is authorized to borrow money for investment purposes, to meet
repurchase requests and for cash management purposes. Borrowings by the Fund are
subject to a 300% asset coverage requirement under the 1940 Act. Portfolio Funds
that are not registered investment companies are not subject to this
requirement. The Fund had no borrowings during the period ended March 31, 2007.
13
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Notes to Financial Statements (continued)
7. CAPITAL ACCOUNTS AND ALLOCATIONS
The Fund maintains a separate capital account for each Member. The net profits
or net losses of the Fund (including, without limitation, net realized gain or
loss and the net change in unrealized appreciation or depreciation of securities
positions) are credited to or debited against the capital accounts of Members as
of the end of each fiscal period in accordance with their respective investment
percentages for the period. Each Member's investment percentage is determined
each fiscal period by dividing, as of the commencement of the period, the
balance of the Member's capital account by the sum of the balances of the
capital accounts of all Members.
A fiscal period begins on the day after the last day of the preceding fiscal
period and ends at the close of business on the first to occur of: (i) the last
day of each fiscal year (March 31); (ii) the last day of each taxable year
(December 31); (iii) the day preceding the date as of which any contributions to
the capital of the Fund is made; (iv) any day as of which the Fund repurchases
the Interest (or portion thereof) of any Member; or (v) any day as of which any
amount is credit to or debited from the capital account of any Member other than
an amount to be credited to or debited from the capital accounts of all Members
in accordance with their respective investment percentages.
8. SUBSCRIPTIONS AND REDEMPTIONS OF INTERESTS
The Board may admit one or more Members generally at the beginning of each
month; provided, however, that the Fund may, in the discretion of the Board,
admit Members more or less frequently.
No Member or other person holding an Interest or portion thereof shall have the
right to require the Fund to repurchase that Interest or portion thereof. The
Board, in its sole discretion and on such terms and conditions as it may
determine, may cause the Fund to repurchase Interests or portions thereof
pursuant to written tenders. However, the Fund shall not offer to repurchase
Interests on more than four occasions during any one fiscal year; provided that
offers made more than semi-annually in any taxable year shall only be accepted
if Members give at least 65 days' notice of their acceptance in any tax year,
unless it has consulted with counsel to the Fund and determined that more
frequent offers would not cause any adverse tax consequences to the Fund or the
Members. In determining whether to cause the Fund to repurchase Interests or
portions thereof pursuant to written tenders, the Board shall consider, among
other things, the recommendation of the Adviser.
9. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
In the normal course of business, the Portfolio Funds in which the Fund invests
trade various financial instruments and enter into various investment activities
with off-balance sheet risk. These include, but are not limited to, short
selling activities, writing options contracts, and swap contracts. The Fund's
risk of loss in the Portfolio Funds is limited to the value of these investments
reported by the Portfolio Funds.
14
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Notes to Financial Statements (continued)
10. INDEMNIFICATIONS
In the normal course of business, the Fund enters into contracts that contain a
variety of representations which provide general indemnifications. The Fund's
maximum exposure under these arrangements is unknown as this would involve
future claims that may be against the Fund that have not yet occurred. However,
based on experience, the Fund expects the risk of loss to be remote.
11. CONCENTRATION OF RISK
The Fund invests primarily in Portfolio Funds that are not registered under the
1940 Act which invest in and actively trade securities and other financial
instruments using different strategies and investment techniques, including
leverage, which may involve significant risks. These Portfolio Funds may invest
a high percentage of their assets in specific sectors of the market in order to
achieve a potentially greater investment return. As a result, the Portfolio
Funds may be more susceptible to economic, political, and regulatory
developments in a particular sector of the market, positive or negative, and may
experience increased volatility of the Portfolio Funds' net asset value.
The Fund may invest in a limited number of Portfolio Funds. Such concentration
may result in additional risk. The Portfolio Funds may enter into the following
transactions and certain of the related risks are described below:
A. Short Sales
Short sales are sales of securities that are not owned or that are not intended
for delivery and the seller will therefore be obligated to purchase such
securities at a future date. The value of the open short position is recorded as
a liability, and the seller records unrealized gain or loss to the extent of the
difference between the proceeds received and the value of the open short
position. A realized gain or loss is recorded when the short position is closed
out. By entering into short sales, the seller bears the market risk of increases
in value of the security sold short in excess of the proceeds received.
B. Swap Agreements
A swap contract is a contract under which two parties agree to make periodic
payments to each other based on the value of a security, a specified interest
rate, an index or the value of some other instrument applied to a stated or
"notional" amount. Swaps are subject to various types of risk, including market
risk, liquidity risk, counterparty credit risk, legal risk and operations risk.
C. Options
The Portfolio Funds may buy or write put and call options through listed
exchanges and the over-the-counter market. The buyer has the right, but not the
obligation, to purchase (in the case of a call option) or sell (in the case of a
put option) a specified quantity of a specific security or other underlying
asset at a specified price prior to or on a specified expiration date. The
writer of an option is exposed to the risk
15
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Notes to Financial Statements (continued)
11. CONCENTRATION OF RISK (CONTINUED)
of loss if the market price of the underlying asset declines (in the case of a
put option) or increases (in the case of call option). The writer of an option
can never profit by more than the premium paid by the buyer but can lose an
unlimited amount.
D. Futures Contracts
The Portfolio Funds may use futures contracts for hedging and non-hedging
purposes. Upon entering into a futures contract, the Portfolio Funds are
required to deposit an amount ("initial margin") equal to a certain percentage
of the contract value. Pursuant to the contract, the Portfolio Funds agree to
receive from, or pay to, the broker an amount of cash equal to the daily
fluctuation in the value of the contract. Such receipts or payments are known as
"variation margin" and are recorded by the Portfolio Funds as unrealized gains
or losses. When the contract is closed, the Portfolio Funds record a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time when it was closed. The use of
futures transactions includes the risk of imperfect correlation in movements in
the price of futures contracts, interest rates, underlying hedged assets, and
the possible inability of the counterparties to meet the terms of their
contracts.
E. Leverage Transactions
In order to obtain more investable cash, the Portfolio Funds may use various
forms of leverage including purchasing securities on margin. Such leverage may
allow the Portfolio Funds to increase partners' capital at a greater rate during
favorable markets, but also may lead to a more rapid decrease in partners'
capital in unfavorable markets. A margin transaction consists of purchasing an
investment with money loaned by a broker and agreeing to repay the broker at a
later date. Interest expense on the outstanding margin balance is based on
market rates at the time of the borrowing.
F. Forward Foreign Currency Contracts
The Portfolio Funds may enter into forward foreign currency contracts. Forward
contracts are over-the-counter contracts for delayed delivery of currency in
which the buyer agrees to buy and the seller agrees to deliver a specified
currency at a specified price on a specified date. Because the terms of forward
contracts are not standardized, they are not traded on organized exchanges and
generally can be terminated or closed-out only by agreement of both parties to
the contract. All commitments are marked to market on each valuation date at the
applicable foreign exchange rate and any resulting unrealized gain or loss is
recorded on such date. The Portfolio Fund realizes gains and losses at the time
forward contracts are extinguished or closed upon entering into an offsetting
contract.
16
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Notes to Financial Statements (continued)
11. CONCENTRATION OF RISK (CONTINUED)
G. Repurchase Agreements
Repurchase agreements are agreements under which a Portfolio Fund or the Fund
purchases securities from a bank that is a member of the Federal Reserve System,
a foreign bank or a securities dealer that agrees to repurchase the securities
from the Portfolio Fund at a higher price on a designated future date. If the
seller under a repurchase agreement becomes insolvent, the Portfolio Fund's
right to dispose of the securities may be restricted, or the value of the
securities may decline before the Portfolio Fund is able to dispose of them.
H. Reverse Repurchase Agreements
Reverse repurchase agreements are a form of borrowing that involves a sale of a
security by a Portfolio Fund to a bank or securities dealer and the Portfolio
Fund's simultaneous agreement to repurchase that security for a fixed price
(reflecting a market rate of interest) on a specific date. These transactions
involve a risk that the other party to a reverse repurchase agreement will be
unable or unwilling to complete the transaction as scheduled, which may result
in losses to the Portfolio Fund. Reverse repurchase transactions are a form of
leverage and may increase the volatility of a Portfolio Fund's investment
portfolio.
I. Lending Portfolio Securities
Portfolio Funds may lend securities held in their portfolios to brokers, dealers
and other financial institutions needing to borrow securities to complete
certain transactions. The lending Portfolio Fund continues to be entitled to
payments in amounts equal to the interest, dividends or other distributions
payable on the loaned securities which afford it an opportunity to earn interest
on the amount of the loan and on the loaned securities' collateral. Loans of
portfolio securities by a Sub-Manager may not exceed 33-1/3% of the value of a
Portfolio Account's total assets, and, in respect of such transactions, the
Portfolio Fund will receive collateral consisting of cash, U.S. Government
Securities or irrevocable letters of credit which will be maintained at all
times in an amount equal to at least 100% of the current market value of the
loaned securities. A Portfolio Fund might experience loss if the institution
with which the Portfolio Fund has engaged in a portfolio loan transaction
breaches its agreement with the Portfolio Fund.
J. When-Issued and Forward Commitment Securities
Portfolio Managers may purchase securities on a when-issued basis and may
purchase or sell securities on a forward commitment basis in order to hedge
against anticipated changes in interest rates and prices. These transactions
involve a commitment by a Portfolio Fund to purchase or sell securities at a
future date (ordinarily one or two months later). The price of the underlying
securities, which is generally expressed in terms of yield, is fixed at the time
the commitment is made, but delivery and payment for
17
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Notes to Financial Statements (continued)
11. CONCENTRATION OF RISK (CONCLUDED)
the securities takes place at a later date. No income accrues on securities that
have been purchased pursuant to a forward commitment or on a when-issued basis
prior to delivery to the Portfolio Fund. When-issued securities and forward
commitments may be sold prior to the settlement date. If a Portfolio Fund
disposes of the right to acquire a when-issued security prior to its acquisition
or disposes of its right to deliver or receive against a forward commitment, it
may incur a gain or loss.
There is a risk that securities purchased on a when-issued basis may not be
delivered and that the purchaser of securities sold by a Portfolio Fund on a
forward basis will not honor its purchase obligation. In such cases, a Portfolio
Fund may incur a loss.
K. Restricted and Illiquid Investments
Portfolio Funds may invest in restricted securities and other investments which
are illiquid. Restricted securities are securities that may not be sold to the
public without an effective registration statement under the Securities Act of
1933 or, if they are unregistered, may be sold only in a privately negotiated
transaction or pursuant to an exemption from registration. The Fund's interests
in unregistered Portfolio Funds are themselves illiquid and subject to
substantial restrictions on transfer. The Fund may liquidate an interest and
withdraw from an unregistered Portfolio Fund pursuant to limited withdrawal
rights. The illiquidity of these interests may adversely affect the Fund if it
is unable to withdraw its investment in a Portfolio Fund promptly after it
determines to do so.
L. Liquidity
The Portfolio Funds provide for periodic redemptions, with lock-up provisions
ranging from one year to three years from the initial investment. The liquidity
provisions shown on the Schedule of Investments apply after the lock-up
provisions.
12. INVESTMENT TRANSACTIONS
For the period ended March 31, 2007, the Fund made investments in Portfolio
Funds in the amount of $10,461,000 and redeemed investments in Portfolio Funds
in the amount of $244,082.
13. INVESTMENTS
As of March 31, 2007, the Fund had investments in 19 Portfolio Funds, none of
which were related parties.
The Fund limits its investment position in any one Portfolio Fund to less than
5% of the Portfolio Fund's outstanding voting securities, absent an order of the
Securities and Exchange Commission (the "SEC") (or assurances from the SEC
staff) under which the Fund's contribution and withdrawal of capital from a
18
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Notes to Financial Statements (continued)
13. INVESTMENTS (CONTINUED)
Portfolio Fund in which it holds 5% or more of the outstanding interests will
not be subject to various 1940 Act prohibitions on affiliated transactions. The
Fund also is not required to adhere to this 5% investment limitation to the
extent that it relies on certain SEC rules that provide exemptions from 1940 Act
prohibitions on affiliated transactions. However, to facilitate investments in
smaller Portfolio Funds deemed attractive by the Adviser, the Fund may purchase
non-voting securities of, or waive its right to vote its interests in, Portfolio
Funds. Although the Fund may hold non-voting interests, the 1940 Act and the
rules and regulations thereunder may nevertheless require the Fund to limit its
position in any one Portfolio Fund, if investments in a Portfolio Fund by the
Fund will equal or exceed 25% of the Portfolio Fund's assets, or such lower
percentage limit as may be determined by the Fund in consultation with its
counsel. These restrictions could change from time to time as applicable laws,
rules or interpretations thereof are modified.
Portfolio Funds' Investment Strategies:
CAPITAL STRUCTURE ARBITRAGE
Capital Structure Arbitrage managers will typically buy "long" and sell "short"
different classes of securities of the same issuer in anticipation of profiting
from the relative mispricing between them. Convertible-bond arbitrage and
equity-warrant arbitrage are forms of balance-sheet arbitrage.
COMMODITY TRADING ADVISOR
Commodity Trading Advisor managers will typically have portfolio funds employing
this particular strategy purchase and sell local or foreign currency, commodity
futures and options or such futures contracts based on supply and demand factors
affecting price within each market. Certain Portfolio funds also use
commodity-related equities to implement their strategies.
EQUITY LONG BIAS
Equity Long Bias managers will typically have portfolios of long equities as
well as some short positions. Unlike variable bias or market neutral, Equity
Long Bias managers are expected to average at least 70% net long (gross long
positions minus short positions). Leverage may be employed, though likely at a
lower amount than market neutral or variable bias strategies. This strategy will
show a high degree of correlation to equity markets, as the majority of their
profits will stem from their long positions. Short positions will typically be
used to hedge though may also be opportunistic in nature.
EQUITY MARKET NEUTRAL
Equity Market Neutral managers will typically have portfolios of long equities
and short equities in equal amounts. While this strategy does offer some
flexibility, managers in this strategy are expected to keep their net exposure
within +/-20%. Leverage will be employed. Short positions can be hedges or
profit centers. While an overall fund can be market neutral, managers may take
sector exposure (though many do not). This strategy should show little
correlation to equity markets, as returns are driven by stock picking, or in the
case of quantitatively driven strategies, factors.
19
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Notes to Financial Statements (continued)
13. INVESTMENTS (CONCLUDED)
Portfolio Funds' Investment Strategies (concluded):
EQUITY VARIABLE BIAS
Equity Variable Bias managers will typically have portfolios of long equities
and short equities. As per the strategy name, net exposure is variable, ranging
from net long to net short to market neutral. Security selection may either be
fundamental or quantitative while net exposure can be either bottom up (security
specific) or top down (macro driven). Leverage is also variable, with some
managers in this strategy using little or no leverage while others may use
substantial leverage; typically, leverage will be lower than found in Equity
Market Neutral. Short positions can be hedges or profit centers. While the bulk
of the portfolio should consist of equities, indices, ETFS, options and futures
may also be used.This strategy's correlation to equity markets will vary, with
returns are driven by stock picking as well as net positioning.
EVENT DRIVEN
Event-Driven managers will typically employ strategies that involve investing in
companies experiencing significant corporate changes. Mispricings arise from
events such as spin-offs, restructurings, stub trades, or other corporate
changes that the broad market does not fully comprehend and appropriately value.
This strategy also includes activist managers who take controlling stakes in
companies and force the "event" internally.
RELATIVE VALUE
Relative Value managers typically seek risk-adjusted absolute returns with
volatility and correlation lower than the broad equity markets by allocating
assets to Advisors that operate primarily in the global relative value sector.
Relative value strategies seek to profit from the mispricing of financial
instruments, capturing spreads between related securities that deviate from
their fair value or historical norms. Directional and market exposure is
generally held to a minimum or completely hedged. Strategies that may be
utilized in the relative value sector include convertible arbitrage, equity
arbitrage and fixed-income arbitrage. Other strategies may be employed as well.
14. RECENT ACCOUNTING PRONOUNCEMENTS
In July 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN
48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Fund's tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax authority.
Adoption of FIN 48 is required for fiscal years beginning after December 15,
2006 and is to be applied to all open tax years as of the effective date. At
this time, management is evaluating the implications of FIN 48 and its impact in
the financial statements has not yet been determined.
20
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Notes to Financial Statements (concluded)
14. RECENT ACCOUNTING PRONOUNCEMENTS (CONCLUDED)
In September 2006, the Financial Accounting Standards Board (FASB) issued
Statement on Financial Accounting Standards (SFAS) No. 157, "Fair Value
Measurements." This standard establishes a single authoritative definition of
fair value, sets out a framework for measuring fair value and requires
additional disclosures about fair value measurements. SFAS No. 157 applies to
fair value measurements already required or permitted by existing standards.
SFAS No. 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007 and interim periods within those fiscal years.
The changes to current generally accepted accounting principles from the
application of this Statement relate to the definition of fair value, the
methods used to measure fair value, and the expanded disclosures about fair
value measurements. At this time, management is evaluating the implications of
FAS 157 and its impact on the financial statements has not yet been determined.
15. SUBSEQUENT EVENT
The Adviser, 2100 Larch Lane LLC, is now doing business as Larch Lane Advisors
LLC.
21
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Board of Managers and Officers of the Fund (unaudited)
as of March 31, 2007
- -----------------------------------------------------------------------------------------------------------------------
NAME, AGE, TERM OF OFFICE PRINCIPAL NUMBER OF OTHER HELD
AND POSITION AND OCCUPATION DURING FUNDS IN DIRECTORSHIPS
WITH THE LENGTH PAST 5 YEARS FUND HELD BY
FUND OF TIME COMPLEX MANAGERS
SERVED OVERSEEN
BY MANAGER
- -----------------------------------------------------------------------------------------------------------------------
DISINTERESTED MANAGERSo
- -----------------------------------------------------------------------------------------------------------------------
Gerald Hellerman, 69 Indefinite/Since Principal, Hellerman 6 Director, The Mexico
October 2006 Associates (financial and Equity and Income Fund,
corporate consulting), 1993 - Inc.; Director,
Manager present; Chief Compliance Innovative Clinical
Officer, The Mexico Equity and Solutions, Ltd.;
Income Fund, Inc., June 2001 - Director, FNC Realty;
present. Director, AirNet
Systems, Inc.; Director,
MVC Capital, Inc.;
Director, Brantley
Capital Corporation
- -----------------------------------------------------------------------------------------------------------------------
Paul D. Malek, 39 Indefinite/Since General Counsel, Latigo 6 None
October 2006 Partners, LP (investment
management), February 2006 -
Manager present; Associate, Milbank,
Tweed, Hadley & McCloy LLP,
May 2001 - January 2006.
- -----------------------------------------------------------------------------------------------------------------------
George W. Morriss, 59 Indefinite/Since Executive Vice President and 6 Trustee/Director,
October 2006 Chief Financial Officer, open-end and closed-end
People's Bank (financial funds in Neuberger
Manager services company), 1991 - 2001. Berman Fund Complex.
- -----------------------------------------------------------------------------------------------------------------------
INTERESTED MANAGER*o
- -----------------------------------------------------------------------------------------------------------------------
William J. Landes, 54 Indefinite/Since Director, 2100 Larch Lane LLC, 6 None
October 2006 October 2005 - present; Chief
Executive Officer, 2100
Manager, President Capital Group LLC, March 2004
and Chief Executive - present; Chief Investment
Officer Officer, Putnam Multi-Strategy
Hedge Funds, Putnam
Investments, February 2003 -
March 2004; Head of Global
Investment Research, January
1998 - February 2003.
- -----------------------------------------------------------------------------------------------------------------------
22
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Board of Managers and Officers of the Fund (concluded) (unaudited)
as of March 31, 2007
- -----------------------------------------------------------------------------------------------------------------------
NAME, AGE, TERM OF OFFICE PRINCIPAL NUMBER OF OTHER HELD
AND POSITION AND OCCUPATION DURING FUNDS IN DIRECTORSHIPS
WITH THE LENGTH PAST 5 YEARS FUND HELD BY
FUND OF TIME COMPLEX MANAGERS
SERVED OVERSEEN
BY MANAGER
- -----------------------------------------------------------------------------------------------------------------------
OFFICERS WHO ARE NOT MANAGERSo
- -----------------------------------------------------------------------------------------------------------------------
Ross Weissman, 36 Indefinite/Since Chief Financial Officer, 2100 N/A N/A
October 2006 Larch Lane LLC, 2005 -
present; Controller and Chief
Treasurer and Chief Financial Officer, Larch Lane
Financial Officer Advisors LP, 1999 - 2005.
- -----------------------------------------------------------------------------------------------------------------------
M. Todd Williams, 35 Indefinite/Since Chief Compliance Officer and N/A N/A
October 2006 Chief Legal Officer, 2100
Larch Lane LLC, 2003 -
Interim Chief present;
Compliance Officer Assistant General Counsel,
Ranger Capital, March 2003 -
July 2003; Associate, Akin
Gump Strauss Hauer & Feld,
LLP, September 1998 - February
2003.
- -----------------------------------------------------------------------------------------------------------------------
*Manager who is an "interested person" (as defined by the 1940 Act) of the Fund because of his
affiliation with the Adviser and its affiliates.
oThe address of each Manager and Officer is as follows: c/o 2100 Larch Lane LLC, 800 Westchester Avenue,
S-618, Rye Brook, New York 10573.
23
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Investment Management Agreement Approval (Unaudited)
The investment management agreement between Old Mutual 2100 Absolute Return
Master Fund, L.L.C., a Delaware limited liability company (the "Fund"), and 2100
Larch Lane LLC, a Delaware limited liability company (the "Adviser") (the
"Investment Management Agreement"), with an initial term of two years was
subject to approval by: (i) the Fund's Board of Managers (the "Board"); and (ii)
the vote of a majority of the outstanding voting securities, as defined by the
1940 Act, of the Fund, provided that the continuance must also be approved by a
majority of the managers (the "Managers") who are not "interested persons," as
defined by the 1940 Act, of the Fund (the "Independent Managers"), by vote cast
in person at a meeting called for the purpose of voting on such approval. The
Fund is a master fund in a master/feeder structure in which its feeder funds
(each, a "Feeder" and collectively with the Fund, the "Funds") invest
substantially all of their assets in the Fund.
At a meeting of the Board held on October 13, 2006, all of the Managers,
including all of the Independent Managers, approved the Investment Management
Agreement for the initial two-year term. In considering whether to approve the
Investment Management Agreement, the Board reviewed various materials from
counsel and from the Adviser which included: (i) information concerning the
services to be rendered to the Funds by the Adviser and the fees to be paid by
the Funds to the Adviser; (ii) information concerning the individuals who would
be responsible for the day-to-day management of the Fund's assets; and (iii) a
summary of the legal duties of the Board under the 1940 Act. In particular, the
Board considered the following:
(a) THE NATURE, EXTENT AND QUALITY OF SERVICES TO BE PROVIDED BY THE ADVISER.
The Managers reviewed the proposed services that the Adviser would provide to
both the Fund and reviewed various presentations from management in this regard.
In connection with the investment advisory services that would be provided to
the Fund, the Board discussed, in detail, with representatives of the Adviser
the proposed management of the Fund's investments in accordance with the Fund's
stated investment objective and policies and the types of transactions to be
entered into on behalf of the Fund. The Board noted that, in addition to the
investment advisory services that would be provided to the Fund under the
Investment Management Agreement, the Adviser also will provide certain
administrative and other services necessary for the operation of the Fund
(including legal and compliance services relating to the provision of investment
advisory services). The Managers took into account the experience, resources and
strengths of the Adviser in managing investment vehicles that invest primarily
in Portfolio Funds, including the Adviser's experience in advising an investment
vehicle that has investment objectives and strategies similar to those of the
Fund. The Managers considered the amount of assets under the management of the
Adviser, as well as the experience of the individuals comprising the Adviser's
Investment Committee. Based on its review of the information provided at the
meeting, and the discussions with the representatives of the Adviser and counsel
to the Fund at the meeting, the Board expressed satisfaction with the scope of
services proposed to be provided to the Fund under the agreement and determined
that these services should be of reasonably high quality.
(b) INVESTMENT PERFORMANCE OF THE FUND AND ADVISER. In connection with the
evaluation of the services to be provided by the Adviser, the Managers generally
reviewed the performance of the Adviser with respect to other investment
vehicles managed by it. Because the Fund was newly formed, the Managers did not
consider the investment performance of the Fund.
24
Old Mutual 2100 Absolute Return Master Fund, L.L.C.
Investment Management Agreement Approval (unaudited) (concluded)
(c) COST OF THE SERVICES TO BE PROVIDED AND PROFITS TO BE REALIZED BY THE
ADVISER FROM THE RELATIONSHIP WITH THE FUNDS. The Managers also considered the
cost of the services to be provided by the Adviser. Under the Investment
Management Agreement, the Fund would not pay any investment management fee to
the Adviser so long as the Adviser serves as the investment adviser to a Feeder.
The Board noted that in the event the Adviser ceases to serve as the Adviser to
a Feeder, the Fund will be charged the lowest annual rate that had most recently
been charged by the Adviser to a Feeder. The Board considered that, under the
existing Feeder's Investment Management Agreement with the Adviser, the Feeder
pays the Adviser a fee at the annual rate of 1.25% of the Feeder's average net
assets. The Board also considered that the Fund will bear the advisory fees
charged by the Portfolio Funds. The Managers reviewed information comparing the
proposed advisory fee rate and estimated total expense ratio of the Fund to
those of comparable registered funds.
The Managers then considered the profits to be realized by the Adviser and its
affiliates from their relationships with the Funds. Since the Fund was newly
formed and the eventual aggregate amount of the Funds' assets was uncertain, the
Adviser was not able to provide the Managers with specific information
concerning the expected profits to be realized by the Adviser and its affiliates
from their relationships with the Funds. The Managers noted the Adviser's
expectation that the profitability level would not be excessive.
The Managers compared both the services to be rendered and the proposed fees to
be paid under the Investment Management Agreement to other contracts of the
Adviser and to other contracts of other advisers with respect to various similar
closed-end registered investment companies. In particular, the Board evaluated
the Funds' contractual fee rate for advisory services as compared to the
contractual fee rate of other publicly offered closed-end funds that are managed
by other investment advisers that invest primarily in unregistered funds. The
Board found that the proposed advisory fee rate for the Fund was within the
range of fee rates paid by such other similar registered funds.
(d) THE EXTENT TO WHICH ECONOMIES OF SCALE WOULD BE REALIZED AS THE FUND GROWS
AND WHETHER FEE LEVELS WOULD REFLECT SUCH ECONOMIES OF SCALE. The Board was
cognizant of the fact that economies of scale in costs of providing services may
be realized when there is a significant increase in a fund's assets. Because the
Fund was newly formed and the eventual aggregate amount of the Funds' assets was
uncertain, the Adviser was not able to provide the Managers with specific
information concerning the extent to which economies of scale would be realized
as the Funds grow and whether fee levels would reflect such economies of scale,
if any. The Managers determined that they would revisit this issue after the
initial two-year term of the Investment Management Agreement.
CONCLUSION. Based on all of the foregoing, and such other matters that were
deemed relevant, the Board found the proposed level of advisory fees to be fair
and reasonable in light of the services proposed to be provided by the Adviser.
No single factor was determinative to the decision of the Board. Based on this
determination, all of the Managers who were present at the October 13, 2006
meeting, including all of the Independent Managers, approved the Investment
Management Agreement for the initial two-year term.
25
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the registrant's
principal executive officer and principal financial officer or persons
performing similar functions, regardless of whether these individuals are
employed by the registrant or a third party. For the fiscal year ended March 31,
2007, there were no amendments to a provision of its code of ethics, nor were
there any waivers granted from a provision of the code of ethics. A copy of this
code of ethics is filed with this form N-CSR under Item 12 (a)(1).
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a)(1) The registrant's board of managers has determined that the registrant has
at least one audit committee financial expert serving on the audit committee.
(a)(2) The audit committee financial expert is Gerald Hellerman. Mr. Hellerman
is independent as defined in Form N-CSR Item 3(a)(2).
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Fees billed by Anchin, Block & Anchin LLP ("Anchin") related to Old Mutual 2100
Absolute Return Master Fund (the "Fund").
Anchin billed the Fund aggregate fees for services rendered to the Fund for the
fiscal year ended March 31, 2007* as follows:
- ----------------------------------- -----------------------------------------------------
2007
- ----------------------------------- -----------------------------------------------------
All fees and All fees and All other fees
services to the services to and services to
Fund that were service service
pre-approved affiliates that affiliates that
were pre- did not require
approved pre-approval
- --------- ------------------------- ---------------- ------------------ -----------------
(a) Audit Fees(1) $55,000 N/A N/A
- --------- ------------------------- ---------------- ------------------ -----------------
(b) Audit-Related Fees $0 N/A N/A
- --------- ------------------------- ---------------- ------------------ -----------------
(c) Tax Fees $20,000 N/A N/A
- --------- ------------------------- ---------------- ------------------ -----------------
(d) All Other Fees $0 N/A N/A
- --------- ------------------------- ---------------- ------------------ -----------------
* No such fees were billed for 2006 because the Registrant was organized on
April 25, 2006 and commenced operations on November 1, 2006.
Notes:
(1) Audit fees include amounts related to the audit of the registrant's
annual financial statements and services normally provided by the
accountant in connection with statutory and regulatory filings or
engagements.
(e)(1) The registrant's Audit Committee pre-approves the principal
accountant's engagements for audit and non-audit services to the
registrant and, as required, non-audit services to service affiliates
on a case-by-case basis. Pre-approval considerations include whether
the proposed services are compatible with maintaining the principal
accountant's independence.
(e)(2) Percentage of fees billed by Anchin applicable to non-audit services
pursuant to waiver of pre-approval requirement were as follows:
---------------------- ------------ -------------
2007 2006
---------------------- ------------ -------------
Audit-Related Fees 0% N/A
---------------------- ------------ -------------
Tax Fees 0% N/A
---------------------- ------------ -------------
All Other Fees 0% N/A
---------------------- ------------ -------------
(f) Not applicable.
(g) The amount of non-audit fees that were billed by Anchin for services
rendered to (i) the registrant, and (ii) the registrant's investment
adviser and any entity controlling, controlled by, or under common
control with the adviser that provides ongoing services to the
registrant for the fiscal year ended March 31, 2007, were $0 and $0,
respectively.
No such fees were billed for 2006 because the Registrant was
organized on April 25, 2006 and commenced operations on November 1,
2006.
(h) Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS
The Schedule of Investments is included as part of the report to shareholders
filed under Item 1 of this form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
The following is the Proxy Voting Policies and Procedures of Larch Lane Advisors
LLC (the "Adviser") in its entirety:
The Firm provides investment advisory services to private investment funds and
managed accounts, and invests the assets of these Funds and accounts in
securities issued by private issuers. Through these private issuers the Firm may
be delegated the right to vote, on behalf of the Funds and accounts, proxies
received from companies, the securities of which are owned by the underlying
private issuers in which the Funds and accounts have invested. In addition, from
time to time, the private issuers may amend or revise their governing documents
or seek investor consents. The Firm has authority to vote proxies relating to
such securities on behalf of the Funds and accounts it manages.
The Securities and Exchange Commission (the "SEC") has adopted Rule 206(4)-6
under the Investment Advisers Act. Under this rule, registered investment
advisers that exercise voting authority over securities
held in client portfolios are required to implement proxy voting policies and
describe those policies to their clients.
The Investment Committee (which may delegate a Proxy Committee for this purpose)
is responsible for making all proxy voting decisions in accordance with these
proxy voting policy and procedures (the "POLICIES"). The investment team is
responsible for the actual voting of all proxies in a timely manner, while the
Compliance Officer is responsible for monitoring the effectiveness of the
Policies. (SEE Section IV, "Procedures for Proxies".)
The Policies attempt to generalize a complex subject. The Firm may, from time to
time, determine that it is in the best interests of its clients to depart from
specific policies described herein. The rationale for any such departure will be
memorialized in writing by the Compliance Officer.
I. GENERAL POLICY
The general policy is to vote proxy proposals, amendments, consents or
resolutions relating to client securities, including interests in private
investment funds, if any (collectively, "PROXIES"), in a manner that reasonably
furthers the best interests of the Funds managed by the Firm and is consistent
with the investment philosophy as set forth in the relevant investment
management documents, as determined by the Firm in its discretion, and taking
into account relevant factors, including, but not limited to:
o the impact on the value of the securities;
o the anticipated costs and benefits associated with the proposal;
o the effect on liquidity; and
o customary industry and business practices.
II. SPECIFIC POLICIES
A. ROUTINE MATTERS
Routine matters are typically proposed by Management (as defined below) of a
company and meet the following criteria: (i) they do not measurably change the
structure, management, control or operation of the company; (ii) they do not
measurably change the terms of, or fees or expenses associated with, an
investment in the company; and (iii) they are consistent with customary industry
standards and practices, as well as the laws of the state of incorporation
applicable to the company.
For routine matters, the Firm will vote in accordance with the recommendation of
the company's management, directors, general partners, managing members or
trustees (collectively, the "MANAGEMENT"), as applicable, unless, in the Firm's
opinion, such recommendation is not in the best interests of the investing Funds
or accounts.
1. GENERAL MATTERS
The Firm will generally vote FOR proposals:
o to set time and location of annual meeting;
o to change the fiscal year of the company; and
o to change the name of a company.
2. BOARD MEMBERS
A. ELECTION OR RE-ELECTION. The Firm will generally vote FOR Management
proposals to elect or re-elect Board members.
B. FEES TO BOARD MEMBERS. The Firm will generally vote FOR proposals to increase
fees paid to Board members, unless it determines that the compensation exceeds
market standards.
3. CAPITAL STRUCTURE
The Firm will generally vote FOR proposals to change capitalization, including
to increase authorized common shares or to increase authorized preferred shares,
as long as the proposal does not either: (i) establish a class or classes of
shares or interests with terms that may disadvantage the class held by the
investing Funds or accounts or (ii) result in disproportionate voting rights for
preferred shares or other classes of shares or interests.
4. APPOINTMENT OF AUDITORS
The Firm will generally vote FOR the approval of auditors and proposals
authorizing the Board to fix auditor fees, unless:
o the Firm has serious concerns about the accountants presented,
including their independence, or the audit procedures used; or
o the auditors are being changed without explanation.
B. NON-ROUTINE MATTERS
Non-routine matters involve a variety of issues and may be proposed by a
company's Management or beneficial owners (I.E., shareholders, members,
partners, etc. (collectively, the "OWNERS")). These proxies may involve one or
more of the following: (i) a measurable change in the structure, management,
control or operation of the company; (ii) a measurable change in the terms of,
or fees or expenses associated with, an investment in the company; or (iii) a
change that is inconsistent with industry standards and/or the laws of the state
of incorporation applicable to the company.
1. BOARD MEMBERS
A. TERM LIMITS. The Firm will generally vote FOR proposals to require a
reasonable retirement age (E.G., 72) for Board members, and will vote on a
CASE-BY-CASE basis on proposals to attempt to limit tenure.
B. REPLACEMENT. The Firm will generally vote AGAINST proposals that make it more
difficult to replace Board members, including proposals:
o to stagger the Board;
o to overweight Management representation on the Board;
o to introduce cumulative voting (cumulative voting allows the Owners
to "stack" votes behind one or a few individuals for a position on
the Board, thereby giving minority Owners a greater chance of
electing the Board member(s));
o to introduce unequal voting rights;
o to create supermajority voting; or
o to establish pre-emptive rights.
C. LIABILITY AND INDEMNIFICATION. In order to promote accountability, the Firm
will generally vote AGAINST proposals to limit the personal liability of Board
members for any breach of fiduciary duty or failure to act in good faith.
D. OWNERSHIP ISSUES. The Firm will generally vote FOR proposals that require
Management to own a minimum interest in the company. The purpose of this policy
is to encourage the alignment of Management's interests with the interests of
the company's Owners. However, the Firm will generally vote AGAINST proposals
for stock options or other compensation that grant an ownership interest for
Management IF SUCH PROPOSALS offer greater than 15% of the outstanding
securities of a company because such options may dilute the voting rights of
other Owners of the company.
2. COMPENSATION, FEES AND EXPENSES
In general, the Firm will vote AGAINST proposals to increase compensation, fees
or expenses to be paid to the company's Owners, unless the Firm determines that
the benefits resulting to the company and its Owners justifies the increased
compensation, fees or expenses.
In many circumstances, where private investment funds seek to change material
terms such as compensation, fee and expense terms, the Firm will examine the
investment opportunity anew in light of the proposed new terms, considering the
private investment funds returns, portfolio and strategy allocations,
alternative investment opportunities and other factors generally considered when
making an investment decision. When applying this examination, the Firm may vote
for proposals where the circumstances of a particular investment justify the
revised compensation, fee and expense terms.
3. VOTING RIGHTS
The Firm will generally vote AGAINST proposals:
o to introduce unequal voting or dividend rights among the classes;
o to change the amendment provisions of a company's charter documents
by removing Owner approval requirements;
o to require supermajority (2/3) approval for votes rather than a
simple majority (1/2);
o to restrict the Owners' right to act by written consent; or
o to restrict the Owners' right to call meetings, propose amendments
to the articles of incorporation or other governing documents of
the company or nominate Board members.
The Firm will generally vote FOR proposals that eliminate any of the foregoing
rights or requirements.
4. TAKEOVER DEFENSES AND RELATED ACTIONS
The Firm will generally vote AGAINST any proposal to create any plan or
procedure designed primarily to discourage a takeover or other similar action,
including "poison pills". Examples of "poison pills" include:
o large increases in the amount of stock authorized but not issued;
o blank check preferred stock (stock with a fixed dividend and a
preferential claim on company assets relative to common shares, the
terms of which are set by the Board at a future date without
further action by the Owners);
o compensation that would act to reward Management as a result of a
takeover attempt, whether successful or not, such as revaluing
purchase price of stock options, or "golden parachutes";
o fixed price amendments that require a certain price to be offered
to all Owners based on a fixed formula; and
o greenmail provisions that allow a company to make payments to a
bidder in order to persuade the bidder to abandon its takeover
plans.
The Firm will generally vote FOR proposals that eliminate any of the foregoing
rights or requirements, as well as proposals to:
o require that golden parachutes or golden handcuffs be submitted for
ratification by the Owners; and
o to opt out of state anti-takeover laws deemed by the Firm to be
detrimental.
The Firm will generally vote on a CASE-BY-CASE basis regarding other proposals
that may be used to prevent takeovers, such as the establishment of employee
stock purchase or ownership plans.
5. REINCORPORATION
The Firm will generally vote FOR a change in the state of incorporation if the
change is for valid business reasons (such as reincorporating in the same state
as the headquarters of any controlling company).
6. DEBT ISSUANCE AND PLEDGING OF ASSETS FOR DEBT
The Firm will generally vote proxies relating to the issuance of debt, the
pledging of assets for debt, and an increase in borrowing powers on a
CASE-BY-CASE basis, taking into consideration relevant factors, including, for
example:
o the potential increase in the company's outstanding interests or
shares, if any (E.G., convertible bonds); and
o the potential increase in the company's capital, if any, over the
current outstanding capital.
7. MERGERS OR ACQUISITIONS
The Firm will vote proxies relating to mergers or acquisitions on a CASE-BY-CASE
basis, but will generally vote for any proposals that the Firm believes will
offer fair value to its clients.
8. TERMINATION OR LIQUIDATION OF THE COMPANY
The Firm will vote proxies relating to the termination or liquidation of a
company on a CASE-BY-CASE basis, taking into consideration one or more of the
following factors:
o terms of liquidation;
o past performance of the company; and
o strategies employed to save the company.
9. SOCIAL & ENVIRONMENTAL ISSUES AND CORPORATE RESPONSIBILITY
The Firm will vote proxies relating to social and environmental issues on a
CASE-BY-CASE basis, but will generally vote for any proposals that will reduce
discrimination, improve protections to minorities and disadvantaged classes, and
increase conservation of resources and wildlife.
The Firm will generally vote AGAINST any proposals that place arbitrary
restrictions on the company's ability to invest, market, enter into contractual
arrangements or conduct other activities. The Firm will also generally vote
AGAINST proposals:
o to bar or restrict charitable contributions; or
o to limit corporate political activities.
10. ALL OTHER MATTERS
All other decisions regarding proxies will be determined on a CASE-BY-CASE basis
taking into account the general policy, as set forth above.
C. ABSTAINING FROM VOTING OR AFFIRMATIVELY NOT VOTING
The Firm will abstain from voting (which generally requires submission of a
proxy voting card) or affirmatively decide not to vote if the Firm determines
that abstaining or not voting is in the best interests of the Fund or account.
In making such a determination, the Firm will consider various factors,
including, but not limited to: (i) the costs associated with exercising the
proxy (E.G., translation or travel costs); and (ii) any legal restrictions on
trading resulting from the exercise of a proxy. The Firm will not abstain from
voting or affirmatively decide not to vote a proxy if the Fund or account is a
plan asset fund subject to the requirements of the Employee Retirement Income
Security Act of 1974, as amended. Furthermore, the Firm will not abstain from
voting or affirmatively decide not to vote merely to avoid a conflict of
interest.
III. CONFLICTS OF INTEREST
At times, conflicts may arise between the interests of the investing Funds or
accounts, on the one hand, and the interests of the Firm or its affiliates, on
the other hand. If the Firm determines that it has, or may be perceived to have,
a conflict of interest when voting a proxy, the Firm will address matters
involving such conflicts of interest as follows:
A. If a proposal is addressed by the specific policies herein, the Firm will
vote in accordance with such policies;
B. If the Firm believes it is in the best interest of the investing Funds or
accounts to depart from the specific policies provided for herein, the Firm will
be subject to the requirements of C or D below, as applicable;
C. If the proxy proposal is (1) not addressed by the specific policies or (2)
requires a case-by-case determination by the Firm, the Firm may vote such proxy
as it determines to be in the best interest of the investing Funds or accounts,
without taking any action described in D below, provided that such vote would be
against the Firm's own interest in the matter (I.E., against the perceived or
actual conflict). The Firm will memorialize the rationale of such vote in
writing; and
D. If the proxy proposal is (1) not addressed by the specific policies or (2)
requires a case-by-case determination by the Firm, and the Firm believes it
should vote in a way that may also benefit, or be perceived to benefit, its own
interest, then the Firm must take one of the following actions in voting such
proxy: (a) delegate the voting decision for such proxy proposal to an
independent third party; (b) delegate the voting decision to an independent
committee of partners, members, directors or other representatives of the Funds
or accounts, as applicable; (c) inform the investors in the investing Funds or
the owners of the investing accounts of the conflict of interest and obtain
consent to (majority consent in the case of a Fund) vote the proxy as
recommended by the Firm; or (d) obtain approval of the decision from the Firm's
Compliance Officer and third party Legal Advisors.
IV. PROCEDURES FOR PROXIES
The Investment Committee will be responsible for determining whether each proxy
is for a "routine" matter or not, as described above. All proxies identified as
"routine" will be voted by the Chief Legal Officer in accordance with the
Policies.
Any proxies that are not clearly "routine" will be submitted to the Investment
Committee, who/which will determine how to vote each such proxy by applying the
Policies. Upon making a decision, the proxy will be executed and returned to the
Chief Legal Officer for submission to the company. Upon receipt of an executed
proxy, the Firm's paralegal will update the investing Funds' or accounts' proxy
voting record. The Chief Legal Officer is responsible for the actual voting of
all proxies in a timely manner. The Compliance Officer is responsible for
monitoring the effectiveness of the Policies.
In the event the Firm determines that the investing Funds or accounts should
rely on the advice of an independent third party or a committee regarding the
voting of a proxy, the Firm will submit the proxy to such third party or
committee for a decision. The Chief Legal Officer will execute the proxy in
accordance with such third party's or committee's decision.
V. RECORD OF PROXY VOTING
The Compliance Officer also will maintain, or have available, written or
electronic copies of each proxy statement received and of each executed proxy.
The Compliance Officer will also maintain records relating to each proxy,
including (i) the determination as to whether the proxy was routine or not, (ii)
the voting decision with regard to each proxy; and (iii) any documents created
by the Investment Committee, or others, that were material to making the voting
decision.
The Firm will maintain a record of each written request from an investor in a
Fund or owner of an managed account for proxy voting information and the Firm's
written response to any request (oral or written) from an investor in a Fund or
owner of an managed account for proxy voting information.
The Compliance Officer will maintain such records in its offices for two years
from the end of the fiscal year during which the record was created, and for an
additional three years in an easily accessible place.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
(A)(1) PORTFOLIO MANAGERS
The day-to-day management of the Fund's portfolio is the responsibility of the
Adviser's Investment Committee, which is led by Mark Jurish, the Adviser's Chief
Investment Officer, and also includes Kenneth Stemme and Ross Weissman (each, a
"Portfolio Manager").
Mark Jurish is the Chief Executive Officer of the Adviser, an investment
advisory firm dedicated to the alternative investment industry and serving hedge
funds and institutional investors. The Adviser is registered with the SEC as an
investment advisor and with the CFTC as a Commodity Pool Operator. Prior to
forming the Adviser in 1999, Mr. Jurish was Managing Director at Paloma
Partners, a firm that he joined in 1988. At Paloma, Mr. Jurish was primarily
responsible for evaluating, selecting, and monitoring suitable investments for
various Paloma trading entities, as well as creating and structuring new
products. His duties included the creation and management of the initial
Upstream Partners Fund in 1993. From 1986 to 1988, Mr. Jurish was employed at
Skadden, Arps, Slate, Meagher and Flom as a specialist in financial investment
modeling and management consulting. Mr. Jurish began his financial career in
1984 at Arthur Young & Company (a predecessor of Ernst & Young), an
international accounting and consulting firm. Previously, he served as an
Independent Trustee of the MBIA Capital/Claymore Managed Duration Investment
Grade Municipal Fund, on the Best Practices Committee of the Greenwich
Roundtable and on the Board of Directors for the Managed Funds Association. Mr.
Jurish received his B.A. from State University of New York at Albany in 1980 and
his M.B.A. in Finance from New York University in 1984.
Ross M. Weissman is the Chief Financial Officer of the Adviser. Mr. Weissman
originally joined the Adviser in December, 1999. Prior to joining the Adviser,
Mr. Weissman was employed at Kenmar Advisory Corp in the fund administration and
risk management group. In 1997, Mr. Weissman joined Wexford Management as the
controller for the Wexford Spectrum Fund, where he was responsible for the
accounting and operations of the fund. From December 1996 until April 1997, he
was employed with KPMG Peat Marwick as a senior consultant in the forensic
accounting group. Mr. Weissman began his career in October 1994 with the public
accounting firm of Leslie Sufrin and Company. He is a Certified Public
Accountant and received his B.B.S. from Pace University.
Kenneth W. Stemme, Director of Research, joined the Adviser in April 2007. Mr.
Stemme was previously a Senior Vice President and Director of Hedge Fund
Investments at Northern Trust Global Advisors, where he managed approximately $1
billion in assets and chaired the Hedge Fund Investment Committee. Prior to
joining Northern Trust in 2003, Mr. Stemme was a Managing Director in the
Alternative Investment Group at American Express Asset Management. From 1999 to
2002, Mr. Stemme was Executive Director in the Alternative Investment Group at
CIBC Oppenheimer, where he was involved in the creation and management of a
registered fund of funds. From 1990 through 1998, Mr. Stemme worked at Harris
Associates, last serving as a research associate. Mr. Stemme received his B.A.
from Cornell University and his M.B.A. from DePaul University.
(A)(2) OTHER FUNDS AND ACCOUNTS MANAGED
The following table sets forth information about funds and accounts other than
the Fund for which the Portfolio Managers are primarily responsible for the
day-to-day portfolio management as of April 30, 2007.
REGISTERED INVESTMENT COMPANIES POOLED INVESTMENT VEHICLES MANAGED OTHER ACCOUNTS MANAGED
MANAGED BY THE PORTFOLIO MANAGER BY THE PORTFOLIO MANAGER BY THE PORTFOLIO MANAGER
-------------------------------- ---------------------------- ---------------------------------
NAME OF FUND'S
PORTFOLIO MANAGER NUMBER TOTAL ASSETS NUMBER TOTAL ASSETS NUMBER TOTAL ASSETS
- ----------------- -------- ---------------- ---------- ---------------- ----------- ----------------
Mark Jurish 5 $21,545,698 15 $660,823,161 1 $133,616,255
Kenneth Stemme 5 $21,545,698 15 $660,823,161 1 $133,616,255
Ross Weissman 5 $21,545,698 15 $660,823,161 1 $133,616,255
- -------------------------------------------------------------------------------------------------------------------
REGISTERED INVESTMENT POOLED INVESTMENT
COMPANIES MANAGED VEHICLES MANAGED OTHER ACCOUNTS MANAGED
BY THE PORTFOLIO MANAGER BY THE PORTFOLIO MANAGER BY THE PORTFOLIO MANAGER
------------------------------------- ----------------------------- -----------------------------
NUMBER WITH NUMBER WITH TOTAL ASSETS NUMBER WITH TOTAL ASSETS WITH
NAME OF FUND'S PERFORMANCE TOTAL ASSETS WITH PERFORMANCE- WITH PERFORMANCE PERFORMANCE- PERFORMANCE-BASED
PORTFOLIO MANAGER BASED FEES PERFORMANCE-BASED FEES BASED FEES BASED FEES BASED FEES BASED FEES
- ----------------- ----------- ---------------------- ------------ ---------------- ------------ -----------------
Mark Jurish 0 3 $36,202,000 0
Kenneth Stemme 0 3 $36,202,000 0
Ross Weissman 0 3 $36,202,000 0
(a)(3) Compensation
Compensation for the Portfolio Managers is a combination of a fixed salary and a
bonus. The bonus paid to a Portfolio Manager for any year may be made with
reference, in part, to the performance of the Fund or any other fund or account
managed by the Adviser during such year. The amount of salary and bonus paid to
the Portfolio Managers is based on a variety of factors, including the financial
performance of the Adviser, execution of managerial responsibilities, client
interactions and teamwork support. As part of their compensation, the Portfolio
Managers also have 401k plans that enable them to direct a percentage of their
pre-tax salary and bonus, without any contribution from the Adviser, into a
tax-qualified retirement plan.
(a)(4) Fund Ownership
The following table sets forth the dollar range of Interests beneficially owned
by the Portfolio Managers as of April 30, 2007.
PORTFOLIO MANAGER DOLLAR RANGE
----------------- ------------
Mark Jurish None
Kenneth Stemme None
Ross Weissman None
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT COMPANY AND
AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The certifying officers, whose certifications are included herewith, have
evaluated the registrant's disclosure controls and procedures within 90 days of
the filing date of this report. In their opinion, based on their evaluation, the
registrant's disclosure controls and procedures are adequately designed, and are
operating effectively to ensure, that information required to be disclosed by
the registrant in the reports it files or submits under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission's rules and forms.
(b) There were no significant changes in the registrant's internal control over
financial reporting that occurred during the registrant's last fiscal half-year
that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEMS 12. EXHIBITS.
(a)(1) Code of Ethics attached hereto.
(a)(2) A separate certification for the principal executive officer and the
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are filed
herewith.
(b) Officer certifications as required by Rule 30a-2(b) under the Investment
Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing
as an Exhibit.
- --------------------------------------------------------------------------------
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) Old Mutual 2100 Absolute Return Master
Fund, L.L.C.
By (Signature and Title)* /s/ William J. Landes
--------------------------------------
William J. Landes
President & Chief Executive Officer
Date: June 8, 2007
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/ William J. Landes
--------------------------------------
William J. Landes
President & Chief Executive Officer
Date: June 8, 2007
By (Signature and Title)* /s/ Ross Weissman
--------------------------------------
Ross Weissman
Treasurer & Chief Financial Officer
Date: June 8, 2007
* Print the name and title of each signing officer under his or her signature.