10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)
þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2007
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from                   to

Commission file number: 000-50723

Goldman Sachs Hedge Fund Partners, LLC

(Exact name of registrant as specified in its charter)

Delaware	04-3638229
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
One New York Plaza New York, New York (Address of Principal Executive Offices)	10004 (Zip Code)

(212) 902-1000

(Registrant’s Telephone Number, including Area Code)

Securities registered pursuant to Section 12(b) of the Act: None

	Name of Each Exchange
Title of Each Class	on Which Registered

Securities registered pursuant to Section 12(g) of the Act:

Units of Limited Liability Company Interests

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes o No þ

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o	Non-accelerated filer þ	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

The Registrant’s Units of Limited Liability Company Interests are not traded on any market and, accordingly, have no aggregate market value. The net asset value of the Units of Limited Liability Company Interests as of June 30, 2007 held by non-affiliates was $682,524,461.

Documents Incorporated By Reference

Certain exhibits are incorporated by reference in ITEM 15 of this report

TABLE OF CONTENTS

		Page
PART I
ITEM 1.	BUSINESS		3
ITEM 1A.	RISK FACTORS		59
ITEM 1B.	UNRESOLVED STAFF COMMENTS		96
ITEM 2.	PROPERTIES		97
ITEM 3.	LEGAL PROCEEDINGS		97
ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS		97
PART II
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES		98
ITEM 6.	SELECTED FINANCIAL DATA		101
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION		102
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		122
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA		126
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE		126
ITEM 9A(T).	CONTROLS AND PROCEDURES		126
ITEM 9B.	OTHER INFORMATION		127
PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS OF THE MANAGING MEMBER AND REGISTRANT AND CORPORATE GOVERNANCE		128
ITEM 11.	EXECUTIVE COMPENSATION		131
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS		131
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE		132
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES		135
PART IV
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES		136
EX-10.2: AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
EX-10.5: FORM OF AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
EX-10.6: FORM OF AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
EX-31.1: CERTIFICATION
EX-31.2: CERTIFICATION
EX-31.3: CERTIFICATION
EX-32.1: CERTIFICATION
EX-32.2: CERTIFICATION
EX-32.3: CERTIFICATION

2

PART I

ITEM 1.   BUSINESS

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

Goldman Sachs Hedge Fund Partners, LLC (the “Company”) is a Delaware limited liability company organized in March 2002 to operate as an investment fund. Goldman Sachs Hedge Fund Strategies LLC (“GS HFS”) (formerly Goldman Sachs Princeton LLC), a Delaware limited liability company, serves as the Company’s managing member (the “Managing Member”). As of December 31, 2007, the Company had net assets of approximately $680.8 million.

From its inception in April 2002 through July 2003, the Company grew through subscriptions of new investors. The Company believes its growth during this period followed the general national trend of significant inflows achieved by other hedge funds during this period. From April 1, 2002 through July 1, 2003, the Company received approximately 834 investors averaging over 50 investors a month and had a maximum of 104 investors subscribing to the Company in July 2003. Moreover, during this fifteen-month period, total subscriptions in the Company exceeded $880 million and averaged over $55 million per month with approximately $121.8 million being invested in July 2003. During this period, the Company had at least 30 new investors each month and at least $24.5 million invested every month. From July 2003 through September 2004, the Company only took in investments from existing investors and limited subscriptions from new qualified investors; however, starting in October 2004, the Company began accepting additional amounts of new subscriptions again and the Company continued to do so through December 31, 2007. For the period from October 1, 2004 through December 31, 2007, the Company had 400 new investors and $404.5 million of aggregate subscriptions from existing and new investors. The number of investors that came into the Company during this period does not represent the number of investors in the Company today due to redemptions made by investors during the same period. The Company may close again at any time without notice at the sole discretion of the Managing Member. The acceptance of future subscriptions in the Company and the continued growth of the Company will be determined by the Managing Member in its sole discretion. In January 2008, the Company satisfied redemption requests in the amount of approximately $22.7 million.

INVESTMENT PROGRAM

Investment Objective and Approach

The Company’s investment objective is to target attractive long-term risk-adjusted returns across a variety of market environments with volatility and correlation that are lower than those of the broad equity markets. To achieve this objective, the Company allocates all or substantially all of its assets among privately placed investment funds (such funds and any successor funds thereto, individually, an “Investment Fund” and collectively the “Investment Funds”) managed by the Managing Member, each of which (directly or through other entities) allocates its assets to, or invests in entities managed by, independent investment managers (collectively, the “Advisors”) that employ a broad range of investment strategies primarily within one or more of the following hedge fund sectors (each an “Investment Sector” and collectively, the “Investment Sectors”): the tactical trading sector, the equity long/short sector, the relative value sector and the event driven sector. Currently, substantially all of the Company’s assets are invested in five Investment Funds, each of which is managed by the Managing Member. The existing Investment Funds are Goldman Sachs Global Equity Long/Short, LLC (“GELS”), Goldman Sachs Global Fundamental Strategies, LLC (“GFS”) (formerly known as Goldman Sachs Global Event Driven, LLC (or “GED”)), Goldman Sachs Global Relative Value, LLC (“GRV”), Goldman Sachs Global Tactical Trading, LLC (“GTT”) and Goldman Sachs HFP Opportunistic Fund, LLC (“HFPO”). The Company may also allocate assets to an Advisor (other than through an investment in Investment Fund) by investing in an Advisor Fund, establishing a Managed Account or investing in a Portfolio Company (each as defined below). See “Direct Allocations to Advisors.” The assets of each Investment Fund are allocated to Advisors, directly or indirectly, by, among other means, (i) investing in investment funds managed by Advisors (each an “Advisor Fund” and collectively the “Advisor Funds”), (ii) investing with Advisors pursuant to investment management agreements

3

in respect of discretionary managed accounts (each a “Managed Account” and collectively the “Managed Accounts”), or (iii) investing in a separate exempted company incorporated with limited liability in the Cayman Islands (each a “Portfolio Company” and collectively the “Portfolio Companies”) that has entered into an investment management agreement with an Advisor in respect of a Managed Account established by such Portfolio Company. See “PORTFOLIO COMPANIES.” (References herein to Advisors include Advisor Funds where the context permits). One or more of the Investment Funds have in the past and may from time to time not accept additional subscriptions or limit the amount of additional subscriptions from third parties because certain of the Advisors with which they invest are no longer accepting additional investments. Under such circumstances, the Managing Member does not expect to allow additional investors to subscribe for units in the Company except as a result of redemptions in the Company. However, even if the Investment Funds are closed generally, the Investment Funds may accept additional investments from the Company for rebalancing or other purposes. See also the Schedule of Investments in the financial statements for more information about the level of the Company’s investments through the Investment Funds with certain Advisors.

Each of the existing Investment Funds is a Delaware limited liability company. A brief description of the investment objective and approach of each of the existing Investment Funds is set forth under “PERFORMANCE OF THE COMPANY—Description of the Investment Funds and the Performance of the Investment Funds.”

The Investment Sectors are subjective classifications made by the managing member of the Investment Funds in its sole discretion. Such classifications are based on information provided by the Advisors to the managing member of the relevant Investment Fund and may differ from classifications of similarly named sectors made by other industry participants. In addition, although each Advisor to which an Investment Fund allocates assets invests principally utilizing investment strategies within the applicable Investment Sector, certain Advisors to which an Investment Fund allocates assets may also utilize other investment strategies that are either related or unrelated to such Investment Sector. For example, multi-strategy Advisors invest across a range of strategies. These Advisors tend to be more opportunistic in targeting specific event driven, equity long/short and relative value strategies during differing market environments.

There can be no assurance that the Company or any of the Investment Funds will achieve its investment objective or that the portfolio design, risk monitoring and hedging strategies of the Company or any of the Investment Funds will be successful. See ITEM 1A. “RISK FACTORS.”

The Company may hold cash or invest the Company’s cash balances at such times and in any instruments it deems appropriate, including cash equivalents and other short term securities, pending investment in Investment Funds, in order to fund anticipated redemptions or expenses of the Company, or otherwise in the sole discretion of the Managing Member. Such balances may also be invested in money market funds sponsored by The Goldman Sachs Group, Inc. or its affiliates, including Goldman, Sachs & Co. (“Goldman Sachs”) (collectively referred to herein, together with their affiliates, directors, partners, trustees, managers, members, officers and employees, as the “GS Group”) and the Company will not be reimbursed for any fees accruing to any affiliate of the GS Group in respect of any such investment. The Company generally reinvests any available income earned from investments of its cash balances in accordance with its investment program. The Investment Funds are also permitted to hold cash or invest their cash balances in the same manner.

Allocation Among the Investment Funds

The Managing Member may allocate the Company’s assets across the Investment Sectors in a manner consistent with the Company’s investment objective. While the Managing Member currently expects to allocate assets to all the Investment Sectors through allocations to GTT, GELS, GRV, GFS and HFPO, as of April 1, 2008, the Managing Member will have no constraints with respect to the percentage of the Company’s assets to be allocated, directly or indirectly, to any single Advisor, group of Advisors, Investment Fund, or Investment Sector, or with respect to the number of Investment Funds and Advisors to which, directly or indirectly, assets of the Company are allocated at any time. The percentage of the Company’s assets to be allocated to any single Advisor, group of Advisors, Investment Fund or Investment Sector, and the number of Investment Funds and Advisors to which the Company allocates assets from time to time will be determined by the Managing Member in its sole discretion, based on factors deemed relevant by the Managing Member at the time of such allocation, which may include the

4

amount of the Company’s assets under management, constraints on the capital capacity of the Investment Funds and Advisors, the availability of attractive opportunities, and other portfolio construction and portfolio management considerations. Through June 30, 2004, the Managing Member allocated on an equal risk-adjusted basis among the Investment Funds. An adjustment to weights was implemented as of July 1, 2004, based on the Managing Member’s judgment, to reflect the Managing Member’s then updated expectations for return, risk and correlations for the Investment Funds. In addition, on July 1, 2005 and January 1, 2006, the Managing Member made tactical adjustments to the weightings of the Investment Funds, based on the Managing Member’s judgment, in each case reflecting the Managing Member’s updated expectations for return, risk and correlations for the Investment Funds. The tactical adjustment to the weights among the Investment Funds made on July 1, 2005 was implemented by the Managing Member gradually following July 1, 2005. The tactical adjustment to the weights among the Investment Funds made on January 1, 2006 was implemented by the Managing Member effective January 1, 2006. The Managing Member may, from time to time, vary or change materially the actual allocation of assets made by the Company, as it deems appropriate in its sole discretion, including without limitation, by way of allocation of Company assets to any new Investment Fund or Advisor, complete or partial withdrawal of an allocation to any existing Investment Fund or Advisor, a reallocation of assets among existing Investment Funds or Advisors, or any combination of the foregoing. In carrying out any reallocation of Company assets, the Managing Member will have the sole discretion to determine the manner of such reallocation, including from which Investment Funds or Advisors to withdraw assets and to which Investment Funds or Advisors to allocate assets. Any reallocation of Company assets may take a significant period of time to implement due to the liquidity provisions and restrictions of the Investment Funds and the Advisors and for other reasons. There can be no assurance that market or other events will not have an adverse impact on the strategies employed by multiple Investment Funds and Advisors. Investment Funds and Advisors may at certain times hold large positions in a relatively limited number of investments. The Company could be subject to significant losses if an Investment Fund or an Advisor holds a large position in a particular investment that declines in value that cannot be liquidated without adverse market reaction or is otherwise adversely affected by changes in market conditions or circumstances. See ITEM 1A. “RISK FACTORS—General Risks—Risks Related to the Company and the Investment Funds’ Performance and Operation—There Can Be No Assurance that the Managing Member’s Decisions Regarding Allocations will be Successful; Inaccurate Information Provided by the Advisors May Have a Material Adverse Effect on Implementing the Company’s Investment Objective,” “—Special Risks of the Company’s Structure—Risks Associated with the Company Investing in Other Entities—Advisors May Have Limited Capacity to Manage Additional Investment Fund Investments, Which Could Cause Dilution or Concentration of the Company’s Investments or Negatively Affect Allocation of Investments” and “—Special Risks of the Company’s Structure—Allocation of the Company’s Assets May Not Protect the Company from Exposure to Economic Downturns in Any Investment Fund or Investment Sector.”

As of December 31, 2007, 2006, 2005, 2004 and 2003, respectively, the members’ equity of the Company was allocated among the Investment Funds approximately as described in the tables below. Members’ equity, or net assets, means the total assets of the Company less total liabilities of the Company at the time of determination in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). Total assets means the sum of the Company’s cash and cash equivalents, other assets and investments determined at any time in accordance with U.S. GAAP as of that date. The figures represent actual allocations of the Company’s members’ equity and not the allocation of the expected risk of the Company among the Investment Funds. The allocations of the Company’s members’ equity will change from time to time in accordance with the Company’s investment objective and strategies. In addition, the tables below as of December 31, 2007, 2006, 2005, 2004 and 2003 also provide the approximate allocations among the Investment Funds of the adjusted members’ equity. The adjusted members’ equity excluded Redemptions payable of $22,708,145 at December 31, 2007, $23,701,199 at December 31, 2006, $347,523,596 at December 31, 2005, $128,546,636 at December 31, 2004 and $34,529,625 at December 31, 2003, which is reflected in the financial statements as a liability under U.S. GAAP. The Managing Member believes this allocation more accurately reflects the percentage of the Company’s equity invested in the Investment Funds given the timing of the payment for the Redemptions payable. The Company’s investments are carried at fair value as determined by the Company’s attributable share of the net assets of the respective Investment Fund. Fair values are determined utilizing information supplied by each individual Investment Fund net of each Advisor’s management fee and incentive allocation and are not a guarantee of actual realizable amounts. See ITEM 1A. “RISK FACTORS—

5

Special Risks of the Company’s Structure—Risks Related to the Company’s Structure—The Company’s Financial Statements are, and in the Future Will Ultimately be, Based on Estimates of Valuations Provided by Third Party Advisors Which May not be Accurate or May Need to be Adjusted in the Future,” “—Risks Associated with the Company Investing in Other Entities—Valuation of the Investment Funds’ Investments Will be Based Upon Valuations Provided by the Advisors Which are Generally not Audited; Uncertainties in Valuations Could Have a Material Adverse Effect on the Company’s Net Assets” and ITEM 7. “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS—Critical Accounting Policies and Estimates.”

December 31, 2007

			Fair Value of			Fair Value of
	Fair Value of		Company’s			Company’s Investment
	Company’s		Investment as a % of			as a % of Adjusted
Investment Fund	Investment in $ Amount		Members’ Equity (1)			Members’ Equity (2)
GELS	$	225,759,808		33.16	%		32.09	%
GFS	$	257,594,595		37.84	%		36.62	%
GRV	$	84,319,166		12.38	%		11.99	%
GTT	$	97,949,282		14.39	%		13.92	%
HFPO	$	36,813,437		5.41	%		5.23	%
Total	$	702,436,288		103.18	%(3)		99.85	%(4)

(1)	Members’ equity, used in the calculation of the investments as a percentage of members’ equity, is reduced for member redemptions that are paid after the balance sheet date.
(2)	Adjusted members’ equity, used in the calculation of the investments as a percentage of adjusted members’ equity, represents members’ equity excluding $22,708,145 in Redemptions payable at December 31, 2007.
(3)	The total value of the Company’s investments in the Investment Funds exceeded 100% of members’ equity and adjusted members’ equity, respectively, because members’ equity and adjusted members’ equity both reflected certain accrued liabilities of the Company, including fees and expenses, and, in addition, members’ equity also reflected Redemptions payable at December 31, 2007.
(4)	The total value of the Company’s investment in the Investment Funds was less than 100% of adjusted members’ equity because members’ equity reflected cash and cash equivalents greater than total liabilities excluding Redemptions payable in the amount of $22,708,145.

December 31, 2006

			Fair Value of			Fair Value of
	Fair Value of		Company’s			Company’s Investment
	Company’s		Investment as a % of			as a % of Adjusted
Investment Fund	Investment in $ Amount		Members’ Equity (1)			Members’ Equity (2)
GELS	$	243,737,514		36.81	%		35.54	%
GFS	$	240,699,867		36.36	%		35.10	%
GRV	$	98,479,997		14.87	%		14.36	%
GTT	$	103,332,963		15.61	%		15.07	%
Total	$	686,250,341		103.65	%(3)		100.07	%(3)

(1)	Members’ equity, used in the calculation of the investments as a percentage of members’ equity, is reduced for member redemptions that are paid after the balance sheet date.
(2)	Adjusted members’ equity, used in the calculation of the investments as a percentage of adjusted members’ equity, represents members’ equity excluding $23,701,199 in Redemptions payable at December 31, 2006.
(3)	The total value of the Company’s investments in the Investment Funds exceeded 100% of members’ equity and adjusted members’ equity, respectively, because members’ equity and adjusted members’ equity both reflected

6

certain accrued liabilities of the Company, including fees and expenses, and, in addition, members’ equity also reflected Redemptions payable at December 31, 2006.

December 31, 2005

			Fair Value of			Fair Value of
	Fair Value of		Company’s			Company’s Investment
	Company’s		Investment as a% of			as a% of Adjusted
Investment Fund	Investment in $ Amount		Members’ Equity (1)			Members’ Equity (2)
GELS	$	294,096,911		37.97	%		26.21	%
GFS	$	301,443,254		38.91	%		26.86	%
GRV	$	317,728,892		41.02	%		28.32	%
GTT	$	211,060,876		27.25	%		18.81	%
Total	$	1,124,329,933		145.15	%(3)		100.20	%(3)

(1)	Members’ equity, used in the calculation of the investments as a percentage of members’ equity, is reduced for member redemptions that are paid after the balance sheet date.
(2)	Adjusted members’ equity, used in the calculation of the investments as a percentage of adjusted members’ equity, represents members’ equity excluding $347,523,596 in Redemptions payable at December 31, 2005.
(3)	The total value of the Company’s investments in the Investment Funds exceeded 100% of members’ equity and adjusted members’ equity, respectively, because members’ equity and adjusted members’ equity both reflected certain accrued liabilities of the Company, including fees and expenses, and, in addition, members’ equity also reflected Redemptions payable at December 31, 2005.

December 31, 2004

			Fair Value of			Fair Value of
	Fair Value of		Company’s Investment			Company’s Investment
	Company’s Investment		as a% of Members’			as a% of Adjusted
Investment Fund	in $ Amount		Equity (1)			Members’ Equity (2)
GELS	$	226,276,134		23.63	%		20.84	%
GFS	$	268,186,702		28.01	%		24.69	%
GRV	$	350,409,379		36.60	%		32.27	%
GTT	$	248,081,137		25.91	%		22.84	%
Total	$	1,092,953,352		114.15	%(3)		100.64	%(3)

(1)	Members’ equity, used in the calculation of the investments as a percentage of members’ equity, is reduced for member redemptions that are paid after the balance sheet date.
(2)	Adjusted members’ equity, used in the calculation of the investments as a percentage of adjusted members’ equity, represents members’ equity excluding $128,546,636 in Redemptions payable at December 31, 2004.
(3)	The total value of the Company’s investments in the Investment Funds exceeded 100% of members’ equity and adjusted members’ equity, respectively, because members’ equity and adjusted members’ equity both reflected certain accrued liabilities of the Company, including fees and expenses, and, in addition, members’ equity also reflected Redemptions payable at December 31, 2004.

7

December 31, 2003

			Fair Value of			Fair Value of
	Fair Value of		Company’s Investment			Company’s Investment
	Company’s Investment		as a% of Members’			as a% of Adjusted
Investment Fund	in $ Amount		Equity (1)			Members’ Equity (2)
GELS	$	140,117,348		15.01	%		14.48	%
GFS	$	221,899,920		23.78	%		22.93	%
GRV	$	359,311,989		38.50	%		37.12	%
GTT	$	249,583,571		26.74	%		25.79	%
Total	$	970,912,828		104.03	%(3)		100.32	%(3)

(1)	Members’ equity, used in the calculation of the investments as a percentage of members’ equity, is reduced for member redemptions that are paid after the balance sheet date.
(2)	Adjusted members’ equity, used in the calculation of the investments as a percentage of adjusted members’ equity, represents members’ equity excluding $34,529,625 in Redemptions payable at December 31, 2003.
(3)	The total value of the Company’s investments in the Investment Funds exceeded 100% of members’ equity and adjusted members’ equity, respectively, because members’ equity and adjusted members’ equity both reflected certain accrued liabilities of the Company, including fees and expenses, and, in addition, members’ equity also reflected Redemptions payable at December 31, 2003.

PERFORMANCE OF THE COMPANY

For the years ended December 31, 2007, 2006, 2005, 2004 and 2003, the Company had net returns as described in the tables below. Past performance of the Company is not indicative of future results which may vary. The Company’s net return has been computed based on the performance of the Company net of all fees and expenses including, among others (i) incentive allocations to the Managing Member and (ii) a monthly management fee to the Managing Member. See “FEES AND EXPENSES.”

January 1, 2007 — December 31, 2007

	Month of Issuance of	Net Return for Period
Series of Units (1)	Units	Outstanding (2)
Class A Series 1	—		11.51%
Class A Series 33	January		11.51%
Class A Series 34	February		9.77%
Class A Series 35	March		8.90%
Class A Series 36	April		7.95%
Class A Series 37	May		6.21%
Class A Series 38	June		3.95%
Class A Series 39	July		3.43%
Class A Series 40	August		3.54%
Class A Series 41	September		5.58%
Class A Series 42	October		3.87%
Class A Series 43	November		0.36%
Class A Series 44	December		0.73%

(1)

As of December 31, 2007, the Company had 13 series of Class A Units (as defined below) outstanding. The Class A Series Units (as defined below) are identical in every regard except with respect to its individualized incentive allocation base. Effective January 1, 2008, Class A Series 33 through Class A Series 44 units were converted into Class A Series 1 units. Class A Series Units (other than Class A Series 1) issued in future periods represent issuances of new series and are different from existing series.

(2)

The net return is shown for the month of issuance through December 31, 2007.

8

January 1, 2006 — December 31, 2006

	Month of Issuance of	Net Return for Period
Series of Units (1)	Units	Outstanding (2)
Class A Series 1	—		9.03	%
Class A Series 21	January		9.03	%
Class A Series 22	February		6.00	%
Class A Series 23	March		5.51	%
Class A Series 24	April		3.82	%
Class A Series 25	May		2.32	%
Class A Series 26	June		4.28	%
Class A Series 27	July		4.74	%
Class A Series 28	August		4.84	%
Class A Series 29	September		4.06	%
Class A Series 30	October		4.77	%
Class A Series 31	November		3.21	%
Class A Series 32	December		1.37	%

(1)

As of December 31, 2006, the Company had 13 series of Class A Units outstanding. The Class A Series Units are identical in every regard except with respect to its individualized incentive allocation base. Effective January 1, 2007, Class A Series 21 through Class A Series 32 units were converted into Class A Series 1 units. Class A Series (other than Class A Series 1) issued in future periods represent issuances of new series and are different from existing series.

(2)

The net return is shown for the month of issuance through December 31, 2006.

January 1, 2005 — December 31, 2005

	Month of Issuance of	Net Return for Period
Series of Units (1)	Units	Outstanding (2)
Class A Series 1	—		4.57	%
Class A Series 9	January		4.57	%
Class A Series 10	February		5.17	%
Class A Series 11	March		4.12	%
Class A Series 12	April		4.69	%
Class A Series 13	May		6.28	%
Class A Series 14	June		5.87	%
Class A Series 15	July		4.71	%
Class A Series 16	August		3.26	%
Class A Series 17	September		2.31	%
Class A Series 18	October		1.04	%
Class A Series 19	November		2.77	%
Class A Series 20	December		1.46	%

(1)

As of December 31, 2005, the Company had 13 series of Class A Units outstanding. The Class A Series Units are identical in every regard except with respect to its individualized incentive allocation base. Effective January 1, 2006, Class A Series 9 through Class A Series 20 units were converted into Class A Series 1 units. Class A Series (other than Class A Series 1) issued in future periods represent issuances of new series and are different from existing series.

(2)

The net return is shown for the month of issuance through December 31, 2005.

9

January 1, 2004 — December 31, 2004

	Month of Issuance of	Net Return for Period
Series of Units (1)	Units	Outstanding (2)
Class A Series 1	—		5.53	%
Class A Series 2	February		4.48	%
Class A Series 3	July		4.95	%
Class A Series 4	August		5.73	%
Class A Series 5	September		5.72	%
Class A Series 6	October		4.98	%
Class A Series 7	November		4.01	%
Class A Series 8	December		1.12	%

(1)

As of December 31, 2004, the Company had 8 series of Class A Units outstanding. The Class A Series Units are identical in every regard except with respect to its individualized incentive allocation base. Effective January 1, 2005, Class A Series 2 through Class A Series 8 units were converted into Class A Series 1 units. Class A Series (other than Class A Series 1) issued in future periods represent issuances of new series and are different from existing series.

(2)

The net return is shown for the month of issuance through December 31, 2004.

January 1, 2003 — December 31, 2003

	Month of Issuance of	Net Return for Period
Series of Units (1)	Units	Outstanding (2)
Class A Series 1	—		9.60	%
Class A Series 2	February		7.98	%
Class A Series 3	March		6.87	%
Class A Series 4	April		7.65	%
Class A Series 5	May		6.59	%
Class A Series 6	June		3.77	%
Class A Series 7	July		3.74	%
Class A Series 8	August		4.64	%
Class A Series 9	November		1.65	%
Class A Series 10	December		1.35	%

(1)

As of December 31, 2003, the Company had 10 series of Class A Units outstanding. The Class A Series Units are identical in every regard except with respect to its individualized incentive allocation base. Effective January 1, 2004, Class A Series 2 through Class A Series 10 units were converted into Class A Series 1 units. Class A Series (other than Class A Series 1) issued in future periods represent issuances of new series and are different from existing series.

(2)

The net return is shown for the month of issuance through December 31, 2003.

The Company only has one class of units at present, Class A units (the “Class A Units” and each series of Class A Units the “Class A Series Units”). The Class A Series Units are subject to a management fee and an incentive allocation. Separately, the Investment Funds (GTT, GELS, GRV, GFS and HFPO) each offer separate classes of units. Among the classes of units offered by GTT, GELS, GRV and GFS, each has offered Class C units (the “Class C Units” and each series of Class C Units the “Class C Series Units”) while HFPO has offered Class A Units, all of which are not subject to management fees and incentive allocations at an Investment Fund level (although management fees and incentive allocations are paid to each of the Advisors in which the Investment Funds invest). The Company only owns Class C Series Units of GTT, GELS, GRV and GFS and owns Class A Series Units of HFPO. The intent behind this fee arrangement was to create a fee structure such that holders of Class A Series Units of the Company are not—in addition to management and incentive allocations paid to the Company (as well as management and incentive allocations paid to individual Advisors)—also subject to management fees and incentive allocations paid by each of the Investment Funds. Therefore, holders of a fee

10

bearing class of the Company indirectly own “no-fee-shares” of the Investment Funds. Through its investment in the Investment Funds, the Company bears a pro rata portion of all other offering, organizational and operating expenses of the Investment Funds, including the administration fee for SEI’s (as defined below) services as administrator of each Investment Fund, and a pro rata portion of the Advisor compensation paid by the Investment Funds. Returns in the tables above are shown net of these expenses. See “FEES AND EXPENSES.”

The table below compares the historical cumulative total net return of the Company’s Units for the investment periods indicated in the table with the 3 Month London Interbank Offered Rate (“LIBOR”), the Lehman Brothers Aggregate Index, the MSCI World Index and the S&P 500 Index. The 3 Month LIBOR, the Lehman Brothers Aggregate Index, the MSCI World Index and the S&P 500 Index are commonly used as comparative indices by hedge fund investors. The Managing Member does not manage the Company in respect of any particular index. References to market or composite indices, benchmarks or other measures of relative market performance over a specified period of time (referred to herein as an “index” or collectively as “indices”) are provided for information only. Reference to these indices does not imply that the portfolio will achieve returns, volatility or other results similar (or dissimilar) to the indices. The composition of an index may not reflect the manner in which a portfolio is constructed in relation to expected or achieved returns, portfolio guidelines, restrictions, sectors, correlations, concentrations, volatility or tracking error targets, all of which are subject to change over time. These indices are unmanaged and the figures for an index reflect the reinvestment of dividends but do not reflect the deduction of any fees or expenses which would reduce returns. The holders of Units of the Company (each a “Member” and collectively the “Members”) cannot invest directly in these indices.

					Lehman
					Brothers		MSCI
	Company		3 Month		Aggregate		World		S&P 500
Investment Period	(1)		LIBOR		Index		Index		Index
1/1/2007 — 12/31/2007		11.51%		5.32%		6.97%		9.04%		5.49%
1/1/2006 — 12/31/2006		9.03%		5.10%		4.33%		20.07%		15.79%
1/1/2005 — 12/31/2005		4.57%		3.32%		2.43%		9.49%		4.91%
1/1/2004 — 12/31/2004		5.53%		1.48%		4.34%		14.72%		10.88%
1/1/2003 — 12/31/2003		9.60%		1.23%		4.10%		33.11%		28.68%

(1) Company returns shown are the net returns for Class A Series 1 for each of the investment periods shown. See above for the Company’s net returns for Class A Series 33-44, Class A Series 21-32, Class A Series 9-20, Class A Series 2-8 and Class A Series 2-10 for 2007, 2006, 2005, 2004 and 2003, respectively.

Description of the Investment Funds and the Performance of the Investment Funds

The annual net returns shown for each Investment Fund in the tables below have been computed based on the performance of the respective Investment Fund net of all expenses allocated by each Investment Fund to the Company for periods shown following the commencement of the Company. Past performance of the Investment Funds is not indicative of future results which may vary significantly. The Company owns “no-fee-shares” in each Investment Fund and accordingly the Company was not charged any incentive allocation or management fee by the Managing Member in its capacity as managing member of each of the Investment Funds. See “FEES AND EXPENSES.”

Goldman Sachs Global Equity Long/Short, LLC

GELS’ investment objective is to target attractive risk-adjusted returns with volatility lower than the broad equity markets, primarily through long and short investment opportunities available principally in the global equity markets. As of December 31, 2007, GELS’ managing member (currently, the Managing Member) had allocated GELS’ assets, directly or indirectly, to 46 Advisors, although this number may change materially over time as determined by GELS’ managing member. Equity long/short strategies involve making long and short equity investments, generally based on fundamental evaluations, although it is expected that Advisors in this Investment Sector will employ a wide range of styles. For example, such Advisors may (i) focus on companies within specific industries; (ii) focus on companies only in certain countries or regions; (iii) focus on companies with certain ranges of market capitalization; or (iv) employ a more diversified approach, allocating assets to opportunities across

11

investing styles, industry sectors, market capitalizations and geographic regions. The managing member of GELS generally will not allocate more than 25% of GELS’ total assets to any single Advisor at the time of allocation. GELS was organized on July 1, 2001 and commenced its operations on August 1, 2001.

Individuals affiliated with GS Group, including directors, officers, employees, partners, trustees, managers, members and any related trusts, owned less than 1% of GELS as of December 31, 2007.

For the past five years from January 1, 2003 to December 31, 2007, GELS had net returns on invested assets as described in the table below.

Investment Period*	Net Return for Period
1/1/2007 — 12/31/2007		11.70%
1/1/2006 — 12/31/2006		11.91%
1/1/2005 — 12/31/2005		9.93%
1/1/2004 — 12/31/2004		9.27%
1/1/2003 — 12/31/2003		13.73%

* Net return is based on the performance of Class C Series 1 units. Class C Series 1 units (“no-fee-shares”) of GELS (including those issued to the Company) are not subject to management fees paid or incentive allocations made to GS HFS as managing member of GELS and therefore returns do not reflect the payment of any such fees or the making of any allocations to GS HFS. In addition, returns for Class C Series 1 units during the entire period reflect returns net of the compensation paid to Advisors. The returns shown for 2003 and 2004 are also net of the payment of an administration fee to GS HFS by GELS. The returns shown for 2005, 2006 and 2007 are net of an administration fee paid by GELS to SEI who became the administrator of GELS on January 1, 2005. No administration fee was paid to GS HFS by GELS in 2005, 2006 and 2007.

Goldman Sachs Global Fundamental Strategies, LLC

GFS’s investment objective is to target attractive risk-adjusted absolute returns with volatility and correlation that are lower than the broad equity markets by allocating assets to Advisors that operate primarily in the global event driven sector. As of December 31, 2007, GFS’s managing member (currently, the Managing Member) had allocated GFS’s assets, directly or indirectly, to 17 Advisors, although this number may change materially over time as determined by GFS’s managing member. Prior to April 1, 2008, GFS’s managing member generally did not allocate more than 25% of GFS’s total assets to any single Advisor at the time of allocation. As of April 1, 2008, there will be no restrictions on the amount of assets of GFS that its managing member can allocate to any single Advisor. Event driven strategies seek to identify security price changes resulting from corporate events such as restructurings, mergers, takeovers, spin-offs and other special situations. Corporate event arbitrageurs generally choose their investments based on their perceptions of the likelihood that the event or transaction will occur, the amount of time that the process will take and the perceived ratio of return to risk.

Strategies that may be utilized in the event driven sector include risk arbitrage/special situations and credit opportunities/distressed securities, each of which is described in greater detail below. Other strategies may be employed as well.

Risk Arbitrage/Special Situations

Risk arbitrageurs seek to capture the price spread between current market prices and the value of securities upon successful completion of a takeover or merger transaction. The availability of spreads reflects the unwillingness of other market participants to take on transaction-based risk, i.e., the risk that the transaction will not be completed and the price of the company being acquired will fall. Risk arbitrageurs evaluate this risk and seek to create portfolios that reduce specific event risk.

Special situations such as spin-offs and corporate reorganizations and restructurings offer additional opportunities for Advisors. Often these strategies are employed alongside risk arbitrage or distressed investing. An Advisor’s ability to evaluate the effect of the impact and timing of the event and to take on the associated event

12

risk is the source of the returns. Advisors differ in the degree to which they hedge the equity market risk of their portfolios.

Credit Opportunities/Distressed Securities

Credit opportunities/distressed securities strategies invest in debt or equity securities of firms in or near bankruptcy. Advisors differ in terms of the level of the capital structure in which they invest, the stage of the restructuring process at which they invest, and the degree to which they become actively involved in negotiating the terms of the restructuring.

Individuals affiliated with GS Group, including directors, officers, employees, partners, trustees, managers, members and any related trusts, owned approximately 1.5% of GFS as of December 31, 2007.

GFS was organized on November 1, 2001 and commenced its operations on April 1, 2002. Since January 1, 2003 until December 31, 2007 GFS had net returns on invested assets as described in the table below.

Investment Period*	Net Return for Period
1/1/2007 — 12/31/2007		20.22%
1/1/2006 — 12/31/2006		14.57%
1/1/2005 — 12/31/2005		7.65%
1/1/2004 — 12/31/2004		12.70%
1/1/2003 — 12/31/2003		18.09%

* Net return is based on the performance of Class C Series 1 units. Class C Series 1 units (“no-fee-shares”) of GFS (including those issued to the Company) are not subject to management fees paid or incentive allocations made to GS HFS as managing member of GFS and therefore returns do not reflect the payment of any such fees or the making of any allocations to GS HFS. In addition, returns for Class C Series 1 units during the entire period reflect returns net of the compensation paid to Advisors. The returns shown for 2003 and 2004 are also net of the payment of an administration fee to GS HFS by GFS. The returns shown for 2005, 2006 and 2007 are net of an administration fee paid by GFS to SEI who became the administrator of GFS on January 1, 2005. No administration fee was paid to GS HFS by GFS in 2005, 2006 and 2007.

Goldman Sachs Global Relative Value, LLC

GRV’s investment objective is to target attractive risk-adjusted absolute returns with volatility and correlation that are lower than the broad equity markets by allocating assets to Advisors that operate primarily in the global relative value sector. As of December 31, 2007, GRV’s managing member (currently, the Managing Member) had allocated GRV’s assets, directly or indirectly, to 24 Advisors, although this number may change materially over time as determined by GRV’s managing member. GRV’s managing member generally will not allocate more than 25% of GRV’s total assets to any single Advisor at the time of allocation. 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. Hence, relative value strategies endeavor to have low correlation and beta to most market indices. Strategies that may be utilized in the relative value sector include credit relative value, convertible arbitrage, equity market neutral and fixed income relative value. Other strategies may be employed as well.

Credit Relative Value

Credit relative value encompasses strategies that take long and short positions in corporate bonds or their derivatives to capture misvaluations between single issues as well as between portfolios or indices and their underlying constituents. Strategies may also involve a capital structure component to capture mispricing between equity and corporate debt. Strategies are driven by both qualitative fundamental analysis and quantitative considerations. Portfolios are constructed to ensure that the directional exposure to credit spreads is minimal.

13

Convertible Arbitrage

Convertible arbitrage strategies consist of buying convertible bonds and shorting an appropriate number of shares of the issuer’s common stock. The stock short sale is intended to hedge the stock price risk arising from the equity conversion feature of the convertible bond. Due to the bond features of convertibles, credit and interest rate risk may also be hedged. Convertible arbitrage strategies are long volatility strategies and primarily profit from rapid changes in stock price. A second source of potential profit is the cash flow generated from the bond’s coupon payment and the short sale interest rebate.

Equity Market Neutral

Equity market neutral strategies try to avoid market direction influences and seek to generate returns purely from stock selection. Advisors construct long and short baskets of equity securities with similar characteristics but different current valuations, with the view that the market will gradually realize these different valuations and correct the difference. Portfolios are designed to exhibit zero or negligible beta to all or most markets. In many instances, Advisors also attempt to immunize portfolios to industry, market capitalization and country exposure.

Fixed Income Relative Value

Fixed income relative value strategies seek to exploit pricing anomalies that might exist across fixed income securities and their related derivatives. Some fixed income strategies are based on macro considerations, and others are primarily quantitative in nature where financial modeling is an integral component. Mispricing in fixed income instruments or baskets of securities is found when securities deviate from historical relationships or fair value. These relationships can be temporarily distorted by exogenous shocks to fixed income supply and demand or by structural changes in the fixed income market. Markets covered are predominantly G10 developed countries, although some Advisors employ similar techniques in developing country fixed income markets.

Volatility Trading

Volatility trading strategies attempt to profit from volatility misvaluations among the global equity and credit markets through taking directional positions, either long or short, on the level of volatility in certain markets. Volatility trading strategies that may be utilized include, among other strategies, equity and credit volatility arbitrage, volatility dispersion, directional volatility trading and variance and volatility swaps trading, as well as some exposure to warrant arbitrage, interest rate, currency volatility trading and convertible arbitrage.

Individuals affiliated with GS Group, including directors, officers, employees, partners, trustees, managers, members and any related trusts, owned 0% of GRV as of December 31, 2007.

For the past five years from January 1, 2003 to December 31, 2007, GRV had net returns on invested assets as described in the table below.

Investment Period*	Net Return for Period
1/1/2007 — 12/31/2007		4.53	%
1/1/2006 — 12/31/2006		5.89	%
1/1/2005 — 12/31/2005		4.09	%
1/1/2004 — 12/31/2004		5.38	%
1/1/2003 — 12/31/2003		7.11	%

* Net return is based on the performance of Class C Series 1 units. Class C Series 1 units (“no-fee-shares”) of GRV (including those issued to the Company) are not subject to management fees paid or incentive allocations made to GS HFS as managing member of GRV and therefore returns do not reflect the payment of any such fees or the making of any allocations to GS HFS. In addition, returns for Class C Series 1 units during the entire period reflect returns net of the compensation paid to Advisors. The returns shown for 2003 and 2004 are also net of the payment of an administration fee to GS HFS by GRV. The returns shown for 2005, 2006 and 2007 are net of an administration fee paid by GRV to SEI, who became the administrator of GRV on January 1, 2005. No administration fee was paid to GS HFS by GRV in 2005, 2006 and 2007.

14

Goldman Sachs Global Tactical Trading, LLC

GTT’s investment objective is to target attractive long-term, risk-adjusted absolute returns by allocating its assets to Advisors that employ strategies primarily within the tactical trading sector. As of December 31, 2007, GTT’s managing member (currently, the Managing Member) had allocated GTT’s assets, directly or indirectly, to 12 Advisors, although this number may change materially over time as determined by GTT’s managing member. GTT’s managing member generally will not allocate more than 25% of GTT’s total assets to any single Advisor at the time of allocation. Tactical trading strategies are directional trading strategies, which generally fall into one of two categories: managed futures strategies and global macro strategies. Managed futures strategies involve trading in futures and currencies globally, generally using systematic or discretionary approaches. Global macro strategies generally utilize analysis of macroeconomic and financial conditions to develop views on country, regional or broader economic themes and then seek to capitalize on such views by trading in securities, commodities, interest rates, currencies and other instruments. Advisors use quantitative models or discretionary inputs to speculate on the direction of individual markets or subsectors of markets. Advisors invest assets in a diversified portfolio composed primarily of futures contracts, forward contracts, physical commodities, options on futures and on physical commodities, and other derivative contracts on foreign currencies, financial instruments, stock indices and other financial market indices, metals, grains and agricultural products, petroleum and petroleum products, livestock and meats, oil seeds, tropical products and softs (such as sugar, cocoa, coffee and cotton). Advisors also engage in the speculative trading of securities, including, but not limited to, equity and debt securities, high yield securities, emerging market securities and other security interests, and may do so on a cash basis or using options or other derivative instruments. Certain Advisors may utilize other investment media, such as swaps and other similar instruments and transactions. Advisors generally trade futures and securities on commodities and securities exchanges worldwide as well as in the interbank foreign currency forward market and various other over- the-counter markets. GTT allocates its assets pursuant to discretionary investment advisory agreements and through investments in Advisor Funds.

Individuals affiliated with GS Group, including directors, officers, employees, partners, trustees, managers, members and any related trusts, owned approximately 4% of GTT as of December 31, 2007.

For the past five years from January 1, 2003 to December 31, 2007, GTT had net returns on invested assets as described in the table below.

Investment Period*	Net Return for Period
1/1/2007 — 12/31/2007		15.72	%
1/1/2006 — 12/31/2006		5.61	%
1/1/2005 — 12/31/2005		4.03	%
1/1/2004 — 12/31/2004		3.87	%
1/1/2003 — 12/31/2003		11.61	%

* Net return is based on the performance of Class C Series 1 units. Class C Series 1 units (“no-fee-shares”) of GTT (including those issued to the Company) are not subject to management fees paid or incentive allocations made to GS HFS as managing member of GTT and therefore returns do not reflect the payment of any such fees or the making of any allocations to GS HFS. In addition, returns for Class C Series 1 units during the entire period reflect returns net of the compensation paid to Advisors. The returns shown for 2003 and 2004 are also net of the payment of an administration fee to GS HFS by GTT. The returns shown for 2005, 2006 and 2007 are net of an administration fee paid by GTT to SEI who became the administrator of GTT on January 1, 2005. No administration fee was paid to GS HFS by GTT in 2005, 2006 and 2007.

Allocations to Other Investment Funds

Historically, the Managing Member has allocated its assets to all of the Investment Sectors through allocations to GTT, GELS, GRV and GFS. Currently, the Managing Member expects to continue to allocate assets to all the Investment Sectors through allocations to GTT, GELS, GRV and GFS as well as through allocations to HFPO. As of April 1, 2008, the Managing Member will have no constraints with respect to the percentage of the Company’s assets to be allocated, directly or indirectly, to any single Advisor, group of Advisors, Investment Fund or

15

Investment Sector, or with respect to the number of Investment Funds and Advisors to which, directly or indirectly, assets of the Company are allocated at any time.

Goldman Sachs HFP Opportunistic Fund, LLC

The Company currently allocates a portion of its assets to HFPO in order to make opportunistic investments by (a) increasing the weighting of particular Advisors that have low weightings in the Company due to a lower target weight in one of the other Investment Funds, and (b) adding Advisors that are not represented in any of the other Investment Funds at the time of determination. HFPO has an investment objective to target attractive long-term risk-adjusted absolute returns with lower volatility than the broad equity markets. To achieve its objective, HFPO, directly or indirectly, allocates its assets to, or invests in entities managed by, a concentrated portfolio of Advisors that employ a broad range of alternative investment strategies primarily within one or more of the Investment Sectors. HFPO is managed by the Managing Member. The Company is not charged an additional management fee or performance-based fee or allocation by the Managing Member, in its capacity as managing member of HFPO, in connection with its investment therein.

Individuals affiliated with GS Group, including directors, officers, employees, partners, trustees, managers, members and any related trusts, owned 0% of HFPO as of December 31, 2007.

HFPO was organized on June 25, 2007 and commenced operations on July 1, 2007. For the six month period ended December 31, 2007, HFPO had net returns on invested assets as described in the table below.

Investment Period*	Net Return for Period
7/1/2007 — 12/31/2007		(10.26	)%

* Net return is based on the performance of Class A Series 1 units. Class A Series 1 units (“no-fee-shares”) of HFPO (including those issued to the Company) are not subject to management fees paid or incentive allocations made to GS HFS as managing member of HFPO and therefore returns do not reflect the payment of any such fees or the making of any allocations to GS HFS. In addition, returns for Class A Series 1 units during the entire period reflect returns net of the compensation paid to Advisors. The returns shown are net of an administration fee paid by HFPO to SEI who became the administrator of HFPO on July 1, 2007. No administration fee was paid to GS HFS by HFPO in 2007.

Overview of the Investment Process of the Investment Funds

In its capacity as managing member of each of the Investment Funds, the Managing Member employs a dynamic investment process that includes Advisor selection, portfolio design and ongoing risk analysis and monitoring. The Goldman Sachs Group, Inc. acquired the assets and business of Commodities Corporation Limited, a Princeton, New Jersey-based asset management firm established in 1969, specializing in alternative investments, and contributed them to a newly formed wholly owned subsidiary, Commodities Corporation LLC, which was renamed Goldman Sachs Princeton LLC in May 2001, and which changed its name to Goldman Sachs Hedge Fund Strategies LLC in December 2004. The Managing Member (together with predecessor entities) has over 30 years of experience in constructing diversified portfolios by selecting, allocating among, and monitoring absolute return-oriented (i.e., returns not measured against a benchmark) or “skill-based” Advisors. Skill-based Advisors are Advisors which, as a result of their particular investment style and skills, have the potential to be profitable regardless of the direction of the market (i.e., unlike long-only Advisors, which would be expected to make money when markets go up, and not during periods of market decline). The Managing Member has also developed computer systems and operational capabilities to assist in the monitoring of Advisors.

Each Investment Fund’s managing member seeks to identify Advisors to which it may allocate such Investment Fund’s assets through Advisor Funds, Managed Accounts and Portfolio Companies. The Advisor selection process includes a review by the Investment Fund’s managing member’s team of professionals, which may include representatives of its portfolio management, Advisor selection, risk and quantitative analysis, compliance, tax, legal, finance and operations areas.

Both qualitative and quantitative criteria are factored into each Investment Fund’s Advisor selection process. These criteria include portfolio management experience, strategy, style, historical performance, including risk

16

profile and drawdown (i.e., downward performance) patterns, risk management philosophy and the ability to absorb an increase in assets under management without a diminution in returns. The managing member of each Investment Fund also examines the organizational infrastructure of each Advisor, including the quality of the investment professionals and staff, the types and application of internal controls and any potential for conflicts of interest. However, the Company and the Investment Funds do not control the Advisors and are frequently not able to review the actual books and investments of many Advisors since this is proprietary information and in many cases such information is not shared with the managing members of the Investment Funds, neither on a historical nor a current basis.

In determining the relative allocations of capital to each Advisor, an Investment Fund’s managing member considers the risk and return characteristics of each of the Advisors, including the average expected volatility of returns, drawdown patterns and liquidity and leverage characteristics, as well as their asset capacity limits and constraints. In addition, an Investment Fund’s managing member considers how each Advisor’s returns are expected to correlate to the other Advisors in the Investment Fund’s portfolio. It is expected that allocations will vary significantly over time as returns for different Advisors vary. An Investment Fund’s managing member also may adjust allocations from time to time when it deems it appropriate to do so. In addition, it is expected that individual allocations will grow larger or smaller as each Advisor’s performance varies over time.

The identity and number of the Advisors of an Investment Fund may change materially over time. The managing member of an Investment Fund may withdraw from or invest with different Advisors without prior notice to or the consent of the Company, the Members or the members of the Investment Fund.

The managing member of an Investment Fund may invest a substantial portion of the Investment Fund’s assets with Advisors that may have limited or no track records and Advisor Funds with limited or no operating histories. Certain Advisors may have limited or no experience managing certain of the strategies expected to be deployed by them in their investment programs. In such cases, the Advisors or individual members of their management teams generally will each have had, in the Investment Fund’s managing member’s opinion, relevant experience in other contexts trading in strategies similar to those that such Advisors are expected to utilize. However, the Company and the Investment Funds are not able to ensure Members that each of the Advisors, even those with longer track records, will perform as expected or not undertake actions that would not be in the best interest of the Company or the Members.

Any references in this Annual Report on Form 10-K (the “Annual Report”) to strategies or techniques utilized by the Advisors on behalf of the Investment Funds include strategies or techniques utilized by (i) Advisors pursuant to investment management agreements entered into with either an Investment Fund or a Portfolio Company through which an Investment Fund allocates assets to such Advisor, or (ii) Advisor Funds in which the Investment Fund invests. See “PORTFOLIO COMPANIES.” In addition, any references in this Annual Report to strategies or techniques utilized by Advisors on behalf of the Investment Funds may also be utilized by the Advisors on behalf of the Company, should the Managing Member decide to make investments with Advisors outside of an investment in an Investment Fund. See “—Direct Allocations to Advisors” below. References herein to Advisors include Advisor Funds managed by such Advisors.

Direct Allocations to Advisors

The Managing Member, in its sole discretion, may from time to time allocate some or all of the Company’s assets to Advisors directly (rather than through an investment in the Investment Funds). In such cases, the Managing Member may allocate Company assets to Advisors similar to the way Investment Funds allocate their assets (i.e., by investing, directly or indirectly, in Advisor Funds, Managed Accounts or Portfolio Companies). Any Advisor selection, portfolio design and monitoring will be conducted by the Managing Member in the same manner as described above under “—Overview of the Investment Process of the Investment Funds” with respect to the Investment Funds.

The Managing Member will assign each direct allocation to an Advisor to a particular Investment Sector (and examine the risk characteristics of such investments), so that such direct allocations will be taken into account by the Managing Member for purposes of determining the appropriate allocation of the Company’s assets among the Investment Sectors. See “INVESTMENT PROGRAM—Allocation Among the Investment Funds.” The

17

Administrator (as defined below) will value such direct allocations using the same policy as the Investment Funds apply to valuations of their assets.

Administration fees are charged at the Investment Fund level. Unless the Company allocates assets directly to Advisors, no administration fee will be paid at the Company level. However, to the extent the Company allocates assets to Advisors other than through investments in Investment Funds, administration fees will be payable. In addition, if the Company allocates assets to Advisors through investments in Advisor Funds or Portfolio Companies, the Company will bear its pro rata portion of the offering, organizational and operating expenses of such Advisor Funds and Portfolio Companies, including management and incentive fees of the applicable Advisors. See “FEES AND EXPENSES.”

Should the Managing Member invest the Company’s assets with Advisors other than through an investment in an Investment Fund, the risks described herein with respect to the Investment Funds will also apply to the Company. See ITEM 1A. “RISK FACTORS” and “POTENTIAL CONFLICTS OF INTEREST.” In addition, any references in this Annual Report to strategies or techniques utilized by Advisors on behalf of the Investment Funds may also be utilized by the Advisors on behalf of the Company.

Certain Considerations Relating to Limited Capacity of Potential Advisors

Goldman Sachs or accounts or other investment funds managed by Goldman Sachs may invest in Investment Funds, Advisor Funds or Portfolio Companies or allocate assets to the Investment Funds’ existing Advisors through Managed Accounts. Such entities or accounts may also seek to invest in funds managed by, or enter into managed account agreements with, investment managers to which it would be appropriate for the Company to allocate assets. For example, GS HFS is currently the managing member of three other Delaware limited liability companies (the “HFP U.S. Funds”), and the investment manager of three Irish public limited companies (the “HFP Ireland Funds”). In addition, GS HFS is the investment manager of Goldman Sachs Hedge Fund Partners Institutional, Ltd., a Cayman Islands exempted limited company (“HFP Institutional” and together with HFP U.S. Funds and HFP Ireland Funds, the “HFP Funds”). The HFP Funds generally have investment objectives and strategies similar to those of the Company and the corresponding offshore funds except that HFP Institutional is currently intended for investment by benefit plans and other similar investors.

In addition, each of the HFP U.S. Funds generally invests all or substantially all of its assets among other investment funds managed by GS HFS. These investment funds include the Investment Funds and other funds that have investment objectives and strategies similar to the Investment Funds. Similarly, the HFP Ireland Funds generally invest all or substantially all their assets among investment funds managed by GS HFS that have investment objectives and strategies similar to the Investment Funds. GS HFS may in the future develop and manage other investment vehicles that have investment objectives and strategies that are similar to the Company, the Investment Funds and the funds in which the HFP Funds invest.

Advisors may limit the amount of assets or the number of accounts that they will manage. In determining how to allocate investment opportunities among the Investment Funds, the other funds in which the HFP Funds invest and any other investment funds or accounts managed by Goldman Sachs, Goldman Sachs and/or GS HFS, as applicable, will take into account the investment objectives of each such entity or account and such other considerations as they deem relevant in their sole discretion.

Such allocations may present certain conflicts. For example, certain Advisors of the funds in which the HFP Funds invest may be closed to new investment. Such Advisors may manage a material portion of the total assets of the funds in which the HFP Funds invest. The Investment Funds and the Company may not be able to allocate assets to such Advisors. If at any time in the future these Advisors accept additional investments, the funds in which the HFP Funds invest may be given priority over the Investment Funds or the Company in the determination of how any available capacity is allocated. See “POTENTIAL CONFLICTS OF INTEREST—Potential Conflicts Relating to the Selection of Advisors, the Sale of Units and the Allocation of Investment Opportunities.”

18

Hedging, Leverage and Other Strategies

Hedging

From time to time in its sole discretion, the Managing Member may employ various hedging techniques to reduce certain actual or potential risks to which the Company’s portfolio may be exposed. These hedging techniques generally will involve the use of derivative transactions, including swaps, futures and forward contracts, exchange-listed and over-the-counter put and call options, currency contracts and interest rate transactions. The Managing Member may employ these hedging techniques directly or by investing a portion of the Company’s assets in one or more entities managed by the Managing Member, an affiliate thereof or an Advisor that engages in such techniques.

Leverage

The Company, GTT, GELS, GRV and HFPO generally do not utilize leverage as part of their investment programs. As of April 1, 2008, GFS may utilize long-term leverage in its investment program, including, without limitation, to pursue investment opportunities that its managing member determines, in its sole discretion, are attractive during periods in which the capital of GFS is otherwise deployed. The amount of leverage utilized by GFS will be determined by its managing member from time to time based on factors deemed relevant by its managing member in its sole discretion, although such amount of leverage will not exceed 25% of the net asset value (the “NAV”) of GFS at the time of any borrowing.

Advisors are expected to utilize varying degrees of leverage in their investment programs. Leverage utilized by the Advisors in their and the Investment Funds’ investment programs may take the form of trading on margin, use of derivative instruments that are inherently leveraged and other forms of direct and indirect borrowings. Advisors may, but are not required to, borrow from the GS Group. Advisors generally will determine the amount of leverage they utilize, provided that limitations on the amount of leverage may be imposed on Advisors by their governing documents or investment management agreements, as applicable. The managing member of the Investment Funds, on behalf of each Investment Fund, may seek to adjust the degree of leverage with which such Investment Fund as a whole invests by taking the Advisors’ anticipated leverage use into account when allocating and reallocating the Investment Fund’s assets among the Advisors. However, the managing member of an Investment Fund generally will not have any right to adjust the amount of leverage utilized by any of the Advisors, and generally does not exercise such right if available. Adjustments to an Investment Fund’s overall leverage level will be based on factors deemed relevant by its managing member, including its assessment of the risk/reward parameters of the Advisors and the strategies currently included in such Investment Fund’s investment portfolio.

The managing member of an Investment Fund may also elect, in its sole discretion, to cause an Investment Fund to invest indirectly in an Advisor Fund through a swap, option or other structure designed to provide greater leverage than a direct investment in the Advisor Fund. During the year ended December 31, 2007, none of the Investment Funds had invested indirectly in an Advisor Fund through such a swap, option or other structure, however, the managing member of an Investment Fund may elect to do so in the future. See “—Indirect Investments in Advisor Funds and with Advisors” below and ITEM 1A. “RISK FACTORS—Investment Related Risks—Risks Related to Investment and Trading—The Use of Leverage May Substantially Increase the Adverse Impact to Which the Investment Funds’ Investment Portfolios May be Subject.”

The Company and each Investment Fund may, but are not required to, borrow (through direct borrowings, borrowings through derivative instruments, or otherwise) from the GS Group or other parties, when deemed appropriate by its managing member, to make investments, to make distributions in respect of redemptions of membership units, to pay expenses or for other purposes.

On June 30, 2006, the Company entered into a credit facility (as amended, the “Credit Facility”) with Barclays Bank PLC (the “Facility Counterparty”). The Credit Facility was extended, prior to its maturity, an additional 90 days to September 30, 2007. On September 19, 2007, the Company further extended the maturity date of the existing credit facility to an additional 364-day period from September 19, 2007. In addition, the Company amended certain terms of the Credit Facility. As of December 31, 2007, the Company had no outstanding borrowings under the Credit Facility. Pursuant to the Credit Facility, the Company may borrow up to an amount equal to the lesser of (i) $32,000,000 which amount may be subsequently increased to $100,000,000 subject to the approval of the Facility Counterparty, and (ii) 15.0% of the Company’s NAV from time to time. If borrowings by the

19

Company exceed 15.0% of its NAV at anytime, then the Company is required to make mandatory prepayments to the extent necessary so that borrowings (subject to adjustments for pending redemptions by the Company) do not exceed 12.5% of the Company’s NAV, payable when the Company has received proceeds of redemptions from the Investment Funds. The Company is also required to prepay all borrowings if, after a five business day remediation period, the Facility Counterparty notifies the Company that its investments in Investment Funds continue to not meet certain liquidity and diversification criteria set forth in the Credit Facility, payable within ninety days of any such notice. The Company may voluntarily borrow, repay and reborrow advances on a revolving basis. The advances bear interest at a per annum rate equal to (i) with respect to advances provided on less than three business days’ notice, the overnight LIBOR, for the initial day of such advance and one-week LIBOR thereafter, and (ii) with respect to all other advances, one-week LIBOR, plus in each case 0.65%. The Company also pays a monthly commitment fee to the Facility Counterparty at the rate of 0.25% per annum of the average daily aggregate unused portion of the commitment. If the Company terminates the Credit Facility prior to the stated final maturity, it has agreed to pay a fee (except in certain circumstances where no such fee will be payable) equal to the product of 0.25% per annum times the commitment in effect immediately prior to such optional termination times “M”; where “M” equals the period commencing on the date of such optional termination and ending on the stated final maturity. The proceeds of the advances under the Credit Facility will be used for liquidity management in connection with subscriptions to the Company and redemptions of the Company’s investments in the Investment Funds and for general purposes not prohibited by the Credit Facility or the investment guidelines therein. The obligation of the Facility Counterparty to make advances is subject to customary conditions precedent, including the absence of defaults. The terms of the Credit Facility include various affirmative and negative covenants, including restrictions on additional indebtedness, liens and change of control events. See ITEM 7. “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS—Liquidity and Capital Resources” and Note 6 to the financial statements for a description of the Credit Facility. The Investment Funds have entered into a similar facility with a different counterparty, except HFPO which does not participate in a credit facility. As a condition to any such borrowing, the Company and each Investment Fund may be required to comply with certain investment guidelines, which may include without limitation, restrictions on permitted investments, strategy limits, leverage and borrowing restrictions, liquidity and diversification guidelines, and remediation requirements. Advisors may also borrow funds for similar purposes or enter into other similar transactions (including from or with the GS Group). The managing member of the Company and each Investment Fund may modify, as applicable, the Company’s or the Investment Fund’s borrowing policies, including the purposes of borrowings, and the length of time that the Company or the Investment Fund may hold portfolio securities purchased with borrowed money. The rights of any lenders to the Company or an Investment Fund to receive payments of interest or repayments of principal will be senior to those of the members of the Company and the Investment Fund and the terms of any borrowings may contain provisions that limit certain activities of the Company and an Investment Fund.

Temporary and Defensive Strategies

The Company and the Investment Funds may, from time to time, take temporary or defensive positions in cash, cash equivalents, other short-term securities or money market funds to attempt to minimize volatility caused by adverse market, economic, or other conditions. Any such temporary or defensive positions could prevent the Company and the Investment Funds from achieving their investment objectives. In addition, the Company may, in the Managing Member’s sole discretion, hold cash, cash equivalents, other short-term securities or investments in money market funds pending allocation to Investment Funds, in order to fund anticipated redemptions, expenses of the Company or other operational needs, or otherwise in the sole discretion of the Managing Member. The Investment Funds are permitted to hold cash or invest their cash balances in the same manner as the Company.

Indirect Investments in Advisor Funds and with Advisors

An Investment Fund will typically invest directly in an Advisor Fund by purchasing an interest in such Advisor Fund. There may be situations, however, where an Advisor Fund is not open or available for direct investment or where the managing member of such Investment Fund elects for other reasons to invest indirectly in an Advisor Fund. Such an instance may arise, for example, where an Investment Fund’s proposed allocation does not meet an Advisor Fund’s investment minimums or where the Investment Fund desires to use an instrument that provides leverage with respect to an investment in an Advisor Fund.

20

An Investment Fund may also invest indirectly in one or more Advisors by allocating assets to investment funds (each an “Indirect Investment Fund”) managed by the managing member of the Investment Fund or an affiliate thereof, so long as the Investment Fund is not subject to an additional management fee or performance-based fee or allocation by the managing member of the Indirect Investment Funds or its affiliate in connection with such investment. An Investment Fund may also invest indirectly in an Advisor Fund through an investment vehicle (a “Feeder Fund”) established by the Managing Member, an Advisor or any of their respective affiliates that invests all or substantially all of its assets in such Advisor Fund. Indirect Investment Funds and Feeder Funds may invest assets in Advisor Funds that charge performance-based compensation similar to the Company, with such compensation being paid only if gains exceed prior losses (i.e., the NAV of the interest in the Advisor Fund must first exceed a “high water mark” attributable to a previously obtained NAV). In such circumstances, appreciation in the net assets managed by an Advisor at any given time will be shared pro rata by all of the investors in the applicable Indirect Investment Fund or Feeder Fund at such time, not just those who were investors at the time prior losses were incurred. The value attributable to the fact that no performance-based compensation will be paid to an Advisor until its gains exceed its prior losses (the “Loss Carry-forward Value”) may not be taken into account in determining the NAV of the Indirect Investment Fund or Feeder Fund. Therefore, such Loss Carry-forward Value to existing investors in the Indirect Investment Fund or Feeder Fund could be diluted by new subscriptions for interests because the new interests will participate in any positive performance by the Advisor until its gains exceed its prior losses without the Advisor being paid any performance-based compensation. Certain Indirect Investment Funds and Feeder Funds may invest with Advisors that have the right to designate investments as “special investments.” Such special investments raise additional liquidity and valuation risks for the applicable Indirect Investment Fund or Feeder Fund (and indirectly the Company). See ITEM 1A. “RISK FACTORS—Investment Related Risks—Risks Related to Issuers of Securities—Advisor Special Investments.” Feeder Funds may be managed by the Managing Member or an affiliate thereof so long as the Company is not subject to an additional management fee or performance-based fee or allocation by the Managing Member or its affiliate in connection with such investment. An Investment Fund may also invest in an Advisor Fund indirectly by purchasing or entering into a “Derivative Advisor Investment,” which is a derivative instrument (such as a structured note, swap or similar contract) designed to pay a return approximately equal to the total return of the Advisor Fund. A Derivative Advisor Investment acquired by an Investment Fund generally would require a counterparty to pay to the Investment Fund a return based on the return of a particular Advisor Fund, in exchange for consideration from the Investment Fund equivalent to the cost of purchasing an ownership interest in the Advisor Fund. In addition, in the sole discretion of the managing member of the Investment Funds, a Derivative Advisor Investment may be structured in a manner that provides greater leverage than a direct investment in the Advisor Fund, which may increase the risks to the Investment Fund and consequently the Company. Indirect investments through Derivative Advisor Investments carry with them the credit risk associated with the applicable counterparty. In addition, such investment may be subject to transaction and other fees, which may reduce the value of the Investment Fund’s underlying investment. There can be no assurance that a Derivative Advisor Investment will have the same or similar results as a direct investment in an Advisor Fund, and the Investment Fund’s value, and consequently the value of the Company, may decrease as a result of making a Derivative Advisor Investment.

Investment in Exchange-Traded Advisor Funds

From time to time, the Company may (directly or indirectly through an Investment Fund) invest in shares or other interests of Advisor Funds which are traded on a stock exchange. Unlike a typical private investment fund, an investor (including the Company) holding shares of an exchange-traded Advisor Fund generally will not have the right to require the Advisor Fund to redeem its shares. Instead, if an investor wishes to realize all or a portion of its investment in the exchange-traded Advisor Fund, it must sell its shares through the applicable exchange at a price set by the market. There can be no assurance that the market price for such shares will reflect the underlying NAV of the shares; such shares may trade at a significant discount to NAV for extended periods of time or at all times. In addition, there can be no assurance that an active trading market in the shares of an exchange-traded Advisor Fund will develop or will be sustained, and if no such market is developed or sustained, the price and liquidity of such shares may be adversely affected. In addition, certain parties, including investors or potential investors in an exchange-traded Advisor Fund, may receive information that has a bearing on the NAV of the Advisor Fund that is not available or has not been made available to the Advisor Fund or other investors (including the Company). These

21

parties may act on the basis of such information in ways that have adverse effects on such Advisor Fund or investors in such Advisor Fund, including the Company.

Co-Investment and Other Investment Opportunities

Goldman Sachs (including, without limitation, the Managing Member) may receive notice of, or offers to participate in, investment opportunities from Advisors, their affiliates or other third parties. Advisors or such other parties (for themselves or funds or accounts under their management) may or may not elect to invest in such opportunities. In this regard, because of many factors and relationships, including considerations that Client/GS Accounts (as defined below), including the Company and the Investment Funds, are investors or have other relationships with such Advisors, as a general matter, neither the Company nor the Investment Funds will have an entitlement to participate in such investments. In certain very limited circumstances, through a pre-emptive or other similar right, the Company or the Investment Funds may have an entitlement which may or may not be realized or exercised. Furthermore, whether or not a pre-emptive or other right exists, such investment opportunities may not be appropriate for the Company or the Investment Funds, considering the Company’s and the Investment Funds’ investment mandate of allocating their assets to, or investing in entities managed by, a portfolio of Advisors. This may be particularly true in cases of direct investments in securities or other assets that either are not managed by the Advisor or are not part of a broader portfolio of securities or other assets. Therefore, there should not be an expectation that the Company or the Investment Funds will participate in any such investment opportunities.

Any such opportunity may be undertaken by other Client/GS Accounts, including without limitation, investment vehicles formed, sponsored, managed or advised by Goldman Sachs to invest in such opportunities, or by Goldman Sachs for its own account. Goldman Sachs’ other activities may have an impact on the selection of Advisors for the Company and the Investment Funds. Certain investment vehicles may be organized to facilitate the investment by Goldman Sachs and certain current or former directors, partners, trustees, managers, members, officers, consultants, employees and their families and related entities, including employee benefit plans in which they participate.

Any references in this Annual Report to strategies or techniques utilized by the Advisors on behalf of the Investment Funds include strategies or techniques utilized by (i) Advisors pursuant to investment management agreements entered into with either the Investment Fund or separate Cayman Islands limited liability companies formed by the managing member of an Investment Fund through which the Investment Fund allocates assets to such Advisor or (ii) Advisor Funds in which an Investment Fund invests. See “PORTFOLIO COMPANIES.”

Potential Types of Advisor Investments

The Advisors may invest in securities, assets and instruments of any type, long or short, including, without limitation, the following: equity securities and instruments including, without limitation, common stock, preferred stock, equity index futures and forwards, interests in real estate investment trusts, convertible debt instruments, convertible preferred stock, equity interests in trusts, partnerships, joint ventures, limited liability companies, warrants and stock purchase rights, swaps and structured notes; fixed income instruments including bonds, interest rate futures contracts and swaps, options on futures, indices, loan participations and government and corporate debt instruments (both rated and unrated); currencies and speculative positions on currencies, spot transactions, currency forwards, cross currency swaps, options and futures on currencies; commodities and futures, including without limitation, spot transactions in commodities, commodities futures and swaps and options on futures; and structured financial products, including mortgage-backed securities, pass-throughs and other asset-backed securities (both investment-grade and non-investment grade). The Advisors may employ short selling, and trade in securities without active public markets, indices, over-the-counter options, when-issued and forward commitment securities and engage in the borrowing and lending of portfolio securities. The Advisors may also engage in derivative transactions including swaps and repurchase and reverse repurchase agreements or other strategies to hedge against securities, currencies or interest rates or to manage risk relating to their portfolio investments, to leverage their

22

portfolio and to establish speculative positions. The Advisors may invest in both U.S. and non-U.S. issuers, including issuers of emerging market countries.

Economic Arrangements with Advisors

From time to time, the Company, an Investment Fund, Goldman Sachs and/or other clients or accounts of Goldman Sachs (including other investment funds managed by the Managing Member or Goldman Sachs, collectively, “Participants”) may enter into economic arrangements with an Advisor Fund or an Advisor in connection with an investment in an Advisor Fund or with an Advisor. Such economic arrangements may include, without limitation, the agreement by an Advisor to reduce or rebate any fees, allocations or other compensation incurred by a Participant in respect of an investment in an Advisor Fund; the agreement by an Advisor to pay or share with a Participant or any third party some or all of the fees, allocations or other compensation earned by the Advisor with respect to one or more Advisor Funds; or the agreement by a Participant to acquire or receive an interest in the equity of and/or profits or revenues earned by an Advisor and/or its affiliates in respect of its business.

The determination as to whether or not the Company or an Investment Fund should negotiate or enter into any such arrangements will be made by the Managing Member or the managing member of the Investment Funds, as applicable, in its sole discretion, based on factors which it considers to be relevant. To participate in such arrangements, the Company or the Investment Fund may be required to make an initial or periodic payment or contribution to the Advisor Fund, which may be substantial. In addition, the Company or the Investment Fund may be required to invest in an Advisor Fund on terms that are more restrictive or less advantageous than may be available to other investors, including without limitation, agreeing to lock up a substantial portion or all of its investment in such Advisor Fund for an extended period of time. Any such determination made on behalf of the Company or an Investment Fund may differ from a determination made by Goldman Sachs in respect of itself or its other Client/GS Accounts. See “POTENTIAL CONFLICTS OF INTEREST—Potential Conflicts Relating to the Selection of Advisors, the Sale of Units and the Allocation of Investment Opportunities” and “Potential Conflicts Relating to the Allocation of Investment Opportunities Among the Company or the Investment Funds and Other Goldman Sachs Accounts.” Subject to applicable law, Goldman Sachs may participate in or be allocated any such arrangements or opportunities.

Such an arrangement, if entered into by the Company or an Investment Fund, may pose liquidity and valuation risks for the Company or the Investment Fund. For example, such an arrangement may be contingent on the Company or the Investment Fund investing in one of the Advisor’s Advisor Funds and locking up such investment for long periods of time, potentially for several years. There can be no assurance that any such arrangement will be beneficial to the Company or the Investment Fund, or that the benefits will outweigh the detriments of any such arrangement. The assets of the Company or the Investment Fund may be tied up in such arrangements for substantial periods of time, during which time the Company or the Investment Fund may be unable to liquidate such assets to pursue more profitable investments. Requests to redeem a substantial amount of the interests in the Company or the Investment Fund may require the Company or the Investment Fund to redeem interests from other more liquid assets in order to meet such redemption requests. This could limit the ability of the Managing Member or the managing member of the Investment Funds, as applicable, to successfully implement the investment program of the Company or the Investment Fund and could have a material adverse effect on the portfolio mix of the Company or the Investment Fund and liquidity for remaining members therein. There can be no assurance that any such illiquid investments will not constitute a material portion of the Company’s portfolio, particularly following substantial redemptions from the Company.

Any fee and/or profit sharing arrangements with, or interest in the profits of, an Advisor, if entered into by the Company or an Investment Fund, will be an asset of the Company or the Investment Fund, and its value will need to be determined in connection with calculating the NAV for purposes of, among other things, subscriptions, redemptions and fees. However, any such arrangements may be difficult to value and generally will not be transferable. The value of any such asset will be determined in accordance with U.S. GAAP consistently applied as a guideline and according to such procedures as may be established from time to time by the Managing Member or the managing member of the Investment Funds, as applicable, in its sole discretion. There is no guarantee, however, that any value given to any such asset will represent the value that would be realized by the Company or the

23

Investment Fund in respect of the asset at the time of valuation. The value of any such asset may change over time and any such asset could lose some or all of its value.

If Goldman Sachs or clients of Goldman Sachs other than the Company or the Investment Funds invest in, or provide financial or non-cash support to, or acquire or receive an interest in the equity of and/or profits or revenues of, an Advisor, or enter into an arrangement with such Advisor to share in fees, allocations and/or profits earned by such Advisor, such arrangement may cause potential conflicts of interest. See “POTENTIAL CONFLICTS OF INTEREST.”

The investment program of the Company and each of the Investment Funds are speculative and entail substantial risks. There can be no assurance that the investment objective of the Company or any Investment Fund, including their asset allocation, risk monitoring and diversification goals, will be achieved, and results may vary substantially over time. Advisors that are directly or indirectly investing Company assets are expected to utilize forward or futures contracts, options, swaps, other derivative instruments, short sales, margin or other forms of leverage in their investment programs. Such investment techniques can substantially increase the adverse impact to which an Investment Fund’s, and the Company’s investment portfolio may be subject. See ITEM 1A. “RISK FACTORS.”

INTERNATIONAL ACTIVITIES

The Company allocates its assets to the Investment Funds who in turn allocate their assets to Advisors located throughout the world. From time to time, these Advisors invest in securities of non-U.S. issuers, including companies based in less developed countries (i.e., “emerging markets”), or in securities issued by the governments outside the United States. A portion of the Company’s assets, therefore, ultimately may be invested in securities and other financial instruments denominated in non-U.S. currencies, the prices of which are translated into U.S. dollars for purposes of calculating the Company’s NAV. Some Advisors may invest exclusively in securities and other financial instruments denominated in non-U.S. currencies. The Investment Funds have invested, from time to time, up to 40%-50% of their assets with Advisors located outside the United States or in non-U.S. markets or financial instruments. The amount so invested outside the United States could be significantly greater than such amount at any particular time in the future. Historical international investment activity may not be indicative of current or future levels.

The value of the Company’s assets and liabilities may fluctuate with U.S. dollar exchange rates as well as with the price changes of the Advisors’ investments in the various local markets and currencies. Investing in securities of companies which are generally denominated in non-U.S. currencies involve certain considerations comprising both risks and opportunities not typically associated with investing in securities of U.S. issuers. See ITEM 1A. “RISK FACTORS—Investment Related Risks—Risks Related to International Investments—Trading on Non-U.S. Exchanges May Involve Higher Risk of Financial Irregularities and/or Lack of Appropriate Risk Monitoring and Controls,” “—Non-U.S. Investments Involve Special Risks not Usually Associated with Investments in U.S. Securities,” “—Investment in Emerging Markets Involves Significant Risks, Including Inflation and Currency Devaluations,” “—Foreign Currency Transactions and Exchange Rate Risk Create Additional Risks for Advisors Investing in Certain Financial Instruments,” and “—Non-U.S. Futures Transactions Afford Less Protection as Rules of a Non-U.S. Exchange May Not be Enforced by a U.S. Regulator.”

PORTFOLIO COMPANIES

The Investment Funds may allocate assets to Advisors (i) through direct or indirect investments in Advisor Funds, (ii) through direct allocation of assets held in a separately managed account pursuant to an investment management agreement between the Investment Fund and the Advisor or such similar arrangement as is determined by the managing member of such Investment Fund or (iii) through investments in Portfolio Companies, each of which allocates its assets to a single Advisor via a separately managed discretionary account. The managing member of the Investment Funds or an affiliate thereof is the investment manager of each Portfolio Company to which the Investment Funds allocate assets, and the officers and all or a majority of the directors of each such entity are persons that are employed by, or are otherwise affiliated with, the managing member of the Investment Funds or their affiliates. Portfolio Companies may have other investors in addition to the Investment Funds. See “POTENTIAL CONFLICTS OF INTEREST.” It is expected that one investor in each Portfolio Company will

24

be an exempted company incorporated with limited liability under the laws of the Cayman Islands or an Irish public limited company each of which is managed by the managing member of the Investment Funds and formed to accept subscriptions from non-U.S. persons and U.S. tax-exempt entities.

Each Portfolio Company (or the managing member of the applicable Investment Fund, in its capacity as investment manager, on behalf of the Portfolio Company) will enter into an investment management agreement with an Advisor selected by the managing member of the applicable Investment Fund. Each investment management agreement provides for the payment of fees and expenses of the Advisor, any restrictions on the Advisor relating to the management of the assets, including restrictions relating to leverage and investment strategies, if applicable, and rights of the managing member of the Investment Fund with respect to ongoing monitoring and risk management, which may include rights to receive reports, require the disposition of positions and withdraw all or a portion of an allocation to the Advisor. A Portfolio Company may issue shares of various series or classes, which may bear fees or have terms that differ from the shares held by the applicable Investment Fund or the corresponding offshore investment fund. Each Portfolio Company reserves the right in its sole discretion and for any reason to waive fees of, or impose different fees on, any investor, as may be agreed to by the Portfolio Company and the investor. Each Portfolio Company may, by agreement with its Advisor, structure the Advisor’s fees (or a portion thereof) as an incentive allocation or other arrangement.

Each Portfolio Company is expected to be formed as an exempted company incorporated with limited liability in the Cayman Islands. The governing documents of each Portfolio Company provide, among other things, for the management of the Portfolio Company by its board of directors, redemption rights of investors in the Portfolio Company (which will be negotiated on a case-by-case basis with each investor, provided that the Investment Funds have the right to redeem their shares upon request, subject to any restrictions contained in the investment management agreement between the Portfolio Company and the Advisor), certain fees and expenses as discussed below and under “FEES AND EXPENSES,” and indemnification and exculpation of the managing member of the Investment Funds (in its capacity as the investment manager of the Portfolio Company) and its affiliates.

Goldman Sachs will be issued the only voting shares of each Portfolio Company, and only those voting shares will be entitled to vote on most Portfolio Company matters, including the election of the Portfolio Company’s directors. Accordingly, an investor in a Portfolio Company (including the applicable Investment Fund) generally will have little or no control rights with respect to the activities of the Portfolio Company, including modifying or enforcing the terms of the investment management agreement between the Portfolio Company and the Advisor. In addition, the terms of a Portfolio Company may be amended in accordance with the memorandum of association and articles of association of such Portfolio Company, without notification to the Members or the investors in the applicable Investment Fund (including the Company).

The board of directors of a Portfolio Company may cause such entity to list its shares on the Irish, Luxembourg or other stock exchange, or to enter into a transaction or series of transactions in which the investors of the Portfolio Company become beneficial owners of economically comparable equity interests of another entity, which may be domiciled outside the Cayman Islands, so long as (i) the investors of the Portfolio Company do not suffer any material adverse economic effect as a result thereof or (ii) the investors of the Portfolio Company receive prior written notice of any initial listing or transaction and an opportunity to redeem their interests in the Portfolio Company prior to the effectiveness of the initial listing or transaction.

A Portfolio Company may issue shares of various series or classes, which may bear fees or have terms that differ from the shares held by an Investment Fund. Each Portfolio Company reserves the right in its sole discretion and for any reason, to waive the fees of, or impose different fees on, any investor, as may be agreed to by the Portfolio Company and the investor.

The managing member of an Investment Fund will not charge any management fee or performance-based fee or allocation at the Portfolio Company level. Each Portfolio Company, however, will pay the Administrator certain fees as described more fully in “FEES AND EXPENSES” and will be responsible for reimbursing the Administrator for its reasonable out-of-pocket expenses incurred in connection with providing services to the Portfolio Company.

25

Each investor in a Portfolio Company (including the applicable Investment Fund) shares in the appreciation and depreciation of the NAV of the Portfolio Company for any accounting period pro rata based on the relative NAV of the investor’s interest as of the beginning of such accounting period (adjusted as necessary to take into account subscriptions, redemptions and distributions, any Advisor fees and any performance-based Advisor compensation or allocations not borne in the same proportions by each investor, and other events as determined by the Portfolio Company’s board of directors in its sole discretion).

The applicable Investment Fund bears, indirectly through its investment in each Portfolio Company, a pro rata portion of the expenses of each Portfolio Company in which it invests. Such expenses include each Portfolio Company’s own offering, organizational and operating expenses, including any management and performance-based fees or allocations payable to the Advisor of the Portfolio Company’s assets pursuant to the Portfolio Company’s investment management agreement. The Company bears, indirectly through its investment in the Investment Funds, a pro rata portion of the expenses of each Portfolio Company in which the Investment Funds invest. See “FEES AND EXPENSES.” For instance, each Portfolio Company is responsible for (and the applicable Investment Fund and, in turn, the Company indirectly will be affected by) indemnifying the managing member of the applicable Investment Fund (in its capacity as investment manager of the Portfolio Company), Goldman Sachs, members of the board of directors, officers of the Portfolio Company, persons controlling, controlled by or under common control with any of the foregoing, or any of their respective directors, members, stockholders, partners, officers, employees or controlling persons against any losses, claims, costs, damages or liabilities to which such person may become subject in connection with any matter arising out of or in connection with the business or affairs of the Portfolio Company, except to the extent that any such loss, claim, cost, damage or liability results solely from the willful misfeasance or gross negligence (as interpreted under the laws of the State of New York) of, or any criminal wrongdoing by, such indemnified person. A Portfolio Company may agree to indemnify certain of the Advisors and their respective officers, directors and affiliates from liability, damage, cost or expenses to which such person may become subject in connection with matters arising out of or in connection with the business or affairs of the Portfolio Company.

References in this Annual Report to assets or investments of the Company, the Investment Funds and the Advisors shall be deemed to include interests in Portfolio Companies and assets and investments of Portfolio Companies to the extent of the Company’s and the Investment Funds’ indirect interest therein, whether or not so indicated, where the context permits.

FEES AND EXPENSES

The Company pays the Managing Member a monthly management fee accruing daily (the “Management Fee”), equal to one-twelfth of 1.25% of the net assets of the Company in respect of each series of Class A Units as of the end of the applicable month, appropriately adjusted to reflect capital appreciation or depreciation and any subscriptions, redemptions or distributions. For purposes of determining the Management Fee, the NAV of each series of Class A Units are not reduced to reflect any accrued incentive allocation (the “Incentive Allocation”), including any Incentive Allocation that is allocated to the Managing Member as of such date. The Management Fee payable by any other class of Units may be different from the Management Fee payable by the Class A Units. The Management Fee with respect to each series of units will reduce the capital account of the series of Units to which it relates, as described under “—Capital Accounts; Allocation of Gains and Losses” below. In return for receiving the Management Fee, the Managing Member, among other things, constructs the portfolio of the Company and evaluates and monitors the performance of each of the Investment Funds. The managing member of each of the Investment Funds (which is currently the Managing Member) does not receive a separate management fee from the Investment Funds for investments in the Investments Funds by the Company because the Company owns “no-fee shares” of each of the Investment Funds.

The Company is currently issued units of a class of membership interests of each Investment Fund (“no-fee-shares”) which are not subject to any management fees or incentive allocation, although the Company may be charged management fees or an incentive allocation in the future. Because the Company owns “no-fee-shares” in each of the Investment Funds, there are no incentive allocations or management fees paid to the Managing Member in respect of the Company’s investments in each of the Investment Funds. The ratios shown below do not reflect the

26

inclusion of the Company’s proportionate shares of expenses of the Investment Funds, including the administration fees paid, directly or indirectly, by the Investment Funds.

Fees and Expenses for Class A Series 1 of the Company for the year ended December 31, 2007 are as follows:

	Class A
	Series 1
Ratios to average net assets (annualized):
Expenses		1.42%
Incentive allocation		0.57%
Total expenses and incentive allocation		1.99%

The table below sets forth certain information with respect to the Company including fees and expenses paid to the Managing Member by the Company. The dollar amounts of fees and expenses are shown for fiscal year 2007 and are based on a $1,000,000 investment in Class A Series 1 made as of January 1, 2007.

Fees and	Percentage			Dollar
Expenses	Amount			Amount
Management Fee		1.25%(1	)	$	13,324(4)
Incentive Allocation		5%(2	)	$	6,013(4)
Administration Fee		N/A(3	)	$	534(4)
Placement Fee		None			None
Entry Fee		None			None
Exit Fee		None			None
Minimum Subscription Amount		N/A		$	1,000,000(5)

(1)	The Managing Member receives a monthly Management Fee, equal to one-twelfth of 1.25% of the net assets of the Company as of the end of the applicable month, appropriately adjusted to reflect capital appreciation or depreciation and any subscriptions, redemptions or distributions. See “—Capital Accounts; Allocation of Gains and Losses” below.
(2)	At the end of each fiscal year of the Company, the Managing Member is entitled to receive an Incentive Allocation equal to 5% of the increase in the NAV of each series of Units. The Managing Member does not receive a payment or make a contribution in the event of a decrease in the NAV of a series of Units, and the Managing Member is only entitled to receive an Incentive Allocation relating to an increase in NAV of a series of Units if the NAV of such series is above a prior high NAV. See “—Capital Accounts; Allocation of Gains and Losses” below.
(3)	The Company bears a pro rata portion of the administration fee paid to the administrator of the Investment Funds for services provided to the Investment Funds and Portfolio Companies. In 2004, each of the Investment Funds paid its managing member an administration fee of 0.20% for services rendered to it as administrator. The dollar amount (which is approximate based on calculation) reflects the total administration fee comprised of the Company’s aggregate pro rata portion for services provided to the Investment Funds and the fee directly payable by the Portfolio Companies based on an investment of $1,000,000 in Class A Series 1 Units as of January 1, 2004. Effective as of January 1, 2005, SEI became the administrator of each Investment Fund and certain Portfolio Companies, and currently serves as the administrator with respect to all of the Investment Funds and Portfolio Companies. Throughout 2007, the administration fee rate (as discussed below) ranged between 0.04% and 0.06%.
(4)	Based on an investment of $1,000,000 in Class A Series 1 Units as of January 1, 2007.
(5)	The minimum subscription by a purchaser of Units is $1,000,000, although the Managing Member, in its sole discretion, may accept subscriptions below the minimum.

Prior to February 9, 2007, the Managing Member served as the administrator of the Company. The Managing Member (in its capacity as administrator of the Company) and the Company entered into an agreement with SEI Global Services, Inc. (“SEI”), as of March 1, 2004, pursuant to which SEI served as the sub-administrator of the Company. Effective as of February 9, 2007, the Managing Member ceased to serve as the administrator of the

27

Company and the Company entered into an administration agreement (the “Administration Agreement”) with SEI pursuant to which SEI became the administrator of the Company, the Investment Funds and the Portfolio Companies (the “Administrator”). The Administrator is responsible for, among other things, calculating the NAV for the Company; maintaining capital accounts; valuing securities and other assets, including securities which are not readily marketable; assisting in the preparation of financial statements and tax returns; assisting in the preparation and distribution of reports; maintaining a registry of ownership and providing certain other administrative services. In addition, the Administrator provides the Company with, among other things, office space, utilities, computer equipment and services, and secretarial, clerical and other personnel. Further, the Administrator may assist in the preparation of the Company’s periodic and other reports including filing such reports with the U.S. Securities and Exchange Commission (the “SEC”) and other services associated with the Company being a registrant under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). See ITEM 1A. “RISK FACTORS—Special Risks of the Company’s Structure—Risks Related to The Company’s Structure—The Company’s Financial Statements are, and in the Future Will Ultimately be, Based on Estimates of Valuations Provided by Third Party Advisors Which May not be Accurate or May Need to be Adjusted in the Future.” From time to time, the terms and conditions of the Administration Agreement may be amended as agreed between the Managing Member and the Administrator.

During 2004, the Managing Member served as the administrator of each Investment Fund and each Portfolio Company and received an administration fee, accruing daily and calculated and paid on a monthly basis, equal to one-twelfth of 0.20% of the net assets of such Investment Fund or Portfolio Company (in the case of the Investment Funds, without taking into account their investments in Portfolio Companies so as to avoid duplication) as of the applicable month-end, appropriately adjusted to reflect capital appreciation of depreciation and any subscriptions, redemptions or distributions. Therefore, no administration fee was paid at the Investment Fund level with respect to any assets of the Investment Funds attributable to investments in Portfolio Companies.

Effective as of January 1, 2005, SEI became the administrator of each Investment Fund and certain Portfolio Companies, and SEI currently serves as the administrator with respect to all of the Investment Funds and Portfolio Companies. Throughout 2005 and 2006, an administration fee was not charged at the Portfolio Company level, and the administration fee charged at the Investment Fund level was paid with respect to assets of the Investment Funds invested in Portfolio Companies. During such period, the administration fee rate was determined each month based on the total assets managed by the Managing Member that were administered by SEI and its affiliates. In determining the administration fee rate, each Investment Fund was assessed a higher rate in respect of assets allocated to Portfolio Companies and Managed Accounts established on behalf of the Investment Funds and other GS HFS-managed investment funds of clients. In 2006, the administration fee rate ranged between 0.04% and 0.06%.

Unless the Company allocates assets directly to Advisors (see “PERFORMANCE OF THE COMPANY—Direct Allocations to Advisors”), SEI does not receive a fee directly from the Company for its service as the Administrator. However, the Administrator receives a per investor servicing charge and will be reimbursed by the Company for all of its reasonable out-of-pocket expenses. The Company will also bear its pro rata portion of each Investment Fund’s administration fees.

Effective as of January 1, 2007, the fees payable to SEI by the Investment Funds and Portfolio Companies were changed. Under the new arrangement, each Investment Fund pays SEI an administration fee equal to a percentage of such Investment Fund’s NAV, calculated and paid on a monthly basis, at a rate based on the total assets managed by the managing member of the Investment Fund that are administered by SEI and its affiliates (the “Administration Fee”). For purposes of determining the Administration Fee, the NAV of the Investment Fund will not be reduced to reflect any accrued but unpaid incentive allocation or management fees payable at the Investment Fund level. In addition, each Investment Fund pays SEI a fee in respect of the assets that the Investment Fund allocates to each Managed Account, and each Portfolio Company pays SEI a fee, a portion of which will be borne by the Investment Fund through its investment therein (each, an “Account Administration Fee” and collectively, the “Account Administration Fees”). Each Account Administration Fee will be equal to a percentage of the NAV of the applicable Managed Account or Portfolio Company, calculated and paid on a monthly basis, at a rate which will vary depending on the complexity of the administration of the Managed Account or Portfolio Company and the total assets of Managed Accounts and Portfolio Companies of a similar type that are administered by SEI. As a result of

28

the foregoing, the amount of the Account Administration Fees borne directly or indirectly by the Company will be greater or lesser depending on the percentage of the Company’s assets that are directly or indirectly allocated to Managed Accounts and Portfolio Companies, and on the complexity of the administration of such Managed Accounts and Portfolio Companies. Each Investment Fund will also pay SEI a monthly investor servicing charge for each investor in the Investment Fund and reimburse SEI for reasonable expenses incurred in connection with providing services to the Investment Fund and the Managed Accounts, and the Investment Fund will bear, through its investment in each Portfolio Company, a portion of similar expenses incurred by such Portfolio Company. In the event that the Company allocates assets directly to Advisors rather than through an investment in a Investment Fund, the Company will pay SEI administration fees similar to the administration fees paid at the Investment Fund level. In 2007, the administration fee rate ranged between 0.04% and 0.06%.

The Company, the Investment Funds and the Portfolio Companies may, in the future, engage other entities, which may be affiliated with the Managing Member, to provide administration services to the Company, the Investment Funds or the Portfolio Companies, respectively, as administrator or sub-administrator. The terms and conditions of any such engagement shall be as agreed to by the Company, the Investment Funds or the Portfolio Companies and the applicable service provider, and may differ from the terms and conditions under which SEI provides administration services to the Company, the Investment Funds and the Portfolio Companies, including without limitation, the compensation arrangements and indemnification obligations described above. In addition, the Company, any Investment Fund or any Portfolio Company may in the future agree with SEI to alter the terms of its existing agreement with SEI, including without limitation, the compensation arrangements described above.

Pursuant to the Administration Agreement with SEI, the Company has agreed to indemnify and hold SEI harmless from and against any loss or liability (including, without limitation, any loss or liability arising out of any act or omission of SEI or any claim asserted or threatened in connection with SEI’s performance of its obligations or duties under the Administration Agreement), except where such loss or liability arises as a result of the willful misfeasance, bad faith or negligence of SEI, or by reason of SEI’s reckless disregard of its duties under the Administration Agreement.

The Company bears all of its own operating expenses, including, without limitation, legal expenses; professional fees (including, without limitation, fees and expenses of consultants and experts) relating to investments; costs and expenses relating to any amendment of the LLC Agreement (as defined below) or the Company’s other organizational documents or the subscription agreement (the “Subscription Agreement”) or any modification or supplement to the Private Placement Memorandum dated February 2008 for the Company (as it may be supplemented or modified from time to time, the “Memorandum”), and any distribution of such documentation to the Members; accounting, auditing and tax preparation expenses; fees and expenses of other agents of the Company; taxes and governmental fees; printing and mailing expenses; expenses relating to transfers and redemptions of Units; fees and out-of-pocket expenses of any service company retained to provide accounting and bookkeeping services to the Company; quotation or valuation expenses; expenses relating to the acquisition, holding and disposition of investments (e.g., expenses which the Managing Member determines to be related to the investment of the assets of the Company, including, among others, research expenses, brokerage fees and commissions, expenses relating to short sales, clearing and settlement charges, fees to Advisors with respect to Managed Accounts, custodial fees and expenses, costs and charges for equipment or services used in communicating information regarding the Company’s transactions between the Managing Member and other agents, bank service fees, interest expenses, borrowing costs and extraordinary expenses); insurance premiums; costs incurred in connection with any claim, litigation, arbitration, mediation, government investigation or dispute in connection with the business of the Company and the amount of any judgment or settlement paid in connection therewith, or the enforcement of the Company’s rights against any person or entity; costs and expenses for indemnification or contribution payable by the Company to any person or entity (including, without limitation, pursuant to the indemnification obligations described under ITEM 12. “INDEMNIFICATION OF DIRECTORS AND OFFICERS” in the Form 10 filed on April 28, 2004, as amended); and all costs and expenses incurred as a result of the reorganization, dissolution, winding-up or termination of the Company.

Certain administrative and investment-related services, including but not limited to those relating to accounting, tax and legal advice and other services (including with respect to litigation, if any), marketing efforts, information technology, risk management, cash management, administrative services, and the selection,

29

investigation, acquisition, holding or disposition of investments may be provided by internal staff of Goldman Sachs, including entities created by Goldman Sachs to handle such services. Goldman Sachs may, in its sole discretion, charge the Company or an Investment Fund its allocable portion of the fees and expenses associated with such services, and the Company or Investment Fund, as applicable, will be responsible for such fees and expenses. In such event, the Managing Member will determine the fair and reasonable cost for such services based on, among other things, the compensation and benefits of the personnel providing the services as well as an allocation of overhead expenses. Amounts paid to Goldman Sachs by the Company directly or indirectly with respect to all of these services are incremental to the Management Fee charged to the Company.

The Company in the past has borne its organizational expenses and continues to bear expenses incurred in connection with the offer and sale of Units, including printing costs, legal fees and other expenses of the Company, the Managing Member and any placement agent and other expenses of the offering of Units. In addition, the Company bears, indirectly through its investment in each Investment Fund, Advisor Fund and Portfolio Company, its pro rata portion of the offering, organizational and operating expenses of such other entities, including, without limitation, expenses similar to those enumerated in this paragraph and the preceding two paragraphs, and expenses related to the investment of such assets, such as Advisor, Advisor Fund and Portfolio Company fees and expenses, brokerage commissions, expenses relating to short sales, clearing and settlement charges, custodial fees, bank service fees, interest expenses, borrowing costs and extraordinary expenses. If the Company or an Investment Fund invests its assets through a Portfolio Company, the Managing Member will not charge an additional management fee or performance-based fee or allocation at the Portfolio Company level.

Advisors are compensated on terms that may include fixed and/or performance-based fees or allocations. Fixed fees, generally calculated and paid to Advisors monthly based upon the NAV of the allocation to such Advisor, are currently expected to range (on an annualized basis) from approximately 0% to 4%. Performance-based fees or allocations of Advisors are currently expected to range from approximately 10% to 30% of the net capital appreciation in each individual Advisor’s investments for the year. However, the Company may, in the Managing Member’s sole discretion, allocate assets to Advisors that receive fixed and/or performance-based fees or other compensation that materially exceed these percentages or that structure their compensation in materially different ways. Certain Advisor Funds in which the Company or an Investment Fund invests may charge redemption fees in certain circumstances. Each Member will indirectly through its investment in the Company bear its pro rata portion of any such redemption fees charged to the Company or the Investment Fund.

Performance-based compensation is typically not paid to an Advisor until the Advisor makes up prior losses. See ITEM 1A. “RISK FACTORS—General Risks—Risks Related to the Units, Liquidity of Units and the Offering of the Units—Special Considerations Applicable to the Continuous Offering of Units; After the Initial Offering of Units Subsequent Purchasers of Units May Suffer Losses Because of Previously Established Open Positions.”

Each of the Managing Member, the Administrator and any sub-administrator pays its own overhead costs and expenses, including the salaries, fringe benefits and other compensation costs of its employees.

The Managing Member, the Administrator or any sub-administrator may pay certain of the Company’s, an Investment Fund’s, an Advisor Fund’s or a Portfolio Company’s expenses described above. The Company or applicable Investment Fund, Advisor Fund or Portfolio Company will reimburse the Managing Member, Administrator or sub-administrator for the payment of any such expenses.

Each Member will indirectly through its investment in the Company bear its pro rata portion of the expenses of the Company (including, without limitation, expenses incurred in connection with the indemnification obligations); provided that any expenses allocable to a specific class or series of Units held by such Member may be allocated only to such class or series.

The Managing Member and its affiliates each has the right, in its sole discretion, to waive the fees and performance-based allocations or compensation to which it is entitled in respect of a Member’s Units or to impose different fees or performance-based allocations or compensation on a Member (including, without limitation, by means of a rebate or the issuance of a new class of Units), and to enter into other agreements with a Member that may affect the Member’s economic or legal rights and obligations with respect to the Member’s investment in the Company (including, without limitation, by waiving any indemnification payments to which the Managing Member

30

or its affiliates are entitled from the Member or by reimbursing the Member for any indemnification payments owed by the Member in connection with its ownership of Units), regardless of the class of Units the Member holds, without notice to other Members. Such arrangements reflect terms privately agreed to between parties other than the Company, and for the avoidance of doubt, the Company cannot, and is under no duty to, enforce equality of treatment between Members by other entities, including the Managing Member and its affiliates. The Managing Member and its affiliates shall be under no obligation to make arrangements available on equal terms to other Members. In addition, where permitted by applicable law, the Managing Member and its affiliates may elect to pay part or all of the fees and performance-based compensation paid to it by the Company to investors or distributors of the Company. See “POTENTIAL CONFLICTS OF INTEREST—Potential Conflicts Relating to the Selection of Advisors, the Sale of Units and the Allocation of Investment Opportunities—Goldman Sachs’ or Intermediaries’ Financial and Other Interests and Relationships May Incentivize Goldman Sachs or Intermediaries to Promote the Sale of Units and Interests in the Investment Funds.”

Capital Accounts; Allocation of Gains and Losses

The Company maintains a separate capital account on its books for each series of Units and for each Member, with respect to each series of Units held by such Member. A “series” includes, for this purpose, a class of Units not issued in multiple series. Each capital account with respect to a series of Units will be (i) increased by the amount of any capital contributions in respect of such series, (ii) decreased for any payments in redemption of, or any distributions in respect of, such series, (iii) increased or decreased by such series’ allocable share of the appreciation or depreciation of the net assets of the Company (determined as set forth below) for each accounting period^*, and (iv) decreased by any Incentive Allocation (discussed below) and any Management Fee in respect of such series, if applicable. For each accounting period, the appreciation or depreciation of the net assets of the Company (before reduction for any Management Fee) shall be allocated among each series of Units pro rata based upon the relative capital accounts of each series (determined prior to any year-to-date accrued Incentive Allocation) as of the beginning of such accounting period, after adjustment for any capital contributions, distributions and redemptions as of the beginning of such accounting period. Each Member’s capital account with respect to each series of Units shall equal the capital account of such series of Units multiplied by the percentage of Units in such series owned by such Member. Capital accounts will be appropriately adjusted for exchanges of Units from one series into another series and for other events and items as determined by the Managing Member in its sole discretion.

^*  An “accounting period” refers to the following periods: the initial accounting period began upon the commencement of operations of the Company. Each subsequent accounting period begins immediately after the close of the preceding accounting period. Each accounting period closes at the close of business on the first to occur of (i) the last day of each calendar month, (ii) the last day of each fiscal year of the Company, (iii) the date immediately prior to the effective date of the admission of a new Member, (iv) the date immediately prior to the effective date of an additional capital contribution by a Member, or (v) the date immediately prior to the effective date of any redemption or complete withdrawal by a Member. In addition, the final accounting period shall end on the date the Company dissolves.

The NAV of a series of Units equals the capital account balance with respect to such series of Units, and the NAV per Unit of a series shall be equal to the NAV of such series divided by the number of outstanding Units of such series.

At the end of each fiscal year of the Company (or other applicable period), the Managing Member receives an Incentive Allocation in respect of each series of Class A Units equal to 5% of the amount by which the NAV of each such series (appropriately adjusted as determined by the Managing Member in its sole discretion for additional subscriptions, distributions and redemptions, and determined prior to any Incentive Allocation accrual with respect to such series of Units, but after the deduction of all Company expenses for the period, including the Management Fee allocable to that series) exceeds the Prior High NAV (as defined below) of such series. The Incentive Allocation in respect of any other class of Units may differ from the Incentive Allocation in respect of the Class A Units.

The “Prior High NAV” with respect to a series of Units initially equals the NAV of such series immediately following the initial issuance of such series. The Prior High NAV with respect to a series of Units immediately following the end of any year for which an Incentive Allocation has been made with respect to such series will be “reset” to equal the NAV of such series as of such time (after reduction for any Incentive Allocation), unless the

31

series is exchanged into another series, in which case the Prior High NAV will be “reset” to equal the NAV of such other series as of such time (after reduction for any Incentive Allocation). The Prior High NAV for each series of Units will be appropriately adjusted, as determined by the Managing Member in its sole discretion, to account for any additional subscriptions, distributions and redemptions made with respect to such series of Units. Since each outstanding series of Units may have a different Prior High NAV, the Managing Member will earn an Incentive Allocation with respect to each series of Units the NAV of which, as of the close of the applicable measurement period, exceeds its Prior High NAV for such period, even though it will not earn an Incentive Allocation with respect to any series of Units the NAV of which, as of the close of such measurement period, did not exceed its Prior High NAV for such period.

The Incentive Allocation with respect to a series of Units accrues daily and is credited to the capital account of the Managing Member as of December 31 of each year out of the capital account of such series. In the event of an intra-year redemption of Units, any accrued Incentive Allocation with respect to such Units will be credited to the capital account of the Managing Member upon redemption. Appropriate adjustments will be made to the calculation of the Incentive Allocation for extraordinary circumstances, including, without limitation, if the Managing Member permits a contribution or redemption by a Member to be made intra-month.

GS HFS, as managing member of each Investment Fund, is entitled to an incentive allocation, which is substantially similar to the arrangement described above. However, the Company will invest in a class of Units of each of the Investment Funds that is not subject to any such incentive allocation.

The Managing Member has the right, in its sole discretion, to partially or completely waive any performance-based incentive allocations or performance compensation arrangements, or to apply no such performance-based fees or allocations or performance-based fees or allocations that are greater or less than or in other ways different from the incentive allocation described in this Annual Report, in respect of certain Members (including without limitation affiliates or personnel of Goldman Sachs), as may be agreed to by the Managing Member and such Members, and the Managing Member may make appropriate amendments to or supplement the LLC Agreement (including in connection with the creation of additional classes or series of Units) if required to reflect any such arrangements, in each case without notice to or the consent of other Members. Such Members may include investment vehicles formed or managed by Goldman Sachs, or formed for purposes of participation by Goldman Sachs or its affiliates or personnel.

THE MANAGING MEMBER

GS HFS, a Delaware limited liability company, serves as Managing Member of the Company and currently acts as the managing member of each of the Investment Funds. GS HFS, in its capacity as the Managing Member, is responsible for the management and operation of the Company. As managing member of the Investment Funds, GS HFS is responsible for the management and operation of the Investment Funds, including the selection of the Advisors with which the Investment Funds invest their assets. GS HFS, in its capacity as Managing Member and as managing member of the Investment Funds, is permitted to delegate some of its investment management responsibilities to its advisory affiliates or other persons as set forth in the limited liability company agreement for the Company (the “LLC Agreement”) and the relevant Investment Fund. The principal business of the Managing Member is to function as an investment manager for multi-advisor funds and to select advisors to make investments on behalf of such funds.

The Managing Member is an affiliate of Goldman Sachs Asset Management, L.P., a Delaware limited partnership (“GSAM”). Each of the Managing Member and GSAM is a wholly owned subsidiary of The Goldman Sachs Group, Inc.

Goldman Sachs, one of the world’s oldest and largest investment banking and securities firms, was founded in 1869. GSAM, formed in 1988, is located at 32 Old Slip, New York, New York 10005. GS HFS is located at One New York Plaza, New York, New York 10004.

The Company has no employees. As of December 31, 2007, the Managing Member was supported by approximately 85 employees of the GS Group worldwide, of which approximately 32 allocated at least a portion of their time to portfolio management of the Company and the Investment Funds. The Company’s assets were managed, indirectly through the Company’s investments in the Investment Funds, by approximately 150 Advisors.

32

The Managing Member may withdraw any interest it may have as the Managing Member, and, subject to applicable law, may substitute any affiliate of Goldman Sachs as the Managing Member of the Company without the consent of the Members. From time to time certain qualified officers and employees of the Managing Member or Goldman Sachs may directly or indirectly invest in the Company or the Investment Funds. Subject to the redemption provisions of the applicable limited liability company agreement, any such party may redeem any units that it may acquire without notice to the non-managing members in the applicable entity. The managing member of each Investment Fund has such rights with respect to its interests therein. Members of the GS Group have from time to time made and withdrawn, and may from time to time make and withdraw, investments in certain of the Investment Funds. Redemptions of any amount may be made by members of the Managing Member and affiliates at any time, without prior notice to the Members, in accordance with the redemption provisions of the limited liability company agreement of the applicable Investment Fund.

It is not currently expected that the Investment Funds’ Advisors or any of those Advisors’ respective principals will purchase units in the Company or the Investment Funds.

The Managing Member also manages a number of other investment funds and accounts that have investment programs that are similar to those of the Company and may manage additional similar funds in the future. See “INVESTMENT PROGRAM—Certain Considerations Relating to Limited Capacity of Potential Advisors” and “POTENTIAL CONFLICTS OF INTEREST.”

POTENTIAL CONFLICTS OF INTEREST

General Categories of Conflicts Associated with the Company and the Investment Funds

The Goldman Sachs Group, Inc. is a worldwide, full-service investment banking, broker-dealer, asset management and financial services organization, and a major participant in global financial markets. As such, it acts as an investor, investment banker, research provider, investment manager, financer, advisor, market maker, proprietary trader, prime broker, lender, agent and principal, and has other direct and indirect interests, in the global fixed income, currency, commodity, equity, bank loan and other markets in which the Company and the Investment Funds directly and indirectly invest. As a result, The Goldman Sachs Group, Inc., GSAM, the Managing Member (for purposes of this “POTENTIAL CONFLICTS OF INTEREST” section, in its capacities as Managing Member of the Company and managing member of each of the Investment Funds), and their affiliates, directors, partners, trustees, managers, members, officers and employees (collectively, for purposes of this “POTENTIAL CONFLICTS OF INTEREST” section, “Goldman Sachs”), including those who may be involved in the management, sales, investment activities, business operations or distribution of the Company or the Investment Funds, are engaged in businesses and have interests other than that of managing the Company or the Investment Funds. Neither the Company nor the Investment Funds will be entitled to compensation related to such businesses. In addition, the Advisors, their affiliates, directors, partners, trustees, managers, members, officers and employees (collectively, for purposes of this “POTENTIAL CONFLICTS OF INTEREST” section, the “Advisors”) may similarly have clients, businesses, and interests in addition to managing assets of the applicable Advisor Fund, Portfolio Company or Managed Account.

The activities and interests of Goldman Sachs and the Advisors include potential multiple advisory, transactional, financial and other interests in securities, instruments and companies that may be directly or indirectly purchased or sold by the Company, the Investment Funds, the Advisor Funds, the Portfolio Companies or the Managed Accounts and their service providers, including without limitation the Advisors. These are considerations of which Members should be aware, and which may cause conflicts that could disadvantage the Company or the Investment Funds.

Present and future activities of Goldman Sachs and the Advisors in addition to those described in this “POTENTIAL CONFLICTS OF INTEREST” section may give rise to additional conflicts of interest.

As a registered investment adviser under the Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”), the Managing Member is required to file a Form ADV with the SEC. Form ADV contains information about assets under management, types of fee arrangements, types of investments, potential conflicts of

33

interest and other relevant information regarding the Managing Member. A copy of Part 1 of the Managing Member’s Form ADV is available on the SEC’s website (www.adviserinfo.sec.gov). A copy of Part 2 of the Managing Member’s Form ADV will be provided to Members upon request.

By having made an investment in the Company, a Member is deemed to have acknowledged and assented to the existence of potential conflicts of interest relating to Goldman Sachs and the Advisors, and to the operations of the Company, Investment Funds, Advisor Funds, Portfolio Companies and Managed Accounts in the face of these conflicts.

Potential Conflicts Relating to the Selection of Advisors, the Sale of Units and the Allocation of Investment Opportunities

     Goldman Sachs’ Other Activities May Have an Impact on the Selection of Advisors

The Managing Member, as the managing member of each Investment Fund, selects Advisors for the Investment Fund in accordance with its obligations as the managing member of the Investment Fund. However, given the breadth of Goldman Sachs’ activities, Goldman Sachs’ other activities may have a negative effect on the Company. It is expected that Goldman Sachs may receive various forms of compensation, commissions, payments, rebates, remuneration, investment activity, services or other benefits from Advisors and/or their Advisor Funds, Portfolio Companies and Managed Accounts, or may have interests in Advisors or their businesses, and provide a variety of products and services to them. The amount of such compensation, commissions, payments, rebates, remuneration, investment activity, services or other benefits to Goldman Sachs may be greater if the managing member of the Investment Funds selects such Advisors than it would have been had other Advisors been selected which also might have been appropriate for the Investment Funds.

As a result of the various activities and interests of Goldman Sachs as described in the first paragraph under “—General Categories of Conflicts Associated with the Company and the Investment Funds” above, it is likely that the Company and the Investment Funds will have multiple business relationships with, and will invest in, engage in transactions with, make voting decisions with respect to, or obtain services from, entities for which Goldman Sachs performs or seeks to perform investment banking or other services. It is also likely that the Advisors will undertake transactions in securities in which Goldman Sachs makes a market or otherwise has other direct or indirect interests. In addition, while the Managing Member, as the managing member of the Investment Funds, will make decisions for the Company and the Investment Funds, respectively, in accordance with its obligations to manage the Company and the Investment Funds appropriately, the fees, allocations, compensation, remuneration and other benefits to Goldman Sachs (including benefits relating to investment and business relationships of Goldman Sachs) arising from those decisions may be greater as a result of Advisor selection, certain portfolio, service provider or other decisions made by the Managing Member than they would have been had other decisions been made which also might have been appropriate for the Company or the Investment Funds. For example, Goldman Sachs or Client/GS Accounts may have equity, profits or other interests in an Advisor or may have entered into arrangements with an Advisor in which the Advisor would share with Goldman Sachs, a Client/GS Account or related parties a portion of its fees or allocations (including, without limitation, fees earned by the Advisor as a result of the Company’s or an Investment Fund’s allocation of assets to an Advisor Fund managed by the Advisor). Payments to Goldman Sachs (either directly from the Advisor or in the form of fees or allocations payable by the Client/GS Accounts) will generally increase as the amount of assets that an Advisor manages increases. Therefore, investment by the Company or an Investment Fund with an Advisor where Goldman Sachs, a Client/GS Account or a related party has a fee and/or profit sharing arrangement or other interest in the equity or profits of the Advisor may result in additional revenues to Goldman Sachs and its personnel or related parties. Also, the Managing Member may make the decision to have Goldman Sachs or an affiliate thereof provide administrative or other services to the Company or the Investment Funds instead of hiring an unaffiliated administrator or service provider, provided that such engagement is on market terms as determined by the Managing Member in its sole discretion.

Goldman Sachs (including, without limitation, the Managing Member) may receive notice of, or offers to participate in, investment opportunities from Advisors, their affiliates or other third parties. An Advisor or its affiliates may offer Goldman Sachs investment opportunities because of the amount of assets managed by an

34

Advisor and its affiliates for Goldman Sachs and Client/GS Accounts, including the Company and the Investment Fund, but such opportunities may not be allocated to the Company or the Investment Funds or such other Client/GS Accounts as described under “—Potential Conflicts Relating to the Allocation of Investment Opportunities Among the Company or the Investment Funds and Other Goldman Sachs Accounts” below. Therefore, investment (or continued investment) by the Company or an Investment Fund with an Advisor where Goldman Sachs, a Client/GS Account or a related party are being offered investment opportunities by the Advisor may result in additional investment opportunities to Goldman Sachs and its personnel or related parties.

In addition, while the Managing Member, as the managing member of the Investment Funds, will select Advisors in accordance with its fiduciary obligations to the Investment Funds, Goldman Sachs may also provide brokerage or other services to Advisors or act as prime broker for Advisors. Payments to Goldman Sachs for providing brokerage or other services or acting as prime broker will generally increase as the size of the assets that an Advisor manages increases. Therefore, investment by an Investment Fund (and indirectly the Company) with an Advisor where Goldman Sachs acts as prime broker, or to which Goldman Sachs provides brokerage or other services, will likely result in additional revenues to Goldman Sachs and its personnel. Goldman Sachs may provide research products and other products and services to an Advisor and receive revenues in connection with these activities. Goldman Sachs may receive price discounts or services from Advisors based on its relationships with such Advisors. In connection with services Goldman Sachs may provide Advisors, Goldman Sachs will act in its own commercial interests. As a result, investment with Advisors will be subject to many of the same conflicts arising from Goldman Sachs activities described herein.

In addition, if an Advisor provides fee “breakpoints,” such breakpoints may be affected by Goldman Sachs’ business relationships and levels or accounts other than with respect to the Company or the Investment Funds, and may directly or indirectly benefit Goldman Sachs and other proprietary or client accounts of Goldman Sachs.

Goldman Sachs may also serve as an Advisor with respect to Advisor Funds, Portfolio Companies and Managed Accounts. Goldman Sachs will receive compensation in connection with acting as an Advisor, and such compensation will not be reduced by any fees payable in accordance with any investments made by Goldman Sachs as Advisor of such Advisor Fund, Portfolio Company or Managed Account (i.e., there could be “double fees” involved in making any such investment, which would not arise in connection with the direct purchase of underlying investments by an Advisor Fund, Portfolio Company or Managed Account). Such fees to Goldman Sachs may be greater as a result of the selection of certain Advisors by the Managing Member and its personnel than they would have been had other Advisors been selected which also might have been appropriate for the Company or the Investment Funds, as applicable.

Goldman Sachs’ or Intermediaries’ Financial and Other Interests and Relationships May Incentivize Goldman Sachs or Intermediaries to Promote the Sale of Units and Interests in the Investment Funds

Goldman Sachs, its personnel and other financial service providers have interests in promoting sales of interests in the Company, the Investment Funds and certain Advisors. With respect to both Goldman Sachs and its personnel, the remuneration and profitability relating to services to and sales of interests in the Company and the Investment Funds or other products may be greater than the remuneration and profitability relating to services to and sales of other products that might be provided or offered. Conflicts may arise in relation to sales-related incentives. Goldman Sachs and its sales personnel may directly or indirectly receive a portion of the fees and commissions charged to the Company, the Investment Funds or their respective investors. Goldman Sachs and its advisory or other personnel may also benefit from increased amounts of assets under management. Fees and commissions may also be higher than for some products or services, and the remuneration and profitability to Goldman Sachs and such personnel resulting from transactions on behalf of or management of the Company or the Investment Funds may be greater than the remuneration and profitability resulting from other products. Goldman Sachs may also benefit from equity, profits or other interests in Advisors or arrangements in which the Advisors agree to share their fees or allocations with Goldman Sachs, Client/GS Accounts or related parties.

Goldman Sachs and its personnel may receive greater compensation or greater profit in connection with the Company or the Investment Funds than with an account advised by an unaffiliated investment adviser. Differentials in compensation may be related to the fact that Goldman Sachs may pay a portion of its advisory fee to the

35

unaffiliated investment adviser, or to other compensation arrangements, including for portfolio management, brokerage transactions or account servicing. Any differential in compensation may create a financial incentive on the part of Goldman Sachs and its personnel to recommend the Company or the Investment Funds over other accounts or products managed by unaffiliated investment advisers or to effect transactions differently in the Company or the Investment Funds as compared to other accounts or products.

Goldman Sachs may also have relationships with, and purchase, distribute or sell services or products from or to, distributors, consultants and others who recommend the Company, the Investment Funds or the Advisors, or who engage in transactions with or for the Company, the Investment Funds or the Advisors. For example, Goldman Sachs regularly participates in industry and consultant sponsored conferences and may purchase educational, data related or other services from consultants or other third parties that it deems to be of value to its personnel and its business. The products and services purchased from consultants may include, but are not limited to, those that help Goldman Sachs understand the consultants’ points of view on the investment management process. Consultants and other third parties that provide consulting or other services or provide service platforms for employee benefit plans to potential investors in the Company or the Investment Funds may receive fees from Goldman Sachs, the Company or the Investment Funds in connection with the distribution of Units or interests in the Investment Funds, or other Goldman Sachs products. For example, Goldman Sachs may enter into revenue or fee sharing arrangements with consultants, service providers, and other intermediaries relating to investments in mutual funds, collective trusts, or other products or services offered or managed by the Managing Member. Goldman Sachs may also pay a fee for membership in industry-wide or state and municipal organizations or otherwise help sponsor conferences and educational forums for investment industry participants including, but not limited to, trustees, fiduciaries, consultants, administrators, state and municipal personnel and other clients. Goldman Sachs’ membership in such organizations allows Goldman Sachs to participate in these conferences and educational forums and helps Goldman Sachs interact with conference participants and develop an understanding of the points of view and challenges of the conference participants. In addition, Goldman Sachs personnel, including employees of the Managing Member, may have board, advisory, brokerage or other relationships with issuers, distributors, consultants and others that may have investments with the Advisors or in the Company or Investment Funds or that may recommend investments with the Advisors or distribute Advisor Fund, Company or Investment Fund interests or engage in transactions for the Advisors and/or their Advisor Funds, Portfolio Companies and Managed Accounts. In addition, Goldman Sachs, including the Managing Member, may make charitable contributions to institutions, including those that have relationships with clients or personnel of clients. Personnel of Goldman Sachs may also make political contributions. As a result of the relationships and arrangements described in this paragraph, consultants, distributors and other parties may have conflicts associated with their promotion of the Company or the Investment Funds, or other dealings with the Company, the Investment Funds or the Advisors, that create incentives for them to promote the Company, the Investment Funds, the Advisors or certain portfolio transactions.

One or more divisions of Goldman Sachs may refer certain investment opportunities to the Managing Member, or otherwise provide services to, or enter into other arrangements with the Managing Member. In connection with such referrals, services or other arrangements involving one or more divisions of Goldman Sachs, such divisions may engage in sharing of fees or other compensation received by the Managing Member from the Company or the Investment Funds.

Goldman Sachs, the Company or the Investment Funds may make payments to authorized dealers and other financial intermediaries (each an “Intermediary” and collectively “Intermediaries”) from time to time to promote the Company, the Investment Funds, Client/GS Accounts and other products. In addition to placement fees, sales loads or similar distribution charges, such payments may be made out of Goldman Sachs’ assets, or amounts payable to Goldman Sachs rather than a separately identified charge to the Company, the Investment Funds, Client/GS Accounts or other products. Such payments may compensate Intermediaries for, among other things: marketing the Company, the Investment Funds, Client/GS Accounts and other products (which may consist of payments resulting in or relating to the inclusion of the Company, the Investment Funds, Client/GS Accounts and other products on preferred or recommended fund lists or in certain sales programs from time to time sponsored by the Intermediaries); access to the Intermediaries’ registered representatives or salespersons, including at conferences and other meetings; assistance in training and education of personnel; “finders” or “referral fees” for directing investors to the Company, the Investment Funds, Client/GS Accounts and other products; marketing support fees for

36

providing assistance in promoting the Company, the Investment Funds, Client/GS Accounts and other products (which may include promotions in communications with the Intermediaries’ customers, registered representatives and salespersons); and/or other specified services intended to assist in the distribution and marketing of the Company, the Investment Funds, Client/GS Accounts and other products. Such payments may be a fixed dollar amount; may be based on the number of customer accounts maintained by an Intermediary; may be based on a percentage of the value of interests sold to, or held by, customers of the Intermediary involved; or may be calculated on another basis. The payments may also, to the extent permitted by applicable regulations, contribute to various non-cash and cash incentive arrangements to promote certain products, as well as sponsor various educational programs, sales contests and/or promotions. Furthermore, subject to applicable law, such payments may also pay for the travel expenses, meals, lodging and entertainment of Intermediaries and their salespersons and guests in connection with educational, sales and promotional programs. The additional payments by Goldman Sachs may also compensate Intermediaries for subaccounting, administrative and/or shareholder processing or other investor services that are in addition to the fees paid for these services by such products.

The payments made by Goldman Sachs, the Company or the Investment Funds may be different for different Intermediaries. The payments may be negotiated based on a range of factors, including but not limited to, ability to attract and retain assets, target markets, customer relationships, quality of service and industry reputation. Payment arrangements may include breakpoints in compensation which provide that the percentage rate of compensation varies as the dollar value of the amount sold or invested through an Intermediary increases. The presence of these payments and the basis on which an Intermediary compensates its registered representatives or salespersons may create an incentive for a particular Intermediary, registered representative or salesperson to highlight, feature or recommend certain products based, at least in part, on the level of compensation paid.

Potential Conflicts Relating to the Allocation of Investment Opportunities Among the Company or the Investment Funds and Other Goldman Sachs Accounts

Goldman Sachs has potential conflicts in connection with the allocation of investments or transaction decisions for the Company and the Investment Funds, including in situations in which Goldman Sachs or its personnel (including personnel of the Managing Member) have interests. For example, an Investment Fund may be competing for investment opportunities with current or future accounts or funds managed or advised by Goldman Sachs (including the Managing Member) or in which Goldman Sachs (including the Managing Member) or its personnel have an interest (each a “Client/GS Account” and collectively the “Client/GS Accounts”). These Client/GS Accounts or funds may provide greater fees or other compensation (including performance-based fees, equity, profit or other interests) to Goldman Sachs (including the Managing Member).

Goldman Sachs may manage or advise Client/GS Accounts that have investment objectives that are similar to those of the Company or the Investment Funds and/or may seek to invest with Advisors with which an Investment Fund invests or that would be an appropriate investment for an Investment Fund or make investments in securities or other instruments, sectors or strategies in which an Investment Fund may invest. This may create potential conflicts where there is limited availability or limited liquidity for those investments or where Advisors limit the number of investors in or the size of their Advisor Funds or the amount of assets that they manage. For example, limited availability may exist, without limitation, in emerging markets, high yield securities, fixed income securities, regulated industries and initial public offerings/new issues. Transactions in investments by multiple Client/GS Accounts (including accounts in which Goldman Sachs and its personnel have an interest), other clients of Goldman Sachs or Goldman Sachs itself may have the effect of diluting or otherwise negatively affecting the values, prices or investment strategies associated with securities held by Client/GS Accounts and the Investment Funds, Advisor Funds, Portfolio Companies and Managed Accounts, particularly, but not limited to, in small capitalization, emerging market or less liquid strategies. In addition, opportunities may arise to enter into economic arrangements with Advisors in which the Advisors may agree to reduce or rebate fees, allocations or other compensation to an investor, or agree to pay or share some or all of the fees, allocations or other compensation earned by the Advisor, or to take equity, profits or other interests in Advisors or their businesses.

The Managing Member has developed policies and procedures that provide that it will allocate investment opportunities and make purchase and sale decisions among the Company, the Investment Funds and other Client/GS Accounts in a manner that it considers, in its sole discretion and consistent with its fiduciary obligation to each

37

Client/GS Account, to be reasonable. In many cases, these policies result in the pro rata allocation of limited opportunities across Client/GS Accounts, but in many other cases the allocations reflect numerous other factors based upon the Managing Member’s good faith assessment of the best use of such limited opportunities relative to the objectives, limitations and requirements of each Client/GS Account and applying a variety of factors including those described below. The Managing Member seeks to treat all clients reasonably in light of all factors relevant to managing an account, and in some cases it is possible that the application of the factors described below may result in allocations in which certain accounts may receive an allocation when other accounts do not. Non-proportional allocations may occur more frequently in the fixed income portfolio management area than many active equity accounts, in many instances because multiple appropriate or substantially similar investments are available in fixed income strategies, as well as due to differences in benchmark factors, hedging strategies, or other reasons, but non-proportional allocations could also occur in other areas. The application of these factors as described below may result in allocations in which Goldman Sachs and Goldman Sachs employees may receive an allocation or an opportunity not allocated to other Clients/GS Accounts (including the Company and the Investment Funds). Allocations may be based on numerous factors and may not always be pro rata based on assets managed.

The Managing Member will make allocation related decisions for the Company, the Investment Funds and other Client/GS Accounts with reference to numerous factors. These factors may include, without limitation, (i) account investment horizons, investment objectives and guidelines; (ii) different levels of investment for different strategies; (iii) client-specific investment guidelines and restrictions, including the ability to hedge through short sales or other techniques; (iv) the expected future capacity of applicable Client/GS Accounts; (v) fully directed brokerage accounts; (vi) tax sensitivity of accounts; (vii) suitability requirements and the nature of the investment opportunity; (viii) account turnover guidelines; (ix) cash and liquidity considerations, including without limitation, availability of cash for investment; (x) relative sizes and expected future sizes of the applicable accounts; (xi) availability of other appropriate investment opportunities; and/or (xii) minimum denomination, minimum increments, de minimis threshold and round lot considerations. Suitability considerations can include without limitation (i) relative attractiveness of a security to different accounts; (ii) concentration of positions in an account; (iii) appropriateness of a security for the benchmark and benchmark sensitivity of an account; (iv) an account’s risk tolerance, risk parameters and strategy allocations; (v) use of the opportunity as a replacement for a security or instrument the Managing Member believes to be attractive for an account; (vi) considerations related to hedging a position in a pair trade; and/or (vii) considerations related to giving a subset of accounts exposure to an industry. In addition, the fact that certain Goldman Sachs personnel are dedicated to one or more funds, accounts or clients may be a factor in determining the allocation of opportunities sourced by such personnel. Reputational matters and other such considerations may also be considered.

During periods of unusual market conditions, the Managing Member may deviate from its normal trade allocation practices. For example, this may occur with respect to the management of unlevered and/or long-only funds or accounts that are typically managed on a side-by-side basis with levered and/or long-short funds or accounts. During such periods, the Managing Member will seek to exercise a disciplined process for determining its actions to appropriately balance the interests of all accounts, as it determines in its sole discretion.

In addition to allocations of limited availability investments, Goldman Sachs may, from time to time, develop and implement new investment opportunities with Advisors and/or trading strategies, and these strategies may not be employed in all accounts (including the Company or the Investment Funds) or pro rata among the accounts where they are employed, even if the strategy is consistent with the objectives of all accounts. Goldman Sachs may make decisions based on such factors as strategic fit and other portfolio management considerations, including, without limitation, an account’s capacity for such strategy, the liquidity of the strategy and its underlying instruments, the account’s liquidity, the business risk of the strategy relative to the account’s overall portfolio make-up, and the lack of efficacy of, or return expectations from, the strategy for the account, and such other factors as Goldman Sachs deems relevant in its sole discretion. For example, such a determination may, but will not necessarily, include consideration of the fact that a particular strategy will not have a meaningful impact on an account given the overall size of the account, the limited availability of opportunities in the strategy and the availability of other strategies for the account.

Although allocating investment opportunities or orders with Advisors among the Investment Funds and other Client/GS Accounts may create potential conflicts of interest because of the interests of Goldman Sachs or its

38

personnel or because Goldman Sachs may receive greater fees or compensation from one Client/GS Account’s allocations relative to another, the Managing Member will not make allocation decisions based on such interests or greater fees or compensation.

Allocation decisions among accounts may be more or less advantageous to any one account or group of accounts. As a result of these allocation issues, the amount, timing, structuring or terms of an investment by the Company or an Investment Fund may differ from, and performance may be lower than, investments and performance of other Client/GS Accounts.

The Managing Member is currently the managing member of the HFP U.S. Funds, and the investment manager of the HFP Ireland Funds. The HFP Funds generally have investment objectives and strategies similar to those of the Company and the Investment Funds, except that HFP Institutional is currently intended for investment by benefit plans and other similar investors.

Certain of the HFP Funds allocate assets to Advisors that are currently not accepting any new investments. Such Advisors may manage a material portion of the total assets of the HFP Funds. It is not anticipated that the Company, indirectly through the Investment Funds, will generally allocate assets to such Advisors. If at any time in the future these Advisors accept additional investments, the HFP Funds that currently allocate assets to such Advisors may be given priority over the Investment Funds in the determination of how any such available capacity is allocated.

Goldman Sachs, accounts managed by Goldman Sachs or other investment funds managed by Goldman Sachs, including accounts and investment funds which have investment objectives and utilize investment strategies similar to those of the Company, may invest in the Investment Funds, Advisor Funds and Portfolio Companies. Such entities or accounts may also seek to invest in funds managed by, or enter into managed account agreements with, investment managers to which it would be appropriate for the Company or the Investment Funds to allocate assets.

Notwithstanding anything in the foregoing, the Company and the Investment Funds may or may not receive, but in any event will have no rights with respect to, opportunities sourced by Goldman Sachs businesses and affiliates. Such opportunities or any portion thereof may be offered to other GS/Client Accounts, Goldman Sachs, all or certain investors in the Company or the Investment Funds, or such other persons or entities as determined by Goldman Sachs in its sole discretion. The Company and the Investment Funds will have no rights and will not receive any compensation related to such opportunities.

Other Potential Conflicts Relating to the Management of the Company and the Investment Funds by the Managing Member

     Potential Restrictions and Issues Relating to Information Held by Goldman Sachs

As a result of informational barriers constructed between different divisions of Goldman Sachs, the Managing Member will generally not have access to information, and may not consult with personnel, in other areas of Goldman Sachs. Therefore, the Managing Member will generally not be able to manage the portfolios of the Company or the Investment Funds with the benefit of information held by many other divisions of Goldman Sachs. From time to time and subject to the Managing Member’s policies and procedures regarding information barriers, the Managing Member may consult with personnel in other areas of Goldman Sachs, or with persons unaffiliated with Goldman Sachs, or may form investment policy committees comprised of such personnel. In certain circumstances, personnel of affiliates of the Managing Member may have input into, or make determinations regarding, portfolio management transactions for the Company or the Investment Funds. The performance by such persons of obligations related to their consultation with personnel of the Managing Member could conflict with their areas of primary responsibility within Goldman Sachs or elsewhere. In connection with their activities with the Managing Member, such persons may receive information regarding the Managing Member’s proposed investment activities for the Company or the Investment Funds that is not generally available to the public. There will be no obligation on the part of such persons to make available for use by the Company or the Investment Funds any information or strategies known to them or developed in connection with their own client, proprietary or other activities. In addition, Goldman Sachs will be under no obligation to make available any research or analysis prior to its public dissemination.

39

The Managing Member makes decisions for the Company and the Investment Funds based on their respective investment programs. The Managing Member from time to time may have access to certain fundamental analysis and proprietary technical models developed by Goldman Sachs and its personnel. Goldman Sachs will not be under any obligation, however, to effect transactions on behalf of the Company or the Investment Funds in accordance with such analysis and models. In addition, Goldman Sachs has no obligation to seek information or to make available to or share with the Company or the Investment Funds any information, investment strategies, opportunities or ideas known to Goldman Sachs personnel or developed or used in connection with other clients or activities. Goldman Sachs and certain of its personnel, including the Managing Member’s personnel or other Goldman Sachs personnel advising or otherwise providing services to the Company or the Investment Funds, may be in possession of information not available to all Goldman Sachs personnel, and such personnel may act on the basis of such information in ways that have adverse effects on the Company or the Investment Funds.

From time to time, Goldman Sachs may come into possession of material, non-public information or other information that could limit the ability of an Investment Fund to invest with Advisors or reduce Company or Investment Fund allocations made to Advisors. The Investment Fund’s and, in turn, the Company’s investment flexibility may be constrained as a consequence. The Managing Member and the Advisors are generally not permitted to obtain or use material non-public information in effecting purchases and sales in public securities transactions for the Company or Investment Funds.

Goldman Sachs conducts extensive broker-dealer, banking and other activities around the world and operates a business known as Goldman Sachs Security Services (“GSS”), which provides prime brokerage, administrative and other services to clients which may involve markets and securities in which the Company or the Investment Funds invest. These businesses will give GSS and many other parts of Goldman Sachs broad access to the current status of certain markets, investments and funds, and detailed knowledge about fund operators. As a result of the activities described in this paragraph and the access and knowledge arising from those activities, parts of Goldman Sachs may be in possession of information in respect of markets, investments and funds, which, if known to the Managing Member, might cause the Managing Member to seek to dispose of, retain or increase interests in investments held by the Company or the Investment Funds or acquire certain positions on behalf of the Company or the Investment Funds. Goldman Sachs will be under no duty to make any such information available to the Managing Member or in particular the personnel of the Managing Member making investment decisions on behalf of the Company or the Investment Funds.

Issues Relating to the Valuation of Assets by the Managing Member and/or Multiple Divisions or Units Within Goldman Sachs

The Managing Member oversees the valuation of the investments of the Company and the Investment Funds based on values provided by the Advisors. Certain securities and other assets in which the Company or the Investment Funds may directly or indirectly invest may not have a readily ascertainable market value. Such securities and other assets may constitute a substantial portion of the investments of the Company and the Investment Funds.

Various divisions and units within Goldman Sachs are required to value assets, including in connection with managing or advising Client/GS Accounts and in their capacity as a broker-dealer. These various divisions and units may share information regarding valuation techniques and models or other information relevant to the valuation of a specific asset or category of assets. Goldman Sachs does not, however, have any obligation to engage in such information sharing. Therefore, a division or unit of Goldman Sachs may value an identical asset differently than another division or unit of Goldman Sachs. This is particularly the case when an asset does not have a readily ascertainable market price and/or where one division or unit of Goldman Sachs has more recent and/or accurate information about the asset being valued.

Potential Conflicts Relating to Goldman Sachs’ Proprietary Activities and Activities on Behalf of Other Accounts

The results of the investment activities of the Company and the Investment Funds may differ significantly from the results achieved by Goldman Sachs for its proprietary accounts and from the results achieved by Goldman Sachs

40

for other Client/GS Accounts. The Managing Member will manage the Company, the Investment Funds and the other Client/GS Accounts it manages in accordance with their respective investment objectives and guidelines. However, Goldman Sachs may give advice, and take action, with respect to any current or future Client/GS Accounts that may compete or conflict with the advice the Managing Member may give to the Company or an Investment Fund, including with respect to the return of the investment, the timing or nature of action relating to the investment or the method of exiting the investment.

Transactions undertaken by Goldman Sachs or Client/GS Accounts may adversely impact the Company and the Investment Funds. Goldman Sachs and one or more Client/GS Accounts may buy or sell positions while the Company or an Investment Fund, Advisor Fund, Portfolio Company or Managed Account is undertaking the same or a differing, including potentially opposite, strategy, which could disadvantage the Advisor Fund, Portfolio Company or Managed Account and, in turn, the relevant Investment Fund and the Company. For example, the Company or an Investment Fund, Advisor Fund, Portfolio Company or Managed Account may buy a security and Goldman Sachs or Client/GS Accounts may establish a short position in that same security. The subsequent short sale may result in impairment of the price of the security which the Company, Investment Fund, Advisor Fund, Portfolio Company or Managed Account holds. Conversely, the Company or an Investment Fund, Advisor Fund, Portfolio Company or Managed Account may establish a short position in a security and Goldman Sachs or other Client/GS Accounts may buy that same security. The subsequent purchase may result in an increase of the price of the underlying position in the short sale exposure of the Company, Investment Fund, Advisor Fund, Portfolio Company or Managed Account and such increase in price would be to the detriment of the Advisor Fund, Portfolio Company or Managed Account and, in turn, the relevant Investment Fund and the Company.

In addition, the Managing Member and other Goldman Sachs affiliates may manage funds or accounts, and Goldman Sachs may be invested in funds or accounts, that have similar investment objectives or portfolios to that of the Company, the Investment Funds, the Advisor Funds, Portfolio Companies or Managed Accounts, and events occurring with respect to such funds or accounts could affect the performance of the Company, the Investment Funds, the Advisor Funds, Portfolio Companies or Managed Accounts. For example, in the event that withdrawals of capital or performance losses result in such a fund or account selling securities, those sales could result in securities of the same issuer, strategy or type held by the Company, the Investment Funds, the Advisor Funds, Portfolio Companies or Managed Accounts falling in value, which could have a material adverse effect on the Company or the Investment Funds.

Goldman Sachs’ investment in the Company may constitute a substantial percentage of the NAV of the Company. Redemptions by Goldman Sachs from the Company may be made at any time without notice to the Members in accordance with the redemption procedures disclosed herein, even if the amount of such redemption constitutes a material portion of the Company’s NAV. Goldman Sachs’ decision to make a redemption from any such entity will be made based on factors it deems relevant in its sole discretion without regard to its effect on the Company.

Conflicts may also arise because portfolio decisions regarding an Advisor Fund, Portfolio Company or Managed Account may benefit other Client/GS Accounts. For example, the sale of a long position or establishment of a short position by an Advisor Fund, Portfolio Company or Managed Account may impair the price of the same security sold short by (and therefore benefit) Goldman Sachs or other Client/GS Accounts, and the purchase of a security or covering of a short position in a security by an Advisor Fund, Portfolio Company or Managed Account may increase the price of the same security held by (and therefore benefit) Goldman Sachs or other Client/GS Accounts.

In addition, transactions in investments by one or more Client/GS Accounts and Goldman Sachs may have the effect of diluting or otherwise negatively affecting the values, prices or investment strategies of the Advisor Funds, Portfolio Companies or Managed Accounts, particularly, but not limited to, in small capitalization, emerging market or less liquid strategies. For example, this may occur when portfolio decisions regarding the Company or an Investment Fund, or for an Advisor Fund, Portfolio Company or Managed Account, are based on research or other information that is also used to support portfolio decisions for other Client/GS Accounts. When Goldman Sachs or a Client/GS Account implements a portfolio decision or strategy ahead of, or contemporaneously with, similar portfolio decisions or strategies for the Advisor Funds, Portfolio Companies or Managed Accounts (whether or not

41

the portfolio decisions emanate from the same research analysis or other information), market impact, liquidity constraints, or other factors could result in the Advisor Funds, Portfolio Companies or Managed Accounts receiving less favorable trading results and the costs of implementing such portfolio decisions or strategies could be increased or the Advisor Funds, Portfolio Companies or Managed Accounts, and, in turn, the relevant Investment Fund and the Company, could otherwise be disadvantaged. Goldman Sachs may, in certain cases, elect to implement internal policies and procedures designed to limit such consequences, which may cause an Advisor Fund, Portfolio Company or Managed Account to be unable to engage in certain activities, including purchasing or disposing of securities, when it might otherwise be desirable for it to do so.

The directors, officers and employees of Goldman Sachs, including the Managing Member, may buy and sell securities or other investments for their own accounts (including through investment funds managed by Goldman Sachs, including the Managing Member). As a result of differing trading and investment strategies or constraints, positions may be taken by directors, officers and employees that are the same as, different from or made at different times than positions taken for the Company or an Investment Fund. To reduce the possibility that the Company and the Investment Funds will be materially adversely affected by the personal trading described above, the Managing Member has established policies and procedures that restrict securities trading in the personal accounts of investment professionals and others who normally come into possession of information regarding the Company’s and the Investment Funds’ portfolio transactions. The Managing Member has adopted a code of ethics restriction required by the Investment Advisers Act and monitoring procedures relating to certain personal securities transactions by the Managing Member personnel that the Managing Member deems to involve potential conflicts involving such personnel, Client/GS Accounts managed by the Managing Member and the Company or the Investment Funds. The code of ethics requires that the Managing Member personnel comply with all applicable U.S. federal securities laws and with the fiduciary duties and anti-fraud rules to which the Managing Member is subject.

Clients of Goldman Sachs (including Client/GS Accounts) may have, as a result of receiving client reports or otherwise, access to information regarding the Managing Member’s transactions (and, when Goldman Sachs is a client of an Advisor, transactions of such Advisor) or views which may affect such clients’ transactions outside of accounts controlled by the Managing Member, and such transactions may negatively impact the performance of the Company, the Investment Funds or the assets managed by the Advisors. The Company, the Investment Funds and the assets managed by the Advisors may also be adversely affected by cash flows and market movements arising from purchase and sales transactions, as well as increases of capital in, and withdrawals of capital from, other Client/GS Accounts. These effects can be more pronounced in thinly traded and less liquid markets.

An Advisor’s management of an Advisor Fund, Portfolio Company or Managed Account may benefit Goldman Sachs. For example, the Advisor Funds, Portfolio Companies and Managed Accounts may, subject to applicable law, invest directly or indirectly in the securities, bank loans or other obligations of companies affiliated with Goldman Sachs or in which Goldman Sachs (or a Client/GS Account) has an equity, debt or other interest. In addition, subject to applicable law, the Advisor Funds, Portfolio Companies and Managed Accounts may engage in investment transactions that may result in other Client/GS Accounts being relieved of obligations or otherwise divesting of investments or cause an Advisor Fund, Portfolio Company or Managed Account to have to divest certain investments. The purchase, holding and sale of investments by the Advisor Funds, Portfolio Companies and Managed Accounts may enhance the profitability of Goldman Sachs’ or other Client/GS Accounts’ own investments in and its activities with respect to such companies.

Without limiting the generality of the foregoing, the Company, the Investment Funds, the Advisor Funds, the Portfolio Companies and the Managed Accounts may invest in indebtedness of portfolio companies affiliated with Goldman Sachs or in which Goldman Sachs and/or funds or accounts managed by Goldman Sachs or in which Goldman Sachs have an equity or other interest, and may acquire such indebtedness either directly or indirectly through syndicate or secondary market purchases. Such investments may benefit Goldman Sachs. In addition, Goldman Sachs may be incentivized not to undertake certain actions on behalf of the Company or the Investment Funds in connection with such investments, including the exercise of certain rights that it may have as a creditor, in view of Goldman Sachs’ involvement with the applicable issuer. Notwithstanding these potential conflicts of interest, the Managing Member will only make investment decisions for the Company and the Investment Funds in good faith and in a manner that is consistent with its fiduciary obligations to the Company and the Investment

42

Funds, without regard to the benefits to Goldman Sachs. Goldman Sachs or funds or accounts which Goldman Sachs manages or in which Goldman Sachs has an interest that hold investments in different parts of the capital structure of a company than the Company, an Investment Fund, Advisor Fund, Portfolio Company or Managed Account, may take certain actions that could be materially adverse to the Company’s direct or indirect investment in such company. There are also certain risks involved in making investments in issuers that are or become insolvent. See ITEM 1A. “RISK FACTORS—Risks Related to Issuers of Securities—Investments in Issuers of Indebtedness May be Adversely Affected in the Event of an Issuer’s Insolvency,” including the discussion on the avoidance of certain payments on indebtedness as preferences in connection with bankruptcy proceedings, which could be a more significant issue for the Company and the Investment Funds in connection with investments in companies affiliated with Goldman Sachs. In addition, it is possible that in connection with an insolvency, bankruptcy or similar proceeding the Company, the Investment Funds, the Advisor Funds, the Portfolio Companies and the Managed Accounts may be limited (by applicable law, courts or otherwise) in the positions or actions they may be permitted to take due to other interests held or actions or positions taken by Goldman Sachs, its affiliates, or funds or other accounts it manages or in which it invests.

The Managing Member may, but is not required to, aggregate purchase or sale orders for the Company and the Investment Funds with trades for other funds or accounts managed by Goldman Sachs, including Client/GS Accounts. When orders are aggregated for execution, it is possible that Goldman Sachs and Goldman Sachs employee interests will receive benefits from such transactions, even in limited capacity situations. While the Managing Member maintains policies and procedures that it believes are reasonably designed to deal with conflicts of interest that may arise in certain situations when purchase or sale orders for the Company and the Investment Funds are aggregated for execution with orders for Client/GS Accounts, in some cases the Managing Member will make allocations to accounts in which Goldman Sachs and/or Goldman Sachs employees have an interest.

Goldman Sachs and one or more Client/GS Accounts (including the Company, the Investment Funds, Advisor Funds, Portfolio Companies and Managed Accounts) may also invest in different classes of securities of the same issuer. As a result, one or more Client/GS Accounts may pursue or enforce rights with respect to a particular issuer in which an Advisor Fund, Portfolio Company or Managed Account has invested, and those activities may have an adverse effect on the Investment Funds and, in turn, the Company. For example, if a Client/GS Account holds debt securities of an issuer and an Advisor Fund, Portfolio Company or Managed Account holds equity securities of the same issuer, then if the issuer experiences financial or operational challenges, the Client/GS Account which holds the debt securities may seek a liquidation of the issuer, whereas the Advisor Fund, Portfolio Company or Managed Account which holds the equity securities may prefer a reorganization of the issuer. In addition, Goldman Sachs and Client/GS Accounts may pursue or enforce rights with respect to an Advisor with respect to any economic arrangements with, or equity, profits or other interests in, the Advisor. The Managing Member may also, in certain circumstances, pursue or enforce rights with respect to a particular issuer jointly on behalf of one or more Client/GS Accounts (including the Company and the Investment Funds), and Goldman Sachs employees may work together to pursue or enforce such rights. The Company and the Investment Funds may be negatively impacted by Goldman Sachs’ and other Client/GS Accounts’ activities, and transactions for the Advisor Fund, Portfolio Company or Managed Account may be impaired or effected at prices or terms that may be less favorable than would otherwise have been the case had Goldman Sachs and Client/GS Accounts not pursued a particular course of action with respect to the issuer of the securities. As a result, prices, availability, liquidity and terms of an Advisor’s investments on behalf of the Advisor Funds, Portfolio Companies and Managed Accounts may be negatively impacted by Goldman Sachs’ and Client/GS Accounts’ activities, and transactions of an Advisor may be impaired or effected at prices or terms that may be less favorable than would otherwise have been the case. In addition, in certain instances personnel of the Managing Member may obtain information about an issuer that would be material to the management of other Client/GS Accounts, which could limit the ability of personnel of the Managing Member to make allocations to or reduce allocations to certain Advisors.

To the extent permitted by applicable law, Goldman Sachs (including its personnel or Client/GS Accounts) may create, write, sell or issue, or act as placement agent or distributor of, derivative instruments with respect to the Company, the Investment Funds, Advisor Funds, Portfolio Companies or Managed Accounts, with respect to underlying securities, currencies or instruments of the Company, the Investment Funds, Advisor Funds, Portfolio Companies or Managing Accounts, or which may be otherwise based on or seek to replicate or hedge the

43

performance of the Company, the Investment Funds, Advisor Funds, Portfolio Companies or Managed Accounts (collectively, “Structured Investment Products”). The values of the Structured Investment Products may be linked to the NAV of the Company, the Investment Funds, Advisor Funds Portfolio Companies or Managed Accounts and/or the Company’s, the Investment Funds’, Advisor Funds’, Portfolio Companies’ or Managed Accounts’ investments. In connection with the Structured Investment Products and for hedging, re-balancing, investment and other purposes, the Company and/or Goldman Sachs (including its personnel or Client/GS Accounts) may (i) purchase or sell investments held by the Company, the Investment Funds, Advisor Funds, Portfolio Companies or Managed Accounts, (ii) purchase or sell Units in the Company or interests in the Investment Funds, Advisor Funds, Portfolio Companies or Managed Accounts, or (iii) hold synthetic positions that seek to replicate or hedge the performance of the Company, the Investment Funds, Advisor Funds, Portfolio Companies or Managed Accounts or the Company’s, the Investments Funds’, Advisor Funds’, Portfolio Companies’ or Managed Accounts’ investments. Such positions may be significant and may differ from and/or be contrary to the Company’s, the Investment Funds’, Advisor Funds’, Portfolio Companies’ or Managed Accounts’ positions. Goldman Sachs (including its personnel and Client/GS Accounts) reserves the right to make purchases and sales of investments that may also be held by the Company, the Investment Funds, Advisor Funds, Portfolio Companies and/or Managed Accounts and to make purchases and sales of Units in the Company or interests in the Investment Funds, Advisor Funds, Portfolio Companies or Managed Accounts at any time and without notice to investors in the Company. These derivative-related activities, as well as such investment and redemption activities, may have an adverse effect on the investment management of the Company and the Company’s positions, flexibility, diversification strategies and on the amount of fees, expenses and other costs incurred directly or indirectly through the Company by the Members.

In addition, Goldman Sachs may make loans to Members or enter into similar transactions that are secured by a pledge of a Member’s Units, which would provide Goldman Sachs with the right to redeem such Units in the event that such Member defaults on its obligations. These transactions and related redemptions may be significant and may be made without notice to the Members. A Goldman Sachs investment may be made in any class of Units, including a class which is not subject to any management fee or incentive allocation. The structure or other characteristics of the derivative instruments (including the Structured Investment Products) may have an adverse effect on the Company, an Investment Fund, an Advisor Fund or Portfolio Company. For example, the derivative instruments could represent leveraged investments in the Company, an Investment Fund, an Advisor Fund or Portfolio Company, and the leveraged characteristics of such investments could make it more likely, due to events of default or otherwise, that there would be significant redemptions of interests from the Company, an Investment Fund, Advisor Fund or Portfolio Company more quickly than might otherwise be the case. Goldman Sachs, acting in commercial capacities in connection with such derivative instruments, may in fact cause such a redemption. This may have an adverse effect on the investment management and positions, flexibility and diversification strategies of the Company, Investment Fund, Advisor Fund or Portfolio Company, as applicable, and on the amount of fees, expenses and other costs incurred directly or indirectly for the account of the Company.

The Managing Member, the Company and the Investment Funds may receive research products and services in connection with the brokerage services that brokers (including, without limitation, Goldman Sachs entities) may provide to the Company, the Investment Funds or one or more Client/GS Accounts. Such products and services may disproportionately benefit other Client/GS Accounts relative to the Company and the Investment Funds based on the amount of brokerage commissions paid by the Company and the Investment Funds and such other Client/GS Accounts. For example, research or other services that are paid for through one client’s commissions may not be used in managing that client’s account. In addition, Client/GS Accounts may receive the benefit, including disproportionate benefits, of economies of scale or price discounts in connection with products and services that may be provided to the Company, the Investment Funds and to Client/GS Accounts.

The Company may also directly or indirectly enter into asset-based credit facilities. Any credit facility of the Company may be secured by all or any portion of the Company’s portfolio of assets, including any interests in other funds. Actions taken by the Managing Member or Goldman Sachs on behalf of Goldman Sachs’ proprietary accounts, Client/GS Accounts or otherwise may result in adverse performance or diminution in value of the Company’s portfolio, which could cause the Company to be in default, or to take certain actions to avoid being in default, in connection with a credit facility. This could have a material adverse effect on the Company. Actions taken either by the applicable lender (which may be Goldman Sachs) or by the Managing Member on behalf of a Client/

44

GS Account or the Company arising out of credit facility related issues could have a material adverse effect on the Company. For example, an event of default or actions taken by the Managing Member to avoid an event of default could cause the Company to liquidate assets more rapidly (and therefore potentially at lower prices) than might otherwise be desirable, which could have a material adverse effect on the Company’s portfolio. In addition, such a liquidation could alter the constitution of the Company’s portfolio, resulting in a portfolio that is less diversified and less liquid, and could otherwise limit the ability of the Company to successfully implement its investment program. Similarly, if the Company is invested in another fund, the consequences arising out of a default or potential default by such fund in connection with a credit facility as described in the prior sentence could adversely affect the Company, and such consequences could be exacerbated by substantial redemptions from other investors (including Goldman Sachs and the Managing Member on behalf Client/GS Accounts) in the defaulting or potentially defaulting fund. Such redemptions could cause the liquidation of additional portfolio assets of the Company at times that would not otherwise be desirable, with the negative effects described above. When Goldman Sachs acts as a lender to a fund or Client/GS Account, it may take commercial steps in its own interest, such as requiring repayment of all or part of a loan at a time that may not be desirable for the Company, and such actions may have a material adverse effect on the Company.

     Potential Conflicts in Connection with Investments in Goldman Sachs Money Market Funds

To the extent permitted by applicable law, the Company and the Investment Funds may invest all or some of their short-term cash investments in any money market fund advised or managed by Goldman Sachs. In connection with any such investments, the Company and the Investment Funds will pay all advisory, administrative or 12b-1 fees applicable to the investment and the fees or allocations from the Company and the Investment Funds will not be reduced thereby (i.e., there could be “double fees” involved in making any such investment, which would not arise in connection with an investor’s direct purchase of the underlying investments because Goldman Sachs could receive fees with respect to both the management of the Company or the Investment Funds and such money market fund). In such circumstances, as well as in all other circumstances in which Goldman Sachs receives any fees or other compensation in any form relating to the provision of services, no accounting or repayment to the Company or the Investment Funds will be required.

     Goldman Sachs May In-Source or Outsource

Subject to applicable law, Goldman Sachs, including the Managing Member, may from time to time and without notice to investors in-source or outsource certain processes or functions in connection with a variety of services that it provides to the Company and the Investment Funds in its administrative or other capacities. Such in-sourcing or outsourcing may give rise to additional conflicts of interest.

Potential Conflicts Related to the Valuation of Investments Made by the Company and the Investment Funds

The valuation of investments made by the Company and the Investment Funds is ordinarily determined based on valuations provided directly or indirectly by the Advisors. Certain securities in which the Company or the Investment Funds invest may not have a readily ascertainable market price and will generally be valued by the Advisors. Such securities and other assets may constitute a substantial portion of the Company’s direct or indirect investments. In this regard, the Advisors may face a conflict of interest in valuing the securities, as their value will affect the Advisors’ compensation. Furthermore, the Managing Member may face a conflict of interest in overseeing the valuation of the investments of the Company or an Investment Fund, as the value of such fund’s investments will affect the Managing Member’s compensation. In certain circumstances, the Managing Member may determine that a valuation of the assets of the Company or an Investment Fund is inaccurate or incomplete. In addition, certain assets of the Company or an Investment Fund may not be valued by the Advisors, including without limitation, fee or profit sharing arrangements with an Advisor. In such events, the Managing Member may, in its sole discretion, determine the fair value of such assets based on information available to, and factors deemed relevant by, the Managing Member at the time of such valuation. The Managing Member may face a conflict of interest in making such determination.

45

Potential Conflicts That May Arise When Goldman Sachs Acts in a Capacity Other than Managing Member to the Company or the Investment Funds

     Potential Conflicts Relating to Principal and Cross Transactions

To the extent permitted by applicable law, the Managing Member, on behalf of the Company or the Investment Funds, or an Advisor, on behalf of an Advisor Fund, Portfolio Company or Managed Account, may enter into transactions and invest in futures, securities, currencies, swaps, options, forward contracts or other instruments in which Goldman Sachs or an affiliate of the Advisor, acting as principal or on a proprietary basis for its customers, serves as the counterparty.

To the extent permitted by applicable law, the Company may also enter into “cross transactions” (i.e., where the Managing Member causes the Company to buy a security from, or sell a security to, another client of the Managing Member or its affiliates) and “agency cross transactions” (i.e., where Goldman Sachs acts as broker for, and receives a commission from, both the Company on one side of the transaction and another account on the other side of the transaction in connection with the purchase or sale of securities). Goldman Sachs may have potentially conflicting divisions of loyalties and responsibilities to both parties to a cross transaction or agency cross transaction. For example, in a cross transaction, the Managing Member or an affiliate will represent the Company on the one side of a transaction and another account on the other side of the transaction (including an account in which Goldman Sachs or its affiliates have a proprietary interest) in connection with the purchase of a security by the Company. In addition, in an agency cross transaction, Goldman Sachs will act as broker and receive compensation or other payments from either or both parties which could influence the decision of Goldman Sachs to cause the Company to purchase such security. The Managing Member will ensure that any such cross transactions or agency cross transactions are effected on commercially reasonable market terms and in accordance with the Managing Member’s fiduciary duties to such entities. The Managing Member may also, to the extent permitted by applicable law and subject to Goldman Sachs’ allocation policies, transfer some or all of the Company’s interest in an Investment Fund, Advisor Fund, Portfolio Company or Managed Account to other Client/GS Accounts if the Managing Member deems it advisable in order to achieve the investment objectives of the Company and such Client/GS Account.

By virtue of entering into the Subscription Agreement, the investor consents to the Company, Investment Funds, Advisor Funds, Portfolio Companies and Managed Accounts entering into principal transactions, agency cross transactions and cross transactions to the fullest extent permitted under applicable law. An investor may revoke such consent in the manner set forth herein or in such other manner as the Company or the Managing Member will notify the investor from time to time.

Pursuant to the Subscription Agreement and to the extent permitted by applicable law, in respect of matters described in the next sentence in which the Company may engage and which may require approval on behalf of the Company or with respect to which the Managing Member determines to seek approval, the Company and/or the Managing Member is authorized, without limitation (but is not in any way required), to (i) consider and approve or disapprove such transactions and other matters on behalf of the Company and its investors, or (ii) select certain Members, or beneficial owners of Units or one or more persons who are not affiliated with the Company, including persons who may or may not be affiliated with the Managing Member and/or Goldman Sachs to serve on a committee, the purpose of which will be to consider and approve or disapprove any such transactions and other matters on behalf of the Company and the Members that are presented to such committee by the Managing Member in its sole discretion. Such transactions or other matters may include the following, but in any event only with respect to any particular transaction or other matter that the Managing Member determines in its sole discretion to either, in the case of (i) above, consider, or in the case of (ii) above, present to the committee: (a) any transaction in which the Company proposes to purchase or sell securities and which, as a result of participation (directly or indirectly) by Goldman Sachs in respect of such transaction, requires consent under the Investment Advisers Act, (b) any fee paid to Goldman Sachs in respect of a transaction in which the Company proposes to be an investor and which, as a result of the participation by Goldman Sachs, requires consent under the Investment Advisers Act, (c) any other transaction or matter for which prior consent or other consent may be required under the Investment Advisers Act, and (d) any other transaction or matter which the Managing Member determines to consider itself or present to the committee, which may include, without limitation, transactions involving possible conflicts of

46

interest. For the avoidance of doubt, the Managing Member will be under no obligation to form any such committee or present any particular matter to any such committee, and the determination to set up a committee or to present any matter for consideration to the committee will in each case be made by the Managing Member in its sole discretion.

Potential Conflicts That May Arise When Goldman Sachs Acts in Commercial Capacities for the Company

To the extent permitted by applicable law, Goldman Sachs may act as broker, prime broker, dealer, agent, lender, borrower or advisor or in other commercial capacities for the Company and the Investment Funds. It is anticipated that the commissions, mark-ups, mark-downs, financial advisory fees, underwriting and placement fees, sales fees, financing and commitment fees, brokerage fees, other fees, compensation or profits, rates, terms and conditions charged by Goldman Sachs will be in its view commercially reasonable, although Goldman Sachs, including its sales personnel, will have an interest in obtaining fees and other amounts that are favorable to Goldman Sachs and such sales personnel. The Company and the Investment Funds may, to the extent permitted by applicable law, borrow funds from Goldman Sachs at rates and on other terms arranged with Goldman Sachs.

Goldman Sachs may be entitled to compensation when it acts in capacities other than as the Managing Member or the managing member of the Investment Funds, and the Company, the Investment Funds, Advisor Funds, Portfolio Companies and Managed Accounts will not be entitled to any such compensation. For example, Goldman Sachs (and its personnel and other distributors) will be entitled to retain fees and other amounts that it receives in connection with its service to the Company and the Investment Funds, Advisor Funds, Portfolio Companies or Managed Accounts and their Advisors as broker, dealer, agent, lender, advisor or in other commercial capacities and no accounting to the Company, the Investment Funds or their respective investors will be required, and no fees or other compensation payable by the Company, the Investment Funds or their respective investors will be reduced by reason of receipt by Goldman Sachs of any such fees or other amounts.

When an Advisor chooses Goldman Sachs to act as broker, prime broker, dealer, agent, lender, borrower or advisor or in other commercial capacities in relation to an Advisor Fund, Portfolio Company or Managed Account, Goldman Sachs may take commercial steps in its own interests, which may have an adverse effect on the Company, the relevant Investment Fund, and the Advisor Fund, Portfolio Company or Managed Account, as applicable. For example, in connection with prime brokerage or lending arrangements involving Advisors on behalf of the Investment Funds, Portfolio Companies or Managed Accounts, Goldman Sachs may require repayment of all or part of a loan at any time or from time to time.

The Company and each Investment Fund will be required to establish business relationships with its counterparties based on its own credit standing. Goldman Sachs, including the Managing Member, will not have any obligation to allow its credit to be used in connection with the Company’s or any Investment Fund’s establishment of its business relationships, nor is it expected that the Company’s or such Investment Fund’s counterparties will rely on the credit of Goldman Sachs in evaluating the Company’s or any Investment Fund’s creditworthiness.

Potential Conflicts Relating to the Selection of Investments by the Advisors

An Advisor’s Other Activities May Have an Impact on the Advisor Funds, Portfolio Companies and Managed Accounts

Each Advisor may act as an investor, investment banker, research provider, investment manager, financer, advisor, market maker, proprietary trader, prime broker, lender, agent or principal, and may have other direct and indirect interests, in the global fixed income, currency, commodity, equity and other markets in which the Advisor trades. Thus, it is possible that an Advisor will undertake transactions in securities in which it makes a market or otherwise has direct or indirect interests.

Potential Conflicts Relating to the Allocation of Investment Opportunities Among the Advisors’ Accounts

Advisors have potential conflicts in connection with the allocation of investments or transaction decisions for Advisor Funds, Portfolio Companies and Managed Accounts, including in situations in which Advisors or their

47

personnel have interests. For example, an Advisor Fund may be competing for investment opportunities with current or future accounts or funds managed or advised by the Advisor Fund’s Advisor, including accounts or funds that may provide greater fees or other compensation, including performance-based fees, to the Advisor or in which the Advisor or its personnel have an interest (each a “Client/Advisor Account” and collectively the “Client/Advisor Accounts”) that have investment objectives that are similar to those of an Advisor Fund, Portfolio Company or Managed Account managed by such Advisor. Economic arrangements which an Advisor may have entered into, such as agreements to share or rebate fees or to grant equity, profits or other interests, may also result in other Client/Advisor Accounts of the Advisor providing greater compensation to the Advisor than an Advisor Fund, Portfolio Company or Managed Account.

An Advisor may manage or advise Client/Advisor Accounts that may seek to make investments in securities or other instruments, sectors or strategies in which an Advisor Fund, Portfolio Company or Managed Account may invest. This will create potential conflicts where there is limited availability or limited liquidity for those investments. For example, limited availability situations may exist, without limitation, in emerging markets, high yield securities, fixed income securities, regulated industries and initial public offerings/new issues. Transactions in investments by multiple Client/Advisor Accounts (including accounts in which an Advisor and its personnel have an interest), other clients of an Advisor or an Advisor itself may have the effect of diluting or otherwise negatively affecting the values, prices or investment strategies associated with securities held by an Advisor Fund, Portfolio Company or Managed Account, particularly, but not limited to, in small capitalization, emerging market or less liquid strategies. Each Advisor will allocate investment opportunities and make purchase and sale decisions among the Advisor Fund, Portfolio Company or Managed Account and other Client/Advisor Accounts in a manner that it considers, in its sole discretion and consistent with its fiduciary obligation to each Client/Advisor Account, to be reasonable. Allocations may be based on numerous factors and may not always be pro rata based on assets managed.

Allocation decisions by Advisors among accounts may be more or less advantageous to any one account or group of accounts. An Advisor may determine that an investment opportunity or particular purchases or sales are appropriate for one or more Client/Advisor Accounts or for itself or an affiliate, but not for the Advisor Fund, Portfolio Company or Managed Account managed by such Advisor, or is appropriate for, or available to, such Advisor Fund, Portfolio Company or Managed Account, but in different sizes, terms or timing than is appropriate for other Client/Advisor Accounts. These allocation issues, the amount, timing, structuring or terms of an investment by an Advisor Fund, Portfolio Company or Managed Account managed by an Advisor may differ from, and performance may be lower than, investments and performance of other Client/Advisor Accounts managed by the same Advisor.

Other Potential Conflicts Relating to the Advisors’ Portfolio Management Activities

Potential Restrictions and Issues Relating to Information Held by Advisors

As a result of informational barriers constructed between different divisions of an Advisor, an Advisor will generally not have access to information and may not consult with personnel in other areas of the Advisor. Therefore, an Advisor will generally not be able to manage the Advisor Funds, Portfolio Companies or Managed Accounts with the benefit of information held by its other divisions. From time to time and subject to each Advisor’s policies and procedures regarding information barriers, an Advisor may consult with personnel of the Advisor or unaffiliated firms, or may form investment policy committees comprised of such personnel. In certain circumstances, personnel of affiliates of the Managing Member may have input into, or make determinations regarding, portfolio management transactions for the Company or the Investment Funds. In connection with their activities with the Advisor, such persons may receive information regarding the proposed investment activities of the Advisor Fund, Portfolio Company or Managed Account managed by such Advisor that is not generally available to the public. There will be no obligation on the part of such persons to make available for use by the Advisor Fund, Portfolio Company or Managed Account any information or strategies known to them or developed in connection with their own client, proprietary or other activities. In addition, Advisors will be under no obligation to make available any research or analysis prior to its public dissemination.

48

An Advisor from time to time may have access to certain fundamental analysis and proprietary technical models developed by it and its affiliates. However, the Advisor may not be permitted to use such analysis and models on behalf of an Advisor Fund, Portfolio Company or Managed Account that it manages. Even if the Advisor is permitted to use such analysis and models, the Advisor will not be under any obligation to effect transactions on behalf of an Advisor Fund, Portfolio Company or Managed Account that it manages in accordance with such analysis and models. In addition, the Advisor may have no obligation to seek information or to make available to or share with the Advisor Fund, Portfolio Company or Managed Account any information, investment strategies, opportunities or ideas known to the Advisor’s personnel or developed or used in connection with other Client/Advisor Accounts or activities.

In addition, an Advisor and certain of its personnel may be in possession of information not available to all Advisor personnel, including the personnel advising or otherwise providing services to an Advisor Fund, Portfolio Company or Managed Account advised by such Advisor, and such personnel may act on the basis of such information in ways that have adverse effects on such Advisor Fund, Portfolio Company or Managed Account. The Advisors will not be under any obligation to disseminate such information.

From time to time, an Advisor may come into possession of material, non-public information or other information that could limit the ability of an Advisor Fund, Portfolio Company or Managed Account managed by such Advisor to buy and sell investments. The investment flexibility of such Advisor Fund, Portfolio Company or Managed Account may be constrained as a consequence. Advisors are not generally permitted to obtain or use material non-public information in effecting purchases and sales in public securities transactions for an Advisor Fund, Portfolio Company or Managed Account.

Potential Conflicts Relating to an Advisor’s Proprietary Activities on Behalf of Other Accounts Managed by the Advisor

The results of the investment activities of an Advisor Fund, Portfolio Company or Managed Account may differ significantly from the results achieved by its Advisor for its proprietary accounts and from the results achieved by the Advisor for other Client/Advisor Accounts. An Advisor is expected to manage the applicable Advisor Fund, Portfolio Company or Managed Account and its other Client/Advisor Accounts in accordance with their respective investment objectives and guidelines. However, the Advisor may give advice, and take action, with respect to any current or future Client/Advisor Accounts that may compete or conflict with the advice the Advisor may give to an Advisor Fund, Portfolio Company or Managed Account, or may involve a different timing or nature of action than with respect to such Advisor Fund, Portfolio Company or Managed Account.

Transactions undertaken by Advisors or Client/Advisor Accounts may adversely impact an Advisor Fund, Portfolio Company or Managed Account. An Advisor and its Client/Advisor Accounts may buy or sell positions while an Advisor Fund, Portfolio Company or Managed Account managed by such Advisor is undertaking the same or a differing, including potentially opposite, strategy, which could disadvantage the Advisor Fund, Portfolio Company or Managed Account. For example, an Advisor Fund may buy a security and its Advisor or such Advisor’s Client/Advisor Accounts may establish a short position in that same security. The subsequent short sale may result in impairment of the price of the security which the Advisor Fund holds. Conversely, the Advisor Fund may establish a short position in a security and the Advisor or its Client/Advisor Accounts may buy that same security. The subsequent purchase may result in an increase of the price of the underlying position in the short sale exposure of the Advisor Fund and such increase in price would be to the Advisor Fund’s detriment.

In addition, transactions in investments by one or more Client/Advisor Accounts or the Advisors may have the effect of diluting or otherwise negatively affecting the values, prices or investment strategies of an Advisor Fund, Portfolio Company or Managed Account, particularly, but not limited to, in small capitalization, emerging market or less liquid strategies. This may occur when portfolio decisions for an Advisor Fund, Portfolio Company or Managed Account are based on research or other information that is also used to support portfolio decisions for other Client/Advisor Accounts managed by personnel of an Advisor. When the Advisor or a Client/Advisor Account implements a portfolio decision or strategy ahead of, or contemporaneously with, similar portfolio decisions or strategies for an Advisor Fund, Portfolio Company or Managed Account, market impact, liquidity constraints, or other factors could result in the Advisor Fund, Portfolio Company or Managed Account receiving

49

less favorable trading results and the costs of implementing such portfolio decisions or strategies could be increased or the Advisor Fund, Portfolio Company or Managed Account could otherwise be disadvantaged. The Advisor may, in certain cases, elect to implement internal policies and procedures designed to limit such consequences to the Client/Advisor Accounts as well as the Advisor Funds, Portfolio Companies and Managed Accounts, which may cause an Advisor Fund, Portfolio Company or Managed Account to be unable to engage in certain activities, including purchasing or disposing of securities, when it might otherwise be desirable for it to do so.

Conflicts may also arise because portfolio decisions regarding an Advisor Fund, Portfolio Company or Managed Account may benefit other Client/Advisor Accounts. For example, the sale of a long position or establishment of a short position by an Advisor Fund may impair the price of the same security sold short by (and therefore benefit) the Advisor or other Client/Advisor Accounts, and the purchase of a security or covering of a short position in a security by an Advisor Fund may increase the price of the same security held by (and therefore benefit) the Advisor or other Client/Advisor Accounts.

The directors, officers and employees of an Advisor may buy and sell securities or other investments for their own accounts (including through funds managed by the Advisor). As a result of differing trading and investment strategies or constraints, positions may be taken by directors, officers and employees of an Advisor that are the same as, different from or made at different times than positions taken for an Advisor Fund, Portfolio Company or Managed Account managed by such Advisor. To reduce the possibility that an Advisor Fund, Portfolio Company or Managed Account will be materially adversely affected by the personal trading described above, each Advisor may establish policies and procedures that restrict securities trading in the personal accounts of investment professionals and others who normally come into possession of information regarding the portfolio transactions of an Advisor Fund, Portfolio Company or Managed Account that it manages. However, there can be no assurance that such policies and procedures will avoid all conflicts of interest.

Clients of an Advisor (including Client/Advisor Accounts) may have, as a result of receiving client reports or otherwise, access to information regarding the Advisor’s transactions or views which may affect such clients’ transactions outside of accounts controlled by the personnel providing advice to an Advisor Fund, Portfolio Company or Managed Account managed by such Advisor, and such transactions may negatively impact the performance of such Advisor Fund, Portfolio Company or Managed Account. An Advisor Fund, Portfolio Company or Managed Account may also be adversely affected by cash flows and market movements arising from purchase and sales transactions, as well as increases of capital in, and withdrawals of capital from, other Client/Advisor Accounts and Client/GS Accounts. These effects can be more pronounced in thinly traded and less liquid markets.

An Advisor’s management of the assets of an Advisor Fund, Portfolio Company or Managed Account may benefit the Advisor. For example, an Advisor Fund, Portfolio Company or Managed Account may, subject to applicable law, invest directly or indirectly in the securities, loans or other obligations of companies affiliated with the Advisor or in which the Advisor has an equity, debt or other interest. In addition, subject to applicable law, an Advisor Fund, Portfolio Company or Managed Account may engage in investment transactions which may result in other Client/Advisor Accounts being relieved of obligations or otherwise divesting of investments or cause an Advisor Fund, Portfolio Company or Managed Account to have to divest certain investments. The purchase, holding and sale of investments by an Advisor Fund, Portfolio Company or Managed Account may enhance the profitability of the Advisor’s or its Client/Advisor Accounts’ own investments in and its activities with respect to such companies.

An Advisor and its clients may pursue or enforce rights with respect to an issuer in which an Advisor Fund, Portfolio Company or Managed Account has invested, and those activities may have an adverse effect on such Advisor Fund, Portfolio Company or Managed Account. As a result, prices, availability, liquidity and terms of Advisor Fund, Portfolio Company or Managed Account investments may be negatively impacted by the activities of the Advisor or its clients, and transactions for an Advisor Fund, Portfolio Company or Managed Account managed by such Advisor may be impaired or effected at prices or terms that may be less favorable than would otherwise have been the case.

To the extent permitted by applicable law, an Advisor may create, write, sell or issue, or act as placement agent or distributor of, derivative instruments with respect to underlying securities, currencies or instruments of an

50

Advisor Fund, Portfolio Company or Managed Account, or which may be otherwise based on the performance of such Advisor Fund, Portfolio Company or Managed Account. The structure or other characteristics of the derivative instruments may have an adverse effect on the Advisor Fund, Portfolio Company or Managed Account. For example, the derivative instruments could represent leveraged investments in an Advisor Fund, and the leveraged characteristics of such investments could make it more likely, due to events of default or otherwise, that there would be significant redemptions of interests from the Advisor Fund more quickly than might otherwise be the case. The Advisor, acting in commercial capacities in connection with such derivative instruments, may in fact cause such a redemption. This may have an adverse effect on the Advisor Fund’s investment management and positions, flexibility, and diversification strategies and on the amount of fees, expenses and other costs incurred directly or indirectly for the account of such Advisor Fund. Similarly, an Advisor (including its personnel or Client/Advisor Accounts) may invest in an Advisor Fund, may hedge its derivative positions by buying or selling interests in the Advisor Fund, and may reserve the right to redeem some or all of its investments at any time. These investments and redemptions may be made without notice to the investors in such Advisor Funds, including the Investment Funds and indirectly the Company.

The Advisors and the Advisor Funds, Portfolio Companies or Managed Accounts may receive research products and services in connection with the brokerage services that brokers (including, without limitation, Goldman Sachs entities and Advisor affiliated entities) may provide to the Advisor Funds, Portfolio Companies or Managed Accounts or one or more Client/Advisor Accounts. Such products and services may disproportionately benefit other Client/Advisor Accounts relative to the Advisor Funds, Portfolio Companies or Managed Accounts based on the amount of brokerage commissions paid by the Advisor Funds, Portfolio Companies or Managed Accounts and such other Client/Advisor Accounts. For example, research or other services that are paid for through one client’s commissions may not be used in managing that client’s account. In addition, Client/Advisor Accounts may receive the benefit, including disproportionate benefits, of economies of scale or price discounts in connection with products and services that may be provided to the Advisor Funds, Portfolio Companies or Managed Accounts and to Client/Advisor Accounts.

Potential Conflicts That May Arise When an Advisor Acts in a Capacity Other Than Advisor to the Advisor Funds, Portfolio Companies or Managed Accounts

An Advisor may act as broker, dealer, agent, lender or advisor or in other commercial capacities for an Advisor Fund, Portfolio Company or Managed Account. It is anticipated that the commissions, mark-ups, mark-downs, financial advisory fees, underwriting and placement fees, sales fees, financing and commitment fees, brokerage fees, other fees, compensation or profits, rates, terms and conditions charged by the Advisor will be in its view commercially reasonable, although the Advisor, including its sales personnel, will have an interest in obtaining fees and other amounts that are favorable to such Advisor and its sales personnel.

To the extent permitted by applicable law, an Advisor may enter into transactions and invest in futures, securities, currencies, swaps, options, forward contracts or other instruments on behalf of an Advisor Fund, Portfolio Company or Managed Account in which such Advisor, acting as principal or on a proprietary basis for its customers, serves as the counterparty. An Advisor Fund, Portfolio Company or Managed Account may also enter into cross transactions in which its Advisor acts on behalf of such Advisor Fund, Portfolio Company or Managed Account and for the other party to the transaction. An Advisor may have a potentially conflicting division of responsibilities to both parties to a cross transaction.

When an Advisor acts as broker, dealer, agent, lender or advisor or in other commercial capacities in relation to an Advisor Fund, Portfolio Company or Managed Account, such Advisor may take commercial steps in its own interests, which may have an adverse effect on such Advisor Fund, Portfolio Company or Managed Account. For example, in connection with prime brokerage or lending arrangements involving an Advisor Fund, Portfolio Company or Managed Account, an Advisor may require repayment of all or part of a loan at any time or from time to time.

To the extent permitted by applicable law, an Advisor Fund, Portfolio Company or Managed Account may invest all or some of its short-term cash investments in any money market fund advised or managed by its Advisor, and may invest in other products advised or managed by its Advisor. In connection with any such investment, the

51

Advisor Fund, Portfolio Company or Managed Account will pay all advisory, administrative or 12b-1 fees applicable to the investment and the fees or allocations from the Advisor Fund, Portfolio Company or Managed Account generally will not be reduced thereby (i.e., there could be “double fees” involved in making any such investment, which would not arise in connection with an investor’s direct purchase of underlying investments because its Advisor could receive fees with respect to both the management of the Advisor Fund, Portfolio Company or Managed Account and such investment). In such circumstances, as well as in all other circumstances in which the Advisor receives any fees or other compensation in any form relating to the provision of services, no accounting or repayment to the Company will be required.

The Advisors May In-Source or Outsource

Subject to applicable law, Advisors may from time to time and without notice to investors in-source or outsource certain processes or functions in connection with a variety of services that they provide to the Advisor Funds, Portfolio Companies or Managed Accounts managed by them in their administrative or other capacities. Such in-sourcing or outsourcing may give rise to additional conflicts of interest.

Potential Conflicts in Connection with Brokerage Transactions and Proxy Voting by the Advisors

To the extent permitted by applicable law, purchases and sales of securities for an Advisor Fund, Portfolio Company or Managed Account may be bunched or aggregated with orders for other Client/Advisor Accounts of the Advisor that manages such Advisor Fund, Portfolio Company or Managed Account. An Advisor, however, is not required to bunch or aggregate orders if portfolio management decisions for different accounts are made separately, if it determines that bunching or aggregating is not practicable or required, or with respect to client-directed accounts.

Prevailing trading activity frequently may make impossible the receipt of the same price or execution on the entire volume of securities purchased or sold. When this occurs, the various prices may be averaged, and the Advisor Fund, Portfolio Company or Managed Account, as applicable, will be charged or credited with the average price. Thus, the effect of the aggregation may operate on some occasions to the disadvantage of the Advisor Fund, Portfolio Company or Managed Account. In addition, under certain circumstances, an Advisor Fund, Portfolio Company or Managed Account will not be charged the same commission or commission equivalent rates in connection with a bunched or aggregated order. Without limitation, time zone differences, separate trading desks or portfolio management processes in a global organization may, among other factors, result in separate, non-aggregated executions.

An Advisor may select brokers (including, without limitation, affiliates) that furnish the Advisor, an Advisor Fund, Portfolio Company or Managed Account managed by the Advisor, or other Client/Advisor Accounts, directly or through correspondent relationships, with proprietary research or other appropriate services which provide, in the Advisor’s view, appropriate assistance to the Advisor in the investment decision-making process (including with respect to futures, fixed-price offerings and over-the-counter transactions). Such research or other services may include, to the extent permitted by law, research reports on companies, industries and securities; economic and financial data; financial publications; proxy analysis; trade industry seminars; computer databases; quotation equipment and services; and research-oriented computer hardware, software and other services and products. Research or other services obtained in this manner may be used in servicing any or all of the Advisor Funds, Portfolio Companies, Managed Accounts or Client/Advisor Accounts, including in connection with Client/Advisor Accounts other than those that pay commissions to the broker relating to the research or other service arrangements. To the extent permitted by applicable law, such products and services may disproportionately benefit other Client/Advisor Accounts relative to the Advisor Fund, Portfolio Company or Managed Account based on the amount of brokerage commissions paid by the Advisor Fund, Portfolio Company or Managed Account and such other Client/Advisor Accounts. For example, research or other services that are paid for through one client’s commissions may not be used in managing that client’s account. In addition, other Client/Advisor Accounts may receive the benefit, including disproportionate benefits, of economies of scale or price discounts in connection with products and services that may be provided to the Advisor Funds, Portfolio Companies or Managed Accounts and to such other Client/Advisor Accounts. To the extent that the Advisor uses soft dollars, it will not have to pay for those products and services itself. The Advisor may receive research that is bundled with the trade execution, clearing, and/or

52

settlement services provided by a particular broker or dealer. To the extent that the Advisor receives research on this basis, many of the same conflicts related to traditional soft dollars may exist. For example, the research effectively will be paid by client commissions that also will be used to pay for the execution, clearing, and settlement services provided by the broker-dealer and will not be paid by the Advisor.

An Advisor may endeavor to execute trades through brokers who, pursuant to such arrangements, provide research or other services in order to ensure the continued receipt of research or other services the Advisor believes are useful in its investment decision-making process.

An Advisor may from time to time choose not to engage in the above-described arrangements to varying degrees.

An Advisor may select brokers (including, without limitation, affiliates) to provide prime brokerage services to an Advisor Fund, Portfolio Company or Managed Account. Conflicts may arise with respect to an Advisor’s selection of prime brokers. Prime brokerage firms may introduce an Advisor to prospective clients which may create incentives for or benefits to the Advisor in selection of such prime brokerage firms. Advisors will select such firms only when consistent with obtaining appropriate services for the Advisor Funds, Portfolio Companies and Managed Accounts.

The Advisors may adopt policies and procedures designed to prevent conflicts of interest from influencing proxy voting decisions that they make on behalf of advisory clients, including the Advisor Funds, Portfolio Companies and/or Managed Accounts that they manage, and to help ensure that such decisions are made in accordance with the Advisors’ fiduciary obligations to their clients. Nevertheless, notwithstanding such proxy voting policies and procedures, actual proxy voting decisions of an Advisor may have the effect of favoring the interests of other clients or businesses of the Advisor and/or its affiliates, and of other divisions or units of Goldman Sachs and/or its affiliates provided that the Advisor believes such voting decisions to be in accordance with its fiduciary obligations.

Potential Regulatory Limitations and Restrictions on Investment Opportunities and Activities of the Advisors and the Company

From time to time, the activities of an Advisor Fund, Portfolio Company or Managed Account may be restricted because of regulatory or other requirements applicable to an Advisor and/or its internal policies designed to comply with, limit the applicability of, or otherwise relate to such requirements. A client not advised by an Advisor would not be subject to some of those considerations. There may be periods when an Advisor may not initiate or recommend certain types of transactions, or may otherwise restrict or limit its advice in certain securities or instruments issued by or related to companies for which the Advisor is performing investment banking, market making or other services or has proprietary positions. For example, when an Advisor is engaged in an underwriting or other distribution of securities of, or advisory services for, a company, an Advisor Fund, Portfolio Company or Managed Account managed by such Advisor may be prohibited from or limited in purchasing or selling securities of that company. In addition, there may be certain investment opportunities, investment strategies or actions that an Advisor will not undertake on behalf of an Advisor Fund, Portfolio Company or Managed Account in view of the Advisor’s client or firm activities. For example, an Advisor may determine that an Advisor Fund, Portfolio Company or Managed Account may be precluded from exercising certain rights that it may have as a creditor to a particular borrower. Certain activities and actions may also be considered to result in reputational risk or disadvantage for the management of the Company, an Investment Fund, an Advisor Fund, Portfolio Company or Managed Account as well as for Goldman Sachs and/or an Advisor. An Advisor Fund, Portfolio Company or Managed Account may also be prohibited from participating in an auction or from otherwise investing in or purchasing certain assets, or from providing financing to a purchaser or potential purchaser, if the Advisor of such Advisor Fund, Portfolio Company or Managed Account is representing the seller or is representing or providing financing to another potential purchaser. Similar situations could arise if personnel of an Advisor serve as directors of companies the securities of which an Advisor Fund, Portfolio Company or Managed Account managed by such Advisor wishes to purchase or sell. The larger an Advisor’s investment advisory business and such Advisor’s overall business, the larger the potential that these restricted policies will impact investment transactions. However, if permitted by applicable law, the Advisor Fund, Portfolio Company or Managed Account may purchase securities or

53

instruments that are issued by such companies or are the subject of an underwriting, distribution, or advisory assignment by its Advisor, or in cases in which the Advisor’s personnel are directors or officers of the issuer.

The investment activities of an Advisor for its proprietary accounts and for Client/Advisor Accounts may also limit the investment strategies and rights of the Advisor Fund, Portfolio Company or Managed Account managed by such Advisor. For example, in regulated industries, in certain emerging or international markets, in corporate and regulatory ownership definitions, and in certain futures and derivative transactions, there may be limits on the aggregate amount of investment by affiliated investors that may not be exceeded without the grant of a license or other regulatory or corporate consent or, if exceeded, may cause the Advisor, the Advisor Fund, Portfolio Company or Managed Account or other Client/Advisor Accounts to suffer disadvantages or business restrictions. If certain aggregate ownership thresholds are reached or certain transactions undertaken, the ability of the Advisor, on behalf of an Advisor Fund, Portfolio Company or Managed Account, to purchase or dispose of investments, or exercise rights or undertake business transactions, may be restricted by regulation or otherwise impaired. In addition, certain investments may be considered to result in reputational risk or disadvantage. As a result, an Advisor, on behalf of its clients (including an Advisor Fund, Portfolio Company or Managed Account), may limit purchases, sell existing investments, or otherwise restrict or limit the exercise of rights (including voting rights) when the Advisor, in its sole discretion, deems it appropriate.

Safeguards Implemented by the Managing Member to Address Conflicts of Interest

The Managing Member and its personnel will act in accordance with their fiduciary duties to the Company and investors, and conduct themselves in accordance with professional and ethical standards. Because of the nature of the Managing Member’s business and the businesses of its affiliates, potential conflicts of interest may arise. To minimize the effect of potential conflicts of interest, the Managing Member and the Company have put in place policies and procedures and ethical standards which are described below. In addition, the Managing Member and the Company have disclosed potential conflicts in this Annual Report and in the Memorandum sent to investors in connection with their investment.

Below is a discussion of three general categories of conflicts of interest that could affect the Company, and the general safeguards that the Managing Member and the Company have put in place to address them.

Conflicts Resulting From Other Business Dealings of the Managing Member and its Affiliates

The Managing Member is a subsidiary of The Goldman Sachs Group, Inc. which is a worldwide, full-service investment banking, broker-dealer, asset management and financial services organization. As a result, Goldman Sachs is engaged in activities that may result in conflicts of interest with those of the Company. For example, potential conflicts of interests may arise if Goldman Sachs were to provide brokerage or other services to an Advisor of an Investment Fund or act as an Investment Fund’s prime broker. In such circumstances, payments to Goldman Sachs resulting from these relationships will generally increase as the size of the assets of the Advisor increases. This may result in the Managing Member having an incentive to select for investment by the Company an Investment Fund whose Advisor has established such a relationship with Goldman Sachs over another Investment Fund that might also be appropriate for the Company. In addition, in connection with prime brokerage or lending arrangements involving Investment Funds, Goldman Sachs may require repayment of all or part of a loan at any time or from time to time.

To minimize the effect of any potential conflict of interest resulting from Goldman Sachs’ other business operations, Goldman Sachs, including the Managing Member, has established policies and procedures addressing potential conflicts of interest. Specifically, Goldman Sachs has put in place “Chinese Walls” policies and procedures, which are designed to separate the various functions and business lines of Goldman Sachs, including the asset management and brokerage businesses. As a result, personnel of the Managing Member that make investment and other decisions on behalf of the Company generally perform their duties for the Company without knowledge of other Goldman Sachs operations.

54

Conflicting Obligations to the Company and Other Advisory Accounts

The Managing Member may have potential conflicts of interest in connection with other accounts it manages (“Advisory Accounts”). For example, there may be a conflict of interest in connection with the Managing Member’s allocation of investments or transaction decisions for the Company and another Advisory Account that may provide the Managing Member greater fees or other compensation than the Company, particularly where there is limited availability or limited liquidity for those investments. This has the potential of providing the Managing Member with an incentive to allocate investment opportunities in a manner that favors the other Advisory Account over the Company.

To minimize the effect of any potential conflict of interest resulting from the Managing Member’s conflicting obligations to Advisory Accounts, including its allocation practices, the Managing Member has developed policies and procedures addressing these conflicts, which provide that portfolio managers will allocate investment opportunities and make purchase and sale decisions among Advisory Accounts in a manner that is reasonable and equitable. It is the policy of the Managing Member to allocate, to the extent possible, investment opportunities to the Company over a period of time on a fair and equitable basis relative to the Advisory Accounts. The Managing Member will generally allocate investments and/or transaction decisions among the Company and the Advisory Accounts pro rata based on their respective relative amounts of capital available for investment. In circumstances when it is impossible or impracticable for investments and/or transaction decisions to be allocated among the Company and the Advisory Accounts in such a manner, the Managing Member will seek to allocate such investments and/or transaction decisions among the Company and the Advisory Accounts in a manner that it believes is in the best interests of the Company and the Advisory Accounts after considering, among other things, the respective investment guidelines and objectives, portfolio weightings, strategy exposure, risk profile and risk tolerance, current investments, cash flow and anticipated liquidity needs, expected future sizes of the Company or the Advisory Accounts and availability of other investments opportunities for the Company and the Advisory Accounts.

Personal Interests of Advisory Personnel

Employees of the Managing Member may have conflicts of interest in connection with performing their duties on behalf of the Company. For example, employees of the Managing Member may come into possession of material, non-public information or other information as a result of their investment activities on behalf of the Company or otherwise, and they may seek to improperly benefit from such information by trading on the information for their own personal benefit.

To minimize the effect of any such potential conflict of interest, the Managing Member has adopted policies and procedures that address conflicts of interest, information barriers and the use of protected information. These policies state, among other things, that protected information may only be used in a manner consistent with the purposes for which it was created, and may not be disclosed to any other person who does not have a need to know the information in order to perform his/her duties and to carry out the purposes for which the information was provided. Furthermore, the Managing Member’s policies specifically address protected information relating to the trading activity of Advisors. These policies state that any such information with respect to Advisors may not be used by employees of the Managing Member to make personal investments or in the management of any other account of the Managing Member or its affiliates.

The Managing Member also has policies relating to personal trading generally. Pursuant to these policies, employees must effect personal securities transactions consistent with their fiduciary duties and subject to professional and ethical standards. Among other things, the policies and procedures of the Managing Member require, subject to certain exceptions, pre-clearance of personal securities transactions by Managing Member employees and minimum holding periods for purchased securities. Violations of these policies, like all Managing Member policies, may result in disciplinary actions up to and including termination, and may also result in the breaking of specific trades. The personal trading of employees of the Managing Member is subject to monitoring by a compliance department to ensure compliance with these policies.

In addition, employees of the Managing Member are subject to a code of business conduct and ethics that is applicable to The Goldman Sachs Group, Inc. and its subsidiaries. Moreover, the Managing Member has also

55

adopted a Code of Ethics, which was filed as an exhibit to the Company’s Form 10-K for December 31, 2004 that requires persons acting as chief executive and senior officers of the Company to promote honest and ethical conduct, including the ethical handling of conflicts of interests between personal and professional relationships.

Error and Error Correction Policy

The below described policy applies to GS HFS as the Managing Member of the Company. GS HFS applies similar policies in connection with its role as managing member of the Investment Funds.

Identification of Compensable Errors

Pursuant to the Managing Member’s policies, an error is compensable from the Managing Member to the Company when it is a mistake (whether an action or inaction) in which the Managing Member has, in the Managing Member’s reasonable view, deviated from the required standard of contractual and fiduciary care in managing the Company’s assets. Actions by the Managing Member that contravene the Company’s investment objective or investment guidelines in a material manner resulting in a loss to the Company will generally be deemed to be compensable errors by the Managing Member except in unusual circumstances.

The Managing Member’s policies do not require perfect implementation of investment management decisions, trading or processing. Therefore, not all mistakes will be considered compensable errors. For example, matching of the Company’s cash inflows and outflows to underlying portfolio investments is not expected to be flawless. Likewise, imperfection in the implementation of investment, execution, rebalancing or processing instructions, particularly in the course of portfolio adjustments, may not be considered by the Managing Member to be compensable errors.

Mistakes may result in gains as well as losses. Unless otherwise determined by the Managing Member, mistakes (including those that result in losses and those that result in gains) will be treated as being for the Company’s account (i.e., Members will bear the losses and will benefit from the gains). In certain circumstances, it is possible that the Managing Member may reallocate or remove gains from the Company’s account that are the result of a mistake.

The Managing Member makes its determinations pursuant to its error policies on a case-by-case basis, in its discretion, based on factors it considers reasonable. Relevant facts and circumstances the Managing Member may consider include, among others, specific applicable contractual and legal restrictions and standards of care, whether the Company’s investment objective was contravened, the nature of the Company’s investment program, whether a contractual guideline was violated, the nature and materiality of the relevant circumstances and, if a compensable error occurred, the materiality of the resulting losses.

No compensable errors have been identified for the years ended December 31, 2007, 2006 and 2005.

Waiver of Subscription and Redemption Requirements

The Company may, in the sole discretion of the Managing Member, approve waivers in connection with the processing of subscription or redemption requests of Members including, without limitation, with respect to any notice periods, lock-up periods, minimum redemption and holding amounts, as applicable, or other requirements. Such waivers may be granted by the Company to any Member, including without limitation affiliates of the Managing Member and persons who have a security interest in the Units of certain Members. Members, including Members who purchase or sell Units during periods in which any such waivers are approved, may not be notified of such matters.

Compensation for Errors.  When the Managing Member determines that reimbursement by the Managing Member is appropriate, the Company will be compensated as determined in good faith by the Managing Member. Compensation will be calculated in the Managing Member’s discretion. The Managing Member will follow what it considers reasonable guidelines regarding these matters in light of all of the facts and circumstances related to an error. In general, compensation is expected to be limited to direct and actual losses, which may be calculated relative to comparable conforming investments, market factors and benchmarks and with reference to other factors the Managing Member considers relevant. Compensation will not include any amounts or measures that the Managing

56

Member determines are speculative or uncertain, including potential opportunity losses resulting from delayed investment as a result of correcting an error. The Managing Member expects that, subject to its discretion, losses will be netted with an account’s gains relating to errors and will not exceed amounts in relation to an appropriate replacement investment, benchmark or other relevant product returns. In addition, losses may also be capped at the value of the actual loss, particularly when the outcome of a differing investment would in the Managing Member’s view be speculative or uncertain in light of reasonable equitable considerations. As a result, error compensation is expected to be limited to the lesser of actual losses or losses in relation to comparables. The Managing Member may also consider whether it is possible to adequately address a mistake through cancellation, correction, reallocation of losses and gains or other means.

Notification of Compensable Errors.  Members will generally not be notified of the occurrence of a compensable error or the resolution thereof.

Errors by Advisors.  Advisors may also have error and error correction policies regarding the implementation of investment management decisions, trading or processing in relation to the Advisors’ clients, including the Company. The Advisors’ respective error and error correction policies may vary materially from one another and each may differ materially from the Managing Member’s policies described herein. Also, there can be no assurance that an Advisor’s actual practices regarding errors and error correction will be in conformity with its policies, and the Managing Member will have limited ability to monitor an Advisor’s compliance with its policies. Although the Managing Member will select and monitor the Advisors to which the Company allocates assets, the Managing Member is not responsible for the actions of, or any errors committed by, any Advisor.

Reprocessing NAV Errors and Compensation of Members.  The Company follows materiality policies to determine when individual Member accounts will be restated (credited or debited) in respect of particular errors, and to handle certain NAV-related errors that occur in the Company’s operation (including, without limitation, errors made in the processing of subscriptions and redemptions). Under these policies, when a compensable error by the Managing Member occurs, the Managing Member may reimburse the Company in an amount according to its policies without reprocessing individual Member accounts. Reprocessing of individual Member accounts will only occur when the error is of a size that exceeds the Company’s materiality threshold. This means that an error below the materiality threshold may disadvantage Members during the period the error persists, but reimbursement may benefit Members at the time of reimbursement and may not, in either event, be allocated to, or in proportion to, the specific Members whose Units were negatively affected by the error. As described in “— Identification of Compensable Errors” above, the Company may also follow materiality policies with respect to the resolution of errors that may limit or restrict when compensation to the Company or Members will be paid. Accordingly, Members who purchase or redeem Units during periods in which errors accrue or occur may not be recompensed in connection with the resolution of the error. Similar considerations may apply with respect to the error and error correction policies of the Advisors.

Additional information about the Managing Member’s error and error correction policies may be set forth in Part 2 of the Managing Member’s Form ADV, which will be provided to Members or prospective investors upon request. The Managing Member may at any time, in its sole discretion and without notice to Members, amend or supplement its error and error correction policies.

COMPETITION

The market for hedge funds and hedge fund products is highly competitive. The Company competes for investors with other hedge funds, funds of funds, mutual funds, and money managers who employ similar investment strategies and who offer similar hedge fund products to investors. New entities, including other hedge funds, funds of funds and money managers, regularly enter the market, and there are limited barriers to entry. In addition, new hedge fund products are regularly introduced into the market by existing funds. The Company competes with its competitors on, among other things, the basis of its reputation, its short-term and long-term performance and track record, access to, and ability to select, Advisors, fees, management and portfolio teams, strategies, client services and its ability to manage risk.

57

FISCAL YEAR

The Company’s fiscal year ends on December 31 of each calendar year. The Managing Member, at its sole discretion, may change the fiscal year-end of the Company.

EMPLOYEES

As of December 31, 2007, the Company had no employees. However, the Company is managed by the Managing Member which as of December 31, 2007, was supported by approximately 85 employees of the GS Group worldwide, of which approximately 32 allocated at least a portion of their time to the management of the Company and the Investment Funds.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report contains certain “forward-looking statements” regarding the operation of the Company and the Company’s investment objective, including, among other things:

•       investment strategies and allocations of assets;

•       future performance; and

•       trends in the Investment Sectors.

Forward-looking statements are typically identified by the use of terms such as “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “predict,” “potential” or the negative of such terms and other comparable terminology. These statements are only predictions and are not historical facts. Actual events or results may differ materially.

The forward-looking statements included herein are based on the Managing Member of the Company’s current expectations, plans, estimates and beliefs that involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business strategies and decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the Company’s control. Any of the assumptions underlying the forward-looking statements contained herein could be inaccurate and, therefore, the Managing Member of the Company cannot assure Members that the forward-looking statements included in this Annual Report will prove to be accurate.

In light of the significant uncertainties inherent in the forward-looking statements included in this Annual Report, including, without limitation, the risks set forth under ITEM 1A. “RISK FACTORS” below, the inclusion of such information should not be regarded as a representation by the Company or the Managing Member that the investment objective set forth in this Annual Report will be achieved. The Company cautions Members that forward-looking statements are not guarantees and that the actual results could differ materially from those expressed or implied in the forward-looking statements.

The Company or the Managing Member does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by the Managing Member of the Company or the Company or on their behalf.

References to market or composite indices, benchmarks or other measures of relative market performance (each, an “index”) are provided for your information only. Reference to an index does not imply that the portfolio will achieve results similar (or dissimilar) to that index.

58

ITEM 1A.

RISK FACTORS

General Risks

The following are certain risk factors that relate to the operation and terms of the Company and the Investment Funds.

Risks Related to the Company and the Investment Funds’ Performance and Operation

Limited Operating History of the Company; Past Performance of the Company is not Indicative of Future Results

The Company has a limited operating history upon which prospective investors can evaluate its likely performance. Similarly, certain of the Investment Funds and the Advisors have limited or no track records and/or operating histories. The past investment performance of the Company or any of the Investment Funds or Advisors should not be construed as an indication of the future results of such Advisors, the Investment Funds, or of the Company. The results of other investment funds or accounts managed by the Managing Member which have or have had an investment objective similar to or different from that of the Company or the Investment Funds, are not indicative of the results that the Company or the Investment Funds may achieve. The Investment Funds make allocations in different portfolios of Advisors and securities and, accordingly, their results and, in turn, the results of the Company, are independent of the previous results obtained by those funds and accounts. See “—Special Risks of the Company’s Structure—Risks Associated with the Company Investing in Other Entities—Past Performance of Affiliated Funds and Advisors are not Necessarily Indicative of the Results that the Company and any Investment Fund May Achieve or of Future Results” below.

A Substantial Portion of an Investment Fund’s Assets May be Invested Utilizing Strategies That are Not Within its Investment Sector; Most Advisors do not Provide Detailed Position Information Regarding their Portfolios

Although the managing member of an Investment Fund intends to allocate assets to Advisors whose principal investment strategies are within one of the Investment Sectors described under ITEM 1. “BUSINESS—PERFORMANCE OF THE COMPANY—Description of the Investment Funds and the Performance of the Investment Funds,” a substantial portion of the Investment Fund’s assets may be invested utilizing strategies within other investment sectors. In addition, the sectors referenced therein are subjective classifications made by the managing member of the Investment Fund in its sole discretion. Such classifications are based on information previously provided by the Advisors to the managing member of the relevant Investment Fund and may differ from classifications of similarly named sectors made by other industry participants. The managing member of each Investment Fund will rely on information previously provided by each Advisor in determining in its sole discretion that the principal investment strategies utilized by an Advisor are within such Investment Fund’s specified Investment Sector.

The managing member of an Investment Fund seeks to select Advisors for the Investment Fund that exhibit certain operational, management and risk control standards in the daily investment of their portfolios. The managing member may request historical performance and position data in order to evaluate how Advisors behave in certain environments. However, some Advisors have no operating history and therefore such performance and position data may not be available. The managing member also may request that each Advisor provide guidelines about the size of its typical positions and the amount of leverage that it will use in managing assets. These risk and investment guidelines serve as a framework for the managing member to conduct its ongoing risk monitoring on behalf of each Investment Fund as it believes that there is value in regularly monitoring each Investment Fund’s Advisors to better understand the Advisors’ risk and sources of return. The managing member also conducts due diligence visits with the Advisors, which may include representatives of its Advisor selection, risk and quantitative analysis, compliance and operations areas. Accordingly, the managing member seeks Advisors

59

who are willing to share information and market outlook and who agree to engage in a regular dialogue and provide portfolio composition and profit and loss information regularly, although the level of detail will vary by Advisor. However, many Advisors are unwilling to provide significant transparency, e.g., position detail, because such information is proprietary to such Advisors, particularly those Advisors operating in the event driven and relative value sectors, but also those in the equity long/short and tactical trading sectors and the Company may still choose to invest with such Advisors because of their historical returns and reputation. Moreover, due to changes in the investment programs of certain Advisors over time or other factors, it is possible that an Investment Fund’s assets may be allocated to Advisors whose principal investment strategies are not within the Investment Fund’s specified Investment Sector for extended periods of time.

As is customary with funds of hedge funds, most of the Advisors do not provide the managing member of the Investment Funds with detailed position reports because such information is proprietary to such Advisors. These Advisors would not likely permit the Investment Funds to invest with them if such an information requirement was a condition to investment. Also, Advisors may not comply with their stated investment strategies. Members of the Company assume the risk that the Advisors may not provide accurate and timely information about their strategies, performance and positions and that the information provided by the Advisors will subsequently be proven or discovered to be inaccurate and/or false. Reference in this Annual Report to information received by Advisors includes information received directly from the Advisors as well as information received from independent administrators or other third party providers on behalf of such Advisors.

There Can Be No Assurance that the Managing Member’s Decisions Regarding Allocations will be Successful; Inaccurate Information Provided by the Advisors May Have a Material Adverse Effect on Implementing the Company’s Investment Objective

As of April 1, 2008, the Managing Member will have the discretion to make allocations among Investment Sectors without being constrained by assumptions, based mainly on historical data, regarding the long-term risk-return and correlation expectations of the Investment Sectors. See ITEM 7A. “QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK—Risk Management.” There is no assurance that the Managing Member’s decisions regarding allocations of assets will be successful. In addition, the Company will be limited in its ability to make changes to allocations due to the subscription and redemption provisions of the Investment Funds, including notice periods and limited subscription and redemption dates, and the ability of the Investment Funds to suspend and postpone redemptions. In addition, any such allocations will be made by the Company based on information previously provided by the Advisors. If such information is inaccurate or incomplete, it is possible that the Company’s allocation to the Investment Sectors may not reflect the Managing Member’s intended allocations. This could have a material adverse effect on the ability of the Managing Member to implement the Company’s investment objective.

Non-Diversified Status; the Managing Member may Allocate to One or More Advisors a Relatively Large Percentage of an Investment Fund’s Assets

The Company is a “non-diversified” investment company. Thus, there are no percentage limitations imposed by the Investment Company Act of 1940, as amended (the “Investment Company Act”) on the percentage of the Company’s assets that may be invested in the securities of any one issuer. Generally, the Company will allocate its assets to Investment Funds. Although the managing member of the Investment Funds intends to follow a general policy of seeking to diversify each Investment Fund’s capital among multiple Advisors, the managing member may in its discretion depart from such policy from time to time and one or more Advisors may be allocated a relatively large percentage of an Investment Fund’s assets, although the managing member of each of GTT, GELS and GRV generally will not allocate more than 25% of the total assets of the applicable Investment Fund to any single Advisor at the time of investment in such Advisor. There are no restrictions on the amount of assets of HFPO that its managing member can allocate to any single Advisor, and as of April 1, 2008, there will be no restrictions on the amount of assets of GFS that its managing member can allocate to any single Advisor. Consequently, losses suffered by such Advisors of any of the Investment Funds could result in a proportionately higher reduction in an Investment Fund’s capital than if such capital had been more proportionately allocated among a larger number of Advisors.

60

Dependence on the Managing Member and the Advisors; the Managing Member Generally Has Limited Access to Information on or Control over Advisors’ Portfolios and Members Assume the Risk that Advisors May Knowingly Misrepresent Information Which Could Have a Material Negative Impact on the Company

Generally, the Managing Member invests assets of the Company in the Investment Funds, which in turn invest their assets through the Advisors. The managing member of each of the Investment Funds, which currently is the Managing Member, has the sole authority and responsibility for the selection of the Advisors for that Investment Fund. The success of each Investment Fund and, in turn, of the Company, depends upon the ability of the managing member of the Investment Funds and each Investment Fund’s Advisors to develop and implement investment strategies that achieve their investment objectives. No assurance can be given that the managing member of the Investment Funds or any Advisor will be able to do so. For example, an Advisor’s inability to effectively hedge an investment strategy that it utilizes may cause the assets of an Investment Fund allocated to such Advisor to significantly decline in value and could result in substantial losses to such Investment Fund and, in turn, to the Company. The Investment Funds do not have any control over the Advisors. Moreover, subjective decisions made by the Managing Member or the managing member of an Investment Fund and/or by the Investment Fund’s Advisors may cause the Company or the Investment Fund to incur losses or to miss profit opportunities on which they may otherwise have capitalized. Members of the Company will have no right or power to participate in the management or control of the Company, Investment Funds, Portfolio Companies, Advisors or Advisor Funds, and will not have an opportunity to evaluate in advance any specific investments made by the Company, Investment Funds, Portfolio Companies, Advisors or Advisor Funds, or the terms of any investments made by the Company, Investment Funds, Portfolio Companies, Advisors or Advisor Funds.

While the managing member of an Investment Fund will select and monitor the Advisors to which the Investment Fund allocates assets, the managing member of an Investment Fund relies to a great extent on information provided by the Advisors and will generally have limited access to other information regarding the Advisors’ portfolios and operations. Most Advisors consider this information proprietary and would not provide this information even if requested. If the Investment Funds only invested in Advisors who provided complete access to their information, the Investment Funds would not be able to access many Advisors with which they might otherwise wish to invest since many Advisors with strong track records and/or limited capacity will not agree to provide this access. Limiting the Advisors that the Investment Funds would invest with would have a material adverse impact on the Investment Funds and, in turn, the Company and its Members. Accordingly, the Investment Funds invest with many Advisors who do not provide any or all such information, and Members who are not willing to assume this risk should not retain their investment in the Company. There is a risk that Advisors may knowingly, recklessly, negligently or otherwise withhold or misrepresent information regarding activities that could have a material negative impact on the performance of an Investment Fund and the Company. Members of the Company are assuming the risk that the Advisors will act in such a manner. These activities, therefore, could occur without the knowledge of the Managing Member, and could have a material negative impact on the Company’s performance and financial statements, including, among other things, causing a restatement of prior financial statements. Any such misrepresentation or fraudulent or similar activities (each a “Fraudulent Activity,” and collectively “Fraudulent Activities”) by an Advisor would result in their position being inaccurately reflected in an Investment Fund’s, and therefore the Company’s, financial statements. Once an Investment Fund learns of any such Fraudulent Activities, it will likely be too late for such Investment Fund to withdraw its assets from such Advisor without incurring significant losses due to its investment with such Advisor. The proper performance of monitoring functions by the Managing Member of the Company or the managing member of the Investment Funds would generally not give the managing member the opportunity to discover such situations prior to the time the Advisor discloses (or there is public disclosure of) the presence or effects of any Fraudulent Activities. Accordingly, the managing member of the Investment Funds can offer no assurances that an Advisor will not engage in Fraudulent Activities and cannot guarantee that it will have the opportunity or ability to protect the Investment Fund, and consequently the Company, from suffering a loss because of an Advisor’s Fraudulent Activities.

In the event of misrepresentation and fraud committed by those Advisors or hedge funds in which the Investment Funds invest, the Company or, more likely the Investment Funds, will have remedies available under applicable state and federal securities and anti-fraud laws. As a general matter, the Company does not have

61

contractual remedies available to it for misrepresentation and fraud, however, in certain limited cases where the Investment Funds invest through Managed Accounts or Portfolio Companies, the Investment Funds may have certain contractual protections. The Company or the Investment Funds intend to pursue their potential legal remedies based on an evaluation of litigation risks and costs involved in pursuing litigation. In addition, in deciding on whether or not to pursue legal remedies available to them, the Company or the Investment Funds will also consider the costs involved in pursuing any remedy and the risk that the underlying hedge fund may have insufficient assets to comply with a successful outcome. Accordingly, even if a legal remedy may be available to the Company or the Investment Funds, it may choose not to pursue such remedy.

The Investment Funds may invest in Advisor Funds that are not administered by an independent third party administrator. Advisor Fund administrators generally are responsible for, among other things, calculating (or assisting with the calculation of) the NAV for the Advisor Funds that they administer, valuing (or assisting in the valuation of) securities and other assets, including securities which are not readily marketable, and assisting in the preparation of financial statements. If an Advisor Fund is not administered by an independent third party administrator, the determinations of the Advisor with respect to valuations generally will not be subject to review or oversight by an independent party other than the Advisor Fund’s auditor. Such an arrangement may have an adverse effect on the Investment Fund and, in turn, the Company and the Members by, among other things, reducing the likelihood that the managing member of the Investment Fund will learn of any error, miscalculation or misrepresentation in the valuation of the Advisor Fund’s investments, whether intentional or otherwise, or any Fraudulent Activity.

The managing member of the Investment Funds may invest a substantial portion of an Investment Fund’s assets with Advisors that may have limited or no track records and Advisor Funds with limited or no operating histories. Certain Advisors may have limited or no experience managing certain of the strategies expected to be deployed by them in their investment programs. Certain strategies utilized may also be newly developed and may not be widely used. The risks of such strategies may be difficult to predict in various market conditions. In such cases, the Advisors or individual members of their management teams will each have had, in the opinion of the managing member of the Investment Fund, sufficient relevant experience in other contexts or trading in strategies similar to those that the Advisor is expected to utilize.

The Company Does Not Currently Intend to Participate in New Issues Which May Limit Potential Gains

The Company does not currently intend to participate in “new issues,” as such term is defined under Financial Industry Regulatory Authority (“FINRA”) Rule 2790, as amended, supplemented and interpreted from time to time (“FINRA Rule 2790”), although this intention could change at any time as determined by the Managing Member in its sole discretion. FINRA Rule 2790 limits the ability of FINRA member firms to sell securities of new issues to certain classes of “restricted persons.” Such securities sold in the past have on occasion experienced initial, sometimes rapid, increases in market value following such offerings. As a result of not participating in new issues, the Company will not share in any such increases.

Risks Related to the Company’s Regulatory Environment

Limited Regulatory Oversight; Members not Afforded Protection of Investment Company Act

The Company and each of the Investment Funds, in reliance upon an exemption available to privately offered investment companies, are not required to register as investment companies and have not registered as such under the Investment Company Act. Thus, the provisions of the Investment Company Act intended to provide various protections to investors (which, among other things, require investment companies to have a majority of disinterested directors, provide limitations on leverage, limit transactions between investment companies and their affiliates, require securities of an investment company held in custody to be individually segregated at all times from the securities of any other person and marked to clearly identify such securities as the property of such investment company and regulate the relationship between the adviser and the investment company) are not applicable. The Managing Member is registered as an adviser under the Investment Advisers Act.

62

Moreover, the Advisor Funds and Portfolio Companies in which the Investment Funds invest generally are not registered as investment companies, and the Investment Funds and the Company, in turn, are not provided the protections of the Investment Company Act. In addition, the Advisors may not be registered as investment advisers under the Investment Advisers Act. Therefore, the Investment Funds and the Company, as investors with such Advisors, will not have the benefit of certain of the protections of the Investment Advisers Act.

The Advisor Funds and Portfolio Companies generally do not maintain their securities and other assets in the custody of a bank or a member of a securities exchange, as generally required of registered investment companies, in accordance with certain SEC rules. A registered investment company which places its securities in the custody of a member of a securities exchange is required to have a written custodian agreement, which provides that securities held in custody will be at all times individually segregated from the securities of any other person and marked to clearly identify such securities as the property of such investment company and which contains other provisions designed to protect the assets of the registered investment company. It is anticipated that the Advisors to which the Investment Funds will allocate assets generally will maintain custody of their assets with brokerage firms which do not separately segregate such customer assets as would be required in the case of registered investment companies. Under the provisions of the Securities Investor Protection Act of 1970, as amended, the bankruptcy of any such brokerage firm could have a greater adverse effect on an Investment Fund and, in turn, on the Company, than would be the case if custody of assets were maintained in accordance with the requirements applicable to registered investment companies. There is also a risk that an Investment Fund’s Advisor could convert to its own use assets committed to it by an Investment Fund or that a custodian could convert to its own use assets committed to it by an Investment Fund’s Advisor. There can be no assurance that the Advisors or the entities they manage will comply with all applicable laws and that assets of the Investment Funds entrusted to Advisors by the Investment Funds will be protected.

Furthermore, in accordance with U.S. Commodity Futures Trading Commission (the “CFTC”) regulations, the Managing Member is registered as a commodity trading advisor (a “CTA”) and a commodity pool operator (a “CPO”) under the U.S. Commodity Exchange Act, as amended (the “Commodity Exchange Act”), and all of the Advisors are either registered as CTAs or have indicated to the managing member of the Investment Funds that they are exempt from such registration. Because the Units are being privately offered under both U.S. federal and state securities laws and Units may be purchased only by persons who are “qualified purchasers” under the Investment Company Act, “accredited investors” under the Securities Act of 1933, as amended (the “Securities Act”), and “qualified eligible persons” or “accredited investors” in accordance with Rule 4.13(a)(4) under the Commodity Exchange Act, the Memorandum has not been filed with or reviewed by the SEC, the CFTC, or any self-regulatory authority. The Managing Member reserves the right to withdraw any registrations relating to the Company in the future as permitted by applicable law.

Although the Managing Member is registered with the CFTC under the Commodity Exchange Act as a CPO with respect to other pools that it operates, the Managing Member operates the Company as if it were exempt from such registration pursuant to Rule 4.13(a)(4) under the Commodity Exchange Act because (i) the Units are exempt from registration under the Securities Act and are being offered and sold without marketing to the public in the United States, and (ii) Units may be purchased only by natural persons who are “qualified eligible persons” as defined in Rule 4.7(a)(2) under the Commodity Exchange Act and non-natural persons that are “qualified eligible persons” as defined in Rule 4.7 under the Commodity Exchange Act or “accredited investors” as defined in Rule 501(a)(1)-(3), (a)(7) or (a)(8) of Regulation D under the Securities Act. Therefore, the Managing Member is not required to deliver to Members certified annual reports and a disclosure document that are required to be delivered pursuant to the Commodity Exchange Act, which would contain certain disclosures required thereby that may not be included herein or in the reports to be provided to Members by the Company.

Legal, Tax and Regulatory Risks; Disclosure of Information Regarding Members

Legal, tax and regulatory changes could occur during the term of the Company and the Investment Funds that may adversely affect the Company and the Investment Funds (including changes under the Exchange Act). For example, the regulatory and tax environment for derivative instruments in which Advisors of an Investment Fund may participate is evolving, and changes in the regulation or taxation of derivative instruments may materially adversely affect the value of derivative instruments directly or indirectly held by such Investment Fund and, in turn,

63

the value of the Company’s assets and the ability of the Advisors with which such Investment Fund invests to pursue their trading strategies. Similarly, the regulatory environment for leveraged investors and for hedge funds generally is evolving, and changes in the direct or indirect regulation of leveraged investors or hedge funds may materially adversely affect the ability of the Company, the Investment Funds and the Advisors to pursue their respective investment objectives or strategies.

Moreover, the Investment Funds, the Managing Member or its affiliates and/or service providers or agents of the Company, the Investment Funds or the Managing Member, may, from time to time, be required or may, in their sole discretion, determine that it is advisable to disclose certain information about the Company, the Investment Funds and the Members, including, but not limited to, investments held by the Company and the names and level of beneficial ownership of Members, to (i) one or more regulatory authorities of certain jurisdictions which have or assert jurisdiction over the disclosing party or in which the Company directly or indirectly invests and/or (ii) one or more counterparties of, or service providers to, the Managing Member or the Company. By virtue of the entering into the Subscription Agreement, each Member will have consented to any such disclosure relating to such Member.

Risks Related to the Units, Liquidity of Units and the Offering of the Units

Units Will Not be Listed and Will Not be Marketable

The Company does not intend to list its Units for trading on any national securities exchange. There is no secondary trading market for the Units, and none is expected to develop. The Units are, therefore, not readily marketable. Units will not be redeemable at the option of Members, other than, on each January 1, April 1, July 1 or October 1 (occurring on or after the first anniversary of the purchase of such Units by the Member) upon 91 days prior written notice to the Managing Member (unless such notice is waived by the Managing Member in its sole discretion), and such Units will not be exchangeable for interests of any other funds. See “—The Company has Limited Liquidity and Limited Rights for Redemption” below.

The Company has Limited Liquidity and Limited Rights for Redemption

The Company is a non-diversified management investment company with limited liquidity designed primarily for long-term investors and is not intended to be a trading vehicle. Members should not retain their investment in this Company if they need a liquid investment.

An investment in the Company provides limited liquidity since the Units are not freely transferable. Generally, a Member is only permitted to redeem Units upon written notice received by the Managing Member at least 91 days prior to the Valuation Date (as defined below) in respect of such redemption, as of the time immediately prior to the opening of business on each January 1, April 1, July 1 and October 1 occurring on or after the first anniversary of the purchase of such Units by the Member, but such right may be limited or postponed under certain circumstances. Additionally, the Managing Member may limit redemptions to the extent that aggregate redemption requests by Members exceed a specified threshold. The same or similar limitations may also apply to the Company’s investment in the Investment Funds or an Investment Fund’s investment with certain Advisors.

The Advisors may invest a portion of the assets allocated to them in derivatives, securities or other financial instruments or assets that are illiquid and/or not publicly traded. Such investments may not be readily disposable, may be difficult to value and, in some cases, may be subject to contractual, statutory or regulatory prohibitions on disposition for a specified period of time. An investment in the Company is therefore suitable only for sophisticated investors that will not be materially impacted by postponements of the Company’s normal redemption dates. The market value of an Advisor’s investments may fluctuate with, among other things, changes in prevailing interest rates, general economic conditions, the condition of financial markets, developments or trends in any particular industry and the financial condition of the issuers of the securities in which such Advisor invests. During periods of limited liquidity and higher price volatility, an Advisor’s ability to acquire or dispose of investments at a price and time that the Advisor deems advantageous may be impaired. As a result, in periods of rising market prices, an Advisor may be unable to participate in price increases fully to the extent that it is unable to acquire desired positions quickly; conversely, such Advisor’s inability to dispose fully and promptly of positions in declining markets will cause the NAV of an Advisor Fund, Portfolio Company or Managed Account (and, consequently, the NAV of an Investment Fund) to decline as the value of unsold positions is marked to lower prices. These

64

circumstances could also impair an Advisor’s ability to make redemption distributions to an Investment Fund in a timely manner and, as a result, could impair the ability of the Investment Fund to make timely distributions to a redeeming member, including the Company. Further, the managing member of an Investment Fund may, in its sole discretion, suspend redemptions, including, among other reasons, because the Investment Fund is unable to withdraw sufficient funds from Advisor Funds and Portfolio Companies or otherwise to meet redemption requests, and in circumstances when the disposal of part or all of such Investment Fund’s assets to meet withdrawal requests would be prejudicial to its members.

Investors in one or more of the Advisor Funds and Portfolio Companies may be permitted to withdraw more of their interests with greater frequency and/or under otherwise more favorable terms than an Investment Fund. This could materially adversely affect the Investment Fund and, in turn, the Company and the Members.

Redemptions of Units are Subject to a Substantial Waiting Period and Potentially Outdated Information

There will be a substantial period of time between the date as of which Members must submit a request for redemption and the date they can expect to receive full payment for their redemption proceeds from the Company. Members whose Units are accepted for redemption bear the risk that the Company’s NAV may fluctuate significantly in the period between the date by which redemption requests must be submitted and the date as of which such Units are valued for purposes of such redemption. Members will have to decide whether to request that the Company redeem their Units without the benefit of having current information regarding the value of Units on a date proximate to the date on which Units are valued by the Company for purposes of effecting such redemptions. In addition, under certain circumstances, the Managing Member may find it necessary (i) to suspend redemptions, including, among other reasons, because the Company is unable to withdraw sufficient funds from Investment Funds or otherwise to meet redemption requests, and in circumstances when the disposal of part or all of the Company’s assets to meet such redemption requests would be prejudicial to the Members; or (ii) to set up a reserve for undetermined or contingent liabilities. The Managing Member may also limit redemptions of Units to the extent that aggregate redemption requests by Members exceed a specified threshold. An investment in the Company is suitable only for Members who can bear the risks associated with the limited liquidity of the Units and the underlying investments of the Company.

Substantial Redemptions Could Have a Material Adverse Effect on the Company

Substantial requests for the Company or an Investment Fund to redeem membership Units of its members in a concentrated period of time, including redemption requests by current and former directors, partners or employees of the GS Group or from certain investment vehicles organized by the Managing Member or its affiliates, could require the Company or the Investment Fund to liquidate certain of its investments more rapidly than otherwise desirable in order to raise cash to fund the redemptions and achieve a market position appropriately reflecting a smaller asset base. In addition, certain Advisor Funds may impose redemption fees, which the Company or the Investment Funds may be required to pay in order to obtain required redemption proceeds. The Company could experience disproportionately high redemptions on any particular redemption date, which could have a material adverse effect on the value of the Units redeemed and the Units that remain outstanding. Members will not receive notification of substantial redemption requests in respect of any particular Redemption Date (as defined below) from the Company, and therefore may not have the opportunity to redeem Units prior to, or at the same time as, the redeeming Members. The Company had redemptions in the amount of $347,523,596 in January 2006, $76,617,985 in April 2006, $192,289 in June 2006, $89,209,736 in July 2006, $31,192,162 in October 2006, $63,683 in December 2006, $23,701,199 in January 2007, $23,430,775 in April 2007, $32,058,148 in July 2007, $27,455,904 in October 2007 and $22,708,145 in January 2008. The Company funded the redemptions made in 2006, 2007 and in January 2008 by making redemptions from the Investment Funds in proportion to the then current weightings, through the use of uninvested cash on hand. The Company also used its old credit facility to fund January 2006 and April 2006 redemptions and its Credit Facility to fund July 2006, October 2006, January 2007 and July 2007 redemptions. The Managing Member expects the Company to fund future redemptions in a similar manner. However, the Managing Member may in its sole discretion decide to change the weightings and the manner in which the Company makes redemptions from the Investment Funds to fund these or any other redemptions. The redemptions from the Investment Funds made during 2007 to fund the redemptions made in the Company

65

during 2007 did not result in any costs, fees or payments of premiums for the Company. The Company does not believe that the Redemptions payable in January 2008 had a material adverse effect on the value of the Units or the performance of the Company. See “—Special Risks of the Company’s Structure—Risks Related to the Company’s Structure—The Investment Funds’ and the Advisors’ Investments May not be Diversified and there can be no Assurance that the Company’s Allocation Models and Methodologies will Achieve the Company’s Allocation Goals” below. The Company may elect to borrow under the Credit Facility, including without limitation, to fund redemptions, from time to time in the future. As further described in Item 7, the Company entered into the Credit Facility on June 30, 2006. For a description of the Credit Facility, see ITEM 7. “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS—Liquidity and Capital Resources” and Note 6 to the financial statements.

Certain Classes of Units May Have No Lock-Up Period

Units of a class that is not subject to any lock-up period may from time to time be issued to one or more investment vehicles organized by the Managing Member or its affiliates (each a “GS Investment Vehicle” and collectively, “GS Investment Vehicles”) that invest in the Company. Since certain Investment Funds and Advisor Funds may impose greater restrictions on redemptions (including lock-ups) than those imposed by the Company on such GS Investment Vehicles, redemptions by such GS Investment Vehicles may materially adversely affect other Members. The Company may determine to meet a redemption request from such a GS Investment Vehicle by redeeming from more liquid Investment Funds and Advisor Funds or Investment Funds and Advisor Funds that impose redemption fees. Since the Company does not charge a redemption fee on redeeming Members, any such redemption fees charged to the Company in connection with the redemption by a GS Investment Vehicle will reduce the NAV of the Company and adversely affect all Members (not just redeeming investors). In addition, redemptions by such GS Investment Vehicles could result in the Company holding a greater concentration of less liquid Investment Funds and Advisor Funds than was previously the case. This could have a material adverse effect on the Company’s investment mix, and could also cause the Company to limit future Member redemptions.

Redemption May be in Cash or In-Kind Under the Sole Discretion of the Managing Member; Members May Bear Risks Related to In-Kind Securities and Pay Fees in Disposing of In-Kind Securities

The Company generally expects to pay redemption proceeds in respect of redeemed Units in cash. However, there can be no assurance that the Company will have sufficient cash to pay for Units that are being redeemed or that it will be able to liquidate investments at favorable prices to pay for redeemed Units. The Company may in certain circumstances distribute securities as payment for redeemed Units, including if making a cash payment would result in a material adverse effect on the Company or the Members, or if the Company has received distributions from the Investment Funds in the form of securities that are transferable to the Members. An Investment Fund may distribute redemption proceeds to the Company if the Investment Fund receives distributions from its Advisors in the form of securities. It is possible that, upon the Company’s withdrawal of all or a portion of its assets invested in an Investment Fund, the Company may receive securities that are illiquid or difficult to value. In such circumstances, the Managing Member would seek to dispose of these securities in a manner that is in the best interests of the Company, which may include a distribution in-kind to its Members. In the event that the Company makes such a distribution of securities as payment for Units, Members will bear any risks of the distributed securities and may be required to pay a brokerage commission or other costs in order to dispose of such securities.

Special Considerations Applicable to the Continuous Offering of Units; After the Initial Offering of Units Subsequent Purchasers of Units May Suffer Losses Because of Previously Established Open Positions

The Company may accept additional subscriptions for Units from time to time as determined by the Managing Member, in its sole discretion, and in accordance with the LLC Agreement. Upon the approval of the Managing Member, a Member or prospective Member may make additional subscriptions for Units on the first day of each calendar month or at such other times as the Managing Member may determine in its sole discretion. Historically, the Company has from time to time taken in funds on a monthly basis. From July 2003 through September 2004, the Company only took in investments from existing investors and limited subscriptions from new qualified investors,

66

however, starting in October 2004, the Company began accepting additional amounts of new subscriptions and the Company continued to do so through December 31, 2007.

Additional subscriptions will dilute the indirect interests of existing Members in the Company’s investment portfolio prior to any such subscription, which could have a material adverse impact on the existing Members’ interest in the Company if future Company investments under-perform the prior investments. The Investment Funds may be closed from time to time to investments by new investors; however, the Investment Funds may be reopened in the sole discretion of the managing member of each Investment Fund. Each Investment Fund may also accept additional subscriptions for membership Units (as determined by the managing member of each Investment Fund and in accordance with such Investment Fund’s governing documents). Such additional subscriptions will dilute the indirect interests of the Investment Fund’s existing members, including the Company, in the Investment Fund’s investment portfolio prior to any such subscription, which could have an adverse impact on the existing members’ interest in the Investment Fund if such Investment Fund’s future investments under-perform its prior investments. In addition, it is expected that certain Advisors of the Investment Funds will structure performance-based compensation similarly to the Company, with such compensation being paid only if gains exceed prior losses (i.e., the NAV of the interest must first exceed a high watermark attributable to a previously obtained NAV). Appreciation in the net assets managed by an Advisor at any given time will be shared pro rata by all of the members of such Investment Fund at such time, including the Company, not just those who were members at the time prior losses were incurred. The value attributable to the fact that no performance-based compensation will be paid to an Advisor until its gains exceed its Loss Carry-forward Value will not be taken into account in determining the NAV of an Investment Fund. Therefore, such Loss Carry-forward Value to existing members of an Investment Fund, including the Company, will be diluted by new subscriptions for Units of such Investment Fund’s membership Units because the new membership Units will participate in any positive performance by the Advisor until its gains exceed its prior losses without the Advisor being paid any performance-based compensation.

In addition, unlike purchasers who purchased the initial Units offered by the Company, Units acquired following the initial offering of Units will represent indirect interests in operating funds that may have significant open positions. Since these Units will, indirectly through the Company’s investments in each of the Investment Funds, share in each Investment Fund’s open positions which may have been held for some period of time prior to the issuance of the additional Units, the application of the relevant Advisor’s trading approach to such positions may have a qualitatively different effect on the performance of the additional Units than it does on the performance of previously issued Units. For example, a number of trading approaches may become more aggressive in terms of willingness to tolerate losses in a position and increase the size of a position after an open trade has generated a substantial profit because subsequent losses (up to a certain level) are perceived as being only a partial give-back of prior profits, not an actual loss. As subsequent purchasers of Units in the continuous offering will not have received, indirectly through the Company’s investments in the Investment Funds, the benefit of any profits on open positions prior to the date on which they purchase the Units, subsequent losses will constitute an absolute loss to such holders, not only a partial give-back of profits. In addition, certain trading approaches may follow profit-taking strategies whereby they will liquidate or partially liquidate a position after it has generated a predetermined amount of profit. Since the new Units will not, indirectly through the Company’s investments in the Investment Funds, have had the benefit of any such profit prior to the date on which they were issued, Members holding such Units may find themselves, indirectly through the Company’s investments in the Investment Funds, liquidated out of a position (which may have continued to generate substantial profits) due to an Advisor “taking profits,” none of which had inured to their benefit. Some approaches apply similar analyses based on overall portfolio performance, not just the performance of particular positions, with generally analogous effects.

Investing Prior to receipt of Subscription Monies and Prior to the Effective Date of Subscriptions

The Company may, in the sole discretion of the Managing Member, begin making investments at any time prior to the effective date of subscriptions for Units on the basis of anticipated subscriptions. In addition, without limiting the generality of the foregoing, the Company may, in the sole discretion of the Managing Member, begin making investments on or after the effective date of a subscription on the basis of anticipated receipt of funds with respect to the subscription even if such funds were not received on such effective date. Pursuant to the Subscription Agreement, an investor or prospective investor will be liable for any losses or costs arising out of or relating to the

67

non-payment or late payment of subscription monies, including any losses or costs incurred as a result of the Company making investments on the basis of anticipated receipt of such monies as of the effective date of a subscription. These practices could have an adverse effect on the Company. Non-payment or late payment of subscription monies may result in direct or indirect losses and costs to the Company, and the Company may not ultimately recoup such losses or costs from the applicable investors or prospective investors. In addition, the Managing Member may make investment or other portfolio decisions in anticipation of subscriptions that would not have been made were it known that the subscriptions would not be made or would be made late, which could have an adverse effect on the Company’s portfolio.

Special Risks of the Company’s Structure

This section discusses certain risks related to the fact that the Company allocates its assets to Investment Funds, which allocate their assets to Advisors.

Risks Related to the Company’s Structure

The Investment Funds’ and the Advisors’ Investments May not be Diversified and There can be no Assurance that the Company’s Allocation Methodologies will Achieve the Company’s Allocation Goals

The managing member of each of GTT, GELS and GRV generally will not allocate more than 25% of the total assets of the applicable fund to any single Advisor at the time of investment in such Advisor. However, following the time of allocation, the percentage of each such Investment Fund’s total assets allocable to any single Advisor could exceed the 25% level due to a number of factors, including redemptions from the applicable Investment Fund and positive or negative performance by an Advisor as compared to other Advisors. There are no restrictions on the amount of assets of HFPO that its managing member can allocate to any single Advisor, group of Advisors or investment strategy, and as of April 1, 2008, there will be no restrictions on the amount of assets of GFS that its managing member can allocate to any single Advisor. No assurance is given as to any level of multiple Advisor diversification. Greater concentration with any single Advisor may entail additional risks.

While the managing member of the Investment Funds may seek Advisors that utilize diversified investment strategies, there can be no assurance that market or other events will not have an adverse impact on the strategies employed by multiple Advisors. Advisors may at certain times hold large positions in a relatively limited number of investments. Advisors may target or concentrate their investments in particular markets, sectors, or industries. Those Advisors that concentrate in a specific industry or target a specific sector will also be subject to the risks of that industry or sector, which may include, but are not limited to, rapid obsolescence of technology, sensitivity to regulatory changes, minimal barriers to entry, and sensitivity to overall market swings. As a result, the NAVs of such Advisors may be subject to greater volatility than those of investment vehicles that are subject to diversification requirements and this may negatively impact the NAV of the Investment Funds and the Company.

The Managing Member establishes allocations among the Investment Sectors in a manner consistent with the Company’s investment objective. Quantitative analysis is combined with judgment to determine weightings and strategic return, risk and correlation estimates inform the quantitative analysis. Judgment is applied to both estimates and weights in an attempt to achieve exposure to hedge funds while targeting attractive risk-adjusted returns. The Managing Member may, from time to time, vary or change materially the actual allocation of assets made by the Company, as it deems appropriate in its sole discretion. The Managing Member may at certain times be unable to reallocate the Company’s assets among the Investment Funds as it determines is advisable in order to achieve the Company’s investment objective due to a number of factors, including without limitation, minimum holding periods and restrictions on redemptions imposed by the Investment Funds or Advisors. If imbalances in the allocations occur because the Company is unable to reallocate on a timely basis, losses occurring as a result could cause the Company to suffer significantly greater losses than would be the case if the Company’s allocation goals had been achieved.

68

The Company’s Financial Statements are, and in the Future Will Ultimately be, Based on Estimates of Valuations Provided by Third Party Advisors Which May not be Accurate or May Need to be Adjusted in the Future

Generally, the managing member of the Investment Funds will have no ability to assess the accuracy of the valuations or other financial information received from each Investment Fund’s Advisors with respect to allocations not made through Managed Accounts or Portfolio Companies. In addition, the Investment Funds may allocate assets to Advisors that invest in assets that are difficult to value. The Company’s NAV will be affected by the valuations of these difficult-to-value assets. Although the managing member of the Investment Funds may obtain information provided by the Advisors about their NAVs, the managing member of the Investment Funds generally does not, and is not able to, confirm independently the accuracy of such valuations (which are generally unaudited except at year-end) except in the case of allocations made through Managed Accounts and Portfolio Companies. Most Advisors treat their investment positions as proprietary information and many of them will not provide such information to their investors. Furthermore, the NAVs received by the managing member of the Investment Funds from Advisors will typically be based on estimated or unaudited reports only, and such values generally will be used to calculate NAVs and fee accruals for purposes of determining amounts payable on redemption to the extent current audited information is not then available. In some cases, Advisors do not use independent administrators or other third party providers to value and report their NAVs. In such cases, the valuations used to determine the NAVs of these Advisors will be dependent solely upon the Advisors for validation, and even when third parties are involved, the Advisors may have primary responsibility for determining the values of the portfolio securities. The valuation reports will not be audited by third parties in most cases except at year-end. Valuations provided by each Investment Fund’s Advisors may be subject to later adjustment based on valuation information available at that time, including, for example, as a result of year-end audits or other valuation reviews conducted by an Advisor’s auditors. Furthermore, there is a risk that any valuation an Investment Fund receives from an Advisor will be fraudulent or may inadvertently contain material errors that the Investment Funds and, in turn, the Company would not know when it prepares its financial statements. Members should understand that the Company cannot prevent this risk since neither the Company nor the Investment Funds have access to the Advisors’ books and records. Neither the Company nor the Investment Funds is a party to any direct agreements with any Advisor providing the Company or the Investment Funds with a specific contractual recourse in the case where an Advisor has provided inaccurate or untimely valuations. Additionally, an Advisor may through its investment documents have sought to limit or eliminate its liability for inaccurate or untimely valuations entirely in which case the Company may not have any recourse. The Company has not entered into any direct agreements to indemnify any of the Advisors against such errors or omissions. Any such adjustments resulting from wrong valuations or errors in calculations may result in the Company restating its NAV or having to restate its financial statements at the time of such restatement, as well as for prior periods. Any such restatement, whether increasing or decreasing the NAV of the Company, could have a material impact on the NAV of Member’s Units. Members of the Company are assuming the risk that valuations may be materially incorrect and/or will need to be adjusted and Members should not retain their investment in the Company if they are unwilling to assume such risks. See “—General Risks—Risks Related to the Company and the Investment Funds’ Performance and Operation—Dependence on the Managing Member and the Advisors; the Managing Member Generally Has Limited Access to Information on or Control over Advisor’s Portfolios and Members Assume the Risk that Advisors May Knowingly Misrepresent Information Which Could Have a Material Negative Impact on the Company” above and “—Risks Associated with the Company Investing in Other Entities—Valuation of the Investment Funds’ Investments Will be Based Upon Valuations Provided by the Advisors Which are Generally not Audited; Uncertainties in Valuations Could Have a Material Adverse Effect on the Company’s Net Assets” below.

The Company follows materiality policies to handle certain NAV-related errors that occur in the Company’s and the Investment Fund’s operation (including, without limitation, errors made in the processing of subscriptions and redemptions). Members who purchase or redeem Units during periods in which errors accrue or occur may not be recompensed in connection with the resolution of the error. See ITEM 1. “BUSINESS—MANAGING MEMBER—Error and Error Correction Policy.”

If at any time the Managing Member determines, in its sole discretion, that an incorrect number of Units was issued to a Member because the NAV of the Company or the applicable series in effect on the date of issuance was

69

materially incorrect, the Managing Member will adjust such Member’s Units by increasing or decreasing them (by means of issuances of additional Units or compulsory redemptions of Units, in each case without additional consideration), as appropriate, to such number of Units as would have been issued at the correct NAV. In addition, if at any time after a redemption of Units (including in connection with any withdrawal of a Member from the Company) the Managing Member determines, in its sole discretion, that the amount paid to such Member or former Member pursuant to such redemption was materially incorrect (including because the NAV at which the Member or former Member purchased such Units was incorrect), the Company will pay to such Member or former Member any additional amount that it determines such Member or former Member would have been entitled to receive had the redemption been effected at the correct NAV, or, in its sole discretion, seek payment from such Member or former Member of (and such Member or former Member shall be required to pay) the amount of any excess payment that the Managing Member determines such Member or former Member received (including, without limitation, by compulsorily redeeming without consideration a number of Units held by such Member having a NAV equal to the amount of such excess payment), in each case without interest. If such a determination is made after a Member has had all of its Units redeemed, or if the NAV of a Member’s remaining Units is insufficient to cover the amount of any overpayment (including, without limitation, due to a decrease in the Company’s NAV), the Company may be unable, or may, under the circumstances, elect not, to collect the amount of any such excess payment, and any corresponding restatement of and reduction in the NAV of the Company will generally be borne by the remaining Members of the Company. The Company will be subject to similar adjustment provisions as a member of the Investment Funds.

The Other Business Activities and Relationships of Goldman Sachs and the Company’s Advisors May Create Conflicts of Interest

Goldman Sachs, including its affiliates and personnel, is a worldwide, full-service investment banking, broker-dealer, asset management and financial services organization, and a major participant in global financial markets. As a result, Goldman Sachs is engaged in many businesses and has interests in the global fixed income, currency, commodity, equity and other markets in addition to those related to the Company, including as an investor, investment banker, research provider, investment manager, financer, advisor, market maker, proprietary trader, prime broker, lender, agent and principal. Such additional businesses and interests likely will give rise to potential conflicts of interest. In addition, the activities of the Advisors and their respective affiliates, and their directors, trustees, managers, members, partners, officers and employees, for their own accounts and other accounts they manage, may give rise to conflicts of interest that could disadvantage the Company and its Members. A description of certain of such potential conflicts of interest is set forth under ITEM 1. “BUSINESS—POTENTIAL CONFLICTS OF INTEREST.”

Affiliates of Goldman Sachs and Members of the Company May Market and Trade Derivatives Linked to the Performance of the Company, Which May Adversely Affect the NAV of the Company

Affiliates of Goldman Sachs and certain Members may market and sell, from time to time, directly or indirectly, derivative instruments, the return on which tracks or is related to the economic performance of the Company. Sellers of such derivative instruments, including affiliates of Goldman Sachs, may seek to hedge the risk associated with their exposure thereunder by purchasing or redeeming Units from time to time, the NAV of which may represent a significant percentage of the Company’s NAV at any given time. Such trading may adversely affect the NAV of the Company. In particular, significant purchases and/or redemptions of Units over a concentrated period of time may result in high transaction costs and other operating inefficiencies in connection with the direct or indirect investment of the Company’s assets. Similar consequences could occur in the case of derivative instruments that track the performance of an Investment Fund.

The Company will be managed in accordance with its investment program and objective and wholly independent of considerations related to any such derivative instruments that are sold by any Member. Accordingly, the identity of, and the relative allocations of capital among, the Investment Funds and Advisors, as well as the manner of any reallocation of the Company’s assets and other investment management decisions (including, without limitation, in connection with the dissolution of the Company), will not take into account, and may run counter to, the terms or objectives of any such derivative instruments.

70

Special Risks of the Fund of Funds Structure

The following are certain risks related to the fact that the Company allocates assets to Investment Funds and Advisors.

Members of the Company are Subject to Multiple Levels of Fees and Expenses Because of the Company’s Structure, and the Fee Structure of the Company May Create Incentives for Advisors to Make Risky Investments

Although in many cases investor access to the Advisors of the Investment Funds may be limited or unavailable, an investor who meets the conditions imposed by an Advisor may be able to invest directly with the Advisor. By investing in Advisors indirectly through the Company, via the Investment Funds, the investor bears asset-based and performance-based fees at the Company level, in addition to any asset-based fees and performance-based fees and allocations at the Advisor level. Moreover, an investor in the Company bears a proportionate share of the fees and expenses of the Company (including organizational and offering expenses, operating costs, sales charges, brokerage transaction expenses, and administrative fees) and, indirectly, similar expenses of the Investment Funds and the Advisors. Thus, a Member of the Company will be subject to higher operating expenses than if the Member invested with the Advisors directly or in a fund that did not utilize a “fund of funds” structure. See ITEM 1. “BUSINESS—FEES AND EXPENSES.”

In addition to the Incentive Allocation payable to the Managing Member, the Investment Funds are subject to performance-based fees or allocations from each Advisor to which they allocate assets, irrespective of the performance of other Advisors, the Investment Funds and the Company generally. Accordingly, an Advisor with positive performance may receive performance-based compensation from an Investment Fund, and thus indirectly from the Members, even if such Investment Fund’s or the Company’s overall performance is negative.

Fixed fees, generally calculated and paid to Advisors monthly based upon the NAV of the allocation to such Advisor, are currently expected to range (on an annualized basis) from approximately 0% to 4%. Performance-based fees or allocations of Advisors are currently expected to range from 0% to 30% of the net capital appreciation in each individual Advisor’s investments for the year. However, each Investment Fund may, in the sole discretion of its managing member, allocate assets to Advisors that receive fixed and/or performance-based fees that materially exceed these percentages or that structure their compensation in materially different ways. The performance-based compensation received by the Managing Member, the managing member of the Investment Funds and an Advisor also may create an incentive for such managing member or Advisor to make investments that are riskier or more speculative than those that it might have made in the absence of the performance-based compensation. Because the performance-based compensation may in certain circumstances be based on calculations of realized and unrealized gains as determined by the person entitled to receive such compensation, certain inherent conflicts of interests and consequent risks can arise.

The Company Could Indirectly Incur Duplicative Transaction Costs Without Accomplishing a Net Investment Result

Investment decisions of the Advisors are generally made independently of each other. As a result, at any particular time, one Advisor may be purchasing securities of an issuer whose securities are being sold by another Advisor. Consequently, the Company and the Investment Funds could indirectly incur transaction costs without accomplishing any net investment result.

Compensation Arrangements With the Managing Member and the Advisors of the Investment Funds May Create Incentives for the Managing Member, the Investment Funds or the Advisors to Make Riskier Investments or to Inflate Returns

The Managing Member of the Company and the Investment Funds receives an incentive allocation based upon the net capital appreciation allocated to their members. In addition, the Advisors of the Investment Funds may receive compensation based on the performance of their investments, a pro rata share of which will be borne by the Company as a member of each Investment Fund. Accordingly, there often may be times when a particular Advisor of an Investment Fund may receive incentive compensation in respect of its portfolio for a period even though such

71

Investment Fund’s or the Company’s overall portfolio depreciated during such period. Incentive compensation arrangements may also create an incentive for the managing member of the Company and the Investment Funds or the Advisors to make investments that are riskier or more speculative than would be the case if such arrangements were not in effect. Such incentives could also cause the Advisors to artificially or fraudulently inflate the actual performance of their portfolio or the valuation of specific positions. In addition, because both the Managing Member’s Incentive Allocation and the performance-based compensation of the managing member of the Investment Funds and the Advisors are calculated on a basis which includes unrealized appreciation of the Company’s or an Investment Fund’s assets or a portion thereof, as the case may be, they may be greater than if such compensation were based solely on realized gains and losses.

Transactions Between and Among Funds May Be Undervalued and Negatively Affect the Company’s Performance

The managing member of the Investment Funds may determine that it is advisable to reallocate some or all of the Investment Funds’ assets away from one or more Advisor Funds in order to achieve the Investment Funds’ investment objectives. In certain cases, such Advisor Funds may be appropriate investments for one or more other investment funds or accounts managed by the managing member of the Investment Funds. Rather than redeeming the Investment Funds’ direct or indirect interests in such Advisor Funds, the managing member of the Investment Funds may attempt to transfer such interests to one or more investment funds or accounts managed by the managing member of the Investment Funds. Any such transfer would be effected at a price equal to the redemption price that otherwise would have been payable to the Investment Funds in respect of such Advisor Fund upon redemption of such interests. The transfer price may not take into account any value associated with the transfer of the Investment Funds’ investment holding period, if any, in an Advisor Fund, or the prior high NAV associated with the transferred interests.

The Investment Funds may allocate assets, directly or indirectly, to Advisor Funds that invest in assets that are difficult to value. If the Investment Funds transfer interests in such Advisor Funds, such interests generally will be valued in accordance with the terms of the Advisor Fund’s governing agreement, as such valuations are reported to the Investment Funds. However, given the nature of such investments, such valuations may not represent the actual amount that would be realized by the Advisor Fund upon a disposition of such investments. If such difficult-to-value assets are undervalued by the Advisor Fund, any transfer of interests in such Advisor Fund may adversely affect the Investment Funds’ and the Company’s performance.

Risks Associated with the Company Investing in Other Entities

Past Performance of Affiliated Funds and Advisors are not Necessarily Indicative of the Results that the Company and Any Investment Fund May Achieve or of Future Results

The past performance of the Investment Funds and other investment funds or accounts formed or managed by the GS Group, including other investment funds or accounts managed by the GS Group which have or have had investment objectives that are similar to those of the Company or the Investment Funds, are not necessarily indicative of the results that the Company or any Investment Fund may achieve. The Company makes indirect investments in a different portfolio of Advisors and securities than other investment funds and, accordingly, its results are independent of the previous results obtained by those funds. See ITEM 1. “BUSINESS—PERFORMANCE OF THE COMPANY—Certain Considerations Relating to Limited Capacity of Potential Advisors.” Further, the Company and each Investment Fund and their methods of operation may differ in several respects from prior GS Group investment vehicles or accounts; e.g., there are different investment and return objectives and investment allocation strategies and the Company and each Investment Fund utilizes a different mix of Advisors and, in certain cases, investment techniques. Similarly, the past investment performance of any of the Advisors with which the Investment Funds will invest or with which other investment funds or accounts managed by the GS Group invest should not be construed as an indication of the future results of such Advisors or of the Investment Funds. Potential investors that desire performance or related information with respect to the Company, Investment Funds or other investment funds formed or managed by the GS Group should contact the Managing Member.

72

A Member’s Investment in the Company will be Affected by the Investment Policies and Decisions of Advisors Which are Outside the Company’s Control

Because the Company generally invests its assets in Investment Funds, which in turn allocate assets to Advisors, a Member’s investment in the Company will be affected by the investment policies and decisions of the Advisors in direct proportion to the amount of an Investment Fund’s assets that are invested with each Advisor. The NAV of the assets allocated to Advisors, and as a result, the NAV of the Investment Funds and, in turn, the Company, will fluctuate in response to, among other things, investment decisions made by the Advisor, various market and economic factors related to the markets in which the Advisors invest and the financial condition and prospects of issuers in which the Advisors invest. These risks will be outside the control of the Company. Certain risks related to the investment strategies and techniques utilized by the Investment Funds and the Advisors are described under “—Investment Related Risks” below.

Limitations on Ability to Invest in Advisors May Result in Assets Not Being Used to Pursue Investment Objectives

In the event that the Investment Funds are able to allocate assets to Advisors only at certain times, the Investment Funds may hold cash or invest any portion of their assets that is not allocated to Advisors in cash equivalents, short-term securities or money market securities pending investment in Advisors. During the time that the Company’s assets are not allocated to Advisors, that portion of the Company’s assets will not be used to pursue the Investment Funds’ and, in turn, the Company’s investment objective.

Valuation of the Investment Funds’ Investments Will be Based Upon Valuations Provided by the Advisors Which are Generally not Audited; Uncertainties in Valuations Could Have a Material Adverse Effect on the Company’s Net Assets

The valuation of an Investment Fund’s investments is ordinarily determined based upon monthly valuations provided by the Advisors which are only audited annually. Many of the securities in which Advisors invest may not have a readily ascertainable market price and will be valued by the Advisors without an independent third party valuation. In this regard, an Advisor may face a conflict of interest in valuing the securities, as their value will affect the Advisor’s compensation. Valuations of the securities are very subjective and could prove in hindsight to have been wrong, and at times by significant amounts. Furthermore, the managing member of the Investment Funds may face a conflict of interest in overseeing the value of the Investment Funds’ investments, as the value of the Investment Funds’ investments will affect such managing member’s compensation. Although prior to investing in any Advisor, the managing member of the Investment Funds generally will seek to conduct a due diligence review of the valuation methodology utilized by such Advisor, no assurances can be given that the managing member of the Investment Funds will be given access to necessary aspects of the Advisors’ systems, that such due diligence review will ascertain whether accurate valuations will be provided by such Advisors to the Investment Funds, that the Advisors will comply with their own internal policies or procedures for keeping records or making valuations, or that the Advisors policies and procedures and systems will not change without notice to the Investment Funds. Moreover, the managing member of the Investment Funds will generally not have sufficient information in order to be able to confirm or review the accuracy of valuations provided by Advisors to whom an Investment Fund allocates assets. See “—General Risks—Risks Related to the Company and the Investment Funds’ Performance and Operation—Dependence on the Managing Member and the Advisors; the Managing Member Generally Has Limited Access to Information on or Control over Advisor’s Portfolios and Members Assume the Risk that Advisors May Knowingly Misrepresent Information Which Could Have a Material Negative Impact on the Company” above.

The NAV of any Advisor Fund, Portfolio Company or Managed Account as of a particular date may be materially greater than or less than the NAV of such Advisor Fund, Portfolio Company or Managed Account that would be determined if its assets were to be liquidated as of such date. For example, if an Advisor Fund, Portfolio Company or Managed Account were required to sell a certain asset or all or a substantial portion of its assets on a particular date, the actual price that such Advisor Fund, Portfolio Company or Managed Account would realize upon the disposition of such asset or assets could be materially less than the value of such asset or assets as reflected in the NAV of the Advisor Fund, Portfolio Company or Managed Account. Volatile market conditions could also cause reduced liquidity in the market for certain assets, which could result in liquidation values that are materially

73

less than the values of such assets as reflected in the NAV of the Advisor Fund, Portfolio Company or Managed Account.

The managing member of an Investment Fund may allocate assets to Advisors that invest in assets that lack a readily ascertainable market value, and the NAV of the Investment Fund will be affected by the valuations of any such assets (including, without limitation, in connection with calculations of any management fee or performance-based fee or allocation at the Investment Fund level). In valuing assets that lack a readily ascertainable market value, Advisors (or affiliated or independent agents thereof) may utilize dealer supplied quotations or pricing models developed by the Advisor, affiliates of the Advisor and/or third parties, including GS HFS or affiliates of GS HFS). Such methodologies may be based upon assumptions and estimates that are subject to error. Given the uncertainty inherent in the valuation of assets that lack a readily ascertainable market value, the value of such assets as reflected in the NAV of an Investment Fund may differ materially from the prices at which the applicable Advisor would be able to liquidate the assets.

The value of assets that lack a readily ascertainable market value may be subject to later adjustment based on valuation information available to the applicable Advisor at that time including, for example, as a result of year-end audits. Any adjustment to the value of such assets may result in an adjustment to the NAV of an Investment Fund and in turn the Company. See “—Risks Related to the Company’s Structure—The Company’s Financial Statements are, and in the Future Will Ultimately be, Based on Estimates of Valuations Provided by Third Party Advisors Which May not be Accurate or May Need to be Adjusted in the Future” above.

The NAVs or other valuation information received by the managing member of the Investment Funds from an Advisor may require estimations of the value of certain assets and liabilities, and may be subject to later adjustment or revision by the Advisor, which adjustment or revisions may be significant. Any such adjustment or revision may result in either an increase or decrease in the NAV of the Company at the time the Company is provided with information regarding the adjustment, which adjustment or revision may be significant. If an Advisor’s valuations are consistently delayed or inaccurate, the managing member of the Investment Funds will consider whether the Advisor continues to be an appropriate manager of Investment Fund assets. However, the managing member of the Investment Funds may elect in its sole discretion to retain the Advisor. The Advisor’s information could be inaccurate due to Fraudulent Activities, misvaluation or inadvertent error. In any case, the Investment Funds may not uncover errors for a significant period of time. If this occurs in connection with an investment in an Advisor Fund, the Investment Fund may be unable to sell interests in an Advisor Fund quickly, and therefore could be obligated to continue to hold such interests for an extended period of time. In such a case, or in the event that the managing member of the Investment Funds does not receive a valuation from an Advisor Fund, or determines, in its sole discretion, that a valuation is inaccurate or incomplete, the managing member of the Investment Funds may, in its sole discretion, determine the fair value of an Investment Fund’s interests in the Advisor Fund independently of the Advisor’s valuations based on information available to, and factors deemed relevant by, the managing member of the Investment Funds at the time of such valuation. Members should be aware that situations involving uncertainties as to the valuations by Advisors could have a material adverse effect on the Company’s net assets if the managing member of the Investment Funds or the Advisor’s judgments regarding valuations should prove incorrect. Members who are unwilling to assume such risks should not retain their investment in the Company. See “—Risks Related to the Company’s Structure—The Company’s Financial Statements are, and in the Future Will Ultimately be, Based on Estimates of Valuations Provided by Third Party Advisors Which May not be Accurate or May Need to be Adjusted in the Future” above.

Investment Fund Allocations to Advisor Funds are Difficult to Monitor and Control

Each Investment Fund may invest all or a substantial portion of its assets in Advisor Funds, rather than allocating assets via Portfolio Companies or directly to Advisors pursuant to Managed Accounts. It is expected that the managing member of the Investment Funds generally will have less ability to monitor investments in the Advisor Funds, to obtain full and current information and to exercise control rights over such investments than with respect to allocations of assets to Portfolio Companies or Managed Accounts. This could have a material adverse effect on the performance of such investments and, therefore, on the performance of the Investment Funds and the Company.

74

Trading in Investments May be Illiquid Which May Cause Substantial Losses and May Negatively Impact the Ability to Make Distributions to a Withdrawing or Redeeming Member

Some investment positions in which the Investment Funds have an interest will be illiquid. The Advisors may invest in restricted or non-publicly traded securities, securities on foreign exchanges and futures. These positions may be illiquid because certain exchanges limit fluctuations in certain securities and futures contract prices during a single day by regulations referred to as “daily price fluctuation limits” or “daily limits.” Under such daily limits, during a single trading day no trades may be executed at prices beyond the daily limits. Once the price of a particular security or futures contract has increased or decreased by an amount equal to the daily limit, positions in that security or contract can neither be taken nor liquidated unless traders are willing to effect trades at or within the limit.

The above-described circumstances could prevent the Advisors of an Investment Fund from liquidating unfavorable positions promptly and subject such Investment Fund and, in turn, the Company, to substantial losses. This could also impair the Company’s ability to redeem its membership Units in an Investment Fund in order to make distributions to a withdrawing or redeeming Member in a timely manner.

Advisor Redemption Holdbacks and Other Advisor Fund Liquidity Restrictions May Adversely Affect Remaining Members

From time to time, the managing member of an Investment Fund may be unable to liquidate the Investment Fund’s assets as it otherwise deems advisable in order to pay redemption requests made by the Company due to a number of factors including, without limitation, minimum holding periods and restrictions on redemptions imposed by the Advisor Funds or Advisors (including but not limited to the use of longer notice periods and less frequent redemption dates than those offered by the Company and the Investment Funds, holdbacks, and the segregation of assets by the Advisors through the use of “side-pockets”). At any given time, assets of an Investment Fund that cannot be redeemed to meet current redemption requests may constitute a substantial portion of the Investment Fund’s portfolio. See “—The Company has Limited Liquidity and Limited Rights for Redemption” above. As a result, the managing member of an Investment Fund may be required to redeem interests from more liquid Advisor Funds or Portfolio Companies in order to meet redemption requests, which could result in an Investment Fund holding a greater concentration of less liquid assets than was previously the case or in the Investment Fund incurring additional costs in connection with the redemption. This could have an adverse effect on the Investment Fund’s portfolio mix and liquidity for remaining members which could potentially include the Company. Significant amounts of redemption requests by investors in an Investment Fund that are not offset by new subscriptions could cause the Investment Fund to postpone or suspend redemptions. The Investment Fund’s inability to liquidate its interests in such less liquid assets may also have a material adverse effect on the Investment Fund’s ability to reallocate assets.

The Company will endeavor to pay redemption proceeds to a redeeming Member within 45 days following the applicable Redemption Date (as defined below). For various reasons, however, including the suspension or delay in payment of redemption proceeds by Advisor Funds and the holdback of a portion of the redemption proceeds otherwise payable to the Company until after the applicable underlying Advisor Fund’s financial records have been audited, the Company may not receive redemption proceeds otherwise expected by it prior to the Company’s payout of proceeds to redeeming Members. Therefore, at the time the Company pays redemption proceeds to a redeeming Member, the Company may hold receivables that may not be paid to the Company for a significant period of time, may not accrue any interest, and ultimately may not be paid to the Company (as a result of post-audit adjustments or for other reasons). During the time that the Company’s assets include such receivables, that portion of the Company’s assets cannot be used to pursue the Company’s investment objective. In addition, in cases in which Investment Funds or Advisor Funds limit or reduce the Company’s redemption request, the Company may continue to have investment exposure to Advisor Funds or Advisors that it would otherwise have redeemed. This could have an adverse effect on the performance of the Company.

The NAV used by the Company to determine the redemption price payable to a redeeming Member generally will include the full value of any receivables due the Company without any discount or reduction, notwithstanding the fact that such receivables do not accrue interest and may ultimately not be paid to the Company by an Investment

75

Fund. If an Investment Fund later determines that a portion or all of such a receivable is no longer payable to the Company or the value of the receivable is otherwise impaired, the Company and the non-redeeming Members may be adversely affected because the Company may be unable, or may elect not, to collect the amount of any over-payment made to a redeeming Member. See “—Risks Related to the Company’s Structure—The Company’s Financial Statements are, and in the Future Will Ultimately be, Based on Estimates of Valuations Provided by Third Party Advisors Which May not be Accurate or May Need to be Adjusted in the Future” above. Any corresponding restatement of and reduction in the NAV of the Company will be borne by the non-redeeming Members.

Managed Account Allocations Expose the Investment Funds to Liability Exceeding Allocations

The Investment Funds may place assets with a number of Advisors by opening Managed Accounts (either directly or via Portfolio Companies). It is possible, given the leverage at which certain of the Advisors of an Investment Fund will trade, that allocations of an Investment Fund to an Advisor through a Managed Account could result in losses that exceed the amount the Investment Fund had allocated to such Advisor to invest. Therefore, Managed Accounts expose the Investment Funds to theoretically unlimited liability. This risk is also applicable to allocations made by the Investment Funds to Portfolio Companies because of the possibility that the limited liability provided by Portfolio Companies could be successfully challenged based on various legal theories which could be proffered.

An Investment Fund May Not be Able to Vote or May Limit its Voting Abilities

The managing member of an Investment Fund may determine, in its sole discretion, to limit the Investment Fund’s voting interest in certain Advisor Funds, including, without limitation, in order to allow other investment vehicles managed by the managing member or its affiliates to avoid becoming subject to certain Investment Company Act prohibitions with respect to affiliated transactions. To the extent the Investment Fund holds non-voting securities, or contractually forgoes the right to vote in respect of the voting securities of an Advisor Fund, the Investment Fund will not be able to vote on matters that require the approval of the interestholders of the Advisor Fund, including matters adverse to the interests of the Investment Fund and its members, including the Company.

Lack of Operating History of Certain Advisors; Past Performance of Advisors is not Indicative of Future Results

Certain of the Advisors have short or limited or even no operating histories. In addition, the information the managing member of an Investment Fund has and will obtain about an Advisor may be limited. As such, the ability of the managing member of an Investment Fund to evaluate past performance or to validate investment strategies of such Advisors will be limited. Moreover, even to the extent an Advisor has a long operating history, the past investment performance of any of the Advisors should not be construed as an indication of the future results of the Advisors or of the Investment Funds or the Company. In addition, the investment professionals within the Advisors and their strategies may change over time. This risk is related to, and enhanced by, the risks created by the fact that the managing member of an Investment Fund relies upon information provided to it by the Advisors that is not, and cannot be, independently verified.

Advisors Invest Independently and May Hold Economically Offsetting Positions

Each of the Advisors generally makes investment decisions wholly independently of other Advisors and may at times hold, or cause the Company and/or the Investment Funds to hold, economically offsetting positions. To the extent that the Advisors, the Company and/or the Investment Funds do, in fact, hold such positions, the Company, may not achieve any gain or loss despite incurring fees and expenses in connection with such positions. In addition, an Advisor may be compensated based on the performance of its portfolio. Accordingly, there may often be times when a particular Advisor may receive performance or incentive compensation in respect of its portfolio for a period even though an Investment Fund’s or the Company’s NAV may not have increased, or may even have decreased, during such period. Furthermore, it is possible that, from time to time, various Advisors may be competing with each other for the same positions in one or more markets. There can be no assurance that choosing a combination of Advisors for an Investment Fund will prove to be any more successful than would the selection of a single Advisor for such Investment Fund.

76

Advisors May Have Limited Capacity to Manage Additional Investment Fund Investments, Which Could Cause Dilution or Concentration of the Company’s Investments or Negatively Affect Allocation of Investments

Certain Advisors’ trading approaches presently can accommodate only a limited amount of capital. Accordingly, each Advisor has the right to refuse to manage some or all of the Investment Funds’ assets that the managing member of an Investment Fund may wish to allocate to such Advisor. Further, in the case of Advisors that limit the amount of additional capital that they will accept from an Investment Fund, continued sales of membership units of such Investment Fund and interests of Advisor Funds in which such Investment Fund invests would dilute the indirect participation of existing members of such Investment Fund, including the Company, with such Advisors. See ITEM 1. “BUSINESS—PERFORMANCE OF THE COMPANY—Certain Considerations Relating to Limited Capacity of Potential Advisors of Certain Investment Funds.” Due to the asset-based fees that Advisors will normally be entitled to receive, Advisors may have an incentive to accept additional capital and may do so even where their respective investment programs cannot accommodate such additional capital.

In determining capital allocations among Advisors, the managing member of the Investment Funds may consider, among other factors, constraints on an Advisor’s capital capacity. See ITEM 1. “PERFORMANCE OF THE COMPANY—Certain Considerations Relating to Limited Capacity of Potential Advisors.” Advisors may in their discretion also limit the capacity available to the Company or other investment funds or accounts managed by the Managing Member or its affiliates after a specific date. In these cases, the managing member of the Investment Funds, in order to provide for long-term management of the Investment Funds, may determine to increase the Investment Funds’ investments in an Advisor more than would otherwise be the case. Such allocations may result in the Investment Funds’ portfolio being more concentrated from time to time and for substantial periods of time. As a result of any such concentration, the Investment Funds’ portfolio may be subject to more rapid changes in value than would be the case if the Investment Funds’ portfolio were less concentrated and the economic returns of the Investment Funds and the Company may thereby be materially adversely affected.

In determining how to allocate investment opportunities among the Investment Funds and any other investment funds or accounts, the managing member will take into account the investment objectives of each such investment fund or account, the capital capacity of the Advisors, and such other considerations as deemed relevant in its sole discretion. Certain Advisors to which the Investment Funds have previously allocated assets may be closed to new investments or may otherwise limit subscriptions (a “Closed Advisor”). The managing member of the Investment Funds may determine, for various reasons, including without limitation, strategic fit and other portfolio construction considerations, that a Closed Advisor is more appropriately included as part of the portfolio of another of its investment funds or accounts rather than the Investment Funds. In such event, the managing member of the Investment Funds may cause the Investment Funds to transfer interests in such Closed Advisor to another investment fund or account managed by the managing member of the Investment Funds, notwithstanding that such Closed Advisor may continue to be an appropriate investment for the Investment Funds. Any such transfer may give rise to potential conflicts of interest. Any such transfer would be effected at a price equal to the redemption price that otherwise would have been payable to the Investment Fund in respect of such Closed Advisor upon redemption of such interests. The transfer price will not take into account any value associated with the transfer of the Investment Fund’s investment holding period, if any, in a Closed Advisor, or the prior high NAV associated with the transferred interests.

Advisor Funds’ Securities are Generally Illiquid Which May Increase Costs and Limit Redemptions

The securities of the Advisor Funds in which the Investment Funds (directly or through Advisors) invest or plan to invest may be illiquid. Subscriptions to purchase the securities of Advisor Funds are generally subject to restrictions or delays. In addition, the Investment Funds may be limited in their ability to make changes to allocations due to potential redemption restrictions of the Advisor Funds, including notice periods and limited redemption dates, the ability of the Advisor Funds to suspend and postpone redemptions, and lockups on redemptions of securities of the Advisor Funds. Further, the Advisor may not be able to dispose of Advisor Fund securities that it has purchased in a timely manner and, if adverse market conditions were to develop during any period in which the Advisor is unable to sell Advisor Fund securities, the Advisor might obtain a significantly less favorable price than that which prevailed when it decided to buy or sell such securities.

77

Frequent Trading and Turnover Typically Result in High Transaction Costs and the Investment Funds Have No Control Over This Turnover

It is expected that Advisors will make frequent trades in securities and other investments. Frequent trades typically result in high transaction costs. The Advisors may invest on the basis of short-term market considerations. The turnover rate within the Advisors may be significant, potentially involving substantial brokerage commissions and fees. The Investment Funds and, in turn, the Company will have no control over this turnover. As a result, it is anticipated that a significant portion of the Company’s income and gains, if any, may be derived from ordinary income and short-term capital gains. In addition, the withdrawal of an Investment Fund from an Advisor could involve expenses to the Investment Fund under the terms of the Investment Fund’s investment with that Advisor.

Indemnification of Advisors May Create Costs for the Company and the Investment Funds

The Company and the Investment Funds may agree to indemnify certain of the Advisors and their respective officers, directors, and affiliates from any liability, damage, cost, or expense arising out of or in connection with, among other things, (i) acts or omissions relating to the offer or sale of Units by the Investment Funds and (ii) services provided by the Advisors directly or indirectly on behalf of the Company. In addition, Advisor Funds and Portfolio Companies in which the Company and the Investment Funds invest may also agree to indemnify Advisors and their respective officers, directors, and affiliates. Any such indemnification obligations incurred directly or indirectly by the Company may adversely affect the Company’s performance. Currently, neither the Company nor the Investment Funds is a party to any direct indemnification agreements with Advisors. Accordingly, the Company and the Investment Funds are under no direct contractual obligation to indemnify any of the Advisors against inaccurate or untimely valuations of investments or NAV and although the Company and the Investment Funds may, the Company and the Investment Funds currently do not intend to, enter into any such direct indemnification agreements with Advisors.

Allocation of the Company’s Assets May Not Protect the Company from Exposure to Economic Downturns in Any Investment Fund or Investment Sector

The Managing Member establishes allocations among the Investment Sectors in a manner consistent with the Company’s investment objective. The identity of, and relative investments of capital among, the Investment Sectors will be determined by the Managing Member, in its sole discretion, based on factors deemed relevant to the Managing Member, which may include the amount of the Company’s assets under management, constraints on the capital capacity of the Investment Fund and Advisors, the availability of attractive opportunities, and other portfolio construction considerations. There is no assurance that the Managing Member’s allocation decisions will be successful. In addition, the Managing Member’s ability to make ongoing changes to the allocation of the Company’s assets will be limited due to the redemption provisions of the Investment Funds in which the Company’s assets are invested, including limited redemption dates, notice periods, minimum holding periods, minimum holding amounts, and/or the possibility of postponement or suspension of redemptions. Any such limitation may be significant. These factors could have an adverse effect on the ability of the Company to successfully and efficiently achieve its investment objective or a market position appropriately reflecting its asset base.

Investment Related Risks

Following is a discussion of certain of the investments that are expected to be made by the Advisors of the Investment Funds and certain of the principal risks associated with such investments. It is possible that an Advisor will make an investment that is not described below, and any such investment will be subject to its own particular risks.

78

Risks Related to Investment and Trading

An Investment in the Company Involves a High Degree of Risk That the Entire Amount Invested May be Lost; Investment Results May Vary Substantially over Time

An investment in the Company involves a high degree of risk, including the risk that the entire amount invested may be lost. The Advisors will invest in and actively trade financial instruments using highly complex strategies and investment techniques with significant risk characteristics, including risks arising from the volatility of the fixed income, commodity, currency and equity markets, risks of concentration, risks of short sales, risks of leverage, risks arising from the potential illiquidity of derivative instruments and the potential illiquidity of certain emerging markets, the risk of loss from counterparty and broker defaults, risk of inaccuracy of information received from Advisors and the risk of borrowing to meet redemption requests. No guarantee or representation is made that the Company’s, the Investment Funds’ or the Advisors’ investment programs will be successful, that the various investment strategies utilized or investments made will have low correlation with each other or that the Company’s returns will exhibit low correlation with an investor’s traditional investment portfolio. Each Advisor’s investment program may utilize such investment techniques as margin transactions, option transactions, short sales, forward contracts and futures contracts, which involve substantial volatility and can, in certain circumstances, substantially increase the adverse impact to which the Investment Funds and the Company may be subject. All investments made by the Company risk the loss of capital. Investment results may vary substantially over time. See ITEM 1. “BUSINESS—INVESTMENT PROGRAM.”

PAST RESULTS OF THE COMPANY, THE INVESTMENT FUNDS, AND THE ADVISORS ARE NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE. NO ASSURANCE CAN BE MADE THAT PROFITS WILL BE ACHIEVED OR THAT SUBSTANTIAL LOSSES WILL NOT BE INCURRED.

The Advisors May be Unable to or May Choose not to Seek to Achieve their Investment Goals; Advisors May Not be Able to Locate Suitable Investment Opportunities

Many of the Advisors will, among other things, seek to utilize specialized investment strategies, follow allocation methodologies, apply investment models or assumptions, achieve a certain level of performance relative to specified benchmarks, and enter into hedging and other strategies intended, among other things, to affect the Advisors’ performance, risk levels, and/or market correlation. There can be no assurance that any Advisor will have success in achieving any goal related to such practices. The Advisors may be unable to, or may choose in their judgment not to seek to, achieve such goals. In addition, there is a risk that Advisors may invest outside their strategies, which could have a negative impact on the Advisors’ performance and in turn on the Company.

The success of an Advisor’s trading activities will depend on, among other things, the Advisor’s ability to identify overvalued and undervalued investment opportunities and to exploit price discrepancies in the capital markets. Identification and exploitation of the investment strategies to be pursued by an Advisor involves a high degree of uncertainty. No assurance can be given that the Advisors will be able to locate suitable investment opportunities in which to deploy all their capital. A decline in, or lack of volatility and pricing inefficiency of, the markets in which an Advisor seeks to invest, as well as other market factors, may reduce the number and scope of investment opportunities available to an Advisor.

Competition

The Advisors compete with a large number of firms. Competitive investment activity by other firms tends to reduce the Advisors’ opportunities for profit by reducing the magnitude as well as the duration of the market inefficiencies which they seek to exploit.

The Use of Leverage May Substantially Increase the Adverse Impact to Which the Investment Funds’ Investment Portfolios May be Subject

As described under ITEM 1. “BUSINESS—PERFORMANCE OF THE COMPANY—Hedging, Leverage and Other Strategies,” it is expected that the Investment Funds and the Advisors will incur leverage in various forms. Such leverage may take the form of loans for borrowed money, trading on margin or other forms of direct and

79

indirect borrowings, or derivative instruments, including, among others, forward contracts, futures contracts, options, swaps and reverse repurchase agreements, and other instruments and transactions that are inherently leveraged. The utilization of leverage will increase the volatility of the Company’s investments. The managing member of the Investment Funds may seek to adjust the degree of leverage with which each Investment Fund as a whole invests by taking the Advisors’ anticipated leverage use into account when allocating and reallocating the Investment Fund’s assets among the Advisors. However, the managing member of the Investment Funds generally will not have any right to adjust the amount of leverage utilized by any of the Advisors, and generally does not exercise such right if available. In the discretion of its managing member, an Investment Fund may make an investment in an Advisor Fund through a swap, option or otherwise in a manner structured to provide greater leverage than a direct investment in the Advisor Fund, which may increase the risks to the Investment Fund relative to a direct investment in the Advisor Fund.

In addition, the Advisors may buy and sell securities on margin and otherwise utilize leverage, further increasing the volatility of the Company’s direct or indirect investments. The use of leverage by the Investment Funds, Advisor Funds, Portfolio Companies or Advisors can substantially increase the adverse impact to which the Company’s investment portfolio may be subject. Trading securities on margin results in interest charges and, depending on the amount of trading activity, such charges could be substantial. The level of interest rates generally, and the rates at which the Investment Funds, Advisor Funds, Portfolio Companies and Advisors can borrow in particular, can affect the operating results of the Company. The low margin deposits normally required in futures and forward trading permit a high degree of leverage; accordingly, a relatively small price movement in a futures contract can result in immediate and substantial losses to the investor. Such a high degree of leverage necessarily entails a high degree of risk. In the event that an Investment Fund or a Portfolio Company enters into an investment management agreement with an Advisor that utilizes leverage in its investment program, the Investment Fund or Portfolio Company may become subject to claims by financial intermediaries that extended “margin” loans to such Advisor in respect of the applicable Managed Account. Such claims could exceed the value of the assets allocated to such Advisor by the Investment Fund or Portfolio Company. The risks involved in the use of leverage are increased to the extent an Investment Fund leverages its capital. The Company generally will not utilize leverage directly, although it may borrow to, among other things, fund redemptions and pay expenses.

The rights of any lenders to the Company, Investment Funds, Advisor Funds and Portfolio Companies to receive payments of interest or repayments of principal will be senior to those of the Members or the investors in such entities, and the terms of any borrowings may contain provisions that limit certain activities of such entities or the Advisors, including the ability to make distributions.

Convergence Risk May Result in Significant Losses of the Investment Funds and the Company

Certain Advisors will take long positions in securities believed to be undervalued and short positions in securities believed to be overvalued. In the event that the perceived mispricings underlying one or more Advisors’ trading positions were to fail to converge toward, or were to diverge further from, relationships expected by such Advisors, the Investment Funds and the Company may incur significant losses.

Possible Effects of Speculative Position Limits Could Adversely Affect the Operations and Profitability of the Investment Funds and the Company

The CFTC, the U.S. commodities exchanges and certain offshore commodity exchanges have established limits referred to as “speculative position limits” or “position limits” on the maximum net long or net short (or, for some commodities, the gross) positions which any person or group of persons may own, hold or control in certain futures or options contracts. No such limits presently exist in the forward contract markets or on most non-U.S. exchanges.

Under currently applicable regulations, each of the Investment Funds that allocates its assets to Advisors who, through Managed Accounts or Portfolio Companies, trade in commodities on behalf of the Investment Fund could be required to comply with position limits as if it were a single trader, absent obtaining exemptive relief therefrom. Many of the major U.S. exchanges have eliminated speculative position limits and have substituted position accountability rules that would permit Advisors of an Investment Fund to trade without restriction as long as the

80

Advisor can demonstrate the positions acquired were not acquired for the purpose of manipulating the market. To the extent a single speculative position limit is not applicable to the Advisors’ trading in any or all futures, the different Advisors of an Investment Fund are able to acquire larger positions on behalf of such Investment Fund. Absent such exemptive relief or exchange rule changes, the position limits, especially in certain markets, may be quite restrictive. There can be no assurance that exemptive relief will continue to be available. The modification of trading strategies or liquidation of positions by the Advisors, if required to comply with position limits, could adversely affect the operations and profitability of the Investment Funds and therefore the Company.

The Commodity Exchange Act provides that trading done by persons directly or indirectly under the same control or trading as one pursuant to an expressed or implied agreement or understanding will be aggregated for determining compliance with applicable position limits. There is a possibility that the positions held by some or all Advisors of an Investment Fund that, through Managed Accounts or Portfolio Companies, trade in commodities on behalf of the Investment Fund and their respective principals could be aggregated under one of the foregoing principles or applicable exchange regulations with those held by certain other Advisors of such Investment Fund. If a commodity exchange or any other regulatory body were to aggregate the positions held by certain Advisors of an Investment Fund, it may have a material adverse effect on the ability of each of the affected Advisors to trade in such markets.

Short Selling Creates the Risk of Significant Losses

Advisors may engage in short selling. Short selling involves selling securities that may or may not be owned and borrowing the same securities for delivery to the purchaser, with an obligation to replace the borrowed securities at a later date. Short selling allows the investor to profit from declines in the value of securities. A short sale creates the risk of a theoretically unlimited loss, in that the price of the underlying security could theoretically increase without limit, thus increasing the cost of buying those securities to cover the short position. There can be no assurance that the security necessary to cover a short position will be available for purchase. Purchasing securities to close out the short position can itself cause the price of the securities to rise further, thereby exacerbating the loss.

The Ability of an Investment Fund to Hedge Successfully will Depend on the Particular Advisor’s Ability to Predict Pertinent Market Movements Which Cannot be Assured

Advisors and Advisor Funds may or may not employ hedging techniques. These techniques could involve a variety of derivative transactions, including futures contracts, exchange-listed and over-the-counter put and call options on securities, financial indices, forward foreign currency contracts, and various interest rate transactions (collectively, “Hedging Instruments”). Hedging techniques involve risks different than those of underlying investments. In particular, the variable degree of correlation between price movements of Hedging Instruments and price movements in the position being hedged creates the possibility that losses on the hedge may be greater than gains in the value of an Investment Fund’s positions. In addition, certain Hedging Instruments and markets may not be liquid in all circumstances. As a result, in volatile markets, transactions in certain of these instruments may not be able to be closed out without incurring losses substantially greater than the initial deposit. Although the contemplated use of these instruments should tend to minimize the risk of loss due to a decline in the value of the hedged position, at the same time they tend to limit any potential gain that might result from an increase in the value of such position. The ability of the Advisors to hedge successfully will depend on the ability of the Advisors to predict pertinent market movements, which cannot be assured. Advisors are not required to hedge and there can be no assurance that hedging transactions will be available or, even if undertaken, will be effective. In addition, it is not possible to hedge fully or perfectly against currency fluctuations affecting the value of securities denominated in non-U.S. currencies because the value of those securities is likely to fluctuate as a result of independent factors not related to currency fluctuations. Finally, the daily variation margin deposit requirements in futures contracts that may be sold by the Advisor or Advisor Funds would create an ongoing greater potential financial risk than would options transactions, where the exposure is limited to the cost of the initial premium and transaction costs paid by the Advisor or Advisor Funds.

81

Forward Contracts May Entail Significant Risks and Uncertainties Which Could Result in Substantial Losses to the Investment Funds and the Company

Advisors may enter into forward contracts, which are the purchase or sale of a specific quantity of a commodity, government security, foreign currency, or other financial instrument at the current or spot price, with delivery and settlement at a specified future date. Because it is a completed contract, a purchase forward contract can be a cover for the sale of a futures contract. The Advisors may enter into forward contracts for hedging purposes and non-hedging purposes (i.e., to increase returns). Forward contracts are transactions involving an Advisor’s obligation to purchase or sell a specific instrument at a future date at a specified price. Forward contracts may be used by the Advisors for hedging purposes to protect against uncertainty in the level of future foreign currency exchange rates, such as when an Advisor anticipates purchasing or selling a non-U.S. security. For example, this technique would allow the Advisor to “lock in” the U.S. dollar price of the security. Forward contracts may also be used to attempt to protect the value of an Advisor’s existing holdings of non-U.S. securities. There may be, however, an imperfect correlation between an Advisor’s non-U.S. securities holdings and the forward contracts entered into with respect to those holdings. Forward contracts may also be used for non-hedging purposes to pursue an Advisor’s investment objective, such as when an Advisor anticipates that particular non-U.S. currencies will appreciate or depreciate in value, even though securities denominated in those currencies are not then held in the Advisor’s portfolio. There is no general requirement that the Advisors hedge all or any portion of their exposure to foreign currency risks.

Forward contracts and options thereon, unlike futures contracts, are not traded on exchanges and are not standardized; rather, banks and dealers act as principals in these markets, negotiating each transaction on an individual basis. Forward and “cash” trading is substantially unregulated; there is no limitation on daily price movements and speculative position limits are not applicable. The principals who deal in the forward markets are not required to continue to make markets in the currencies or commodities they trade and these markets can experience periods of illiquidity, sometimes of significant duration. There have been periods during which certain participants in these markets have refused to quote prices for certain currencies or commodities or have quoted prices with an unusually wide spread between the price at which they were prepared to buy and that at which they were prepared to sell. Disruptions can occur in any market traded by an Advisor due to unusually high trading volume, political intervention or other factors. Arrangements to trade forward contracts may be made with only one or a few counterparties, and liquidity problems therefore might be greater than if such arrangements were made with numerous counterparties. Significant risks and uncertainties exist in dealing with counterparties in forward contracts. The imposition of controls by governmental authorities might also limit such forward (and futures) trading to less than that which the Advisors would otherwise recommend, to the possible detriment of the Advisor and therefore the applicable Investment Fund and the Company. Market illiquidity or disruption could result in major losses to an Investment Fund and the Company. In addition, Managed Accounts or Advisor Funds in which an Investment Fund has an interest may be exposed to credit risks with regard to counterparties with whom the Advisors trade as well as risks relating to settlement default. Such risks could result in substantial losses to the Investment Funds and the Company.

Swap Agreements May Increase or Decrease the Overall Volatility of an Investment Fund’s Portfolio

Advisors and Advisor Funds may enter into equity, interest rate, index, currency rate, total return, and other types of swap agreements. The transactions are entered into in an attempt to obtain a particular return without the need to actually purchase the reference asset. Swap agreements can be individually negotiated and structured to include exposure to a variety of different types of investments or market factors. Depending on their structure, swap agreements may increase or decrease an Investment Fund’s exposure to long-term or short-term interest rates (in the United States or abroad), foreign currency values, mortgage securities, corporate borrowing rates, or other factors such as security prices, baskets of securities, or inflation rates. Swap agreements can take many different forms. Advisors and Advisor Funds are not limited to any particular form of swap agreement.

Swap agreements are two-party contracts entered into primarily by institutional investors for periods ranging from a few weeks to more than a year. In a standard swap transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments, which may be adjusted for an interest factor. The gross returns to be exchanged or “swapped” between the parties are

82

generally calculated with respect to a “notional amount” (i.e., the return on or increase in value of a particular U.S. dollar amount invested at a particular interest rate, in a particular foreign currency, or in a “basket” of securities representing a particular index).

Swap agreements will tend to shift investment exposure from one type of investment to another. For example, if an Advisor agrees to exchange payments in U.S. dollars for payments in foreign currency, the swap agreement would tend to decrease the Company’s exposure to U.S. interest rates and increase its exposure to foreign currency and interest rates. Depending on how they are used, swap agreements may increase or decrease the overall volatility of an Investment Fund’s portfolio.

Most swap agreements entered into by an Advisor or Advisor Fund would require the calculation of the obligations of the parties to the agreements on a “net basis.” Consequently, an Advisor or Advisor Fund’s current obligations (or rights) under a swap agreement generally will be equal only to the net amount to be paid or received under the agreement based on the relative values of the positions held by each party to the agreement (the “net amount”). The risk of loss with respect to swaps is limited to the net amount of interest payments that an Advisor or Advisor Fund is contractually obligated to make. If the other party to a swap defaults, an Investment Fund’s risk of loss consists of the net amount of payments that the Advisor or Advisor Fund contractually is entitled to receive. If a swap agreement calls for payments by an Investment Fund, an Advisor Fund or Portfolio Company, such entity must be prepared to make such payments when due. In addition, if the counterparty’s creditworthiness declined, the value of a swap agreement would be likely to decline, potentially resulting in losses to the Investment Fund and the Company.

The Prices of an Investment Fund’s Investments Can be Highly Volatile and Influenced by External Factors Outside the Control of Such Investment Fund

The prices of an Investment Fund’s investments, and therefore the NAVs of the Investment Fund and the Company, can be highly volatile. Price movements of forward contracts, futures contracts and other derivative contracts in which an Advisor may invest are influenced by, among other things, interest rates, changing supply and demand relationships, trade, fiscal, monetary and exchange control programs and policies of governments, and national and international political and economic events and policies. In addition, governments from time to time intervene, directly and by regulation, in certain markets, particularly those in currencies, financial instruments and interest rate-related futures and options. Such intervention often is intended directly to influence prices and may, together with other factors, cause all of such markets to move rapidly in the same direction because of, among other things, interest rate fluctuations. Moreover, since internationally there may be less government supervision and regulation of worldwide stock exchanges and clearinghouses than in the United States, Advisors also are subject to the risk of the failure of the exchanges on which their positions trade or of their clearinghouses, and there may be a higher risk of financial irregularities and/or lack of appropriate risk monitoring and controls.

Failure of the Investment Funds’ Counterparties, Brokers, and Exchanges Exposes Investment Funds to Credit Risks in Various Forms

The Investment Funds will be exposed to the credit risk of the counterparties with which, or the brokers, dealers and exchanges through which, the Advisors deal, whether they engage in exchange-traded or off-exchange transactions. More than one of the Investment Funds at any time may be subject to the credit risk of the same counterparty or broker-dealer. An Advisor’s prime brokers or other parties may hold assets as collateral for margin loans or other financing provided to such Advisor. Under the terms of such arrangements and under applicable law, a secured party may be permitted to rehypothecate such assets in connection with securities lending or other transactions entered into by the secured party. An Investment Fund may be subject to risk of loss of its assets placed on deposit with a broker by an Advisor in the event of the broker’s bankruptcy, the bankruptcy of any clearing broker through which the broker executes and clears transactions on behalf of the Advisor, or the bankruptcy of an exchange clearing house. Although the Commodity Exchange Act requires a commodity broker to segregate the funds of its customers, if a commodity broker fails to properly segregate customer funds, the Advisor may be subject to a risk of loss of its funds on deposit with such broker in the event of such broker’s bankruptcy or insolvency. An Investment Fund may be subject to risk of loss of its funds on deposit with non-U.S. brokers because non-U.S. regulatory bodies may not require such brokers to segregate customer funds. An Advisor may be

83

required to post margin for its foreign exchange transactions either with the foreign exchange dealers who are not required to segregate funds (although such funds are generally maintained in separate accounts on the foreign exchange dealer’s books and records in the name of the Advisor). Under certain circumstances, such as the inability of another customer of the commodity broker or foreign exchange dealer or the commodity broker or foreign exchange dealer itself to satisfy substantial deficiencies in such other customer’s account, an Investment Fund may be subject to a risk of loss of its funds placed on deposit with such broker or dealer, even if such funds are properly segregated. In the case of any such bankruptcy or customer loss, the Advisor might recover, even in respect of property specifically traceable to the Advisor, only a pro rata share of all property available for distribution to all of such broker’s or dealer’s customers, which could result in significant losses to the Investment Fund.

Many of the markets in which the Advisors effect their transactions are “over-the-counter” or “interdealer” markets. Participants in these markets are typically not subject to credit evaluation and regulatory oversight as are members of “exchange based” markets. To the extent an Advisor invests in swaps, derivatives or synthetic instruments, or other over-the-counter transactions in these markets, the Advisor may take a credit risk with regard to parties with which it trades and also may bear the risk of settlement default. These risks may differ materially from those involved in exchange-traded transactions, which generally are characterized by clearing organization guarantees, daily marking-to-market and settlement, and segregation and minimum capital requirements applicable to intermediaries. Transactions entered into directly between two counterparties generally do not benefit from these protections, which, in turn, may subject an Advisor to the risk that a counterparty will not settle a transaction in accordance with agreed terms and conditions because of a dispute over the terms of the contract or because of a credit or liquidity problem. Such “counterparty risk” is increased for contracts with longer maturities when events may intervene to prevent settlement. The ability of the Advisors to transact business with any one or any number of counterparties, the lack of any independent evaluation of the counterparties or their financial capabilities, and the absence of a regulated market to facilitate settlement, may increase the potential for losses to the Investment Funds and the Company.

In addition, the Advisors may engage in direct or indirect trading of securities, currencies, forward contracts, options, swaps and repurchase agreements on a principal basis. As such, the Advisors as transferee or counterparty could experience both delays in liquidating the underlying security, future or other investment and losses, including: (a) the risk of the inability or refusal to perform with respect to such transactions on the part of the principals with which the Advisor trades; (b) possible decline in the value of any collateral during the period in which the Advisor seeks to enforce its rights with respect to such collateral; (c) possible subnormal levels of income and lack of access to income during such period; (d) expenses of enforcing its rights; and (e) legal uncertainty concerning the enforceability of certain rights under swap agreements and possible lack of priority against collateral posted under the swap agreements. Any such failure or refusal, whether due to insolvency, bankruptcy or other causes, could subject the Advisor and, in turn, the Investment Fund and the Company, to substantial losses. The Advisor will not be excused from performance on any such transactions due to the default of third parties in respect of other trades which in the Advisor’s trading strategies were to have substantially offset such contracts.

Risks Related to International Investments

Trading on Non-U.S. Exchanges May Involve Higher Risk of Financial Irregularities and/or Lack of Appropriate Risk Monitoring and Controls

Advisors may trade, directly or indirectly, futures and securities on exchanges located outside the United States. Some non-U.S. exchanges, in contrast to U.S. exchanges, are “principals’ markets” in which performance is solely the individual member’s responsibility with whom the Advisor has entered into a commodity contract and not that of an exchange or its clearinghouse, if any. In the case of trading on non-U.S. exchanges, the Advisors, and, in turn, the Investment Funds and the Company, will be subject to the risk of the inability of, or refusal by, the counterparty to perform with respect to contracts. Moreover, since there is generally less government supervision and regulation of non-U.S. exchanges, clearinghouses and clearing firms than in the United States, there is a risk of the failure of the exchanges on which their positions trade or of their clearinghouses or clearing firms, and there may be a higher risk of financial irregularities and/or lack of appropriate risk monitoring and controls.

84

Non-U.S. Investments Involve Special Risks not Usually Associated with Investments in U.S. Securities

The Advisors may invest in securities of non-U.S. issuers and the governments of non-U.S. countries. These investments involve special risks not usually associated with investing in securities of U.S. companies or the U.S. government, including political and economic considerations, such as greater risks of expropriation and nationalization, confiscatory taxation, the potential difficulty of repatriating funds, general social, political and economic instability and adverse diplomatic developments; the small size of the securities markets in such countries and the low volume of trading, resulting in potential lack of liquidity and in price volatility; fluctuations in the rate of exchange between currencies and costs associated with currency conversion; and certain government policies that may restrict an Investment Fund’s and its Advisors’ investment opportunities. In addition, because non-U.S. entities are not subject to uniform accounting, auditing, and financial reporting standards, practices and requirements comparable with those applicable to U.S. companies, there may be different types of, and lower quality, information available about a non-U.S. company than a U.S. company. There is also less regulation, generally, of the securities markets in many non-U.S. countries than there is in the United States, and such markets may not provide the same protections available in the United States. With respect to certain countries there may be the possibility of political, economic or social instability, the imposition of trading controls, import duties or other protectionist measures, various laws enacted for the protection of creditors, greater risks of nationalization or diplomatic developments which could materially adversely affect the Advisors’ investments in those countries. Furthermore, individual economies may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross national product, rate of inflation, capital reinvestment, resource self-sufficiency, and balance of payments position. An Advisor’s investment in non-U.S. countries may also be subject to withholding or other taxes, which may be significant and may reduce the Advisor’s returns.

Brokerage commissions, custodial services and other costs relating to investment in international securities markets generally are more expensive than in the United States. In addition, clearance and settlement procedures may be different in non-U.S. countries and, in certain markets, such procedures have been unable to keep pace with the volume of securities transactions, thus making it difficult to conduct such transactions.

Investment in sovereign debt obligations of non-U.S. governments involves additional risks not present in debt obligations of corporate issuers and the U.S. government. The issuer of the debt or the governmental authorities that control the repayment of the debt may be unable or unwilling to repay principal or pay interest when due in accordance with the terms of such debt, and an Advisor may have limited recourse to compel payment in the event of a default. A sovereign debtor’s willingness or ability to repay principal and to pay interest in a timely manner may be affected by, among other factors, its cash flow situation, the extent of its foreign currency reserves, the availability of sufficient foreign exchange on the date a payment is due, the relative size of the debt service burden to the economy as a whole, the sovereign debtor’s policy toward international lenders, and the political constraints to which the sovereign debtor may be subject. Periods of economic uncertainty may result in the volatility of market prices of sovereign debt to a greater extent than the volatility inherent in debt obligations of other types of issues.

Investment in Emerging Markets Involves Significant Risks, including Inflation and Currency Devaluations

The Advisors may invest in securities of companies based in emerging markets or issued by the governments of such countries. Securities traded in certain emerging markets may be subject to risks due to the inexperience of financial intermediaries, the lack of modern technology, the lack of a sufficient capital base to expand business operations, and the possibility of temporary or permanent termination of trading. Political and economic structures in many emerging markets may be undergoing significant evolution and rapid development, and emerging markets may lack the social, political and economic stability characteristics of more developed countries.

85

As a result, the risks relating to investments in non-U.S. securities described above, including the possibility of nationalization or expropriation, may be heightened. In addition, certain countries may restrict or prohibit investment opportunities in issuers or industries deemed important to national interests. Such restrictions may affect the market price, liquidity and rights of securities that may be purchased by Advisors. Settlement mechanisms in emerging securities markets may be less efficient and less reliable than in more developed markets, and placing securities with a custodian or broker-dealer in an emerging country may also present considerable risks. The small size of securities markets in such countries and the low volume of trading may result in a lack of liquidity and in substantially greater price volatility. Many emerging market countries have experienced substantial, and in some periods extremely high, rates of inflation for many years. Inflation and rapid fluctuations in inflation rates and corresponding currency devaluations and fluctuations in the rate of exchange between currencies and costs associated with currency conversion have had, and may continue to have, negative effects on the economies and securities markets of certain emerging market countries. In addition, accounting and financial reporting standards that prevail in certain of such countries are not equivalent to standards in more developed countries and, consequently, less information is available to investors in companies located in such countries.

Reliance on Technology

Certain Advisors may utilize quantitative portfolio models to seek to allocate assets. These models, among other things, may forecast relative returns for, risk levels and volatility of, and correlations among, strategies and investments. However, these models may, for a variety of reasons, fail to accurately predict such factors, including because of scarcity of historical data in respect of certain strategies and investments, erroneous underlying assumptions or estimates in respect of certain data or other defects in the models, or because future events may not necessarily follow historical norms. In particular, substantial components of the strategies employed on behalf of one or more of the Advisors may involve attempts at the analysis of market phenomena for which there is limited or otherwise unreliable historical data, and therefore, the risk of various statistical or other errors may be considerably higher under such circumstances. There can be no assurance that the predictive models of an Advisor are adequate or that the models will be adequately utilized by the Advisor. In addition, certain Advisors may employ investment strategies that are dependent upon various computer and telecommunications technologies. The successful implementation and operation of these strategies could be severely compromised by telecommunications failures, power loss, software-related “system crashes,” fire or water damage, or various other events or circumstances. Any such event could result in, among other things, the inability of an Advisor to establish, maintain, modify, liquidate or monitor its investments, which could have a material adverse effect on an Investment Fund, Advisor Fund or Portfolio Company and consequently, the Company.

Foreign Currency Transactions and Exchange Rate Risk Create Additional Risks for Advisors Investing in Certain Financial Instruments

Advisors may invest in equity and equity-related securities denominated in non-U.S. currencies and in other financial instruments, the price of which is determined with reference to such currencies. Advisors may engage in foreign currency transactions for a variety of purposes, including to “lock in” the U.S. dollar price of the security, between the trade and the settlement dates, the value of a security an Advisor has agreed to buy or sell, or to hedge the U.S. dollar value of securities the Advisor already owns. The Advisors may also engage in foreign currency transactions for non-hedging purposes to generate returns. The Investment Funds will, however, value their investments and other assets in U.S. dollars. To the extent unhedged, the value of each Investment Fund’s net assets will fluctuate with U.S. dollar exchange rates as well as with price changes of an Advisor’s investments in the various local markets and currencies. Forward currency contracts and options may be utilized by Advisors to hedge against currency fluctuations, but the Advisors are not required to utilize such techniques, and there can be no assurance that such hedging transactions will be available or, even if undertaken, effective.

86

Non-U.S. Futures Transactions Afford Less Protection as Rules of a Non-U.S. Exchange May Not be Enforced by a U.S. Regulator

Non-U.S. futures transactions involve executing and clearing trades on a non-U.S. exchange. This is the case even if the non-U.S. exchange is formally “linked” to a U.S. exchange, whereby a trade executed on one exchange liquidates or establishes a position on the other exchange. No U.S. organization regulates the activities of a non-U.S. exchange, including the execution, delivery, and clearing of transactions on such an exchange, and no U.S. regulator has the power to compel enforcement of the rules of the non-U.S. exchange or the laws of the non-U.S. country. Moreover, such laws or regulations will vary depending on the non-U.S. country in which the transaction occurs. For these reasons, an Investment Fund may not be afforded certain of the protections that apply to U.S. transactions, including the right to use U.S. alternative dispute resolution procedures. In particular, funds received from customers to margin non-U.S. futures transactions may not be provided the same protections as funds received to margin futures transactions on U.S. exchanges. In addition, the price of any non-U.S. futures or option contract and, therefore, the potential profit and loss resulting therefrom, may be affected by any fluctuation in the foreign exchange rate between the time the order is placed and the non-U.S. futures contract is liquidated or the non-U.S. option contract is liquidated or exercised.

Risks Related to Securities and Other Instruments

Investing in Derivative Instruments Involves Risk of Loss to the Advisors That Could Materially Adversely Affect the Value of the Company’s Net Assets

Advisors may invest in, or enter into transactions involving, derivative instruments. These are financial instruments that derive their performance, at least in part, from the performance of an underlying asset, index, or interest rate. Examples of derivatives include, but are not limited to, futures contracts, options contracts, and options on futures contracts. A futures contract is an exchange-traded agreement between two parties, a buyer and a seller, to exchange a particular commodity or financial instrument at a specific price on a specific date in the future. An option transaction generally involves a right, which may or may not be exercised, to buy or sell a commodity or financial instrument at a particular price on a specified future date.

An Advisor’s use of derivatives involves risks different from, or possibly greater than, the risks associated with investing directly in securities or more traditional investments, depending upon the characteristics of the particular derivative and the Advisor’s portfolio as a whole. Derivatives permit an Advisor to increase or decrease the level of risk of its portfolio, or change the character of the risk to which its portfolio is exposed, in much the same way as the Advisor can increase or decrease the level of risk, or change the character of the risk, of its portfolio by making investments in specific securities.

Derivatives may entail investment exposures that are greater than their cost would suggest, meaning that a small investment in derivatives could have a large potential impact on an Advisor’s performance. If an Advisor invests in derivatives at inopportune times or judges market conditions incorrectly, such investments may lower the Advisor’s return or result in a loss. An Advisor also could experience losses if derivatives are poorly correlated with its other investments, or if an Advisor is unable to liquidate its position because of an illiquid secondary market. The market for many derivatives is, or suddenly can become, illiquid. Changes in liquidity may result in significant, rapid, and unpredictable changes in the prices for derivatives.

Engaging in these transactions involves risk of loss to the Advisors that could materially adversely affect the value of the Company’s net assets. No assurance can be given that a liquid market will exist for any particular futures contract at any particular time.

The successful use of futures also is subject to the ability to predict correctly movements in the direction of the relevant market, and, to the extent the transaction is entered into for hedging purposes, to ascertain the appropriate correlation between the transaction being hedged and the price movements of the futures contract.

87

Equity Securities and Equity-Related Instruments May be Subject to Various Types of Risk, Including Market Risk, Liquidity Risk, Counterparty Credit Risk, Legal Risk and Operations Risk

Advisors may invest long and short in equities and equity-related instruments in their investment programs. Stocks, options and other equity-related instruments may be subject to various types of risk, including market risk, liquidity risk, counterparty credit risk, legal risk and operations risk. In addition, equity-related instruments can involve significant economic leverage and may, in some cases, involve significant risk of loss. “Equity securities” may include common stocks, preferred stocks, interests in real estate investment trusts, convertible debt obligations, convertible preferred stocks, equity interests in trusts, partnerships, joint ventures or limited liability companies and similar enterprises, warrants and stock purchase rights. In general, stock values fluctuate in response to the activities of individual companies and in response to general market and economic conditions. Accordingly, the value of the stocks and other securities and instruments that the Investment Funds hold directly or indirectly may decline over short or extended periods of time. The stock markets tend to be cyclical, with periods when stock prices generally rise and periods when stock prices generally decline. The volatility of equity securities means that the value of an investment in each of the Investment Funds and, in turn, the Company may increase or decrease.

Fixed Income Securities are Subject to Credit Risk and Price Volatility

Advisors may invest in fixed income securities. Investment in these securities may offer opportunities for income and capital appreciation, and may also be used for temporary defensive purposes and to maintain liquidity.

“Fixed income securities” are obligations of the issuer to make payments of principal and/or interest on future dates, and include, among other securities: bonds, notes, and debentures issued by corporations; debt securities issued or guaranteed by the U.S. government or one of its agencies or instrumentalities or by a non-U.S. government; municipal securities; and mortgage-backed and asset-backed securities. These securities may pay fixed, variable, or floating rates of interest, and may include zero coupon obligations. Fixed income securities are subject to the risk of the issuer’s or a guarantor’s inability to meet principal and interest payments on its obligations (i.e., credit risk) and are subject to price volatility due to such factors as interest rate sensitivity, market perception of the creditworthiness of the issuer, and general market liquidity (i.e., market risk). In addition, mortgage-backed securities and asset-backed securities may also be subject to call risk and extension risk. For example, homeowners have the option to prepay their mortgages. Therefore, the duration of a security backed by home mortgages can either shorten (i.e., call risk) or lengthen (i.e., extension risk). In general, if interest rates on new mortgage loans fall sufficiently below the interest rates on existing outstanding mortgage loans, the rate of prepayment would be expected to increase. Conversely, if mortgage loan interest rates rise above the interest rates on existing outstanding mortgage loans, the rate of prepayment would be expected to decrease. In either case, a change in the prepayment rate can result in losses to investors. The same would be true of asset-backed securities, such as securities backed by car loans.

Generally, mortgage-backed securities on commercial (in contrast to residential) properties are not subject to prepayment risk, but are subject to other risks, including without limitation the financial well being of large tenants, local or general business climate, and ability to raise and collect rents. Mortgage loans on commercial properties often are structured so that a substantial portion of the loan principal is not amortized over the loan term, but is payable at maturity. Therefore, repayment of the loan principal often depends upon the future availability of property financing from the lenders and/or upon the current value and salability of the property.

High Yield Debt Investments are Subject to Significant Risks of Default, Illiquidity and Volatility

High yield bonds (commonly known as “junk bonds”) and other debt securities in which Advisors may invest on behalf of certain of the Investment Funds will typically be junior to the obligations of companies to senior creditors, trade creditors and employees. The lower rating of high yield debt reflects a greater possibility that adverse changes in the financial condition of the issuer or in general economic, financial, competitive, regulatory or other conditions may materially impair the ability of the issuer to make payments of principal and interest. High yield debt securities have historically experienced greater default rates than investment grade securities. The ability of holders of high yield debt to influence a company’s affairs, especially during periods of financial distress or following an insolvency, will be substantially less than that of senior creditors.

As with other investments, there may not be a liquid market for certain high yield debt, which could result in an Advisor being unable to sell such securities for an extended period of time, if at all. In addition, as with other types

88

of Advisor investments, the market for high yield debt has historically been subject to disruptions that have caused significant illiquidity and substantial volatility in the prices of such securities. Consolidation in the financial services industry has resulted in fewer market makers for high yield debt, which may result in further risk of illiquidity and volatility with respect to high yield debt, and this trend may continue in the future.

Other Debt Instruments; CBOs and CLOs

Advisors may directly or indirectly invest in other debt instruments (both investment-grade and non-investment grade) of companies or other entities not affiliated with countries or governments, including but not limited to, senior and subordinated corporate debt; tranches of collateralized mortgage obligations, collateralized bond obligations and collateralized loan obligations; preferred stock; corporate securities; and bank debt. Advisors may acquire debt securities on a private placement basis and may invest in loan participations. As with other investments made by Advisors, there may not be a liquid market for these debt instruments, which may limit the Advisors’ ability to sell these debt instruments or to obtain the desired price.

Advisors may also invest in collateralized bond obligations (“CBOs”) and collateralized loan obligations (“CLOs”) and other similar securities. These may be fixed pools or may be “market value” or managed pools of collateral, including commercial loans, high yield debt, structured securities and derivative instruments relating to debt. The pools are typically separated into tranches representing different degrees of credit quality, with lower rated tranches being subordinate to senior tranches. The senior tranches of CBOs and CLOs, which represent the highest credit quality in the pool, have the greatest collateralization and pay the lowest spreads over treasuries. Lower rated CBO and CLO tranches represent lower degrees of credit quality and pay higher spreads over treasuries to compensate for the attendant risks. The bottom tranches specifically receive the residual interest payments (i.e., money that is left over after the higher tiers have been paid) rather than a fixed interest rate. The returns on the junior tranches of CBOs and CLOs are especially sensitive to the rate of defaults in the collateral pool. In addition, the exercise of redemption rights, if any, by more senior CBO and CLO tranches and certain other events could result in an elimination, deferral or reduction in the funds available to make interest or principal payments to the junior tranches.

In addition, there can be no assurance that a liquid market will exist in any CBO or CLO when an Advisor seeks to sell its interest therein. Also, it is possible that an Advisor’s investment in a CBO or CLO will be subject to certain contractual limitations on transfer.

Structured Securities May Present a Greater Degree of Market Risk and May be More Volatile, Less Liquid and More Difficult to Price Accurately Than Less Complex Securities

Advisors may invest in structured securities. Structured securities are securities whose value is determined by reference to changes in the value of specific currencies, interest rates, commodities, indexes or other financial indicators (the “Reference”) or the relative change in two or more References. The interest rate or the principal amount payable upon maturity or redemption may be increased or decreased depending upon changes in the applicable Reference. Structured securities may be positively or negatively indexed, so that appreciation of the Reference may produce an increase or decrease in the interest rate or value of the security at maturity. In addition, changes in the interest rates or the value of the security at maturity may be a multiple of changes in the value of the Reference. Consequently, structured securities may present a greater degree of market risk than other types of securities and may be more volatile, less liquid and more difficult to price accurately than less complex securities.

Call Options Involve Significant Risks for Buyers and Sellers

Advisors may participate in, and there are risks associated with, the purchase and sale of call options. The seller (writer) of a call option which is covered (e.g., the writer holds the underlying security) assumes the risk of a decline in the market price of the underlying security below the purchase price of the underlying security less the premium received, and gives up the opportunity for gain on the underlying security above the exercise price of the option. The seller of an uncovered call option assumes the risk of a theoretically unlimited increase in the market price of the underlying security above the exercise price of the option.

89

The buyer of a call option assumes the risk of losing its entire investment in the call option. If the buyer of the call sells short the underlying security, the loss on the call will be offset in whole or in part by any gain on the short sale of the underlying security.

Put Options Involve Significant Risks for Buyers and Sellers

Advisors may participate in, and there are risks associated with, the purchase and sale of put options. The seller (writer) of a put option which is covered (e.g., the writer has a short position in the underlying security) assumes the risk of an increase in the market price of the underlying security above the sales price (in establishing the short position) of the underlying security plus the premium received, and gives up the opportunity for gain on the underlying security below the exercise price of the option. If the seller of the put option owns a put option covering an equivalent number of shares with an exercise price equal to or greater than the exercise price of the put written, the position is “fully hedged” if the option owned expires at the same time or later than the option written. The seller of an uncovered put option assumes the risk of a decline in the market price of the underlying security below the exercise price of the option.

The buyer of a put option assumes the risk of losing its entire investment in the put option. If the buyer of the put holds the underlying security, the loss on the put will be offset in whole or in part by any gain on the underlying security.

Reverse Repurchase Agreements May Increase the Volatility of an Investment Fund’s and the Company’s Investment Portfolio

The Investment Funds or the Advisors may enter into reverse repurchase agreements. A reverse repurchase agreement typically involves the sale of a security by a party to a bank or securities dealer and the selling party’s simultaneous agreement to repurchase that security for a fixed price (reflecting a rate of interest) on a specific date, and may be considered a form of borrowing for some purposes. These transactions involve risks that the value of portfolio securities being relinquished may decline below the price that must be paid when the transaction closes or 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 applicable Investment Fund and the Company. Reverse repurchase agreements are a form of leverage that may also increase the volatility of an Investment Fund’s and the Company’s investment portfolio.

There are Significant Risks Associated with When-Issued and Forward Commitment Securities

Advisors 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 or for speculative purposes. These transactions involve a commitment by an Advisor to purchase or sell securities at a future date (ordinarily at least 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 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 Advisor. When-issued securities and forward commitments may be sold prior to the settlement date. If an Advisor 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 an Advisor on a forward basis will not honor its purchase obligation. In such cases, the applicable Investment Fund and, in turn, the Company, may incur a loss.

Derivatives with Respect to High Yield and Other Indebtedness Expose Advisors to Counterparty and Issuer Risk

In addition to the credit risks associated with holding high yield debt securities, with respect to derivatives involving high yield and other debt, an Advisor will usually have a contractual relationship only with the counterparty of the derivative, and not with the issuer of the indebtedness. An Advisor generally will have no right to directly enforce compliance by the issuer with the terms of the derivative nor any rights of set-off against the

90

issuer, nor have any voting rights with respect to the indebtedness. An Advisor will not directly benefit from the collateral supporting the underlying indebtedness and will not have the benefit of the remedies that would normally be available to a holder of the indebtedness. In addition, in the event of the insolvency of the counterparty to the derivative, the Advisor will be treated as a general creditor of such counterparty, and will not have any claim with respect to the underlying indebtedness. Consequently, the Advisor will be subject to the credit risk of the counterparty as well as that of the issuer of the indebtedness. As a result, concentrations of such derivatives in any one counterparty subject the Advisor, and, in turn, the applicable Investment Fund, to an additional degree of risk with respect to defaults by such counterparty as well as by the issuer of the underlying indebtedness.

Credit Default Swaps

Advisors may enter into credit derivative contracts. The typical credit default swap contract requires the seller to pay to the buyer, in the event that a particular reference entity experiences specified credit events, the difference between the notional amount of the contract and the value of a portfolio of securities issued by the reference entity that the buyer delivers to the seller. In return, the buyer typically agrees to make periodic and/or upfront payments equal to a fixed percentage of the notional amount of the contract. Advisors may also purchase or sell credit default swaps on a basket of reference entities or an index. In circumstances in which Advisors do not own the debt securities that are deliverable under a credit default swap, Advisors will be exposed to the risk that deliverable securities will not be available in the market, or will be available only at unfavorable prices, as would be the case in a so-called “short squeeze.” In certain instances of issuer defaults and restructurings, it has been unclear under the standard industry documentation for credit default swaps whether or not a “credit event” triggering the seller’s payment obligation had occurred. In such cases, an Advisor would not be able to realize the full value of the credit default swap upon a default by the reference entity. As sellers of credit default swaps, Advisors incur leveraged exposure to the credit of the reference entity and are subject to many of the same risks they would incur if they were holding debt securities issued by the reference entity. However, Advisors will not have any legal recourse against the reference entity and will not benefit from any collateral securing the reference entity’s debt obligations. In addition, the credit default swap buyer will have broad discretion to select which of the reference entity’s debt obligations to deliver to an Advisor following a credit event and will likely choose the obligations with the lowest market value in order to maximize the payment obligations of the Advisor. Given increases in volume of credit derivatives trading in the market, settlement of such contracts may also be delayed beyond the time frame originally anticipated by counterparties. Such delays may adversely impact the Advisors’ ability to otherwise productively deploy any capital that is committed with respect to such contracts.

Risks of Spread Transactions

Where an Advisor enters into spread transactions, it is subject to the risk that the prices of the currencies underlying the positions comprising such spreads will not fluctuate in the same direction or to the same extent during the period in which the spread position is maintained. Under such circumstances, the relevant Investment Fund or Advisor Fund could sustain losses on one or both legs of the spread position.

The Company May be Prevented From Achieving its Objective During any Period in Which Assets are not Substantially Invested in Accordance with Principal Investment Strategies

Advisors may invest, for defensive purposes or otherwise, some or all of their assets in fixed income securities, money market instruments, and money market mutual funds, or hold cash or cash equivalents in such amounts as the Advisors deem appropriate under the circumstances. Pending allocation of the offering proceeds and thereafter, from time to time, the Company and the Investment Funds also may invest in these instruments. Money market instruments are short-term fixed income obligations, which generally have remaining maturities of one year or less, and may include U.S. government securities, commercial paper, certificates of deposit, bankers’ acceptances issued by U.S. branches of U.S. banks that are members of the Federal Deposit Insurance Corporation, and repurchase agreements. The Company and the Investment Funds may be prevented from achieving their objectives during any period in which the Company’s and the Investment Funds’ assets are not substantially invested in accordance with their principal investment strategies.

91

Restricted and Illiquid Investments May Prevent Prompt Liquidation of Unfavorable Positions Resulting in Substantial Loss

The market value of an Advisor’s investments may fluctuate with, among other things, changes in prevailing interest rates, general economic conditions, the condition of financial markets, developments or trends in any particular industry and the financial condition of the issuers of the securities in which the Advisor invests. During periods of limited liquidity and higher price volatility, the Advisor’s ability to acquire or dispose of its investments at a price and time that the Advisor deems advantageous may be impaired. As a result, in periods of rising market prices, the Advisor may be unable to participate in price increases fully to the extent that it is unable to acquire desired positions quickly; conversely, the Advisor’s inability to dispose fully and promptly of positions in declining markets will cause its NAV to decline as the value of unsold positions is marked to lower prices.

In addition, Advisors may invest a portion or all of the value of their assets in restricted securities and other investments that are illiquid. Restricted securities are securities that may not be sold to the public without an effective registration statement under the Securities Act or, if they are unregistered, may be sold only in a privately negotiated transaction or pursuant to an exemption from registration. These may include restricted securities that can be offered and sold only to “qualified institutional buyers” under Rule 144A of the Securities Act. There may be no limit to the percentage of an Advisor’s net assets that may be invested in illiquid securities.

Positions in restricted or non-publicly traded securities, securities on non-U.S. exchanges and certain futures contracts may be illiquid because certain exchanges limit fluctuations in certain securities and futures contract prices during a single day by regulations referred to as “daily price fluctuation limits” or “daily limits.” Under such daily limits, during a single trading day no trades may be executed at prices beyond the daily limits. Once the price of a particular security or futures contract has increased or decreased by an amount equal to the daily limit, positions in that security or contract can neither be taken nor liquidated unless traders are willing to effect trades at or within the limit. This constraint could prevent the Advisors from promptly liquidating unfavorable positions and subject the Investment Funds and, in turn, the Company to substantial losses. This could also impair the Company’s ability to redeem its membership units from an Investment Fund in order to redeem Members’ Units in a timely manner. An investment in the Company is therefore suitable only for certain sophisticated investors that will not be materially impacted by postponement of the Company’s redemption dates.

Risks Related to Issuers of Securities

The Issuers of Securities Acquired by Advisors will Sometimes Face a High Degree of Business and Financial Risk

The issuers of securities acquired by Advisors will sometimes involve a high degree of business and financial risk. These companies may be in an early stage of development, may not have a proven operating history, may be operating at a loss or have significant variations in operating results, may be engaged in a rapidly changing business with products subject to a substantial risk of obsolescence, may require substantial additional capital to support their operations, to finance expansion or to maintain their competitive position, or may otherwise have a weak financial condition.

Issuers of securities acquired by Advisors may be highly leveraged. Leverage may have important adverse consequences to these companies. These companies may be subject to restrictive financial and operating covenants. The leverage may impair these companies’ ability to finance their future operations and capital needs. As a result, these companies’ flexibility to respond to changing business and economic conditions and to business opportunities may be limited. A leveraged company’s income and net assets will tend to increase or decrease at a greater rate than if borrowed money were not used.

In addition, such companies may face intense competition, including competition from companies with greater financial resources, more extensive development, manufacturing, marketing, and other capabilities, and a larger number of qualified managerial and technical personnel.

92

Expected Transactions May not Take Place or may Result in Substantial Losses

The Advisors of the Investment Funds, particularly those of GFS, may engage in merger arbitrage transactions. Substantial transaction failure risks are involved with respect to companies that are the subject of publicly disclosed mergers, takeover bids, exchange offers, tender offers, spin-offs, liquidations, corporate restructuring, and other similar transactions. Thus, there can be no assurance that any expected transaction will take place. Certain transactions are dependent on one or more factors in order to become effective, such as market conditions which may lead to unexpected positive or negative changes in a company profile, shareholder approval, regulatory and various other third party constraints, changes in earnings or business lines or shareholder activism as well as many other factors. No assurance can be given that the merger arbitrage transactions entered into by the Advisors will be profitable, and any such transaction may result in substantial losses.

Investments in Small Capitalization Companies are Speculative and May be Difficult to Value

Advisors may invest in securities of small capitalization companies and recently organized companies and, conversely, the Advisors may establish significant short positions in such securities. Historically, such securities have been more volatile in price than those of larger capitalized, more established companies. The securities of small capitalization and recently organized companies pose greater investment risks because such companies may have limited product lines, distribution channels and financial and managerial resources. In particular, small capitalization companies may be operating at a loss or have significant variations in operating results; may be engaged in a rapidly changing business with products subject to substantial risk of obsolescence; may require substantial additional capital to support their operations, to finance expansion or to maintain their competitive position; and may have substantial borrowings or may otherwise have a weak financial condition. In addition, these companies may face intense competition, including competition from companies with greater financial resources, more extensive development, manufacturing, marketing, and other capabilities, and a larger number of qualified managerial and technical personnel. Further, there is often less publicly available information concerning such companies than for larger, more established businesses. The equity securities of small capitalization companies are often traded over-the-counter or on regional exchanges and may not be traded in the volumes typical on a national securities exchange. Consequently, the Advisors may be required to dispose of such securities or cover a short position over a longer (and potentially less favorable) period of time than is required to dispose of or cover a short position with respect to the securities of larger, more established companies. Investments in small capitalization companies may also be more difficult to value than other types of securities because of the foregoing considerations as well as lower trading volumes. Investments in companies with limited operating histories are more speculative and entail greater risk than do investments in companies with an established operating record. Additionally, transaction costs for these types of investments are often higher than those of larger capitalization companies.

Investments in Issuers of Indebtedness May be Adversely Affected in the Event of an Issuer’s Insolvency

Various laws enacted for the protection of creditors may apply to indebtedness in which the Advisors of the Investment Funds invest. The information in this and the following paragraph is applicable with respect to U.S. issuers subject to United States federal bankruptcy law. Insolvency considerations may differ with respect to other issuers. If a court in a lawsuit brought by an unpaid creditor or representative of creditors of an issuer of indebtedness, such as a trustee in bankruptcy, were to find that the issuer did not receive fair consideration or reasonably equivalent value for incurring the indebtedness and after giving effect to such indebtedness, the issuer (i) was insolvent, (ii) was engaged in a business for which the remaining assets of such issuer constituted unreasonably small capital or (iii) intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they mature, such court could determine to invalidate, in whole or in part, such indebtedness as a fraudulent conveyance, to subordinate such indebtedness to existing or future creditors of such issuer, or to recover amounts previously paid by such issuer in satisfaction of such indebtedness. The measure of insolvency for purposes of the foregoing will vary. Generally, an issuer would be considered insolvent at a particular time if the sum of its debts was then greater than all of its property at a fair valuation, or if the present fair saleable value of its assets was then less than the amount that would be required to pay its probable liabilities on its existing debts as they became absolute and matured. There can be no assurance as to what standard a court would apply in order to determine whether the issuer was “insolvent” after giving effect to the incurrence of the indebtedness in which an

93

Advisor invested or that, regardless of the method of valuation, a court would not determine that the issuer was “insolvent” upon giving effect to such incurrence. In addition, in the event of the insolvency of an issuer of indebtedness in which an Advisor invests, payments made on such indebtedness could be subject to avoidance as a “preference” if made within a certain period of time (which may be as long as one year) before insolvency. In general, if payments on indebtedness are avoidable, whether as fraudulent conveyances or preferences, such payments can be recaptured from the Advisor to which such payments were made.

The Company and the Investment Funds do not anticipate that the Advisors will engage in conduct that would form the basis for a successful cause of action based upon fraudulent conveyance, preference or equitable subordination. There can be no assurance, however, as to whether any lending institution or other party from which the Advisor may acquire such indebtedness engaged in any such conduct (or any other conduct that would subject such indebtedness and any Investment Fund, the assets of which such Advisor used to purchase such indebtedness, to insolvency laws) and, if it did, as to whether such creditor claims could be asserted in a U.S. court (or in the courts of any other country) against such Investment Fund.

Indebtedness consisting of obligations of non-U.S. issuers or U.S. issuers with respect to their foreign obligations may be subject to various laws enacted in the countries of their issuance for the protection of creditors. These insolvency considerations will differ depending on the country in which each issuer is located or domiciled and may differ depending on whether the issuer is a non-sovereign or a sovereign entity.

Purchases of Securities and Other Obligations of Financially Distressed Companies Create an Enhanced Risk of Substantial Loss or Loss of Entire Investment

The Advisors may purchase securities and other obligations of companies that are experiencing significant financial or business distress, including companies involved in bankruptcy or other reorganization and liquidation proceedings. Although such purchases may result in significant returns, they involve a substantial degree of risk and may not show any return for a considerable period of time. In fact, many of these instruments ordinarily remain unpaid unless and until the company reorganizes and/or emerges from bankruptcy proceedings, and as a result may have to be held for an extended period of time. The level of analytical sophistication, both financial and legal, necessary for successful investment in companies experiencing significant business and financial distress is unusually high. There is no assurance that the Advisors will correctly evaluate the nature and magnitude of the various factors that could affect the prospects for a successful reorganization or similar action. In any reorganization or liquidation proceeding relating to a company in which an Advisor invests, an Advisor may lose its entire investment or may be required to accept cash or securities with a value less than its original investment. Under such circumstances, the returns generated from an Advisor’s investments may not compensate investors adequately for the risks assumed.

Investments in Certain Multi-Advisor Structures

From time to time, the Managing Member may cause the Company or the Investment Fund, as applicable, to allocate assets to an Advisor that allocates assets to investment funds that retain certain services and support from service providers retained by, or affiliated with, such Advisor (a “Multi-Advisor Structure”). As described under ITEM 1. “BUSINESS—PERFORMANCE OF THE COMPANY—Overview of the Investment Process of the Investment Funds,” the Advisor selection process generally includes an examination of the organizational infrastructure, including the quality of the investment professionals and staff, the types and application of internal controls, and any potential for conflicts of interest. However, where funds are allocated to a Multi-Advisor Structure, the Managing Member generally will have limited ability to examine the organizational infrastructure of the underlying managers and the investment funds in which the Company or the Investment Fund indirectly invests. In addition, the Managing Member will not be able to control the selection or removal of underlying managers. The risks described under “— Special Risks of the Fund of Funds Structure” above are particularly applicable to investments in Multi-Advisor Structures, including, without limitation, the payment of multiple levels of fees. Any references in this Annual Report to strategies or techniques utilized by the Advisors include strategies or techniques utilized by investment funds and their managers in which Multi-Advisor Structures invest.

94

Additional Investment Risks of Certain Advisor Funds

Certain Advisor Funds to which the Investment Funds may allocate assets may invest in private equity investments, which involve a high degree of business and financial risk. These investments typically take many years to be realized or to become liquid. Certain Advisor Funds may also invest in real estate investments, which generally will be subject to the risks incident to the ownership and operation of commercial real estate and risks incident to the making of non-recourse mortgage loans secured by real estate including risks associated with U.S. and non-U.S. general economic climates, local real estate conditions, dependence on cash flow and lack of liquidity.

Private equity and real estate investments may be difficult to value. The Investment Funds will generally value interests in Advisor Funds in accordance with the terms of the Advisor Fund’s governing agreement, as such valuations are reported to the Investment Fund. Such valuations will be, indirectly through the Investment Funds, utilized by the Company in calculating the NAV of the Company and the NAV per Unit for purposes of subscriptions and redemptions, as well as for calculating the Management Fee, Incentive Allocation and administration fee. These calculations will therefore be directly affected by the valuations of any difficult-to-value assets.

In addition, the Investment Funds may from time to time allocate assets to Advisor Funds that require the Investment Funds to make capital commitments, which will be drawn down over time rather than paid at the time of the initial investment. If an Investment Fund fails to make a required capital contribution, the Investment Fund may be liable for costs incurred in collecting or attempting to collect such late payment, and could lose its entire investment in such an Advisor Fund. The Company, as a member of an Investment Fund, will not be required to make additional investments to fund capital contributions; these will come solely from the Investment Fund’s existing assets.

Advisor Special Investments

From time to time certain Advisor Funds may segregate from their portfolio of assets certain illiquid or difficult-to-value securities or instruments (each, a “special investment”) and hold them in special investment accounts. This practice is commonly referred to as “side-pocketing.” Interests in special investment accounts generally are allocated only to those investors that were investors at the time the relevant special investment was acquired or segregated and future investors in the Advisor Fund generally will not participate in such special investment. Investors (including the Investment Funds) that hold interests in special investment accounts generally will not be able to redeem their interests in such accounts until the relevant special investments are liquidated, deemed realized (because, for example, the special circumstances surrounding such investment ceases) or otherwise disposed of. Therefore, an Investment Fund may be required to hold its interest in a special investment account for a significant period of time. An Investment Fund’s inability to redeem its interests from such special investment account may have a material adverse effect on the Investment Fund’s ability to reallocate assets. In addition, significant amounts of redemption requests by investors in the Investment Fund that are not offset by new subscriptions could result in the Investment Fund holding a greater concentration of highly illiquid investments than was previously the case. This could have a material adverse effect on the Investment Fund’s investment mix, and could also cause the Investment Fund to postpone or suspend future redemptions.

Special investments generally are carried on the books of an Advisor Fund at a value determined by the applicable Advisor (which may, under the relevant Advisor Fund’s organizational documents, be presumed to be the cost of such special investment). However, given the nature of special investments, such determinations may not represent the actual amount that would be realized by the Advisor Fund (and therefore the Investment Fund) upon the eventual disposition of such special investment or that would, in fact, be realized upon an immediate disposition of the special investment. As discussed above, an Investment Fund will generally value interests in Advisor Funds in accordance with the terms of the Advisor Fund’s governing agreement, as such valuations are reported to the Investment Fund. Unlike a typical Advisor Fund, however, which generally will not use the unrealized value of a special investment for purposes of subscriptions, redemptions and calculating performance-based fees or allocations, such valuations will be utilized by the Investment Fund in calculating the NAV of units in the Investment Fund for purposes of subscriptions and redemptions, as well as for calculating the management fee, incentive allocation and administration fees in respect thereof. Accordingly, indirectly through the Investment

95

Funds, the NAV of the Company and the NAV per Unit will be directly affected by the valuations of any special investments as reported to the Investment Funds. Valuations of special investments generally will not be adjusted retroactively when such special investments are sold or otherwise disposed of by an Advisor Fund.

Certain Investment Funds may charge a performance-based incentive fee or allocation (i) at the time a special investment is designated and/or (ii) at the time a special investment is realized or deemed realized based solely on the gains with respect to such special investment, which could adversely affect investors in the Advisor Fund, including an Investment Fund and, indirectly, the Company. Other Advisor Funds may have different procedures for calculating fees or allocations with respect to special investments that also could adversely affect the Company and its Members.

Changes to the Trading and Investment Strategies Utilized by the Advisors

Advisors may, from time to time, without prior notice to the Managing Member, the Investment Funds or the Company, utilize additional investment strategies and sub-strategies, including investment strategies and sub-strategies that are not discussed herein, and/or remove, substitute or modify their investment strategies and sub-strategies or any of the types of investments then being utilized. Any such addition or change may result in the Advisors investing in other markets, securities and instruments than those described herein. Any such decision may result in all or a significant portion of an Advisor’s assets being allocated to a single investment strategy or sub-strategy or type of investment. There can be no assurance that an Advisor’s decisions in this regard will be successful or will not otherwise have an adverse effect on the assets managed by such Advisor and, in turn, the Investment Funds and the Company. The Company will not have an opportunity to evaluate such decisions or an opportunity to redeem its interests in the applicable Investment Fund prior to any such decision.

Limits of Risk Disclosure

The Company Should be Considered a Speculative Investment and Members Should Retain Their Investment Only if They Can Sustain a Complete Loss of their Investment

The above discussions relating to various risks associated with the Company, the Units, the Investment Funds and the Advisors are not, and are not intended to be, a complete enumeration or explanation of the risks involved in an investment in the Company. Should the Managing Member invest the Company’s assets with Advisors other than through an investment in an Investment Fund, the risks described herein with respect to the Investment Funds will also apply to the Company. Members should read this entire Annual Report and the LLC Agreement and should consult with their own advisers before deciding whether to retain their investment in the Company. In addition, as the Company’s investment program or market conditions change or develop over time, an investment in the Company may be subject to risk factors not currently contemplated or described in this Annual Report.

In view of the risks noted above, the Company should be considered a speculative investment and Members should retain their investment in the Company only if they can sustain a complete loss of their investment.

No guarantee or representation is made that the investment program of the Company, the Investment Funds or any Advisor will be successful, that the Investment Funds or the various Advisors selected by the Investment Funds will produce positive returns, or that the Advisors selected by the Company or the Investment Funds will provide complete or accurate information to the Company or the Investment Funds, or that the Company, the Investment Funds or the Advisors will achieve their investment objectives.

ITEM 1B.   UNRESOLVED STAFF COMMENTS

None.

96

ITEM 2.   PROPERTIES

The Company does not own or lease any physical properties. The Company is operating at the Managing Member’s facility and is not being charged rent except indirectly through the monthly Management Fee.

ITEM 3.   LEGAL PROCEEDINGS

There are no material pending legal proceedings to which the Company or the Managing Member is a party or to which any of their assets are subject.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of holders of Units during the fiscal year ended December 31, 2007.

97

PART II

ITEM 5.   MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Currently, there is no established public trading market for the Units. Other than transfers to the Company in redemption, transfers of Units are expressly prohibited by the LLC Agreement without the consent of the Managing Member.

Units are subject to the restrictions on transfer contained in the LLC Agreement. Without the prior written consent of the Managing Member, which may be withheld in its sole discretion, a Member may not assign, pledge or otherwise transfer its Units in the Company in whole or in part, except by operation of law pursuant to the death, adjudication of incompetency, insolvency or bankruptcy of the Member, or pursuant to the corporate reorganization or merger of the Member, nor substitute any other person as a Member. No transferee or assignee will be admitted as a Member without the prior consent of the Managing Member, which may be withheld in its sole discretion. A Member is permitted to redeem Units upon 91 days’ prior written notice to the Managing Member (unless such notice is waived by the Managing Member in its sole discretion) as of the time immediately prior to the opening of business on each January 1, April 1, July 1, and October 1 occurring on or after the first anniversary of the purchase of such Units by the Member, but may be limited or postponed under limited circumstances. Prior to January 1, 2006, a Member had the right to redeem some or all of its Units, upon 61 days’ prior written notice to the Managing Member on each January 1 or July 1 (occurring on or after the first anniversary of the purchase of such Units by the Member).

There are no outstanding options or warrants to purchase, or securities convertible into, Units of the Company.

The high and low NAV per Unit of the initial series of Units for Class A Series 1 of the Company during each quarterly period from January 1, 2006 through December 31, 2007 are as follows:

Quarter Ended		High		Low
	3/31/06	$	132.04	$	129.33
	6/30/06	$	133.99	$	130.88
	9/30/06	$	131.74	$	130.76
	12/31/06	$	137.10	$	132.83
	3/31/07	$	141.61	$	139.27
	6/30/07	$	147.79	$	143.91
	9/30/07	$	147.63	$	144.78
	12/31/07	$	152.88	$	151.77

The Units have not been and will not be registered under the Securities Act and may not be resold unless an exemption from such registration is available. Members have no right to require registration of the Units and the Company does not intend to register the Units under the Securities Act or take any action to cause an exemption (whether pursuant to Rule 144 of the Securities Act or otherwise) to be available.

Record Holders of Units of the Company

As of December 31, 2007, 4,588,504.15 Units were held by 505 Members.

Distributions

The Company has not made distributions from January 1, 2007 to December 31, 2007 other than distributions to facilitate redemptions of individual Members. The Company does not presently intend to make distributions to Members other than in connection with redemptions of Units.

98

Recent Sales of Unregistered Units and Use of Proceeds

From January 1, 2007 to December 31, 2007, aggregate subscriptions totaled $43,080,500. The Company previously reported sales of unregistered Units during the 2007 fiscal year in the Company’s Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. In connection with each funding, the Units were privately offered and sold to accredited investors pursuant to Rule 506 of Regulation D and the sales were exempt from registration under the Securities Act. The Company has used the proceeds to make investments in the Investment Funds.

Purchases of Units by the Company and Affiliated Purchasers

Pursuant to the Company’s LLC Agreement, holders of Units may redeem their Units upon 91 days’ prior written notice to the Managing Member (unless such notice is waived by the Managing Member in its sole discretion), on each January 1, April 1, July 1, or October 1 occurring on or after the first anniversary of the purchase of such Units by the Member (each a “Redemption Date”). Units of a particular series will be redeemed at a per Unit price based upon the NAV of such series as of the close of business on the day (the “Valuation Date”) immediately preceding the applicable Redemption Date (taking into account the allocation of any net appreciation or depreciation in the net assets of the Company for the accounting period then ending), after reduction for any Management Fee and Incentive Allocation (calculated as if the applicable Valuation Date was the last day of the fiscal year) and other liabilities of the Company to the extent accrued or otherwise attributable to the Units being redeemed.

The Company previously reported redemptions of Units during 2007 in the Company’s Quarterly Reports on Form 10-Q. There were 671,424.67 redemptions of Units during the fourth quarter ended December 31, 2007. Redemptions of $22,708,145 will be effective on January 1, 2008 and are reflected in Redemptions payable in the December 31, 2007 balance sheet. See ITEM 15. “EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.”

99

Performance Graph

The line graph below compares the cumulative total return on the Company’s Units during the period from January 1, 2003 through December 31, 2007, with the return on the 3 Month LIBOR, the Lehman Brothers U.S. Aggregate Index, the MSCI World Index and the S&P 500 Index. These indices are unmanaged, the figures for an index reflect the reinvestment of dividends but do not reflect the deduction of any fees or expenses which would reduce returns. The Members cannot invest directly in these indices.

The Company has not paid any cash dividends in the past and does not expect to pay any in the foreseeable future.

•       The performance of the Company is based on net returns for Class A Series 1 Units. The performance of the Units shown in the graph is not necessarily indicative of future performance.

•       General: References to market or composite indices, benchmarks or other measures of relative market performance over a specified period of time (for purposes of this section, each an “index”) are provided for your information only. Reference to an index does not imply that the portfolio will achieve returns, volatility or other results similar to the index. The composition of an index may not reflect the manner in which a portfolio is constructed in relation to expected or achieved returns, portfolio guidelines, restrictions, sectors, correlations, concentrations, volatility or tracking error targets, all of which are subject to change over time.

•       MSCI World Index: The Morgan Stanley Capital International World Index is a price index of the total return with dividends reinvested monthly net of dividend withholding tax of a representative group of listed companies for each region, with each component market weighted on the basis of market capitalization relative to the total market capitalization of the market being measured and adjusted for changes in capital within the component firms.

•       S&P 500 Index: Standard & Poor’s S&P 500 Index is an index based on the prices of the securities of 500 different companies. Total returns are calculated by adding the dividend income and price appreciation for a given time period.

•       Lehman Brothers U.S. Aggregate Index: Lehman Brothers’ U.S. Aggregate Index represents securities that are U.S. domestic, taxable, and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through

100

securities, and asset-backed securities. These major sectors are subdivided into more specific indices that are calculated and reported on a regular basis.

•       Indices Source: Bloomberg, Bond.Hub

ITEM 6.   SELECTED FINANCIAL DATA

Set forth below is certain selected historical data for the Company as of and for the years ended December 31, 2007, 2006, 2005, 2004 and 2003. The selected historical financial data as of and for the years ended December 31, 2007, 2006, 2005, 2004 and 2003 were derived from the financial statements of the Company, which were audited by Ernst & Young LLP (“E&Y”). The information set forth below should be read in conjunction with the financial statements and notes thereto contained elsewhere in this Annual Report.

	Year Ended December 31,
Operations Data	2007		2006		2005		2004		2003
Net trading profit/(loss)	$	87,875,947	$	76,020,409	$	66,816,581	$	72,018,387	$	81,854,395
Total expenses	$	9,808,096	$	9,926,911	$	14,836,748	$	14,457,852	$	10,733,672
Net income/(loss)	$	78,394,581	$	66,569,645	$	52,141,634	$	58,055,729	$	71,218,666
Less: Incentive allocation to the managing member	$	3,919,729	$	3,328,482	$	2,615,216	$	2,902,854	$	3,560,865
Net income/(loss) available for pro-rata allocation to members	$	74,474,852	$	63,241,163	$	49,526,418	$	55,152,875	$	67,657,801

	As of December 31,
Financial Condition Data	2007			2006			2005			2004			2003
Investments	$	702,436,288		$	686,250,341		$	1,124,329,933		$	1,092,953,352		$	970,912,828
Total assets	$	705,861,961		$	687,475,191		$	1,125,036,745		$	1,093,172,149		$	1,019,413,929
Total liabilities	$	25,077,879		$	25,400,717		$	350,437,862		$	135,716,916		$	86,168,187
Members’ equity	$	680,784,082	(1)	$	662,074,474	(2)	$	774,598,883	(3)	$	957,455,233	(4)	$	933,245,742	(5)
Ending NAV/Unit:
Class A Series 1	$	152.88		$	137.10		$	125.75		$	120.25		$	113.95

(1)	The reduction in members’ equity as of December 31, 2007 reflects Redemptions payable in the amount of $22,708,145 that was payable at December 31, 2007.
(2)	The reduction in members’ equity as of December 31, 2006 reflects Redemptions payable in the amount of $23,701,199 that was payable at December 31, 2006.
(3)	The reduction in members’ equity as of December 31, 2005 reflects Redemptions payable in the amount of $347,523,596 that was payable at December 31, 2005.
(4)	The reduction in members’ equity as of December 31, 2004 reflects Redemptions payable in the amount of $128,546,636 that was payable at December 31, 2004.
(5)	The reduction in members’ equity as of December 31, 2003 reflects Redemptions payable in the amount of $34,529,625 that was payable at December 31, 2003.

101

ITEM 7.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

The following discussion should be read in conjunction with the audited financial statements of the Company and related notes thereto appearing elsewhere in this Annual Report, ITEM 6. “SELECTED FINANCIAL DATA,” and ITEM 1A. “RISK FACTORS—Special Risks of the Company’s Structure—Risks Related to the Company’s Structure—The Company’s Financial Statements Are, and in the Future Will Ultimately be, Based on Estimates of Valuations Provided by Third Party Advisors Which May not be Accurate or May Need to be Adjusted in the Future.”

The Company is a Delaware limited liability company organized in March 2002 to operate as an investment fund. It commenced operations on April 1, 2002. GS HFS, a Delaware limited liability company, serves as the Company’s Managing Member.

As of December 31, 2007, the Company had total assets of $705,861,961 compared with total assets of $687,475,191 as of December 31, 2006. Total liabilities of the Company totaled $25,077,879 as of December 31, 2007 compared to $25,400,717 as of December 31, 2006. Members’ equity of the Company was $680,784,082 as of December 31, 2007 compared to $662,074,474 as of December 31, 2006.

The Company’s investment objective is to target attractive long-term risk-adjusted returns across a variety of market environments with volatility and correlation that are lower than those of the broad equity markets. To achieve this objective, the Company allocates all or substantially all of its assets among privately placed Investment Funds managed by the Managing Member, each of which allocates its assets to, or invests in entities managed by, the Advisors that employ a broad range of investment strategies primarily within one of the Investment Sectors: the tactical trading sector, the equity long/short sector, the relative value sector, and the event driven sector. Currently, substantially all of the Company’s assets are invested in five Investment Funds: GELS, GFS, GRV, GTT and, as of July 1, 2007, HFPO.

Performance of the Company in any period will be dependent upon the performance in the relevant period by the Investment Funds and the weighted average percentage of the Company’s assets in each of the Investment Funds during the period. In addition, performance is determined by the allocation by the Investment Funds of their assets with the various Advisors and the performance of each of those Advisors.

While the Managing Member currently expects to allocate assets to all the Investment Sectors through allocations to GTT, GELS, GRV, GFS and HFPO, as of April 1, 2008, the Managing Member will have no constraints with respect to the percentage of the Company’s assets to be allocated, directly or indirectly, to any single Advisor, group of Advisors, Investment Fund, or Investment Sector, or with respect to the number of Investment Funds and Advisors to which, directly or indirectly, assets of the Company are allocated. The percentage of the Company’s assets to be allocated to any single Advisor, group of Advisors, Investment Fund or Investment Sector, and the number of Investment Funds and Advisors to which the Company allocates assets from time to time will be determined by the Managing Member in its sole discretion, based on factors deemed relevant by the Managing Member at the time of such allocation, which may include the amount of the Company’s assets under management, constraints on the capital capacity of the Investment Funds and Advisors, the availability of attractive opportunities, and other portfolio construction and portfolio management considerations.

The Company’s results depend on the Managing Member, including in its capacity as managing member of each of the Investment Funds, and the ability of the Managing Member to recognize and capitalize on trends and other profit and investment opportunities within the Investment Sectors. Unlike many operating businesses, general economic or seasonal conditions may not have any direct effect on the profit potential of the Company due to the speculative nature of the Company’s investments and since the Company’s investments in the Investment Funds are managed to seek to eliminate or at least significantly reduce the impact of general economic or seasonal conditions. In addition, the Company’s past performance is not necessarily indicative of future results. Each Investment Fund allocates assets to Advisors that invest in various markets at different times and prior activity in a particular market does not mean that such market will be invested in by the Advisors or will be profitable in the future.

102

Results of Operations

The following presents a summary of the operations for the year ended December 31, 2007, 2006 and 2005, and a general discussion of each Investment Fund’s performance during those periods.

2007 Performance

The Company’s net trading profit/loss for the year ended December 31, 2007 was $87,875,947 compared to the year ended December 31, 2006 of $76,020,409.

Overview

The Company is designed to be broadly exposed to the hedge fund market by allocating its assets to the Investment Funds in the Investment Sectors: tactical trading, equity long/short, relative value and event driven. As further described under ITEM 7A. “QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK—Risk Management,” quantitative analysis is combined with judgment to determine weightings and strategic return, risk and correlation estimates inform the quantitative analysis. Judgment is applied to both estimates and weights in an attempt to achieve exposure to hedge funds while targeting attractive risk adjusted returns. For 2007, all four Investment Sectors posted positive returns, with the strongest performance delivered by the event driven sector. Short positions in credit, in particular short exposure to bonds linked to sub-prime mortgages, were profitable. The weakest performance came from the allocation to HFPO, which finished the year in negative territory. Negative performance was driven by exposure to quantitative equity market neutral strategies which suffered from liquidity pressures as the sub-prime mortgage crisis led to widespread liquidations in August. The Company cannot predict which Investment Sector and accordingly which Investment Fund will perform best in the future. The table below illustrates the portfolio weighting of each Investment Fund as of December 31, 2007, as well as each Investment Fund’s net return for the year ended December 31, 2007.

							Year Ended
	Portfolio Weight			Portfolio Weight as			December 31,
	as a% of			a% of Adjusted			2007
Investment Fund	Members’ Equity (1)			Members’ Equity (2)			Net Return (3)
GELS		33.16	%		32.09	%		11.70	%
GFS		37.84	%		36.62	%		20.22	%
GRV		12.38	%		11.99	%		4.53	%
GTT		14.39	%		13.92	%		15.72	%
HFPO		5.41	%		5.23	%		(10.26	)%

(1)	Members’ equity, used in the calculation of the investments as a percentage of members’ equity, is reduced for member redemptions that are paid after the balance sheet date.
(2)	As a percentage of the Company’s adjusted members’ equity which represents members’ equity excluding Redemptions payable in the amount of $22,708,145 that was payable at December 31, 2007.
(3)	These returns are based on the performance of Class C Series 1 units for GELS, GFS, GRV and GTT and Class A Series 1 units for HFPO. The returns are net of administration fees. No management fee or incentive allocation was charged by the managing member of the Investment Funds with respect to the Company’s investment in any of the Investment Funds. Past performance is not indicative of future results, which may vary.

For the year ended December 31, 2007, the Company’s Class A Series 1 Units returned 11.51% net of fees and incentive allocation.

The Investment Funds

Each of the Investment Funds’ performance during the year ended December 31, 2007 is described in the following.

103

Goldman Sachs Global Equity Long/Short, LLC

As of December 31, 2007, GELS represented approximately 32% of the Company’s adjusted members’ equity which excluded redemptions paid after December 31, 2007. GELS returned 11.70% for Class C Series 1 units for the year ended December 31, 2007.

The annualized volatility of GELS’ returns for the year ended December 31, 2007 was 5.73%. In comparison, the S&P 500 Index had an annualized volatility of 9.66% and the MSCI World Index (hedged to U.S. dollars) had an annualized volatility of 8.80% for the same period.

During the year ended December 31, 2007, GELS Advisors delivered positive performance in nine months (January, February, March, April, May, June, September, October and December) and negative performance in three months (July, August and November). Notably, the performance of GELS Advisors in July and August suffered as equity markets fell on concerns of a global credit crunch, a slowing U.S. economy and continued fallout in the sub-prime mortgage and structured finance spaces. GELS Advisors with long exposure to financial and consumer stocks underperformed during the second half of the year as large write-downs from major banks and concerns of a slowdown in consumer spending weighed on these sectors.

GELS Advisors performed well from January 2007 through May 2007, with especially strong performance in April and May. During this period, GELS Advisors benefited from a rally in global equity markets, driven by global economic growth, robust mergers and acquisitions activity and abundant liquidity. September and October 2007 were positive months for GELS Advisors, as global equity markets rallied from the late summer sell-off as the U.S. Federal Reserve (the “Federal Reserve”) cut interest rates. Top-performing GELS Advisors benefited from an increase in volatility during the second half of 2007 as strong stock pickers were able to realize gains more quickly. Additionally, GELS Advisors who reduced portfolio risk during the summer were able to better preserve capital and realize gains from hedges and short positions during the drawdown in the second half of the year.

Thirty-six out of 48 GELS Advisors delivered positive performance for the year ended December 31, 2007. GELS Advisors with long exposure to Asian market volatility, emerging markets, energy/commodities and short exposure to financials performed particularly well during 2007. The GELS Advisors that posted losses had long exposure to value stocks, small- and mid-cap stocks and Japanese equities.

Goldman Sachs Global Fundamental Strategies, LLC

As of December 31, 2007, GFS represented approximately 37% of the Company’s adjusted members’ equity which excluded redemptions paid after December 31, 2007. GFS returned 20.22% for Class C Series 1 units for the year ended December 31, 2007.

The annualized volatility of GFS’s returns for the year ended December 31, 2007 was 4.55%. In comparison, the S&P 500 Index had an annualized volatility of 9.66% and the MSCI World Index (hedged to U.S. dollars) had an annualized volatility of 8.80% for the same period.

GFS generated solid returns in 2007, with substantially lower volatility than global equity markets. In the first half of the year, GFS Advisors performed well as the equity and credit markets continued their positive performance from 2006. In the first half of 2007, robust mergers and acquisitions activity, idiosyncratic credit events and abundant corporate restructuring activity contributed positively to some of the GFS Advisors’ returns. In the second half of 2007, the market experienced substantially more volatility and negative performance as investors became concerned about the economic and financial outlook.

Global announced mergers and acquisitions activity surpassed $4.4 trillion in 2007, a new annual record; however this was not without some unconsummated deals. In general, GFS Advisors were able to take advantage of the robust environment in the first half of 2007 through risk arbitrage and equity special situations. In the second half of 2007, risk arbitrage spreads proved to be a profitable area given the completion of several bellwether deals. Equity markets experienced negative performance as valuations were readjusted given lower mergers and acquisitions and private equity activity, which negatively impacted the performance of some GFS Advisors.

The credit asset class proved to be difficult in 2007 given the broad re-pricing of risk across the asset class. In particular, some GFS Advisors were hurt by long exposure to bank debt and some high yield bonds. Hedges and

104

directional short exposure to credit generated substantial gains for some GFS Advisors in the fund. In particular, short exposure to bonds linked to sub-prime mortgages were profitable, as several of the multi-strategy and credit GFS Advisors were able to put on exposure early.

Credit opportunities/distressed strategies returned 40.10% and contributed 9.70% to GFS’s gross income for the year ended December 31, 2007. The multi-strategy component of the portfolio returned 15.02% and contributed 9.86% to GFS’s gross income for the year ended December 31, 2007. Risk arbitrage/special situations strategies returned 5.28% and contributed 0.38% to GFS’s gross income for the year ended December 31, 2007.

Goldman Sachs Global Relative Value, LLC

As of December 31, 2007, GRV represented approximately 12% of the Company’s adjusted members’ equity which excluded redemptions paid after December 31, 2007. GRV returned 4.53% for Class C Series 1 units for the year ended December 31, 2007.

Following a fairly stable market environment in 2006, volatility increased significantly in 2007 and, consequently, relative value strategies experienced mixed results.

Overall, 2007 was a good year for GRV Advisors strategically positioned to take advantage of long volatility, as market participants became increasingly nervous due to the widening impact of the sub-prime mortgage crisis and the deteriorating state of the U.S. economy. Within the volatility trading sector, the Asian-focused GRV Advisor outperformed as it successfully captured the region’s rise in implied volatility, particularly in single-name stocks. Given this GRV Advisor’s negative correlation with the markets, the outsized results are particularly impressive considering the bull market in Asia, where the MSCI Asia ex-Japan Index returned 33%, its best performance since 2003.

Credit spreads were re-priced in virtually every market (i.e., investment grade, high yield, loans, residential mortgage-backed securities, commercial mortgage-backed securities, etc.) and across all rating categories, benefiting GRV Advisors with short biases and creating opportunities for relative value trading around technical dislocations. GRV Advisors with long credit exposures, particularly in high-grade asset-backed securities, suffered losses as market liquidity decreased significantly.

GRV Advisors implementing equity market neutral strategies suffered from liquidity pressures as the sub-prime mortgage crisis led to widespread liquidations in August. GRV Advisors with longer-term models were particularly impacted. As a result, GRV Advisors reduced leverage and focused research efforts on minimizing correlation with other hedge funds.

Emerging markets’ fundamental strength continued due to strong growth, high commodity prices, and increasing levels of domestic reserves. The asset class grew during the year, with new local issues from major economies, corporate issues and new sovereign markets. Long external debt positions in Venezuela and Russia, as well as long positions in Brazilian and Turkish local markets, contributed to positive performance by GRV Advisors. In addition, strategic short positions benefited GRV Advisors’ returns in late 2007.

The opportunity set for relative value investments across the fixed income universe broadened significantly in 2007. Turmoil in the housing and credit markets resulted in increased uncertainty and higher volatility levels, creating an environment favorable for fixed income arbitrage.

Credit relative value strategies returned 6.12% and contributed 0.46% to GRV’s gross income for the year ended December 31, 2007. Equity market neutral strategies returned (14.14)% and contributed (3.78)% to GRV’s gross income for the year ended December 31, 2007. Fixed income arbitrage strategies returned 13.25% and contributed 2.74% to GRV’s gross income for the year ended December 31, 2007. Emerging markets relative value strategies returned 12.19% and contributed 1.37% to GRV’s gross income for the year ended December 31, 2007. Multi-strategies returned (2.68)% and contributed (0.24)% to GRV’s gross income for the year ended December 31, 2007. Volatility trading returned 42.52% and contributed 4.45% to GRV’s gross income for the year ended December 31, 2007.

105

Goldman Sachs Global Tactical Trading, LLC

As of December 31, 2007, GTT represented approximately 14% of the Company’s adjusted members’ equity which excluded redemptions paid after December 31, 2007. GTT returned 15.72% for Class C Series 1 units for the year ended December 31, 2007.

The first quarter of 2007 was moderately profitable for the tactical trading sector. Short European fixed income positions generated strong profits early in the first quarter for GTT Advisors. However, a broad recovery in global bond markets in February, followed by another reversal later in the first quarter, led many GTT Advisors to give back prior gains. Commodities trading posted gains, mainly due to long exposure to grains. Foreign exchange trading detracted from performance for the first quarter, with losses predominantly driven by developed-market currency trading, and short Japanese yen positions suffered material losses at February month-end, as investors unwound their carry trades following the global equity plunge. Equities trading finished the first quarter approximately flat. After posting strong gains in the first half of the first quarter, GTT Advisors who were positioned net long gave back most profits when a sharp decline in Chinese markets on February 27 triggered a global equity sell-off.

The tactical trading sector had a strong second quarter in 2007, finishing the period profitable in all four asset classes. In fixed income trading, the majority of gains by GTT Advisors were generated from short European fixed income exposures maintained throughout the second quarter. Foreign exchange trading was also positive for the second quarter, with short Japanese yen positions contributing the bulk of gains. Short U.S. dollar positions against major currencies proved more difficult for GTT Advisors, as choppy markets resulted in weak performance. In equities trading, GTT Advisors with broadly long exposure profited from the global stock market rally, with the S&P nearing record levels and major European indices moving consistently higher. Finally, commodities trading was modestly profitable, with gains attributable to select long positions in grains, particularly soybeans. Soybeans soared mid-second quarter on speculation that an increasing number of soybean acres will be rotated into corn planting, resulting in a diminished supply.

Tactical trading delivered positive results in the third quarter of 2007. Foreign exchange trading was positive for the third quarter. Short U.S. dollar positions contributed most of the gains as the U.S. dollar experienced notable declines through the third quarter, dropping to a record low against the euro in September. Equities trading from the long side proved difficult for GTT Advisors during the first two months of the third quarter. However, GTT Advisors with sustained long exposures were able to profit from the market recovery in September, which was largely driven by the widely anticipated 50 basis point cut in the federal funds rate. Fixed income trading generated moderate losses for GTT Advisors for the third quarter, as bond markets were centered on concerns about the credit crisis in the U.S. Finally, GTT Advisors with broad long exposures to commodities delivered strong results across grains, metals and energy.

The tactical trading sector posted strong performance in the fourth quarter of 2007. Commodities trading was a significant contributor to performance by GTT Advisors during the fourth quarter. Long positions in grains were particularly profitable as wheat, corn and soybeans all surged substantially higher amid concerns regarding weather and growing global supply. Fixed income trading was also positive. Global government bonds rallied during the fourth quarter as continued credit concerns led to a “flight-to-quality”. As a result, GTT Advisors with long exposures to U.S. Treasury bonds produced strong returns. GTT Advisors with yield curve plays in the U.S. and Europe also generated positive results. Equities trading posted flat performance for the fourth quarter, with the vast majority of GTT Advisors positioned net long. In foreign exchange trading, GTT Advisors were generally short the U.S. dollar, which led to notable profits during the first half of the fourth quarter. As the U.S. dollar recovered later in the fourth quarter, many GTT Advisors returned most prior gains. Declines in high-yielding currencies during the second half of the fourth quarter also added to losses.

Goldman Sachs HFP Opportunistic Fund, LLC

On July 1, 2007, the Company made an investment in HFPO in the aggregate amount of $26,100,000. The investment objective of HFPO is to make opportunistic investments in underlying Advisors in order to (a) increase the weighting of a particular Advisor which had a low weighting in the Company due to a lower target weight in one of the other Investment Funds or (b) add an Advisor that is not currently represented in any of the other Investment

106

Funds. As of December 31, 2007, the fair value of the Company’s investment in HFPO was $36,813,437. The change in value from July 1, 2007 through December 31, 2007 reflects the return of the Company’s investment during the six month period ended December 31, 2007.

As of December 31, 2007, HFPO represented approximately 5% of the Company’s adjusted members’ equity which excluded redemptions paid after December 31, 2007. HFPO returned (10.26)% for Class A Series 1 units for the period from commencement of HFPO’s operations on July 1, 2007 through December 31, 2007.

     For the period from July 1, 2007 (commencement of operations of HFPO) through December 31, 2007

HFPO experienced negative performance during the period from July 2007 through December 2007. The negative performance was driven by exposure to equity market neutral strategies which suffered from liquidity pressures as the sub-prime mortgage crisis led to widespread liquidation in August. Managers with value oriented models and longer-term models were particularly impacted. Exposure to macro strategies slightly mitigated losses as managers benefited from the higher volatility environment. Commodities trading drove performance and fixed income trading was also positive over the period. Equities trading was flat from July 2007 through December 2007.

2006 Performance

The Company’s net trading profit/loss for the year ended December 31, 2006 was $76,020,409 compared to the year ended December 31, 2005 of $66,816,581 and the year ended December 31, 2004 of $72,018,387.

Overview

For 2006, all four hedge fund sectors posted positive returns, with the strongest performance delivered by the event driven sector. Robust mergers and acquisitions activity, idiosyncratic credit events, and abundant corporate restructuring activity were all significant drivers of performance. The weakest performance came from the tactical trading sector. On January 1, 2006, the Managing Member made a tactical adjustment to the weightings of the Investment Funds. This adjustment to the weights among the Investment Funds reflected the Managing Member’s judgment and was implemented by the Managing Member effective January 1, 2006. The Company cannot predict which hedge fund sector and accordingly which Investment Fund will perform best in the future. The table below illustrates the portfolio weighting of each Investment Fund as of December 31, 2006, as well as each Investment Fund’s net return for the year ended December 31, 2006.

	Portfolio Weight			Portfolio Weight as			Year Ended
	as a% of			a% of Adjusted			December 31, 2006
Investment Fund	Members’ Equity (1)			Members’ Equity (2)			Net Return (3)
GELS		36.81	%		35.54	%		11.91	%
GFS		36.36	%		35.10	%		14.57	%
GRV		14.87	%		14.36	%		5.89	%
GTT		15.61	%		15.07	%		5.61	%

(1)	Members’ equity, used in the calculation of the investments as a percentage of members’ equity, is reduced for member redemptions that are paid after the balance sheet date.
(2)	As a percentage of the Company’s adjusted members’ equity which represents members’ equity excluding Redemptions payable in the amount of $23,701,199 that was payable at December 31, 2006.
(3)	These returns are based on the performance of Class C Series 1 units. The returns are net of administration fees. No management fee or incentive allocation was charged by the managing member of the Investment Funds with respect to the Company’s investment in any of the Investment Funds. Past performance is not indicative of future results, which may vary.

107

For the year ended December 31, 2006, the Company’s Class A Series 1 Units returned 9.03% net of fees and incentive allocation.

The Investment Funds

Each of the Investment Funds’ (GELS, GFS, GRV and GTT) performance during the year ended December 31, 2006 is described in the following.

Goldman Sachs Global Equity Long/Short, LLC

As of December 31, 2006, GELS represented approximately 36% of the Company’s adjusted members’ equity which excluded redemptions paid after December 31, 2006. GELS returned 11.91% for Class C Series 1 units for the year ended December 31, 2006.

The annualized volatility of GELS’ returns for the year ended December 31, 2006 was 7.31%. In comparison, the S&P 500 Index had an annualized volatility of 5.64% and the MSCI World Index had an annualized volatility of 7.30% for the same period.

During the year ended December 31, 2006, GELS Advisors delivered positive performance in nine months (January, February, March, April, August, September, October, November, and December) and negative performance in three months (May, June, and July). Notably, the performance of GELS Advisors in May and June suffered as the vast majority of global equity markets sold off. GELS Advisors with exposure to emerging markets, Japan, and commodity-related equities were the worst performers. In July, GELS Advisors with exposure to Japanese equities performed poorly due to the large sell-off in small- and mid-cap Japanese equities.

GELS Advisors performed well from January 2006 through April 2006, with especially strong performance in January and March. During this period, GELS Advisors benefited from a rally in global equity markets, most notably in the materials, energy, and emerging markets sectors. August 2006 through December 2006 were positive months for GELS Advisors, as nearly all global equity markets rallied from the May through July sell-off. The sole exception was Japan, which negatively impacted GELS Advisors with significant Japanese equity exposure. GELS Advisors with exposure in the consumer and technology sectors performed particularly well, as those sectors led the market higher in the fourth quarter of 2006.

Thirty out of thirty-four GELS Advisors delivered positive performance for the year ended December 31, 2006. GELS Advisors with exposure to the U.S. and Europe performed particularly well during 2006. The GELS Advisors that posted losses had exposure to Japan, as Japanese equities underperformed other global equity markets. Those GELS Advisors were negatively impacted by the significant underperformance of small-cap stocks relative to large-cap stocks in Japan.

Goldman Sachs Global Fundamental Strategies, LLC

As of December 31, 2006, GFS represented approximately 35% of the Company’s adjusted members’ equity which excluded redemptions paid after December 31, 2006. GFS returned 14.57% for Class C Series 1 units for the year ended December 31, 2006.

The annualized volatility of GFS’s returns for the year ended December 31, 2006 was 2.92% compared to the S&P 500 Index which had an annualized volatility of 5.64% and to the MSCI World Index which had an annualized volatility of 7.30% for the same period.

GFS generated solid returns in 2006, with approximately half the volatility of equity markets. GFS withstood the global equity market sell-off in May and June of 2006, generating positive returns in both months, with only two GFS Advisors failing to generate double-digit returns for the entire year. Robust mergers and acquisitions activity, idiosyncratic credit events, and abundant corporate restructuring activity contributed positively to GFS Advisor returns. Equity and credit market hedges proved to be the biggest detractors from performance, as many GFS Advisors remained defensively positioned.

Global announced mergers and acquisitions activity surpassed $3.5 trillion in 2006, a new annual record, on the back of strong equity markets and the continued availability of debt financing in the capital markets. Cross-

108

border transactions accounted for 38% of global activity, with the total volume of transactions being 33% higher than 2005 levels and higher than the previous record of $3.4 trillion set in 2000. High yield issuance reached a record $171 billion, and leveraged loan issuance also set a new record, with over $480 billion of issuance over the course of 2006. Private equity firms, with leveraged buyout activity, accounted for $689 billion, or 19%, of overall announced mergers and acquisitions volume, the highest level since 1988.

The year 2006 experienced a surge in competitive and hostile deals, driven by continued consolidation in the mining, infrastructure, financial exchanges, energy, and steel sectors.

The high yield and distressed markets posted another strong year of returns in 2006 with CCC and lower rated credits (+18.6%) significantly outperforming the broader credit markets. High yield credit spreads ended the year at 289 basis points over Treasuries and default rates ended the year at an anemic 1.6%. GFS Advisors benefited from exposure to specific names in the auto, airline, energy and power, and cable sectors.

Credit opportunities/distressed strategies returned 17.77% and contributed 4.16% to GFS’s gross income for the year ended December 31, 2006. The multi-strategy component of the portfolio returned 14.66% and contributed 9.65%to GFS’s gross income for the year ended December 31, 2006. Risk arbitrage/special situations strategies returned 8.63% and contributed 0.64% to GFS’s gross income for the year ended December 31, 2006. These percentages reflect certain reclassifications of select advisors from one sub-strategy to another at a time subsequent to the date of the data reflected herein.

Goldman Sachs Global Relative Value, LLC

As of December 31, 2006, GRV represented approximately 14% of the Company’s adjusted members’ equity which excluded redemptions paid after December 31, 2006. GRV returned 5.89% for Class C Series 1 units for the year ended December 31, 2006.

The annualized volatility of GRV’s returns for the year ended December 31, 2006 was 8.75%. In comparison, the S&P 500 Index had an annualized volatility of 5.64% and the MSCI World Index had an annualized volatility of 7.30% for the same period.

GRV Advisors implementing a multi-strategy approach had a strong start in 2006. However, one GRV Advisor detracted from the sector’s overall performance in 2006 due to substantial losses incurred as this GRV Advisor was forced to unwind its energy portfolio. Despite this loss, other GRV Advisors implementing a multi-strategy approach benefited from opportunities across all relative value trading strategies, in addition to event-oriented trades.

GRV Advisors implementing equity market neutral strategies experienced strong performance in 2006, with shorter-term trading models bringing particular success. Long/short stock selection in the United States and Japan, driven by valuation factors, also performed well for GRV Advisors, while Europe proved more challenging for some models. The CBOE Volatility Index experienced limited volatility for most of 2006, trading at an average of 13%, with the exception of May, when a brief spike in volatility resulted from equity market weakness.

Select GRV Advisors focusing on equity volatility trading strategies performed well in 2006 due to stock-specific situations. Such GRV Advisors relying on a macro increase in volatility were unrewarded.

GRV Advisors focused on fixed income trading strategies collectively experienced a slightly positive year in 2006, although global yield curves remained flat, and volatility was low, leading to a challenging trading environment. However, GRV Advisors did profit from yield curve strategies in Japan and U.S. municipal bonds. Short-biased interest rate trades and mortgage positions detracted from returns over the year.

GRV Advisors implementing credit relative value strategies were the largest contributors to performance in 2006. While credit spreads (particularly in high yield) narrowed, leveraged buy-outs and other corporate activity provided numerous trading opportunities. More volatile United States credit markets, where instrument, company, and country specific views were profitable for GRV Advisors, experienced the strongest returns. In the United States and, to a lesser extent, Europe, long/short credit, index dispersion, and structured credit relative value strategies drove returns.

109

GRV Advisors implementing strategies based on emerging market relative value suffered the most from increased investor risk aversion in the first half of 2006; however, such GRV Advisors nevertheless delivered strong returns. GRV Advisors profited from country selection and relative value trades, particularly in Argentina, Russia, and Brazil.

Credit relative value strategies returned 13.20% and contributed 1.73% to GRV’s gross income for the year ended December 31, 2006. Equity market neutral strategies returned 14.27% and contributed 1.78% to GRV’s gross income for the year ended December 31, 2006. Fixed income arbitrage strategies returned 4.39% and contributed 0.80% to GRV’s gross income for the year ended December 31, 2006. Emerging markets relative value strategies returned 14.02% and contributed 1.53% to GRV’s gross income for the year ended December 31, 2006. Multi-strategies returned (3.66)% and contributed (0.55)% to GRV’s gross income for the year ended December 31, 2006. Volatility trading returned 7.04% and contributed 0.36% to GRV’s gross income for the year ended December 31, 2006. These percentages reflect certain reclassifications of select advisors from one sub-strategy to another at a time subsequent to the date of the data reflected herein.

GRV Advisors implementing a multi-strategy approach experienced significant losses for the year ended December 2006, due to losses at one GRV Advisor, Amaranth Advisors LLC (“Amaranth”). Negative performance was attributed to the energy-related investments Amaranth held, following a dramatic move in natural gas prices in September of 2006. The contribution of Amaranth to GRV’s performance was (4.50)% for the year ended December 31, 2006. Most other GRV Advisors delivered positive returns due to their diverse investments in different asset classes, geographies, and strategies.

Throughout the month of September of 2006, Amaranth reported to investors the approximate year-to-date and month-to-date losses estimated for its funds in the wake of its collapse. Neither GRV’s administrator nor the managing member of GRV had any additional information from Amaranth upon which to estimate the fair value of GRV’s investment in Amaranth. As a result, GRV relied upon the information provided by Amaranth throughout the month of September of 2006 in connection with the preparation of the NAV of GRV’s investment in Amaranth.

It is important to note that the fair value estimate of GRV’s investment in Amaranth was based on limited information and such information may have been inaccurate or incomplete.

Goldman Sachs Global Tactical Trading, LLC

As of December 31, 2006, GTT represented approximately 15% of the Company’s adjusted members’ equity which excluded redemptions paid after December 31, 2006. GTT returned 5.61% for Class C Series 1 units for the year ended December 31, 2006.

The annualized volatility of GTT’s returns for the year ended December 31, 2006 was 5.31% compared to the S&P 500 Index which had an annualized volatility of 5.64% and the MSCI World Index which had an annualized volatility of 7.30% for the same period.

The first quarter of 2006 was profitable for the tactical trading sector, with commodities and fixed income being the largest contributors to performance. GTT Advisors benefited from long positions in precious and base metals, as base metals rose toward record prices due to demand from emerging economies such as China and India, and gold rose as investors sought shelter from signs of inflation. Fixed income trading was a substantial contributor, as GTT Advisors shifted positioning from long to short exposure in order to profit from higher global yields. Equity index trading was also positive in the first quarter of 2006, driven by long positions in Europe, Japan, and emerging markets. U.S. equities were less profitable due to continued concern that higher interest rates would decrease consumer strength. Finally, foreign exchange trading detracted from GTT Advisor returns during the first quarter of 2006; with uncertainty regarding the course of monetary policy in the United States, Japan, and Europe, exchange rates traded without clear direction. Directionless markets are typically problematic for systematic GTT Advisors who attempt to extract profits from price momentum.

The tactical trading sector experienced increased volatility during the second quarter of 2006, resulting in mixed performance across the four asset classes. Fixed income was the largest contributor to GTT Advisor returns, followed by commodities; however, both equities and foreign exchange trading detracted from performance. Returns were negatively impacted as several markets experienced major reversals in mid-May of 2006, when strong

110

risk appetite turned to broad risk aversion amid inflation fears and hawkish comments from the Federal Reserve. Most asset classes experienced negative performance during May, with commodities, foreign exchange trading, and equities positions accounting for the majority of losses by GTT Advisors, as trends reversed sharply in markets with close links to economic growth such as base metals, emerging markets, and equities, as well as in gold, historically has been a more defensive asset. Difficult markets continued through June of 2006, with many markets unable to find clear direction, although some GTT Advisors were able to generate profits from short positions in fixed income. In general, GTT Advisors with a relatively short-term outlook outperformed those Advisors with a larger view, with some generating very strong gains in the second quarter of 2006.

The tactical trading sector experienced difficulty during the third quarter of 2006, as three of the four asset classes posted negative returns. Fixed income and foreign exchange trading were the largest detractors from GTT Advisor performance. Commodities trading also ended the third quarter with modest losses, while equity trading saw moderately positive performance. European fixed income trading, particularly at the shorter-end of the major yield curves, generated losses, as did short-biased Japanese fixed income trading. In foreign exchange trading, losses were generated from developed market currencies, as the dollar again failed to generate any sustainable momentum. Precious and industrial metals moved lower during the third quarter. As a result, GTT Advisors with sustained net long exposure to these metals posted negative performance. Equity index trading ended the quarter broadly positive. Positive performance by GTT Advisors was primarily driven by long positioning in the U.S. and Europe.

The tactical trading sector delivered strong performance in the fourth quarter of 2006, with positive results generated in most asset classes. Global equity index trading was the largest driver of performance by GTT Advisors. GTT Advisors benefited from broadly long exposures, as the equity markets maintained upward momentum on the back of healthy mergers and acquisitions activities and corporate stock repurchases. Commodity trading finished the quarter generally positive, with long exposure to grains, particularly corn, driving performance. GTT Advisors with sustained short positions in natural gas benefited from warm winter weather across the U.S. fixed income trading posted flat performance, as global bond markets were characterized by frequent sharp reversals resulting from changes in economic prospects and rate expectations. Foreign exchange trading generated moderate profits for GTT Advisors, as both systematic and discretionary GTT Advisors were able to capture the dollar sell-off. Short Japanese yen positioning was a notable contributor late in the fourth quarter of 2006 as re-pricing of the odds for imminent interest rate raises pushed the Japanese yen notably lower.

2005 Performance

The Company’s net trading profit/loss for the year ended December 31, 2005 was $66,816,581, compared to the year ended December 31, 2004 of $72,018,387 and December 31, 2003 of $81,854,395.

Overview

For 2005, all four hedge fund sectors posted positive returns, with the strongest performance delivered by the equity long/short sector. Strong European and Asian markets, a lagging U.S. market, and a sharp decline and subsequent rally in energy, industrial, and cyclical stocks were all significant drivers of performance. The Managing Member utilizes a strategic sector allocation and periodically re-evaluates the contribution to the risk and return of the Company from each investment sector and may in its sole discretion adjust the Company’s assets or weights as it deems advisable. On July 1, 2005, the Managing Member made a tactical adjustment to the weightings of the Investment Funds. This adjustment to the weights among the Investment Funds reflected the Managing Member’s judgment and was implemented by the Managing Member gradually following July 1, 2005. The Company cannot predict which hedge fund sector and accordingly which Investment Fund will perform best in the future. The table below illustrates the portfolio weighting of each Investment Fund as of December 31, 2005, as well as each Investment Fund’s net return for the year ended December 31, 2005.

111

					Year Ended
	Portfolio Weight		Portfolio Weight as		December 31,
	as a% of		a% of Adjusted		2005
Investment Fund	Members’ Equity(1)		Members’ Equity(2)		Net Return(3)
GELS		37.97%		26.21%		9.93%
GFS		38.91%		26.86%		7.65%
GRV		41.02%		28.32%		4.09%
GTT		27.25%		18.81%		4.03%

(1)	Members’ equity, used in the calculation of the investments as a percentage of members’ equity, is reduced for member redemptions that are paid after the balance sheet date.
(2)	As a percentage of the Company’s adjusted members’ equity which represents members’ equity excluding Redemptions payable in the amount of $347,523,596 that was payable at December 31, 2005.
(3)	These returns are based on the performance of Class C Series 1 units. The returns are net of administration fees. No management fee or incentive allocation was charged by the managing member of the Investment Funds with respect to the Company’s investment in any of the Investment Funds. Past performance is not indicative of future results, which may vary.

For the year ended December 31, 2005, the Company’s Class A Series 1 Units returned 4.57% net of fees and incentive allocation.

The Investment Funds

Each of the Investment Funds’ (GELS, GFS, GRV and GTT) performance during the year ended December 31, 2005 is described in the following.

Goldman Sachs Global Equity Long/Short, LLC

As of December 31, 2005, GELS represented approximately 26% of the Company’s adjusted members’ equity which excluded redemptions paid after December 31, 2005 and which reflected the reweighting of the portfolio and the subsequent increase in the weighting of GELS during the first half of 2005. GELS returned 9.93% for Class C Series 1 units for the year ended December 31, 2005.

The annualized volatility of GELS’ returns for the year ended December 31, 2005 was 7.54%. In comparison, the S&P 500 Index had an annualized volatility of 7.92% and the MSCI World Index had an annualized volatility of 8.20% for the same period.

During the year ended December 31, 2005, GELS Advisors delivered positive performance in eight months (February, May, June, July, August, September, November, and December) and negative performance in four months (January, March, April, and October). Notably, the performance of GELS Advisors in January and February was mixed, as U.S. markets lagged both European and Asian markets. In addition, March and April were particularly difficult months due to significant sell-offs in several areas where GELS Advisors had exposure, particularly energy, industrial, and cyclical stocks.

GELS Advisors performed well from May 2005 through September 2005, with especially strong performance in June and July. During this period, GELS Advisors benefited from a rally in global equity markets, most notably in the areas that negatively impacted performance earlier in the year (e.g., energy, industrial, and cyclical stocks). October was a difficult month for GELS Advisors, as global equity markets declined sharply. The decline was particularly severe in energy-related stocks, which had been among the best performing stocks going into October 2005. November and December were positive for GELS Advisors, as global equity markets recovered from the decline in October 2005. Non-U.S. markets, particularly Japan, were especially strong during the last two months of the year in 2005.

Thirty out of thirty-four GELS Advisors delivered positive performance for the year ended December 31, 2005. GELS Advisors with exposure to Japan, Europe, and India performed particularly well during 2005. GELS

112

Advisors who posted losses included those Advisors with notional (gross long plus gross short) or beta-adjusted (adjusted to take into account the volatility of underlying securities) net short exposures.

Goldman Sachs Global Fundamental Strategies, LLC

As of December 31, 2005, GFS represented approximately 27% of the Company’s adjusted members’ equity which excluded redemptions paid after December 31, 2005 and which reflected the weighting of the portfolio and the subsequent increase in the weighting of GFS during the first half of 2005. GFS returned 7.65% for Class C Series 1 units for the year ended December 31, 2005.

The annualized volatility of GFS’s returns for the year ended December 31, 2005 was 3.32% compared to the S&P 500 Index which had an annualized volatility of 7.92% and to the MSCI World Index which had an annualized volatility of 8.20% for the same period.

GFS Advisors had particularly strong performance in the third quarter of 2005, with the majority of gains resulting from exposure to European and Asian situations, specifically merger-related equity transactions and distressed credit names. April and October of 2005 proved to be challenging months, due to a widespread sell-off in the credit markets in April and difficult global equity and credit markets in October. In general, European-focused GFS Advisors generated strong returns in 2005, driven by strength in the European equity markets and by a resurgence in corporate activity in Europe.

Risk arbitrage Advisors were able to profit from some of the larger deals such as Procter & Gamble-Gillete, Sprint-Nextel, and Bank of America-MBNA. Returns were muted to some extent by transactions such as Johnson & Johnson-Guidant, where there were multiple periods of negative news. Mergers and acquisitions activity continued to improve in 2005, and the number of deals was up 32% from 2004 levels. Leveraged buyout activity soared to $259 billion, and was up 56% from $144 billion in 2004.

Despite strong issuance of $111 billion of debt in 2005, the high yield market had a mediocre year of performance, returning 2.74% in 2005, following successive years of double digit returns in 2003 and 2004. Credit spreads widened from 310 bps at the beginning of the year to 371 bps at the end of the year over 10-year U.S. Treasuries. Defaults remained near historical lows, though the trailing twelve-month default rate jumped by over one percentage point to 2.87% in the third quarter of 2005. The year was also marked by over $295 billion of issuance of debt in the leveraged loans market and significant outflows from high yield mutual funds, which reached over $11 billion. While mutual fund outflows and the downgrade of General Motors were responsible for significant credit spread widening in the second quarter of 2005, many GFS Advisors chose to invest in more senior parts of the capital structure, given the lack of incremental return associated with investing in the lower parts of the capital structure. The airline sector continued to be one of the most negatively impacted sectors, with negative trends continuing in major airlines. The auto suppliers sector was also negatively impacted by rising raw materials prices and declining sales for the major auto makers. Delphi, the largest U.S. auto parts supplier, filed for Chapter 11 bankruptcy protection in October. In general, GFS Advisors who were involved in bankruptcy-related situations avoided losses, with secured assets performing better than unsecured assets.

Credit opportunities/distressed strategies returned 10.32% and contributed 2.56% to GFS’s gross income for the year ended December 31, 2005. The multi-strategy component of the portfolio returned 7.31% and contributed 4.80% to GFS’s gross income for the year ended December 31, 2005. Risk arbitrage/special situations strategies returned 6.06% and contributed 0.50% to GFS’s gross income for the year ended December 31, 2005. These percentages reflect certain reclassifications of select advisors from one sub-strategy to another at a time subsequent to the date of the data reflected herein.

Goldman Sachs Global Relative Value, LLC

As of December 31, 2005, GRV represented approximately 28% of the Company’s adjusted members’ equity which excluded redemptions paid after December 31, 2005 and which reflected the reweighting of the portfolio and the subsequent decrease in the weighting of GRV during the first nine months of 2005. GRV returned 4.09% for Class C Series 1 units for the year ended December 31, 2005.

113

GRV Advisors implementing a multi-strategy approach experienced overall positive results in 2005, but returns were widely dispersed. The differences in performance between multi-strategy GRV Advisors were primarily due to the different allocations each GRV Advisor had to convertible bond trading, correlation trading, and equity volatility trading strategies. GRV Advisors who allocated in favor of fundamental credit, equity trading, and less crowded strategies, such as energy volatility trading produced better results than those who allocated to convertible bond, correlation, and equity volatility trading strategies.

Equity market neutral GRV Advisors experienced a strong year in 2005 despite an environment characterized by low equity volatility and low single-stock return dispersion. GRV Advisors typically benefit from strong performance by value stocks and stocks that have recently experienced strong price or earnings momentum; both of these types of stocks performed well in 2005.

GRV Advisors focused on fixed income trading strategies collectively experienced a slightly positive year in 2005, although there was significant variance among GRV Advisors’ returns. Profits were primarily due to a strong overall market, coupled with a successful long and short trading of securities based upon fundamental country selection. GRV Advisors focused on trading different points along the yield curve experienced mixed results, while those whose fixed income trading was based upon individual country selection performed better.

GRV Advisors implementing credit relative value strategies delivered positive results in 2005 despite some intra-month volatility. While credit relative value GRV Advisors with a more quantitatively based investment processes (especially those exposed to structured credit trades) suffered losses in the first half of 2005 but were able to gain the profits back in the second half of 2005.

GRV Advisors implementing strategies based on emerging market relative value posted strong results in 2005. Profits were primarily due to a strong market, coupled with successful long and short trading of securities based upon fundamental country selection.

Convertible bond arbitrage strategies generated negative returns in 2005. Realized and implied equity volatility remained low throughout 2005, and the new issue market was weak. For much of the period, there was also pressure on convertible bond valuations as a result of technical selling, driven by hedge fund investor redemptions. GRV’s exposure to convertible bond arbitrage strategies is only through Advisors implementing a multi-strategy approach.

Credit relative value strategies returned (0.49)% and contributed (0.06)% to GRV’s gross income for the year ended December 31, 2005. Convertible bond arbitrage strategies returned (6.39)% and contributed (0.21)% to GRV’s gross income for the year ended December 31, 2005. Equity market neutral strategies returned 4.06% and contributed 0.39% to GRV’s gross income for the year ended December 31, 2005. Fixed income arbitrage strategies returned 3.84% and contributed 0.51% to GRV’s gross income for the year ended December 31, 2005. Emerging markets relative value strategies returned 5.90% and contributed 0.53% to GRV’s gross income for the year ended December 31, 2005. Multi-strategies returned 7.80% and contributed 3.64% to GRV’s gross income for the year ended December 31, 2005. These percentages reflect certain reclassifications of select advisors from one sub-strategy to another at a time subsequent to the date of the data reflected herein.

Goldman Sachs Global Tactical Trading, LLC

As of December 31, 2005, GTT represented approximately 19% of the Company’s adjusted members’ equity which excluded redemptions paid after December 31, 2005 and which reflected the reweighting of the portfolio and the subsequent decrease in the weighting of GTT during the first nine months of 2005. GTT returned 4.03% for Class C Series 1 units for the year ended December 31, 2005.

The first quarter of 2005 brought reversals of several trends which had been drivers of performance during the fourth quarter of 2004. The most salient and difficult of these reversals was the path of the U.S. dollar. The dollar rallied sharply in early January 2005 and then traded in a narrow range, leading to a difficult trading environment for most GTT Advisors. Global equity markets also experienced a sharp reversal during the first quarter of 2005, causing GTT Advisors to give back a portion of their 2004 fourth quarter profits. Fixed income trading was the largest contributor to performance for the first quarter of 2005, with the majority of returns made from short positions in short-term U.S. government debt, as investors priced in additional interest rate increases by the Federal

114

Reserve. Commodity trading was roughly flat for the first quarter. Long energy positions performed well as crude oil prices reached record highs and grain and gold positions sustained moderate losses.

The second quarter was profitable for GTT Advisors with gains led by fixed income positions. Long positions in German Bunds (10-year government bonds) generated gains during the second quarter, while falling yields reflected slower growth in Germany. Foreign exchange trading also posted gains during the second quarter of 2005. Long dollar positions performed well as investors looked toward strong growth and high interest rates in the U.S. relative to most other major economies. Equity index trading contributed small losses, following a difficult April, which saw a sharp reversal in global equity indices as markets reacted to soft U.S. retail numbers, GTT Advisors recouped most losses during May and June with long positions in most regions, with the majority of risk taken in Europe. Commodity trading was the largest detractor from performance in the second quarter. After steep losses suffered in April, volatile energy and grain markets proved to be difficult trading environments for most GTT Advisors.

GTT Advisors posted modest gains during the third quarter of 2005. Profits were driven by long equity index positioning and major global indices rallied during the third quarter, reflecting an increasingly positive outlook on the global economy. Commodity trading was strongly positive in 2005 as energy prices rose following Hurricane Katrina and the resultant supply disruptions. GTT Advisors were also profitable trading industrial metals during the third quarter. Foreign exchange markets continued to trade on growth and interest rate differentials during the third quarter. Accordingly, long dollar positions against most major currencies performed well during the quarter. Offsetting losses were sustained in long dollar position against the Australian dollar as it appreciated in response to growing commodity demand. Fixed income positions declined during the quarter. GTT Advisors that were long in most instruments suffered losses as yields rose globally in response to economic optimism. Losses were partially recouped in September via short U.S. positions at all points on the yield curve.

The fourth quarter was also profitable for GTT Advisors. Commodities drove gains during the fourth quarter, with the highest profits derived from the base and precious metal markets. Gold traded above $500/ounce as investors bought the metal as an alternative to major currencies, given the uncertainty surrounding future exchange rates. Moreover, higher prices were supported by investor flows into gold’s new exchange traded fund, which allows retail investors to gain exposure to gold. Base metals were also strongly positive via long positioning. Long dollar positions performed exceptionally well in the fourth quarter. The dollar was supported by its yield and growth advantages over most major currencies. Equity trading was solidly profitable with gains concentrated in Europe and Asia. Indices in both regions ended the year near multi-year highs. Finally, GTT Advisors finished the fourth quarter of 2005 approximately flat in fixed income trading. Losses were sustained in a number of markets that finished the quarter nearly unchanged.

Comparison of Select Financial Information from 2007, 2006 and 2005

Interest Income

Interest income for the years ended December 31, 2007, 2006 and 2005 was $326,730, $476,147 and $161,801 respectively. The Company’s interest income fluctuates with its level of cash available to invest.

Expenses

The Management Fee for the year ended December 31, 2007 was $8,636,414, compared to the year ended December 31, 2006 of $9,131,947 and the year ended December 31, 2005 of $13,560,772. Because the Management Fee is calculated as a percentage of the Company’s member’s equity as of each month end (equal to one-twelfth of 1.25% of the net assets of the Company as of the end of the applicable month), the changes in the expense were due to fluctuations in the Company’s average net assets for the year ended December 31, 2007 compared to the year ended December 31, 2006 and the year ended December 31, 2006 compared to the year ended December 31, 2005.

Interest expense for the year ended December 31, 2007 was $283,897, compared to the year ended December 31, 2006 of $252,759 and the year ended December 31, 2005 of $37,747. The increase in interest expenses for the year ended December 31, 2007 compared to December 31, 2006 was due to short-term borrowing during the period and the accrual of commitment fees under the Credit Facility. The increase in interest expenses for

115

the year ended December 31, 2006 compared to December 31, 2005 was due to increased levels of short-term borrowing during the period.

Professional fees for the year ended December 31, 2007 were $632,679, compared to the year ended December 31, 2006 of $481,551 and the year ended December 31, 2005 of $1,237,030. The increase in professional fees for the year ended December 31, 2007 compared to the year ended December 31, 2006 was primarily due to increased legal and audit costs related to the ongoing operations as a publicly registered Company and the costs related to Sarbanes-Oxley 404 compliance. The decrease in professional fees for the year ended December 31, 2006 compared to the year ended December 31, 2005 was primarily due to reduced services rendered by the Company’s legal providers and auditors related to the ongoing operations of the Company, including the review of investor subscription documents for the year and registration with the SEC.

Incentive Allocation

The Incentive Allocation for the year ended December 31, 2007 was $3,919,729, compared to the year ended December 31, 2006 of $3,328,482 and the year ended December 31, 2005 of $2,615,216. The increase in Incentive Allocation for the year ended December 31, 2007 compared to the year ended December 31, 2006 was due to an increase in net income from operations for the period. The increase in Incentive Allocation for the year ended December 31, 2006 compared to the year ended December 31, 2005 was due to an increase in net income from operations for the period.

Other than the management fee, the professional fees and miscellaneous expenses and the incentive allocation, there are no other fees directly borne by the Company.

Through its investments in the Investment Funds, the Company bears a pro rata portion of the administration fee paid to the administrator of the Investment Funds for services provided to the Investment Funds and Portfolio Companies. The total administration fee (which is approximate based on calculation), comprised of the Company’s aggregate pro rata portion for services provided to the Investment Funds and the fee directly payable by the Portfolio Companies based on an investment of $1,000,000 in Class A Series 1 Units as of January 1, 2007, January 1, 2006 and January 1, 2005, was $534, $1,053 and $1,031, respectively. Effective as of January 1, 2005, SEI became the administrator of each Investment Fund and certain Portfolio Companies, and currently serves as the administrator with respect to all of the Investment Funds and Portfolio Companies. Throughout 2007, the administration fee rate ranged between 0.04% and 0.06%. See ITEM 1. “BUSINESS—FEES AND EXPENSES.”

Liquidity and Capital Resources

The Company’s liquidity requirements consist of cash needed to fund investments in the Investment Funds in accordance with the Company’s investment strategy and to fund semi-annual redemptions and to pay costs and expenses. The Company periodically re-allocates its investments in the Investment Funds based on the performance of the Investment Funds and other factors. Redemptions are permitted on a quarterly basis rather than a semi-annual basis, and written notices of redemption must be delivered to the Company at least 91 days prior to the applicable valuation date which is the day immediately preceding the applicable redemption date. Accordingly, the Company cannot predict the level of redemptions in the Company for any quarterly period until 91 days prior to the redemption date. The Company endeavors to pay redemption proceeds within 45 days following the redemption date, without interest. If the Company faces a liquidity problem, the redemptions may be limited or postponed under certain limited circumstances. The Managing Member’s ability to limit or postpone redemptions in the Company enables the Company to control and to some extent avoid a liquidity problem. However, substantial redemptions of Units in the Company could require the Company to liquidate certain of its investments in the Investment Funds in order to raise cash to fund the redemptions which could have a material adverse effect on the NAV of the Units and the performance of the Company.

The Company can fund its liquidity requirements by liquidation (through redemption, or as otherwise permitted in the limited liability agreements of the Investment Funds) of its investments in the Investment Funds and from new investments from existing and new investors. Redemptions can be made quarterly, subject to certain limitations. From July 2003 through September 2004, the Company only took in investments from existing investors and limited subscriptions from new qualified investors, however, starting in October 2004, the Company

116

began accepting additional amounts of new subscriptions again and the Company continued to do so through December 31, 2007. The Company may close again at any time without notice at the sole discretion of the Managing Member. The acceptance of future subscriptions in the Company and the continued growth of the Company will be determined by the Managing Member in its sole discretion. Although the Managing Member began to receive new subscriptions to the Company in October 2004, any liquidity requirements in the near term may need to be funded through the redemption of existing investments in the Investment Funds to the extent new investments are not received in sufficient amounts to cover redemptions. If the Company seeks to redeem all or a portion of its investment positions in any of the Investment Funds, the Investment Fund, to the extent it does not have cash on hand to fund such redemption, will need to liquidate some of its investments. Substantial redemptions of membership units in an Investment Fund, including by the Company, could require the Investment Fund to liquidate certain of its investments more rapidly than otherwise desirable in order to raise cash to fund the redemptions and achieve a market position appropriately reflecting a smaller asset base. This could have a material adverse effect on the value of the membership units redeemed and the membership units that remain outstanding and on the performance of the Investment Fund. Under certain exceptional circumstances, such as force majeure, the managing member of an Investment Fund (currently, the Managing Member) may find it necessary (a) to postpone redemptions if it determines that the liquidation of investments in the Investment Fund to fund redemptions would adversely affect the NAV per membership unit of the Investment Fund or (b) to set up a reserve for undetermined or contingent liabilities and withhold a certain portion of redemption proceeds. In such circumstances, the Investment Fund would likely postpone any redemptions it could not fund.

Certain investment positions in which the Investment Funds have a direct or indirect interest are illiquid. The Advisors may invest in restricted or non-publicly traded securities, securities on foreign exchanges and futures. These positions may be illiquid because certain exchanges limit fluctuations in certain securities and futures contract prices during a single day by regulations referred to as “daily price fluctuation limits” or “daily limits.” Under such daily limits, during a single trading day no trades may be executed at prices beyond the daily limits. Once the price of a particular security or futures contract has increased or decreased by an amount equal to the daily limit, positions in that security or contract can neither be taken nor liquidated unless traders are willing to effect trades at or within the limit.

The Company received investments from new and existing investors of $43,080,500 during the year ended December 31, 2007, of $41,883,000 during the year ended December 31, 2006, and of $225,329,193 during the year ended December 31, 2005.

Demand from new and existing investors varies from period to period based upon market conditions, the Company’s returns and other alternative investments available to investors. The Company believes that in more recent periods investors’ interest has declined from earlier periods as investors have sought different types of investment opportunities with different risk/return profiles.

The Company paid out redemptions in the amount of $103,758,527 during the year ended December 31, 2007, $544,799,451 during the year ended December 31, 2006 and $241,350,217 during the year ended December 31, 2005. The Company had Redemptions payable in the amount of $22,708,145 at December 31, 2007, $23,701,199 at December 31, 2006 and $347,523,596 at December 31, 2005. The Company funded the redemptions made in 2006, 2007 and January 2008 by making redemptions from the Investment Funds in proportion to the then current weightings and through the use of uninvested cash on hand. The Company also used its old credit facility to fund January 2006 and April 2006 redemptions and its Credit Facility to fund July 2006, October 2006, January 2007 and July 2007 redemptions. The Managing Member expects the Company to fund future redemptions in a similar manner and does not believe that the Redemptions payable in January 2008 had a material adverse effect on the value of the Units or the performance of the Company. As further described below in this section, the Company entered into the Credit Facility on June 30, 2006, which was extended on two occasions as described below. Although the Company may elect to borrow under the Credit Facility, including without limitation, to fund redemptions, from time to time, in the future, it currently expects any such borrowing would not result in long-term debt of the Company and does not expect the Company’s risk position to change as a result thereof.

Demand for redemptions varies from period to period based upon market conditions, the Company’s returns and other alternative investments available to investors. In particular, in January 2006, the Company saw a surge in

117

investment demand for investment products utilizing different investment strategies with different risk/return profiles than the Company and accordingly the Company experienced a high volume of redemptions at such time. For the year ending December 31, 2005, the Company experienced returns of 4.57%. The Company believes while such returns were generally in line with the returns of investment products using similar investment strategies as the Company, such returns were significantly less attractive than those realized for the year ending December 31, 2005 by other investment products with much more exposure to volatility and which utilize leverage, including other products managed by affiliates of the Company. As a consequence, the Company believes that in January 2006, along with other products following similar investment strategies, it may have experienced meaningful outflows while other investment products utilizing investment strategies capitalizing on higher volatility and employing leverage and thereby receiving higher relative returns for the period experienced significant inflows.

The Company and each Investment Fund may, but are not required to, borrow from (including through direct borrowings, borrowings through derivative instruments, or otherwise) the GS Group or other parties, when deemed appropriate by its managing member, including to make investments and distributions in respect of redemptions of membership units, to pay expenses or for other purposes.

On June 30, 2006, the Company entered into the Credit Facility with the Facility Counterparty. The Credit Facility was extended, prior to its maturity, an additional 90 days to September 30, 2007. On September 19, 2007, the Company further extended the maturity date of the Credit Facility to an additional 364-day period from September 19, 2007. In addition, the Company amended certain terms of the Credit Facility. As of December 31, 2007, the Company had no outstanding borrowings under the Credit Facility. Pursuant to the Credit Facility, the Company may borrow up to an amount equal to the lesser of (i) $32,000,000 which amount may be subsequently increased to $100,000,000 subject to the approval of the Facility Counterparty, and (ii) 15.0% of the Company’s NAV from time to time. If borrowings by the Company exceed 15.0% of its NAV at anytime, then the Company is required to make mandatory prepayments to the extent necessary so that borrowings (subject to adjustments for pending redemptions by the Company) do not exceed 12.5% of the Company’s NAV, payable when it has received proceeds of redemptions from the Investment Funds. The Company is also required to prepay all borrowings if, after a five business day remediation period, the Facility Counterparty notifies the Company that its investments in funds continue to not meet certain liquidity and diversification criteria set forth in the Credit Facility, payable within ninety days of any such notice. The Company may voluntarily borrow, repay and reborrow advances on a revolving basis. The advances bear interest at a per annum rate equal to (i) with respect to advances provided on less than three business days’ notice, the overnight London inter-bank offered rate (“LIBOR”), for the initial day of such advance and one-week LIBOR thereafter, and (ii) with respect to all other advances, one-week LIBOR, plus in each case 0.65%. The Company also pays a monthly commitment fee to the Facility Counterparty at the rate of 0.25% per annum of the average daily aggregate unused portion of the commitment. If the Company terminates the Credit Facility prior to the stated final maturity, it has agreed to pay a fee (except in certain circumstances where no such fee will be payable) equal to the product of 0.25% per annum times the commitment in effect immediately prior to such optional termination times “M”; where “M” equals the period commencing on the date of such optional termination and ending on the stated final maturity. The proceeds of the advances under the Credit Facility will be used for liquidity management in connection with subscriptions to the Company and redemptions of the Company’s investments in the Investment Funds and for general purposes not prohibited by the Credit Facility or the investment guidelines therein. The obligation of the Facility Counterparty to make advances is subject to customary conditions precedent, including the absence of defaults. The Credit Facility contains customary representations and warranties, affirmative covenants, including a covenant to deliver information regarding the Company’s NAV and negative covenants, including restrictions on the Company’s ability to incur additional indebtedness (other than the advances or fees and expenses incurred in the ordinary course of business), grant liens, merge or sell all or substantially all of its assets, pay dividends or make redemptions of the Company’s investors if advances would exceed the permitted borrowing amount or there is an event of default regarding non-payment of advances, failure to comply with investment guidelines, failure to provide access to financial records, insolvency events or change of control events, and enter into material amendments of the Company’s organizational documents or investment management or fund administration agreements. The Credit Facility contains customary events of default (subject to thresholds, materiality qualifications and notice periods specified therein), including: failure to make payments when due, incorrectness of representations and warranties, non-compliance with the Credit Facility and note, breach of material agreements, insolvency events; judgments or orders to pay money, a “material adverse effect” as defined in

118

the Credit Facility, change in the control of the Managing Member, or its removal or resignation, violation of law or suspension of licenses held by the Company or the Managing Member; and suspension in the redemption of the Units. In addition, the Credit Facility contains investment guidelines setting forth certain requirements regarding permitted instruments, strategy limits, leverage and borrowing, liquidity, diversification and remediation. The Managing Member does not expect that any of these investment guidelines, including but not limited to, the strategy limits, will have a limiting effect on the operation of the Company or the Managing Member’s investment strategy for the Company. Each Investment Fund, except HFPO, has entered into a similar facility with a different counterparty. See Note 6 to the financial statements for a description of the Company’s Credit Facility.

As of December 31, 2007, the Company had Cash and cash equivalents on hand of $3,425,673. As of December 31, 2006, the Company had Cash and cash equivalents on hand of $1,224,850.

Investments as of December 31, 2007 were $702,436,288 as compared to $686,250,341 as of December 31, 2006. The increase for the year ended December 31, 2007 compared to the year ended December 31, 2006 was due to the reinvestment of profits earned by the Company from the Investment Funds less net redemptions made by the Company from the Investment Funds during the year ended December 31, 2007.

Due to managing member represents the management fees due to the Managing Member. Due to managing member as of December 31, 2007 was $2,181,659 as compared to $1,415,426 as of December 31, 2006. Because the management fee is calculated as a percentage of the Company’s net assets as of each month end, the liability related to management fees will fluctuate based on the fluctuation of the month end NAV of the Company. The increase in Due to managing member is due to the amount and timing of the payment of the monthly management fee to the Managing Member.

The Company generally expects that its cash flow from liquidating its investment positions in the Investment Funds to the extent necessary and from new investments in the Company together with borrowings under the borrowing facility will be adequate to fund its operations and liquidity requirements.

The value of the Company’s directly held cash and financial instruments is not expected to be materially affected by inflation. At the Investment Fund level, given that GRV’s and GFS’s Advisors seek to profit from price movements and can take both positive and negative views on the drivers of such movements, their outlooks may include a view on the direction of inflation, with the outcome of their trades derived, at least in part, from the accuracy of such a view. No first-order endemic effects from inflation, as may exist in long-only bond portfolios, are expected. Further, extended changes in inflation may be associated with strong up or down trends in interest rates, creating a favorable environment for GTT’s Advisors, and therefore contributing to the Company’s profit potential. However, unexpected changes in inflation can also give rise to rapid reversals in interest rate markets, creating an environment in which such Advisors, and the Company, potentially may suffer losses. The impact of changes in inflation on equity long/short strategies used by GELS’ Advisors is difficult to predict and depends upon how large the change is in both absolute terms and relative to expectations. A sharp increase in inflation could hurt certain sectors, such as regional banks, homebuilders, and autos, while sharp downward moves could be beneficial for equities. If a downward move were too large, however, it could give rise to concerns about deflation. In addition, as HFPO employs a broad range of alternative investment strategies primarily within one or more of the Investment Sectors, HFPO’s Advisors could experience similar effects from changes in inflation depending on the particular strategy employed. In all cases, however, the Company endeavors to take inflation, and its possible effects on each of the Investment Funds, into account when it develops its investment strategies.

Recent Accounting Pronouncements

FASB Interpretation No. 48

In June 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 Company’s tax returns to determine whether the tax positions have met a “more-likely-than-not” threshold of being sustained by the applicable tax authority. Tax positions that meet the more-likely-than-not recognition threshold would be measured to determine the amount of benefit to recognize in the current year. If the more-likely-than-not threshold is not met,

119

tax positions would be measured to determine if a tax expense is required for the current year. For public companies, 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. Based on its analysis, the Managing Member has determined that the adoption of FIN 48 did not have a material impact on the Company’s financial statements. However, the Managing Member’s determination regarding FIN 48 may be subject to review and adjustment at a later date based upon factors including, but not limited to, further implementation guidance expected from the FASB, and ongoing analysis of tax laws, regulations and interpretations thereof.

Statement of Financial Accounting Standards No. 157

In September, 2006, the FASB released Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”), which provides enhanced guidance for using fair value to measure assets and liabilities. FAS 157 requires companies to provide expanded information about the assets and liabilities measured at fair value and the potential effect of these fair valuations of an entity’s financial performance. FAS 157 does not expand the use of fair value in any new circumstances, but provides clarification on acceptable fair valuation methods and applications. FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. As of December 31, 2007, management does not believe the adoption of FAS 157 will materially impact the amounts reported in the financial statements, however, additional disclosures will be required about the inputs used to develop the measurements of fair value and the effect of certain of the measurements reported in the Statement of Operations for a fiscal period.

Critical Accounting Policies and Estimates

The discussion and analysis of the Company’s financial condition and results of operations are based on the Company’s financial statements, which have been prepared in accordance with U.S. GAAP, which require the Managing Member to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. The financial statements are expressed in U.S. dollars. A summary of the Company’s accounting policies is set forth in Note 1 to the Company’s financial statements. In the Managing Member’s view, the policy that involves the most subjective judgment is set forth below.

The Company’s investments in Investment Funds are subject to the terms and conditions of the operating agreements of the respective Investment Funds. These investments are carried at fair value, based on the Company’s attributable share of the net assets of the respective Investment Fund. Fair values of interests in Investment Funds are determined utilizing NAV information supplied by each individual Investment Fund that is net of the Advisors’ management and incentive fees charged to the Investment Funds. The underlying investments of each Investment Fund are also accounted for at fair value. For investments of the underlying Advisor Funds, market value normally is based on quoted market prices or broker-dealer price quotations provided to the Advisor Fund. In the absence of quoted market prices or broker-dealer price quotations, underlying Advisor Fund investments are valued at fair value as determined by the Advisors or their administrator. Assets of the Company invested directly in Advisor Funds will generally be valued based on the value reported by or on behalf of the applicable Advisor, and other assets of the Company will be valued at fair value in a commercially reasonable manner.

For the fiscal years ended December 31, 2007 and December 31, 2006, the fair value of the Company’s investments in the Investment Funds was determined by the following valuation techniques:

December 31, 2007

	% of fair value	% of fair value
	investments valued using	investments valued by
Investment Fund	quoted market prices	external advisors
GELS	6.32%	25.82%
GFS	—	36.67%
GRV	1.15%	10.86%
GTT	0.55%	13.40%
HFPO	0.82%	4.42%
Total	8.84%	91.16%

120

December 31, 2006

	% of fair value	% of fair value
	investments valued using	investments valued by
Investment Fund	quoted market prices	external advisors
GELS	15.82%	19.70%
GFS	5.36%	29.71%
GRV	1.54%	12.81%
GTT	5.52%	9.54%
Total	28.24%	71.76%

The change in percentages between December 31, 2007 and December 31, 2006 were primarily due to assets being allocated from investments valued using quoted market prices to investments valued directly by external Advisors.

Because of the inherent uncertainty of valuation, estimated fair values may differ, at times significantly, from the values that would have been used had a ready market existed. In particular, the valuations generally are made based on information the Company or the Investment Funds, as applicable, receive from the Advisors. This information is generally not audited, except at year-end, and could prove to be inaccurate due to inadvertent mistakes, negligence, recklessness or fraud by the Advisors. The Company received preliminary and final NAVs from each of the Investment Funds on a monthly basis. Historically, the Company has not experienced any material variance between the preliminary and final NAVs which would have required adjustment to the Company’s financial statements. If the Managing Member determines that any such valuation may be inaccurate or incomplete, the Managing Member may determine the fair value of the asset based on information available to, and factors deemed relevant by, the Managing Member at the time of such valuation. Generally, however, neither the Company nor the Investment Funds will receive independent valuations with respect to the assets managed by Advisors and will not in many cases be able to conduct any independent valuations on their own or to cause any third parties to undertake such valuations. In addition, valuations of illiquid securities and other investments are inherently uncertain and may prove to be inaccurate in hindsight. These risks are described under ITEM 1A. “RISK FACTORS—General Risks—Risks Related to the Company and the Investment Funds’ Performance and Operation—Dependence on the Managing Member and the Advisors; the Managing Member Generally Has Limited Access to Information on or Control over Advisor’s Portfolios and Members Assume the Risk that Advisors May Knowingly Misrepresent Information Which Could Have a Material Negative Impact on the Company,” “—Special Risks of the Company’s Structure—Risks Related to the Company’s Structure—The Company’s Financial Statements are, and in the Future will be, Based on Estimates of Valuations Provided by Third Party Advisors Which May not be Accurate or May Need to be Adjusted in the Future,” and “—Special Risks of the Company’s Structure—Risks Associated with the Company Investing in Other Entities—Valuation of the Investment Funds’ Investments Will be Based upon Valuations Provided by the Advisors Which are Generally not Audited; Uncertainties in Valuations Could Have a Material Adverse Effect on the Company’s Net Assets.”

The valuation provisions of the LLC Agreement and the limited liability company agreements of the Investment Funds have been revised as of January 1, 2006 to provide the Managing Member with greater flexibility to more accurately value the Company’s assets (for purposes of subscriptions, redemptions and fees) in circumstances where the Managing Member has information available to it indicating that a valuation may be inaccurate or incomplete, although generally, as described above, the Managing Member will not have access to independent valuations and will rely on valuations provided by the Advisors. However, where such information does exist, the Managing Member will be entitled to apply its authority to more accurately reflect the Company’s value. Accordingly, to the extent that the Managing Member determines that a valuation provided by an Advisor may be inaccurate or incomplete, the additional flexibility on the Company’s valuation practices is designed to make the Company’s valuations more accurate. For example, to the extent an Advisor has allocated assets to an Advisor Fund that has provided the Company with a valuation report indicating a positive valuation, but the Managing Member is aware that the Advisor Fund has filed for bankruptcy, the Managing Member will now be able to take the bankruptcy into account to attempt to more accurately determine the fair value of such assets.

121

To date there has been one situation during the periods presented in the Company’s financial statements contained in this Annual Report, occurring during the year ended December 31, 2005, where the Managing Member has determined that the valuation provided by an Advisor or independent investment manager in which one of the Investment Funds had invested was not complete or was inaccurate. In this particular situation, the managing member of the Investment Fund adjusted the valuation provided by the Advisor to the Investment Fund upon receipt of information that the investment was under distress to reflect more fairly its belief as to the appropriate value of the investment. As the Company continues to ascribe a minor value to this investment, the Managing Member continues to evaluate this investment on an on-going basis and may further adjust its valuation in the future.

Off Balance Sheet Risk

There are no off-balance sheet or material contingent liabilities at the Company level.

Contractual Obligations

The Company does not have any long-term debt obligations, capital or operational lease obligations or other long-term debt liabilities.

ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and Qualitative Disclosures About Market Risk

The following table lists the significant market risk sensitive instruments held by the Company, through the Investment Funds, as of December 31, 2007 and as of December 31, 2006, as indicated by the Fair Value/Value at Risk column, and the Net Trading Profit/(Loss) from January 1, 2007 to December 31, 2007 and January 1, 2006 to December 31, 2006. Because of the speculative nature of the investments that the Company engages in through the Investment Funds, the Managing Member believes the entire portfolio value of the Company is at risk. The Managing Member is unable to track the impact of market volatility, credit and interest rate risk on the Units as in many cases it does not receive information on individual investments made by Advisors or their aggregate holdings and so is not in a position to track such risks on an aggregate basis.

Year Ended
December 31, 2007
	% of Members’			% of Adjusted			Fair Value/Value		Net Trading Profit/(Loss)
Investment Fund	Equity			Members’ Equity(8)			at Risk		(In millions)			Liquidity
GELS		33.16	%		32.09	%	$	225,759,808	$	26.0			(1	)
GFS		37.84	%		36.62	%	$	257,594,595	$	45.2			(2	)
GRV		12.38	%		11.99	%	$	84,319,166	$	4.3			(3	)
GTT		14.39	%		13.92	%	$	97,949,282	$	14.4			(4	)
HFPO		5.41	%		5.23	%	$	36,813,437	$	(2.0	)		(5	)
Total		103.18	%(6)		99.85	%(7)	$	702,436,288	$	87.9

Year Ended
December 31, 2006
	% of Members’			% of Adjusted			Fair Value/Value		Net Trading Profit
Investment Fund	Equity			Members’ Equity(8)			at Risk		(In millions)		Liquidity
GELS		36.81	%		35.54	%	$	243,737,514	$	27.6		(1	)
GFS		36.36	%		35.10	%	$	240,699,867	$	33.9		(2	)
GRV		14.87	%		14.36	%	$	98,479,997	$	8.7		(3	)
GTT		15.61	%		15.07	%	$	103,332,963	$	5.8		(4	)
Total		103.65	%(6)		100.07	%(6)	$	686,250,341	$	76.0

(1) Effective January 1, 2008, redemptions can be made quarterly with 61 days notice, or at the sole discretion of the Managing Member. Prior to January 1, 2008, redemptions could be made quarterly with 45 days notice, or at the sole discretion of the Managing Member.

122

(2)	Effective January 1, 2008, redemptions can be made quarterly on or after the first anniversary of the initial purchase of the units with 91 days notice, or at the sole discretion of the Managing Member. Prior to January 1, 2008, redemptions could be made quarterly with 91 days notice, or at the sole discretion of the Managing Member.
(3)	Redemptions can be made quarterly with 91 days notice, or at the sole discretion of the Managing Member.
(4)	Redemptions can be made quarterly with 60 days notice, or at the sole discretion of the Managing Member.
(5)	Redemptions can be made quarterly on or after the first anniversary of the initial purchase of the units with at least 91 days notice or at the sole discretion of the Managing Member.
(6)	The total value of the Company’s investments in the Investment Funds exceeded 100% of members’ equity and adjusted members’ equity, respectively, because members’ equity and adjusted members’ equity reflected certain accrued liabilities of the Company, including fees and expenses, and members’ equity also reflected Redemptions payable after the balance sheet date.
(7)	The total value of the Company’s investment in the Investment Funds was less than 100% of adjusted members’ equity because members equity reflected cash and cash equivalents greater than total liabilities excluding Redemptions payable in the amount of $22,708,145.
(8)	Adjusted members’ equity, used in the calculation of the investments as a percentage of adjusted members’ equity, represents members’ equity excluding Redemptions payable in the amount of $22,708,145 that was payable at December 31, 2007 and $23,701,199 that was payable at December 31, 2006.

Risk Management

In the ordinary course of business, the Managing Member, including in its capacity as managing member of the Investment Funds, attempts to manage a variety of risks, including market, credit and operational risk. The Managing Member, including in its capacity as the managing member of the Investment Funds, attempts to identify, measure and monitor risk through various mechanisms including risk management strategies and credit policies. These include monitoring risk guidelines and diversifying exposures across a variety of instruments, markets and counterparties.

Market risk is the risk of potential significant adverse changes to the value of financial instruments because of changes in market conditions such as interest rates, foreign exchange rates, equity prices, credit spreads, liquidity and volatility in commodity or security prices. The Managing Member, including in its capacity as managing member of the Investment Funds, monitors its exposure to market risk at both the Advisor and portfolio level through various analytical techniques. At the Advisor level, market risk is monitored on a regular basis. Where position level detail is available, the Managing Member, including in its capacity as managing member of the Investment Funds, monitors its exposure to market risk through a variety of analytical techniques, including Value-at-Risk (“VaR”) and scenario analysis (stress testing). VaR is calculated for each Advisor using a Monte Carlo simulation with a one-year lookback period. The Managing Member looks at VaR over a one-day horizon at the 95% and 99% confidence intervals. As of December 31, 2007, the Company had full position level transparency for approximately 36% (as a percentage of fair value investments) of the Advisors in which the Company invests through the Investment Funds. The Managing Member believes that the VaR assumptions it utilizes are reasonable given that VaR is only one determinant in the Managing Member’s overall risk management. Where position level detail is unavailable, an Investment Fund relies on risk reports provided by the Advisors as well as through open communication channels with Advisors, which generally includes site visits and monthly conference calls. The Company’s maximum risk of loss is limited to the Company’s investment in the Investment Funds. The risks involved are described under ITEM 1A. “RISK FACTORS—General Risks—Risks Related to the Company and the Investment Funds’ Performance and Operation—A Substantial Portion of an Investment Fund’s Assets May be Invested Utilizing Strategies That are not Within its Investment Sector; Most Advisors do not Provide Detailed Position Information Regarding their Portfolios” and “—Dependence on the Managing Member and the Advisors; the Managing Member Generally Has Limited Access to Information on or Control over Advisor’s Portfolios and Members Assume the Risk that Advisors May Knowingly Misrepresent Information Which Could Have a Material Negative Impact on the Company.”

123

The managing member of the Investment Funds monitors Advisors to prevent style drift. “Style drift” is defined as Advisors changing their investment style from the Investment Fund’s expectations. Where position level detail is available, the managing member of the Investment Funds monitors leverage against predetermined limits. Positions sizing limits are also monitored to ensure Advisors are properly diversified and risk normally is not concentrated in one or relatively few positions. In some cases, the managing member of the Investment Funds also has the ability to monitor approved trading instruments to ensure Advisors are not trading securities outside their mandate. Where position level detail is not available, the managing member of the Investment Funds relies on both written and oral Advisor communications. The risks involved are described under ITEM 1A. “RISK FACTORS—General Risks—Risks Related to the Company and the Investment Funds’ Performance and Operation—A Substantial Portion of an Investment Fund’s Assets May be Invested Utilizing Strategies That are not Within its Investment Sector; Most Advisors do not Provide Detailed Position Information Regarding their Portfolios” and ‘‘—Dependence on the Managing Member and the Advisors; the Managing Member Generally Has Limited Access to Information on or Control over Advisor’s Portfolios and Members Assume the Risk that Advisors May Knowingly Misrepresent Information Which Could Have a Material Negative Impact on the Company.”

At the Company’s portfolio level, the Company’s portfolio construction process is designed to provide for adequate diversification. Each Investment Fund, other than HFPO, is a portfolio of approximately 20-30 underlying Advisors and the managing member of each of the Investment Funds regularly reviews portfolio statistics, such as relative contribution to risk, to confirm that risk is not concentrated in any single Advisor. However, as of April 1, 2008, GFS will no longer be prohibited from allocating 25% or more of its assets to any single Advisor. The managing member of GFS, in its sole discretion, may determine from time to time the number of Advisors with which GFS invests based on factors such as the amount of GFS’s assets under management, the availability of attractive opportunities, and other portfolio construction considerations. Any such greater concentration with any single Advisor or in any single investment strategy may entail additional risks. See Item 1A. “RISK FACTORS—General Risks—Risks Related to the Company and the Investment Funds’ Performance and Operation—Non-Diversified Status; the Managing Member may Allocate to One or More Advisors a Relatively Large Percentage of an Investment Fund’s Assets.”

Quantitative analysis is combined with judgment to determine weightings and strategic return, risk and correlation estimates inform the quantitative analysis. Judgment is applied to both estimates and weights in an attempt to achieve exposure to hedge funds while delivering attractive risk-adjusted returns. Until June 30, 2004, the Company had allocated its assets on a roughly equivalent risk-weighted basis to each of the Investment Sectors. In other words, each of GELS, GFS, GRV and GTT contributed approximately 25% of the total risk of the Company portfolio, although the actual allocations that achieve the roughly equivalent risk weightings were different for each sector. Historically, the Managing Member utilized a strategic sector allocation policy and periodically reevaluated the contribution to the risk and return of the Company from each investment sector and may, in its sole discretion, adjust the Company’s assets or weights as it deems advisable. Through June 30, 2004, the Managing Member had not made any tactical adjustments to the weightings of the Investment Funds. An adjustment to the weights was implemented as of July 1, 2004 to reflect the Managing Member’s then updated expectations for return, risk and correlations for the Investment Funds as well as the Managing Member’s judgment. In addition, the weights among the Investment Funds no longer reflected a strict equal risk allocation (as they had prior to July 1, 2004). As of July 1, 2004, the weights were set to 20% GELS, 24% GFS, 33% GRV, and 23% GTT. On July 1, 2005, the Managing Member made a tactical adjustment pursuant to which the weights were set to 30% GELS, 30% GFS, 25% GRV, and 15% GTT as of July 1, 2005 and which was implemented by the Managing Member gradually following July 1, 2005. As of January 1, 2006, the Managing Member made another tactical adjustment to the weightings of the Investment Funds pursuant to which the weights were set to 35% GELS, 35% GFS, 15% GRV, and 15% GTT as of January 1, 2006 and which was implemented by the Managing Member effective January 1, 2006. These adjustments to the weights among the Investment Funds were based on the Managing Member’s judgment, in each case reflecting the Managing Member’s updated expectations for return, risk and correlations for the Investment Funds. The approximate weights of the Investment Funds were 32% GELS, 37% GFS, 12% GRV, 14% GTT and 5% HFPO as of December 31, 2007 as a percentage of adjusted members’ equity which excluded redemptions paid after December 31, 2007. This portfolio construction process is designed to create a diversified hedge fund portfolio with attractive return and risk characteristics. See ITEM 1. “BUSINESS—INVESTMENT PROGRAM—Allocation Among the Investment Funds.”

124

The Managing Member may, from time to time, vary or change materially the actual allocation of assets made by the Company, as it deems appropriate in its sole discretion, including without limitation by way of allocation of Company assets to any new Investment Fund or Advisor, complete or partial withdrawal of an allocation to any existing Investment Fund or Advisor, a reallocation of assets among existing Investment Funds or Advisors, or any combination of the foregoing. In carrying out any reallocation of Company assets, the Managing Member will have the sole discretion to determine the manner of such reallocation, including from which Investment Funds or Advisors to withdraw assets and to which Investment Funds or Advisors to allocate assets. Any reallocation of Company assets, for purposes of diversification, attempts to meet target allocations or otherwise, may take a significant period of time to implement due to the liquidity provisions and restrictions of the Investment Funds and the Advisors and for other reasons. There can be no assurance that market or other events will not have an adverse impact on the strategies employed by multiple Investment Funds and Advisors. Investment Funds and Advisors may at certain times hold large positions in a relatively limited number of investments. The Company could be subject to significant losses if an Investment Fund or an Advisor holds a large position in a particular investment that declines in value that cannot be liquidated without adverse market reaction or is otherwise adversely affected by changes in market conditions or circumstances. While the Managing Member currently expects to allocate assets to all the Investment Sectors through allocations to GTT, GELS, GRV, GFS and HFPO, as of April 1, 2008, the Managing Member will have no constraints with respect to the percentage of the Company’s assets to be allocated, directly or indirectly, to any single Advisor, group of Advisors, Investment Fund, or Investment Sector, or with respect to the number of Investment Funds and Advisors allocated to which, directly or indirectly, assets of the Company are allocated at any time. The percentage of the Company’s assets to be allocated to any single Advisor, group of Advisors, Investment Fund or Investment Sector, and the number of Investment Funds and Advisors to which the Company allocates assets from time to time will be determined by the Managing Member in its sole discretion, based on factors deemed relevant by the Managing Member at the time of such allocation, which may include the amount of the Company’s assets under management, constraints on the capital capacity of the Investment Funds and Advisors, the availability of attractive opportunities, and other portfolio construction and portfolio management considerations.

The Company invests in the Investment Funds, and may from time to time redeem its membership units of the Investment Funds. The Investment Funds, in turn, maintain relationships with counterparties that include the Advisors. These relationships could result in concentrations of credit risk. Credit risk arises from the potential inability of counterparties to perform their obligations under the terms of the contract, including in the case of the Company’s investments in the Investment Funds, the potential inability of an Investment Fund to satisfy its redemption obligations. The managing member of the Investment Funds (currently, the Managing Member) has formal credit-review policies to monitor counterparty risk.

In addition to market risk and credit risk, the Managing Member, including in its capacity as managing member of the Investment Funds, allocates resources to mitigate operational risk. Operational risk is the potential for loss caused by a deficiency in information, communication, transaction processing, settlement and accounting systems. The Managing Member, including in its capacity as managing member of the Investment Funds, maintains controls and procedures for the purpose of mitigating its own operational risk but it does not have control over the systems of the Advisors. In addition, the Managing Member, including in its capacity as managing member of the Investment Funds, deploys resources to assess control systems, legal risk, compliance risk, operations and treasury risk, credit risk, accounting risk and reputational risk.

Fraud and other business risks cannot be eliminated, however, the Managing Member, including in its capacity as managing member of the Investment Funds, seeks to significantly reduce such risks. The portfolio risk management process includes an effort to monitor and manage risk, but should not be confused with and does not imply low risk. There can be no assurance that the Managing Member, including in its capacity as managing member of the Investment Funds, will be able to implement its risk guidelines or that its risk monitoring strategies will be successful.

125

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

For the Company’s financial statements, see the Financial Statements beginning on page F-1 of this Annual Report.

The following is a summary of unaudited quarterly results of operations of the Company for the period from January 1, 2006 to December 31, 2007.

	Fiscal Quarter Ended
	Mar. 31,		June 30,			Sep. 30,			Dec. 31,
	2006		2006			2006			2006
Net Trading Profit/(Loss)	$	43,835,232	$	(4,725,910	)	$	1,952,682		$	34,958,405
Total Expenses	$	2,806,142	$	2,440,102		$	2,207,817		$	2,472,850
Net Income/(Loss)	$	41,240,462	$	(7,044,975	)	$	(173,192	)	$	32,547,350
Net Income/(Loss) Available for pro rata allocation to Members	$	39,178,439	$	(6,696,764	)	$	(165,319	)	$	30,924,807

	Fiscal Quarter Ended
	Mar. 31,		June 30,		Sep. 30,			Dec. 31,
	2007		2007		2007			2007
Net Trading Profit/(Loss)	$	25,218,664	$	33,486,055	$	(633,005	)	$	29,804,233
Total Expenses	$	2,252,706	$	2,536,562	$	2,458,008		$	2,560,820
Net Income/(Loss)	$	23,005,486	$	31,004,318	$	(2,920,258	)	$	27,305,035
Net Income/(Loss) Available for pro rata allocation to Members	$	21,855,212	$	29,454,102	$	(2,775,795	)	$	25,941,333

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

There have been no changes in, or disagreements with, accountants on accounting and financial disclosure.

ITEM 9A(T).   CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of the end of the period covered by this report, an evaluation was carried out by the Managing Member’s management, with the participation of its principal Executive Officer and Chief Financial Officer (or persons performing similar functions), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based on that evaluation, including an evaluation of the facts and circumstances relating to the disclosure set forth in Item 9B herein, the Company’s principal Executive Officer and Chief Financial Officer (or persons performing similar functions) concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

Management’s Report on Internal Control over Financial Reporting

The management of the Managing Member of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act, as a process designed by, or under the supervision of, the Managing Member’s principal executive and principal financial officers (or persons performing similar functions) and effected by the Managing Member’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for the Company for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

•       pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;

126

•       provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

•       provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The management of the Managing Member assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2007. In making this assessment, the Managing Member used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework.

Based on this assessment, the management of the Managing Member believes that, as of December 31, 2007, the Company’s internal control over financial reporting is effective based on those criteria.

This Annual Report does not include an Attestation Report of the Company’s registered public accounting firm regarding internal control over financial reporting. The report of the management of the Managing Member was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only the Managing Member’s management’s report in this Annual Report.

The information contained in this report shall not be deemed to be filed for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act.

Changes in Internal Control Over Financial Reporting

In addition, no change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) occurred during the fourth quarter of the Company’s fiscal year ended December 31, 2007 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B.   OTHER INFORMATION

During the preparation of this Annual Report on Form 10-K, the Company determined that certain information which was required to be included in a Current Report on Form 8-K was not so included. The following information should have been provided by the Company on a Current Report on Form 8-K pursuant to Item 5.02 therein with respect to the following reportable events: Thomas Dobler notified the Company that effective January 31, 2008, he would no longer serve as a Vice President of the Managing Member, and Melanie Owen notified the Company that effective March 18, 2008, she would no longer serve as a Vice President of the Managing Member.

127

PART III

ITEM 10.   DIRECTORS, EXECUTIVE OFFICERS OF THE MANAGING MEMBER AND REGISTRANT AND CORPORATE GOVERNANCE

The Company has no directors or executive officers. The Managing Member is responsible for the management and operations of the Company. Information about the Managing Member and the GS Group appears in ITEM 1. See ITEM 1. “BUSINESS—THE MANAGING MEMBER.” The following table sets forth the directors and executive officers of the Managing Member who have responsibility for the Company.

Name	Age		Position(s)
Omar Asali		37	Director, Managing Director and Co-Head*
Peter Ort		37	Director, Managing Director and Co-Head*
Jennifer Barbetta		35	Director, Managing Director and Chief Financial Officer
Kent A. Clark		43	Managing Director*
Westley D. Chapman		41	Managing Director

*  Kent A. Clark had been performing the responsibilities of principal executive officer since August 7, 2006. On March 26, 2008, Kent A. Clark notified the Company that, effective March 26, 2008, he would no longer serve on the Board of Directors of the Managing Member and as Managing Director and Chief Investment Officer of the Managing Member and would no longer be performing the responsibilities of the principal executive officer of the Managing Member. On March 26, 2008, the Managing Member elected Omar Asali and Peter Ort to the Board of Directors of the Managing Member and appointed them as Co-Heads of the Managing Member. Effective March 26, 2008, Omar Asali and Peter Ort will jointly be performing the responsibilities of the principal executive officer of the Managing Member.

On March 26, 2008, Hugh J. Lawson notified the Company that effective March 26, 2008, he will no longer serve on the Board of Directors of the Managing Member of the Company. Thomas Dobler notified the Company that effective January 31, 2008, he would no longer serve as a Vice President of the Managing Member, and Melanie Owen notified the Company that effective March 18, 2008, she would no longer serve as a Vice President of the Managing Member.

Information about the directors and executive officers of the Managing Member is provided below.

Omar Asali is a Managing Director of Goldman Sachs and is the Co-Head of the Managing Member and a Director of the Managing Member. As Co-Head of the Managing Member, Mr. Asali also performs the responsibilities of co-principal executive officer of the Managing Member. Prior to this, he was the Head of GFS and was Portfolio Manager of West Street Partners, a concentrated, multi-manager vehicle that invests in hedge funds that demand longer term, stable capital. Prior to joining Goldman Sachs Asset Management in 2003, Mr. Asali worked in Goldman Sachs’ Investment Banking Division providing M&A and strategic advisory services to clients in the High Technology Group. Prior to joining the firm, Mr. Asali worked in private equity at Capital Guidance. He started his career as a C.P.A. working for a public accounting firm. Mr. Asali has 12 years of industry experience. He received a B.S. in Accounting from Virginia Tech and an M.B.A. from Columbia University.

Peter Ort is a Managing Director of Goldman Sachs and is the Co-Head of the Managing Member and a Director of the Managing Member. As Co-Head of the Managing Member, Mr. Ort also performs the responsibilities of co-principal executive officer of the Managing Member. Prior to this, he was the Head of GELS. Prior to joining the Managing Member in 2001, Mr. Ort was a Vice President with Smartleaf, Inc. a portfolio management software company based in Cambridge, Massachusetts. He was previously with Goldman Sachs from 1996-2000, where he worked in the Investment Management Division’s Private Equity Group, evaluating private equity fund managers and direct investment opportunities. He first joined the firm in the Investment Banking Division’s Financial Institutions Group, where he focused on M&A transactions in New York and Tokyo. Mr. Ort received a J.D./M.B.A. from New York University in 1995 and a B.A. from Duke University in 1991. He was a Fulbright Scholar in Japan from 1991-1992.

128

Jennifer Barbetta is a Managing Director of Goldman Sachs and is the Chief Financial Officer of the Managing Member and a Director of the Managing Member. Ms. Barbetta is also the Chief Operating Officer for Goldman Sachs Asset Management’s Alternative Investments & Manager Selection businesses, which include the Private Equity Group, Hedge Fund Strategies and Global Manager Strategies. Ms. Barbetta is responsible for client reporting, portfolio monitoring and analytics, cash and credit management, infrastructure development and overall administration of the groups’ products. Ms. Barbetta joined Goldman Sachs in 1995 as an analyst in the Finance Division where she supported the Real Estate Principal Investment Area, focusing on the financial and tax reporting of the Whitehall Street Real Estate Limited Partnerships. Ms. Barbetta joined the Private Equity Group in 1997 and became head of its Portfolio Analytics and Reporting team in 2003 and Chief Operating Officer in 2005, prior to expanding her role within GSAM. Ms. Barbetta earned a B.S. in Finance from Villanova University and was a member of the Beta Gamma Sigma honor society.

Kent A. Clark is a Managing Director of Goldman Sachs and Chairman of the Investment Committee of the Managing Member. Prior to this, he was the Chief Investment Officer of the Managing Member, and he had performed the responsibilities of principal executive officer of the Managing Member until March 26, 2008. Mr. Clark joined GSAM in 1992 as a member of the Quantitative Equity team, where he managed Global Equity portfolios and equity market neutral trading strategies. In this capacity, he also developed risk and return models. Mr. Clark’s research has been published in the Journal of Financial and Quantitative Analysis and in Enhanced Indexing. Mr. Clark serves on the Board of Governors of the Graduate Faculty at the New School University, on the board of the Managed Funds Association, and he is a member of the Chicago Quantitative Alliance. Formerly, he was president of the Society of the Quantitative Analysts. Mr. Clark joined Goldman Sachs from the University of Chicago Graduate School of Business where he completed all but dissertation in the Ph.D. program and earned an M.B.A. He holds a Bachelor of Commerce degree from the University of Calgary.

Westley D. Chapman is a Managing Director of Goldman Sachs and Head of Quantitative, Operational & Business Due Diligence of the Managing Member. Prior to joining the Managing Member, Mr. Chapman was the Chief Financial Officer of the Investment Management Division where he led the division’s financial management processes, including a strategic review of the infrastructure systems and processes supporting the Managing Member. Prior to joining GSAM in 1997, Mr. Chapman was the Director of Financial Planning & Analysis at Travelers Group, focusing on their life insurance businesses, where he participated in the integration and evaluation of business acquisitions. Prior to joining Travelers Group in 1994, Mr. Chapman supported IBM as an auditor at Price Waterhouse where he led elements of the annual audit, performed control reviews of various Corporate Treasury systems and processes, and participated in a number of consulting projects. He obtained a M.B.A. in Finance from New York University in 1993 and a B.A. in Economics from Harvard College in 1989. Mr. Chapman is a Certified Public Accountant.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Exchange Act requires the officers and directors of the Managing Member and persons who own more than ten percent of the Company’s Units to file forms reporting their affiliation with the Company and reports of ownership and changes in ownership of the Company’s Units with the SEC. These persons and entities are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file. To the best of the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company, during the year ended December 31, 2007 all Section 16(a) filing requirements applicable to such persons and entities were complied with for such year.

Code of Ethics

The Company has no directors or executive officers. The Managing Member has adopted a Code of Ethics for the Company that applies to the persons acting as chief executive officer and chief financial officer/chief accounting officer of the Company. A copy of the Company’s Code of Ethics was filed as an exhibit to the Company’s Form 10-K for December 31, 2004. If the Company makes any substantive amendments to the Code of Ethics or grants any waiver, including an implicit waiver, from a provision of the Code of Ethics as applicable to the persons acting as chief executive officer and chief financial officer/chief accounting officer of the Company, the Company will disclose the nature of such amendment or waiver in a report on Form 8-K. In addition, the Managing Member has adopted a Code of Ethics for the Managing Member that applies to, among others, the chief executive officer

129

and chief financial officer/chief accounting officer of the Managing Member. A copy of the Managing Member’s Amended Code of Ethics was filed as an exhibit to the Company’s Form 10-K, filed April 2, 2007.

Corporate Governance

Nominating Committee and Compensation Committee

The Company has no directors or executive officers. The Company is not a “listed issuer” as defined under Section 10A-3 of the Exchange Act and is therefore not required to have a nominating and compensation committee comprised of independent directors. The Company currently does not have a standing nominating or compensation committee and accordingly there are no charters for such committees. In light of the fact that the Company does not have any directors or executive officers, the Board of Directors of the Managing Member believes that standing committees are not necessary and that the directors of the Board of Directors of the Managing Member collectively have the requisite background, experience, and knowledge to fulfill any limited duties and obligations that a nomination committee and a compensation committee would have on behalf of the Company. In addition, no direct compensation is paid to any employees of the Company making a compensation committee not applicable. Furthermore, the Board of Directors of the Managing Member has the power to engage experts or consultants as it deems appropriate to carry out its responsibilities.

Audit Committee and Audit Committee Financial Expert

The Company has no directors or executive officers. The Company is not a “listed issuer” as defined under Section 10A-3 of the Exchange Act and is therefore not required to have an audit committee comprised of independent directors. The Company currently does not have an audit committee, and accordingly there is no charter for such committee, and the Board of Directors of the Managing Member which performs the functions of an audit committee on behalf of the Company believes that the directors collectively have the requisite financial background, experience, and knowledge to fulfill the duties and obligations that an audit committee would have including overseeing the Company’s accounting and financial reporting practices. Therefore, the Board of Directors of the Managing Member does not believe that it is necessary at this time to search for a person who would qualify as an audit committee financial expert. Furthermore, the Board of Directors of the Managing Member has the power to engage experts or consultants as it deems appropriate to carry out its responsibilities.

The Board of Directors of the Managing Member has:

•       reviewed and discussed the financial statements with management of the Managing Member responsible for the management and operations of the Company;

•       discussed with the independent auditors the matters required to be discussed by the statement of Auditing Standards No. 61, as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T;

•       received the written disclosures and the letters from the independent accountants required by Independence Standards Board Standard No. 1, as adopted by the Public Company Accounting Oversight Board in Rule 3600T, and has discussed with the independent accountant, the independent accountant’s independence; and based on the review and discussions referred to above, the Board of Directors of the Managing Member recommended that the audited financial statement be included in the Company’s Annual Report for filing with the SEC.

The Board of Directors of the Managing Member consisted of Tobin V. Levy, Kent A. Clark and Hugh J. Lawson from January 1, 2007 through March 31, 2007. Effective April 1, 2007, Jennifer Barbetta was elected as a new member of the Board of Directors in lieu of Tobin V. Levy who stepped down as of the same date. Effective March 26, 2008, Omar Asali and Peter Ort were elected as new members of the Board of Directors in lieu of Kent A. Clark and Hugh J. Lawson who stepped down as of the same date.

Advisory Committee

In addition, pursuant to the LLC Agreement, the Managing Member is authorized to select one or more Members who are not affiliated with the Managing Member to serve on a committee, the purpose of which would be

130

to, on behalf of the Members, approve or disapprove, to the extent required by applicable law, principal transactions and certain other related party transactions.

Board Meetings and Committees; Annual Meeting Attendance; Shareholder Communications

The Company has no directors. The Board of Directors of the Managing Member is responsible for the management and operations of the Company. Although there were no formal meetings of the Board of Directors of the Managing Member in 2007, the directors, along with other employees of the Managing Member, met together frequently during 2007 to discuss, among other things, the Company. As discussed above, the Company does not have standing audit, nominating and compensation committees.

The Company does not have a policy with regard to board members’ attendance at annual meetings of Members. The Company does not hold director elections and therefore does not solicit proxies for the elections of directors from Members at annual meetings (or by written consent) and the Company is not required under Delaware law nor under its LLC Agreement to hold annual meetings for its Members. The Company did not hold an annual meeting for Members in 2007 and accordingly no members of the Board of Directors of the Managing Member attended.

Members wishing to communicate with the Board of Directors may send communications to Ms. Kristin Olson, Goldman, Sachs & Co., One New York Plaza, New York, New York 10004 who will forward all appropriate communications directly to the Board of Directors of the Managing Member or to any individual director or directors, depending upon the facts and circumstances outlined in the communication. In addition, Members have the opportunity to receive the Company’s monthly report to Members which provides for information as to how Members can contact a designated contact person at the Managing Member of the Company with any questions relating to the Member’s investment in the Company and the Company’s performance. Moreover, the Memorandum provides for contact information for Members relating to their investment in the Company. As the Company does not have a board of directors, the Managing Member believes that it is not necessary to have a more specific and detailed process and that providing contact information for the Managing Member provides for an appropriate means for communication for Members with the Board of Directors of the Managing Member or with respect to their investment in the Company.

ITEM 11.   EXECUTIVE COMPENSATION

The Company has no directors or executive officers.

In addition, the Company does not bear the costs of the annual compensation of the executive officers or the directors of the Managing Member. The Managing Member and its affiliates receive compensation from the Company for services provided to the Company. Set forth below are the amounts of the different types of fees paid or payable by the Company, or allocable to the Managing Member and its affiliates during the year ended December 31, 2007. Information about the terms and conditions of the Management Fee and the Incentive Allocation and other fees and expenses appear in ITEM 1. See ITEM 1. “BUSINESS—FEES AND EXPENSES.”

Fee Type	Fee Amount
Management Fee paid or payable by the Company	$	8,636,414
Incentive Allocation paid or payable by the Company	$	3,919,729
Placement Fee paid or payable by the Company to Goldman Sachs	$	—

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Security Ownership of Certain Beneficial Owners

To the knowledge of the Company, no person beneficially owns more than five percent of the Units.

Security Ownership of Management

The Company has no directors or executive officers.

131

GS HFS, the Managing Member of the Company, did not have a beneficial interest in the Company as of December 31, 2007 other than the Incentive Allocation and other fees payable to it by the Company.

The following table sets forth (i) the individual directors and executive officers of the Managing Member and (ii) all of the directors and executive officers as a group who beneficially owned Units of the Company as of March 28, 2008.

			Percentage of All
			Investors’
Number of Units		Name of Beneficial Owner	Interests
	0	Omar Asali		—
	0	Peter Ort		—
	0	Jennifer Barbetta		—
	0	Kent A. Clark		—
	0	Westley D. Chapman		—
	0	Directors and executive officers as a group		—

Changes in Control

There are no arrangements, including pledges by any person of Units of the Company, the operation of which may at a subsequent date result in a change of control of the Company.

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The Managing Member is an advisory affiliate of Goldman Sachs and GSAM. Each of the Managing Member, Goldman Sachs and GSAM is a wholly owned subsidiary of The Goldman Sachs Group, Inc. See ITEM 1. “BUSINESS—POTENTIAL CONFLICTS OF INTEREST.”

The Managing Member also manages a number of other investment funds that have investment programs that are similar to those of the Company. See ITEM 1. “BUSINESS—POTENTIAL CONFLICTS OF INTEREST.”

From time to time certain qualified officers and employees of the GS Group may invest in the Company. Neither the Investment Funds’ Advisors nor any of their respective principals are presently expected to purchase Units or membership units in the Investment Funds. See ITEM 1. “BUSINESS—POTENTIAL CONFLICTS OF INTEREST.”

The Company may from time to time, in the sole discretion of the Managing Member, invest in money market funds sponsored by the GS Group, and the Company will not be reimbursed for any fees accruing to any affiliate of the GS Group in respect of any such investment. See ITEM 1. “BUSINESS—INVESTMENT PROGRAM—Investment Objective and Approach.”

The Company pays the Managing Member a Management Fee. See ITEM 1. “BUSINESS—FEES AND EXPENSES.”

Some of the directors and executive officers of the Managing Member also are or may become directors and executive officers of Goldman Sachs and Goldman Sachs affiliates which entities provided services for the Company, other than as an underwriter, during the year ended December 31, 2007 and are proposed to provide such services in the current year.

No directors and executive officers of the Managing Member, their spouses and entities owned or controlled by them invested an amount in excess of $120,000 in the Company during the year ended December 31, 2007. Certain directors and executive officers of the Managing Member, including their spouses and entities owned or controlled by them, may from time to time invest in the Company. In addition, certain of the directors and executive officers from time to time invest their personal funds directly in other funds managed by the GS Group on the same terms and conditions as the other investors in these funds, who are not directors, executive officers or employees.

132

Under the Company’s Related Party Transaction Policy, which is a written policy adopted as of March 28, 2007, the Board of Directors of the Managing Member is required to review all related party transactions for potential conflicts of interest. The Board of Directors of the Managing Member shall approve each such transaction if it is consistent with the policy and is on terms, taken as a whole, which the Board of Directors of the Managing Member believes are no less favorable to the Company than could be obtained in an arms-length transaction with an unrelated third party, unless the Board of Directors of the Managing Member otherwise determines that the transaction is not in the Company’s best interests. The policy also provides for a ratification process if it is not practical for the Board of Directors of the Managing Member to review the transaction in advance.

The types of related party transactions covered by the policy are those that are required to be disclosed pursuant to SEC Regulation S-K, Item 404(a). There were no transactions required to be reported under Item 404(a) since the beginning of the Company’s fiscal year where the Company’s procedures and policies did not require review or were not followed.

Pursuant to the LLC Agreement, the Managing Member is authorized by the Members to select on behalf of the Members one or more Members who are not affiliated with the Managing Member to serve on a committee, the purpose of which will be to consider and, on behalf of the Members, approve or disapprove, to the extent required by applicable law, principal transactions and certain other related party transactions.

Director Independence

The Company has no directors or executive officers. The Company is not a “listed issuer” as defined under Section 10A-3 of the Exchange Act and is therefore not subject to a requirement that a majority of the board of directors be independent. The Managing Member is responsible for the management and operations of the Company. All of the directors of the Board of Directors of the Managing Member are employees of Goldman Sachs and the Managing Member. Accordingly, under the Independence Test of the Corporate Governance Standards of the New York Stock Exchange and other comparable stock exchange standards, none of the directors of the Board of Directors of the Managing Member are independent. Similarly, as discussed further under Item 10, the Company is not subject to the requirements under the Corporate Governance Standards of the New York Stock Exchange that the audit, nominating and compensation committees be comprised of independent directors and the Managing Member does not currently have separately designated audit, nominating and compensation committees.

Brokerage

The Advisors of the Investment Funds, managing their assets directly (including through Advisor Funds) or through Portfolio Companies, have the authority to select brokers and dealers from a list approved by the managing member of the Investment Funds, through which to effect transactions on the basis of various factors. The managing member of the Investment Funds requires such Advisors to select executing brokers on a best execution basis, taking into consideration such factors as price, commissions and commission equivalents, other transaction costs, quality of brokerage services, financing arrangements, creditworthiness and financial stability, financial responsibility, strength and clearance and settlement capability. The Company does not have oversight over broker and dealer selection by Investment Funds.

To the extent permitted under applicable law, the Advisors may, in their sole discretion, execute transactions on behalf of the Company and the Investment Funds, through Managed Accounts, Portfolio Companies and Advisor Funds, and with or through Goldman Sachs, and such transactions may, in some cases, be executed together with transactions on behalf of Goldman Sachs. The Advisors may also use Goldman Sachs for prime brokerage and other services for the Managed Accounts, Portfolio Companies and Advisor Funds, as well as their other clients.

Additionally, in selecting brokers and dealers to execute transactions for any Portfolio Company or Advisor Fund, or the Company or an Investment Fund through any Managed Account, certain of the Advisors may have authority to and may consider products or services provided, or expenses paid, by such brokers and dealers to, or on behalf of, such Advisors. Products and services generally include research items. In some circumstances, the commissions paid on transactions with brokers or dealers providing such services may exceed the amount another broker would have charged for effecting that transaction. “Soft dollar” payments or rebates of amounts paid to brokers and dealers may arise from exchange traded agency transactions, as well as over-the-counter principal

133

transactions. In addition, such payments or rebates may be made by futures brokers in connection with futures transactions.

Research or other services obtained in this manner may be used in servicing any or all advisory clients of the Advisors of the Investment Funds, including each of the Investment Funds and the Portfolio Companies, and may be used in connection with advisory accounts other than those that pay commissions to the broker or dealer relating to the research or other service arrangements.

GS Group may also receive products or services, including research, from brokers and dealers that provide brokerage services to its clients. The brokers and dealers providing such products and services may include the brokers and dealers that Advisors select to execute transactions on behalf of Portfolio Companies and Advisor Funds, and the Company or an Investment Fund through Managed Accounts. Research products and services made available to GS Group through such brokers and dealers may include: performance and other qualitative and quantitative data relating to Advisors in general and certain Advisors in particular; data relating to the historic performance of categories of securities associated with particular investment styles; quotation equipment; and related computer hardware and software, all of which research products and services may be used by the managing member of the Investment Funds in connection with its selection and monitoring of Advisors, the portfolio design of a mix of investment styles appropriate to investment objectives of clients, and the determination of overall portfolio strategies including asset allocation models.

Placement Agent

Goldman Sachs acts as placement agent for the Company (the “Placement Agent”). The Placement Agent is entitled to a fee (the “Placement Fee”) of up to a specified amount of each Member’s subscription. Historically, Goldman Sachs has not charged a Placement Fee, however, there can be no assurance that Goldman Sachs will not charge a Placement Fee in the future. Amounts paid in respect of the Placement Fee will not constitute assets of the Company. The Placement Agent may also receive compensation from the Managing Member that represents a portion of the Management Fee. The Placement Agent may enter into sub-placement agreements with affiliates and unaffiliated third parties, and the Company may engage one or more affiliated or unaffiliated successors or additional placement agents or distributors. At the discretion of the Placement Agent, all or a portion of the Placement Fee may be allocated to such sub-placement agents. The Managing Member or the Company may also pay certain expenses of the Placement Agent and certain fees and expenses of other Intermediaries. The Company may waive or impose different sales charges, or otherwise modify its distribution arrangements, in connection with the offering of Units. Subject to applicable law, the Placement Agent and Intermediaries, at their discretion (with the approval of the Managing Member) may on a negotiated basis enter into private arrangements with a Member or prospective Member (or an agent thereof) under which the Placement Agent, an Intermediary or the Managing Member makes payments to or for the benefit of such Member which represent a rebate of all or part of the fees paid by the Company to the Managing Member in respect of such holder’s Units. Consequently, the effective net fees payable by a Member who is entitled to receive a rebate under the arrangements described above may be lower than the fees payable by a Member who does not participate in such arrangements. Such arrangements reflect terms privately agreed between parties other than the Company, and for the avoidance of doubt, the Company cannot, and is under no duty to, enforce equality of treatment between Members by other entities, including those service providers of the Company that it has appointed. The Placement Agent, an Intermediary or the Managing Member shall be under no obligation to make arrangements available on equal terms to other Members. Pursuant to an agreement entered into between the Placement Agent and the Company (the “Placement Agent Agreement”), the Company has agreed to indemnify and hold harmless the Placement Agent, its affiliates and any agent against any losses, claims, damages or liabilities (or actions in respect thereof), joint or several (the “Covered Claims”), to which the Placement Agent may become subject, to the extent such Covered Claims arise out of or are based upon (i) an untrue statement or alleged untrue statement of a material fact contained in the Memorandum, or (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement therein not misleading. The Placement Agent Agreement provides that the Company will reimburse the Placement Agent for any legal or other expenses reasonably incurred by the Placement Agent in connection with investigating or defending any such Covered Claims; provided, however, that the Company will not be liable to indemnify or reimburse the Placement Agent in any such case to the extent that any such Covered Claims arises out

134

of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Memorandum in reliance upon and in conformity with written information furnished to the Company by the Placement Agent expressly for use therein.

In addition, to the extent the indemnification provisions described in the preceding paragraph are unavailable or insufficient to hold harmless an indemnified party with respect to any Covered Claims, the Placement Agent Agreement specifies that the Company will contribute to the amount paid or payable by such indemnified party as a result of such Covered Claims in such proportion as is appropriate to reflect the relative benefits received by the Company and the Placement Agent from the offering of the Units, unless otherwise provided by applicable law or the Placement Agent Agreement.

Goldman Sachs also acts as the placement agent on behalf of the Investment Funds. The Company will not be charged any placement fee by the Investment Funds.

ITEM 14.   PRINCIPAL ACCOUNTING FEES AND SERVICES

The following table presents fees for the professional audit services rendered by E&Y for the audit of the Company’s annual financial statements for the years ended December 31, 2007 and 2006 and fees billed for other services rendered by E&Y during those periods.

	Year Ended December 31,
	2007		2006
Audit Fees	$	146,000	$	134,000
Audit-Related Fees	$	—	$	—
Tax Fees(1)	$	65,000	$	61,900
All Other Fees	$	—	$	—
Total	$	211,000	$	195,900

(1) Tax services primarily involve assistance with the preparation of tax returns and K-1s.

The board of directors of the Managing Member does not have an audit committee which is responsible for the oversight of the Company’s accounting and financial reporting practices. As the Company does not have a formal audit committee, the services described above were not approved by the audit committee and the Company does not have audit committee pre-approval policies and procedures. The board of directors of the Managing Member as a whole is responsible for the oversight of the Company’s accounting and financial reporting practices and the board is responsible for approving every engagement of E&Y to perform audit or non-audit services for the Company before E&Y is engaged to provide those services. The board of directors considers whether the provision of any non-audit provisions is compatible with maintaining E&Y’s independence.

135

PART IV

ITEM 15.   EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)  Documents Filed as Part of this Annual Report:

1.  Financial Statements.

	Page
Description of Financial Statements	Number
Goldman Sachs Hedge Fund Partners, LLC Financial Statements
Report of Ernst & Young LLP, Independent Registered Public Accounting Firm		F-2
Schedule of Investments as of December 31, 2007 and 2006		F-3
Balance Sheet as of December 31, 2007 and 2006		F-4
Statement of Operations for the years ended December 31, 2007, 2006 and 2005		F-5
Statement of Changes in Members’ Equity for the years ended December 31, 2007, 2006 and 2005		F-6
Statement of Cash Flows for the years ended December 31, 2007, 2006 and 2005		F-7
Notes to Financial Statements		F-8

2.   Financial Statement Schedules.

Certain schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

3.  List of Exhibits.

See Index of Exhibits included on page E-1.

136

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC
(Registrant)

By: Goldman Sachs Hedge Fund Strategies LLC
Managing Member

By: /s/  Jennifer Barbetta

   Name: Jennifer Barbetta
   Title: Managing Director and Chief Financial Officer

Date: March 31, 2008

137

INDEX OF EXHIBITS

Exhibit No.			Description
	3	*	Copy of Amended and Restated Limited Liability Company Agreement of Goldman Sachs Hedge Fund Partners, LLC dated January 1, 2006 (Note: the LLC Agreement also defines the rights of the holders of Units of the Company) (filed as Exhibit 3 to the Form 8-K, filed January 6, 2006, and incorporated herein by reference).
	10.1	*	Copy of Amended and Restated Limited Liability Company Agreement of Goldman Sachs Global Tactical Trading, LLC, dated as of January 1, 2006 (filed as Exhibit 10.1 to the Form 8-K, filed January 6, 2006, and incorporated herein by reference).
	10.2		Copy of Amended and Restated Limited Liability Company Agreement of Goldman Sachs Global Equity Long/Short, LLC, dated as of January 1, 2008.
	10.3	*	Copy of Amended and Restated Limited Liability Company Agreement of Goldman Sachs Global Relative Value, LLC, dated as of January 1, 2006 (filed as Exhibit 10.3 to the Form 8-K, filed January 6, 2006, and incorporated herein by reference).
	10.4	*	Copy of Amended and Restated Limited Liability Company Agreement of Goldman Sachs Global Event Driven, LLC, dated as of January 1, 2006 (filed as exhibit 10.4 to the Form 8-K, filed January 6, 2006, and incorporated herein by reference).
	10.5		Form of Amended and Restated Limited Liability Company Agreement of Goldman Sachs Global Fundamental Strategies, LLC, to be dated as of April 1, 2008.
	10.6		Copy of Limited Liability Company Agreement of Goldman Sachs HFP Opportunistic Fund, LLC, dated as of June 25, 2007.
	10.7	*	Distribution Agreement between Goldman Sachs Hedge Fund Partners, LLC and Goldman, Sachs & Co. dated March 1, 2002 (filed as Exhibit 10.5 to the Form 10, filed April 29, 2004, and incorporated herein by reference).
	10.8	*	Administration Agreement between Goldman Sachs Hedge Fund Partners, LLC and Goldman Sachs Hedge Fund Strategies LLC (formerly Goldman Sachs Princeton LLC) dated March 1, 2002 (filed as Exhibit 10.6 to the Form 10, filed April 29, 2004, and incorporated herein by reference).
	10.9	*	Administration Agreement between Goldman Sachs Hedge Fund Partners, LLC and SEI Global Services, Inc. dated February 9, 2007 (filed as Exhibit 10.7 to the Form 10-K, filed April 2, 2007, and incorporated herein by reference).
	14.1	*	Code of Ethics for Goldman Sachs Hedge Fund Partners, LLC (filed as Exhibit 14.1 to the Form 10-K, filed March 29, 2005, and incorporated herein by reference).
	14.2	*	Amended Code of Ethics for Goldman Sachs Hedge Fund Strategies LLC (filed as Exhibit 14.2 to the Form 10-K, filed April 2, 2007, and incorporated herein by reference).
	31.1		Certification in the form prescribed by Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934.
	31.2		Certification in the form prescribed by Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934.
	31.3		Certification of Chief Financial Officer in the form prescribed by Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934.
	32.1		Certification in the form prescribed by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2		Certification in the form prescribed by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.3		Certification of Chief Financial Officer in the form prescribed by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*  Previously filed

E-1

INDEX OF FINANCIAL STATEMENTS

	Page
Description of Financial Statements	Number
Goldman Sachs Hedge Fund Partners, LLC Financial Statements
Report of Ernst & Young LLP, Independent Registered Public Accounting Firm	F-2
Schedule of Investments as of December 31, 2007 and 2006	F-3
Balance Sheet as of December 31, 2007 and 2006	F-4
Statement of Operations for the years ended December 31, 2007, 2006 and 2005	F-5
Statement of Changes in Members’ Equity for the years ended December 31, 2007, 2006 and 2005	F-6
Statement of Cash Flows for the years ended December 31, 2007, 2006 and 2005	F-7
Notes to Financial Statements	F-8

F-1

Report of Ernst & Young LLP
Independent Registered Public Accounting Firm

The Managing Member and Members

Goldman Sachs Hedge Fund Partners, LLC

We have audited the accompanying balance sheet, including the schedule of investments, of Goldman Sachs Hedge Fund Partners, LLC (the “Company”), as of December 31, 2007 and 2006, and the related statements of operations for the two years then ended, and the changes in members’ equity, cash flows and financial highlights for each of the three years in the period then ended. These financial statements are the responsibility of the managing member. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the 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. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by the managing member, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Goldman Sachs Hedge Fund Partners, LLC at December 31, 2007 and 2006, and the results of its operations, the changes in its members’ equity, its cash flows and the financial highlights for each of the three years in the period then ended, in conformity with U.S. generally accepted accounting principles.

-s- Ernst & Young

New York, NY

March 31, 2008

F-2

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

Schedule of Investments

December 31, 2007 and 2006

	2007								2006
			% of			% of adjusted					% of			% of adjusted
	Fair		members’			members’			Fair		members’			members’
Investee	value		equity(1)			equity(2)			value		equity(1)			equity(2)
Goldman Sachs Global Equity Long/Short, LLC	$	225,759,808		33.16	%		32.09	%	$	243,737,514		36.81	%		35.54	%
Goldman Sachs Global Fundamental Strategies, LLC		257,594,595		37.84	%		36.62	%		240,699,867		36.36	%		35.10	%
Goldman Sachs Global Relative Value, LLC		84,319,166		12.38	%		11.99	%		98,479,997		14.87	%		14.36	%
Goldman Sachs Global Tactical Trading, LLC		97,949,282		14.39	%		13.92	%		103,332,963		15.61	%		15.07	%
Goldman Sachs HFP Opportunistic Fund, LLC		36,813,437		5.41	%		5.23	%		—		—			—
Total investments (cost $532,669,888 and $554,997,009, respectively)	$	702,436,288		103.18	%		99.85	%	$	686,250,341		103.65	%		100.07	%

Underlying investment information required to make a complete presentation of the Company’s aggregate proportionate share of the underlying investments of the Investees is not available from certain Investees at December 31, 2007 and 2006. Where such information is available, the Company’s aggregate proportionate share of any underlying investment of the Investees, which exceeds 5% of the Company’s members’ equity, would be disclosed.

The Companies aggregate proportionate share of the following underlying investments of the investee represented greater than 5% of the Company’s member’s equity. At December 31, 2006 none of the aggregate proportionate shares of the underlying investments exceeded 5%.

December 31, 2007
								% of
			Proportionate		% of			Adjusted
	Underlying		Share of		Members’			Members’
Investee	Investment		Fair Value		Equity(1)			Equity(2)
Goldman Sachs Global Fundamental Strategies, LLC		Eton Park Fund, L.P.	$	38,952,802		5.72	%		5.54	%

(1)	Members’ equity used in the calculation of the investments as a percentage of members’ equity, is reduced for member redemptions that are paid after the balance sheet date.
(2)	Adjusted members’ equity used in the calculation of the underlying investments as a percentage of adjusted members’ equity, represents members’ equity excluding Redemptions payable in the amount of $22,708,145 at December 31, 2007 and $23,701,199 at December 31, 2006.

F-3

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

BALANCE SHEET

December 31, 2007 and 2006

	2007		2006
ASSETS
Assets:
Investments (cost $532,669,888 and $554,997,009, respectively)	$	702,436,288	$	686,250,341
Cash and cash equivalents		3,425,673		1,224,850
Total assets	$	705,861,961	$	687,475,191
LIABILITIES AND MEMBERS’ EQUITY
Liabilities:
Redemptions payable	$	22,708,145	$	23,701,199
Due to managing member		2,181,659		1,415,426
Due to bank		6,889		15,592
Accounts payable and accrued liabilities		181,186		268,500
Total liabilities		25,077,879		25,400,717
Members’ equity (units outstanding 4,588,504.15 and 4,928,239.53, respectively)		680,784,082		662,074,474
Total liabilities and members’ equity	$	705,861,961	$	687,475,191
Analysis of members’ equity:
Net capital contributions, accumulated net investment income/(loss) and realized profit/(loss)	$	511,017,682	$	530,821,142
Accumulated net unrealized profit/(loss)	$	169,766,400	$	131,253,332

See accompanying notes.

F-4

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

STATEMENT OF OPERATIONS

For the years ended December 31, 2007, 2006 and 2005

	2007			2006			2005
Income from trading:
Equity in earnings of investees:
Realized profit/(loss)	$	49,362,879		$	119,798,202		$	38,871,694
Changed in unrealized profit/(loss)		38,513,068			(43,777,793	)		27,944,887
Net trading profit/(loss)		87,875,947			76,020,409			66,816,581
Interest income		326,730			476,147			161,801
Expenses:
Management fee		8,636,414			9,131,947			13,560,772
Professional fees		632,679			481,551			1,237,030
Interest expense		283,897			252,759			37,747
Miscellaneous expenses		255,106			60,654			1,199
Total expenses		9,808,096			9,926,911			14,836,748
Net investment income/(loss)		(9,481,366	)		(9,450,764	)		(14,674,947	)
Net income/(loss)		78,394,581			66,569,645			52,141,634
Less: Incentive allocation to the Managing Member		3,919,729			3,328,482			2,615,216
Net income/(loss) available for pro-rata allocation to members	$	74,474,852		$	63,241,163		$	49,526,418

See accompanying notes.

F-5

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

STATEMENT OF CHANGES IN MEMBERS’ EQUITY

For the years ended December 31, 2007, 2006 and 2005

	Managing									Total
	member’s			Members’			Members’			members’
	equity			units			equity			equity
Balance at December 31, 2004	$	—			8,106,803.34		$	957,455,233		$	957,455,233
Subscriptions		—			2,253,291.93			225,329,193			225,329,193
Redemptions		(2,615,216	)		(3,708,281.88	)		(457,711,961	)		(460,327,177	)
Share class conversion		—			(144,688.21	)		—			—
Allocations of net income/(loss):
Incentive allocation		2,615,216			—			—			2,615,216
Pro-rata allocation		—			—			49,526,418			49,526,418
Balance at December 31, 2005		—			6,507,125.18			774,598,883			774,598,883
Subscriptions		—			418,830.00			41,883,000			41,883,000
Redemptions		(3,328,482	)		(1,650,633.46	)		(217,648,572	)		(220,977,054	)
Share class conversion		—			(347,082.19	)		—			—
Allocations of net income/(loss):
Incentive allocation		3,328,482			—			—			3,328,482
Pro-rata allocation		—			—			63,241,163			63,241,163
Balance at December 31, 2006		—			4,928,239.53			662,074,474			662,074,474
Subscriptions		—			430,805.00			43,080,500			43,080,500
Redemptions		(3,919,729	)		(671,424.67	)		(98,845,744	)		(102,765,473	)
Share class conversion		—			(99,115.71	)		—			—
Allocations of net income/(loss):
Incentive allocation		3,919,729			—			—			3,919,729
Pro-rata allocation		—			—			74,474,852			74,474,852
Balance at December 31, 2007	$	—			4,588,504.15		$	680,784,082		$	680,784,082

See accompanying notes.

F-6

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

STATEMENT OF CASH FLOWS

For the years ended December 31, 2007, 2006 and 2005

	2007			2006			2005
Cash flows from operating activities
Net income/(loss)	$	78,394,581		$	66,569,645		$	52,141,634
Adjustments to reconcile net income/(loss) to net cash from operating activities:
Purchases of investments		(100,310,000	)		(92,900,000	)		(192,640,000	)
Proceeds from sales of investments		172,000,000			607,000,001			228,080,000
Realized profit/(loss) from sales of Investments		(49,362,879	)		(119,798,202	)		(38,871,694	)
Change in unrealized profit/(loss)		(38,513,068	)		43,777,793			(27,944,887	)
(Increase)/decrease in operating assets:
Other assets		—			—			—
Increase/(decrease) in operating liabilities
Due to managing member		766,233			(905,688	)		(926,660	)
Accounts payable and accrued liabilities		(87,314	)		(314,540	)		(339,466	)
Net cash from operating activities		62,887,553			503,429,009			19,498,927
Cash flows from financing activities
Subscriptions		43,080,500			41,883,000			225,329,193
Redemptions		(103,758,527	)		(544,799,451	)		(241,350,217	)
Proceeds from loan		20,283,897			79,732,020			13,448,144
Repayments of loan		(20,292,600	)		(79,726,540	)		(16,438,032	)
Net cash from financing activities		(60,686,730	)		(502,910,971	)		(19,010,912	)
Net change in cash and cash equivalents		2,200,823			518,038			488,015
Cash and cash equivalents at beginning of year		1,224,850			706,812			218,797
Cash and cash equivalents at end of year	$	3,425,673		$	1,224,850		$	706,812
Supplemental disclosure of cash flow information
Cash paid by the Company during the year for interest	$	292,600		$	247,279		$	27,635

See accompanying notes.

F-7

GOLDMAN SACHS HEDGE FUND PARTNERS, LLC

NOTES TO FINANCIAL STATEMENTS

December 31, 2007

Note 1 – Significant accounting policies

Organization and basis of financial statements

Goldman Sachs Hedge Fund Partners, LLC (the “Company”) was organized as a limited liability company, pursuant to the laws of the State of Delaware and commenced operations on April 1, 2002 for the principal purpose of investing in the equity long/short, event driven, relative value, and tactical trading hedge fund sectors (the “Investment Sectors”) through investments in Goldman Sachs Global Equity Long/Short, LLC (“GELS”), Goldman Sachs Global Fundamental Strategies, LLC (“GFS”) (formerly known as Goldman Sachs Global Event Driven, LLC), Goldman Sachs Global Relative Value, LLC (“GRV”) and Goldman Sachs Global Tactical Trading, LLC (“GTT”) and, as of July 1, 2007, Goldman Sachs HFP Opportunistic Fund, LLC (“HFPO”) (collectively, the “Investees”). Each of these Investees invests directly through trading advisors, or indirectly through investment vehicles managed by such trading advisors (together, the “Advisors”). Goldman Sachs Hedge Fund Strategies LLC (“GS HFS”), a wholly-owned subsidiary of The Goldman Sachs Group, Inc. (the “Managing Member”), is the managing member, administrator and commodity pool operator of the Company. During the year ended December 31, 2006, the Company changed its exemption status with the Commodity Futures Trading Commission from Section 4.7 to Section 4.13(a)(4).

The financial statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), which require the Managing Member to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. The financial statements are expressed in U.S. dollars. Certain reclassifications have been made to previously reported amounts to conform to current year presentation.

The Company is an investment company for financial reporting purposes and accordingly carries its assets and liabilities at fair value. Net asset value (“NAV”) per unit is determined by dividing the net assets attributable to each series by that series’ respective number of units outstanding. The fair value of the Company’s assets and liabilities that qualify as financial instruments under Statement of Financial Accounting Standards No. 107, “Disclosures About Fair Value of Financial Instruments”, approximates the carrying amounts presented in the statement of financial condition.

Consolidation

During the years ended December 31, 2007 and 2006, the Company’s ownership percentage of certain Investees may have exceeded 50%. This ownership percentage will fluctuate as a result of the Company’s investment strategy and investor subscriptions and redemptions at the Company and Investee level. The Company does not consolidate the results of the Investees in its financial statements because the Company does not invest in such Investees for purposes of exercising control; ownership in excess of 50% may be temporary; and the consolidation of these balances would not enhance the usefulness or understandability of information to the members. The Company may, but normally does not intend to, exercise control over majority owned Investees.

F-8

The following table summarizes the Company’s ownership in the Investees at December 31, 2007 and 2006:

	December 31, 2007
					% owned		Adjusted		Adjusted%
	Company		Investee		by the		Investee		owned by the
	investment		equity(1)		Company(1)		equity(2)		Company(2)
GELS	$	225,759,808	$	766,588,143		29.45%	$	843,755,327		26.76%
GFS		257,594,595		972,766,382		26.48%		1,060,284,572		24.29%
GRV		84,319,166		252,699,023		33.37%		319,010,784		26.43%
GTT		97,949,282		204,678,528		47.86%		239,742,530		40.86%
HFPO		36,813,437		93,157,724		39.52%		93,157,724		39.52%
Total	$	702,436,288

	December 31, 2006
					% owned			Adjusted		Adjusted %
	Company		Investee		by the			Investee		owned by the
	investment		equity(1)		Company(1)			equity(2)		Company(2)
GELS	$	243,737,514	$	834,038,536		29.22	%	$	885,765,989		27.52	%
GFS		240,699,867		917,260,045		26.24	%		958,045,903		25.12	%
GRV		98,479,997		314,304,435		31.33	%		340,185,617		28.95	%
GTT		103,332,963		244,658,889		42.24	%		287,382,985		35.96	%
Total	$	686,250,341

(1)	The Investees’ equity used in the calculation of the percentage owned by the Company is reduced for member redemptions from the Investees that are paid after the balance sheet date.
(2)	The Adjusted Investees’ Equity used in the calculation of the percentage owned by the Company represents Investees’ equity excluding Redemptions payable at December 31, 2006 and December 31, 2007.

Equity in earnings of investees

Equity in earnings of investees includes the change in fair value of each Investee. Fair values are determined utilizing NAV information supplied by each individual Investee, which includes realized and unrealized gains/losses on investments as well as the Advisor’s management, incentive and administration fees and all other income/expenses. See Note 2 — Investments for further information.

Cash and cash equivalents

The Company considers all highly liquid investments with a maturity of less than 90 days at the time of purchase, which are not held for resale to be cash equivalents. Cash equivalents are carried at cost plus accrued interest, which approximates fair value.

Allocation of net income/(loss)

Net income/(loss) is allocated monthly to the capital account of each member in the ratio that the balance of each such member’s capital account bears to the total balance of all members’ capital accounts. The Managing Member receives an annual incentive allocation equal to 5.0% of any new appreciation in the NAV of each series, as defined. Any depreciation in the NAV of a series must be recouped prior to the Managing Member receiving an incentive allocation.

Subscriptions and redemptions

Subscriptions to the Company can be made as of the first day of each calendar quarter or at the sole discretion of the Managing Member. Redemptions from the Company can be made quarterly after a twelve-month holding period or at such other times as determined in the sole discretion of the Managing Member, as provided for in the Company’s limited liability company agreement.

F-9

Income taxes

The Company is taxed as a partnership for U.S. federal income tax purposes. The members include their distributive share of the Company’s taxable income or loss on their respective income tax returns. Accordingly, no income tax liability or expense has been recorded in the financial statements of the Company.

Indemnifications

The Company enters into contracts that contain a variety of indemnification arrangements. The indemnification arrangements the Company has entered into with service providers include provisions for the Company to indemnify and hold harmless such service providers for certain liabilities. These indemnification arrangements typically cover liabilities incurred by service providers in connection with the services provided under the contractual arrangements with the Company and are generally entered into as part of a negotiated contractual arrangement stipulating the furnishing of the delineated services. However, under the terms of such contractual arrangements, the Company will not be required to indemnify service providers in certain situations to the extent that the liabilities incurred by the service providers were caused by the gross negligence, willful misconduct, bad faith, reckless disregard of duties, or similar conduct on the part of the service provider. The Company’s maximum exposure under these arrangements is unknown. It is not possible to estimate the maximum potential exposure under these agreements, because the indemnification arrangements relate to unforeseeable liabilities suffered as a result of the conduct of the Company or other parties which is presently unknown or unforeseeable. However, the Company has not had prior claims or losses pursuant to these indemnification arrangements and expects the risk of material loss therefrom to be remote.

Note 2 – Investments

The Investees seek capital appreciation over time by investing in the Investment Sectors. The Company’s investments in Investees are subject to terms and conditions of the respective operating agreements. The investments are carried at fair value as determined by the Company’s attributable share of the net assets of the respective Investees. Fair values are determined utilizing NAV information supplied by each individual Investee net of each Advisor’s management and incentive fees. These fees are included in Equity in earnings of investees on the Statement of Operations. Realized gains/(losses) on the sale of investments in Investees are calculated using the specified identified cost method. Because of the inherent uncertainty of valuation, estimated fair values may differ, at times significantly, from the values that would have been used had a ready market existed. GS HFS is the Managing Member for each of the Investees. GS HFS does not charge the Company any management fee or incentive allocation at the Investee level.

The Managing Member generally has limited access, if at all, to specific information regarding the Advisors’ portfolios and relies on valuations provided by the Advisors. Generally, the valuations provided by the Advisors are only audited on an annual basis and are not subject to independent third party verification. Typically, audited financial statements are not received before issuance of the Company’s financial statements. GS HFS, in its capacity as Managing Member of the Company, may perform additional procedures including Advisor due diligence reviews and analytical procedures with respect to the valuations provided by the Advisors and to ensure conformity with U.S. GAAP. Valuations provided by the Advisors may differ from the audited values received subsequent to the date of the Company’s NAV determination. In such cases, the Company will evaluate the materiality of any such differences.

Certain of the Investees’ investments in the Advisors are subject to various lock-up provisions. Additionally, the Advisors of the investments held by the Investees may, at their discretion, transfer a portion of the Investees’ investment into side pocket share classes where liquidity terms are directed by the Advisor in accordance with the respective investment’s prospectus. These side pockets may have restricted liquidity and prohibit the Investees from fully liquidating its investment without delay.

F-10

The following table summarizes the Company’s Equity in earnings of investees for the year ended December 31, 2007, 2006 and 2005:

	Year Ended December 31,
Investee	Liquidity			2007			2006		2005
GELS		(1	)	$	26,022,295		$	27,640,603	$	25,751,277
GFS		(2	)		45,144,727			33,856,614		20,855,652
GRV		(3	)		4,339,169			8,751,105		12,266,713
GTT		(4	)		14,366,319			5,772,087		7,942,939
HFPO		(5	)		(1,996,563	)		—		—
Total				$	87,875,947		$	76,020,409	$	66,816,581

(1)	Effective January 1, 2008, redemptions can be made quarterly with 61 days notice, or at the sole discretion of the Managing Member. Prior to January 1, 2008, redemptions could be made quarterly with 45 days notice, or at the sole discretion of the Managing Member.
(2)	Effective January 1, 2008, redemptions can be made quarterly on or after the first anniversary of the initial purchase of the units with 91 days notice, or at the sole discretion of the Managing Member. Prior to January 1, 2008, redemptions could be made quarterly with 91 days notice, or at the sole discretion of the Managing Member.
(3)	Redemptions can be made quarterly with 91 days notice, or at the sole discretion of the Managing Member.
(4)	Redemptions can be made quarterly with 60 days notice, or at the sole discretion of the Managing Member.
(5)	Redemptions can be made quarterly on or after the first anniversary of the initial purchase of the units with at least 91 days notice or at the sole discretion of the Managing Member.

Goldman Sachs Global Equity Long/Short, LLC

Goldman Sachs Global Equity Long/Short, LLC seeks risk-adjusted absolute returns with volatility lower than the broad equity markets, primarily through long and short investment opportunities in the global equity markets. Strategies generally involve making long and short equity investments, often based on the Advisor’s assessment of fundamental value compared to market price, although Advisors employ a wide range of styles.

Goldman Sachs Global Fundamental Strategies, LLC

Goldman Sachs Global Fundamental Strategies, LLC seeks 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 event driven sector. Event driven strategies seek to identify security price changes resulting from corporate events such as restructurings, mergers, takeovers, spin-offs, and other special situations. Corporate event arbitrageurs generally choose their investments based on their perceptions of the likelihood that the event or transaction will occur, the amount of time that the process will take, and the perceived ratio of return to risk. Strategies that may be utilized in the event driven sector include risk arbitrage/special situations, credit opportunities/distressed securities and multi-strategy investing. Other strategies may be employed as well.

Goldman Sachs Global Relative Value, LLC

Goldman Sachs Global Relative Value, LLC seeks 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.

F-11

Goldman Sachs Global Tactical Trading, LLC

Goldman Sachs Global Tactical Trading, LLC seeks long-term risk-adjusted returns by allocating its assets to Advisors that employ strategies primarily within the tactical trading sector. Tactical trading strategies are directional trading strategies that generally fall into one of the following two categories: managed futures strategies and global macro strategies. Managed futures strategies involve trading in the global futures and currencies markets, generally using systematic or discretionary approaches. Global macro strategies generally utilize analysis of macroeconomic, geopolitical, and financial conditions to develop views on country, regional or broader economic themes and then seek to capitalize on such views by trading in securities, commodities, interest rates, currencies and various financial instruments.

Goldman Sachs HFP Opportunistic Fund, LLC

On July 1, 2007, the Company made an investment in HFPO whose investment objective is to make opportunistic investments in underlying Advisors in order to (a) increase the weighting of a particular Advisor which had a low weighting in the Company due to a lower target weight in one of the other Investees or (b) add an Advisor that is not currently represented in any of the other Investees.

Information regarding the actual management and incentive fees charged by the Advisors for the period was not available for all Advisors. The following table reflects the weighted average Advisors’ management fee and incentive fee rates at the Investee level at December 31, 2007, 2006 and 2005. The weighted average is based on the period-end market values of each Advisor’s investment in proportion to the Investee’s total investments. The fee rates used are the actual rates charged by each Advisor.

	2007						2006						2005
	Management			Incentive			Management			Incentive			Management			Incentive
Investee	fees			fee			fees			fee			fees			fee
GELS		1.49	%		20.22	%		1.60	%		19.91	%		1.50	%		19.94	%
GFS		1.51	%		19.77	%		1.51	%		19.91	%		1.47	%		19.92	%
GRV		1.51	%		20.91	%		1.64	%		20.98	%		1.65	%		20.88	%
GTT		2.09	%		22.70	%		2.11	%		21.71	%		2.02	%		20.63	%
HFPO		1.56	%		20.18	%		n/a			n/a			n/a			n/a

The Advisors’ management and incentive fees are not paid to the Managing Member.

The following table summarizes the cost of the Company’s investments in the Investees at December 31, 2007 and 2006:

Investee	12/31/2007		12/31/2006
GELS	$	168,574,601	$	193,158,402
GFS		171,521,192		178,904,875
GRV		76,051,896		90,318,077
GTT		77,712,199		92,615,655
HFPO		38,810,000		—
Total	$	532,669,888	$	554,997,009

Note 3 – Fees

The Company pays a monthly management fee accruing daily to GS HFS equal to 1.25% per annum of the net assets of the Company as of each month-end, as defined.

During the year ended December 31, 2007, the Company paid a monthly administration fee to SEI Global Services, Inc. (“SEI”) in the range between 0.04% and 0.06% per annum of the net assets at the Investee level, but such rate may be exceeded under certain circumstances, subject to a maximum of approximately 0.20%. During the year ended December 31, 2006, the Company paid a monthly administration fee to SEI in the range of 0.06% to 0.09%. During the year ended December 31, 2005, the Company paid a monthly administration fee to SEI in the range of 0.07% to 0.10%. The administration fee is charged at the Investee level and is included in Equity in earnings of

F-12

investees on the Statement of Operations. For the year ended December 31, 2007, 2006 and 2005, the administration fee charged at the Investee level totaled $324,928, $511,676 and $713,242, respectively.

Prior to February 9, 2007, the Managing Member served as the administrator of the Company. The Managing Member (in its capacity as administrator of the Company) and the Company entered into an agreement with SEI, as of March 1, 2004, pursuant to which SEI served as the sub-administrator of the Company. Effective as of February 9, 2007, the Managing Member ceased to serve as the administrator of the Company and the Company entered into an administration agreement with SEI pursuant to which SEI became the administrator of the Company.

Note 4 – Risk Management

In the ordinary course of business, GS HFS, in its capacity as Managing Member of the Company and the Investees, attempts to manage a variety of risks, including market, credit and operational risk. GS HFS, in its capacity as Managing Member of the Company and the Investees, attempts to identify, measure and monitor risk through various mechanisms including risk management strategies and credit policies. These include monitoring risk guidelines and diversifying exposures across a variety of instruments, markets and counterparties.

Market risk is the risk of potential significant adverse changes in the value of financial instruments because of changes in market conditions such as interest and currency rate movements and volatility in commodity or security prices. GS HFS, in its capacity as Managing Member of the Company and the Investees, monitors its exposure to market risk through various analytical techniques.

The Company invests in the Investees, and may from time to time redeem its membership units of the Investees. The Investees, in turn, maintain relationships with counterparties that include the Advisors. These relationships could result in concentrations of credit risk. Credit risk arises from the potential inability of counterparties to perform their obligations under the terms of the contract. GS HFS, in its capacity as Managing Member of the Investees, has formal credit-review policies to monitor counterparty risk.

Operational risk is the potential for loss caused by a deficiency in information, communication, transaction processing and settlement and accounting systems. GS HFS, in its capacity as Managing Member of the Company and the Investees, maintains controls and procedures for the purpose of mitigating operational risk.

Note 5 – Related parties

The Due to managing member liability on the Balance Sheet represents management fees due to GS HFS at December 31, 2007 and 2006.

Included in the Redemptions payable on the Balance Sheet at December 31, 2007 and 2006 were redemptions due to the Managing Member of $3,885,293 and $2,888,230, respectively.

Goldman, Sachs & Co. (“GS & Co.”), an affiliate of the Managing Member, is one of several prime brokers for certain Advisors. GS & Co. charges fees at prevailing market rates.

Directors and Executive Officers of the Managing Member owned less than 1% of the Company’s equity at December 31, 2007, 2006 and 2005.

Note 6 – Borrowing facility

On June 30, 2006, the existing credit facility, which was entered into on November 24, 2004, was terminated, and the Company entered into a credit facility (as amended, the “Credit Facility”) with Barclays Bank PLC (the “Facility Counterparty”). The Credit Facility was extended, prior to its maturity, an additional 90 days to September 30, 2007. On September 19, 2007, the Company further extended the maturity date of the Credit Facility to an additional 364-day period from September 19, 2007. In addition, the Company amended certain terms of the Credit Facility. Pursuant to the Credit Facility, the Company may borrow up to an amount equal to the lesser of (i) $32,000,000, which amount may be subsequently increased to $100,000,000 subject to the approval of the financial institution, and (ii) 15.0% of the Company’s NAV from time to time. The effective interest rate on borrowings outstanding is equal to (i) with respect to advances provided on less than three business days’ notice, the overnight London Interbank Offered Rate (“LIBOR”), for the initial day of such advance and one-week LIBOR

F-13

thereafter, and (ii) with respect to all other advances, one-week LIBOR, plus in each case 0.65% per annum. The Company also pays a monthly commitment fee to the Facility Counterparty at the rate of 0.25% per annum of the average daily aggregate unused portion of the commitment. The commitment fees and the interest related to borrowing are included in Interest expense on the Statement of Operations. The Company had no outstanding borrowings at December 31, 2007 and 2006.

On November 24, 2004, the Company entered into a five year credit facility with a major financial institution. From January 3, 2006 through June 29, 2006, the Company could have requested to borrow up to $80,000,000, at the discretion of the financial institution. Prior to January 3, 2006, the Company could request to borrow up to $40,000,000, at the discretion of the financial institution. Prior to September 1, 2005, the Company could request to borrow up to $45,000,000, at the discretion of the financial institution. At the time of any borrowing, the aggregate amounts borrowed could not exceed 10% of the Company’s NAV and at all other times the aggregate amount borrowed could not exceed 15% of the Company’s NAV. The effective interest rate on borrowed amounts equaled LIBOR plus 0.85%. The Company also paid an administration and structuring fee calculated as 0.10% per annum on the aggregate amount of $80,000,000. The administration and structuring fee and the interest related to borrowing are included in Interest expense on the Statement of Operations.

Note 7 – New accounting pronouncements

In June 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 Company’s tax returns to determine whether the tax positions have met a “more-likely-than-not” threshold of being sustained by the applicable tax authority. Tax positions that meet the more-likely-than-not recognition threshold would be measured to determine the amount of benefit to recognize in the current year. If the more-likely-than-not threshold is not met, tax positions would be measured to determine if a tax expense is required for the current year. For public companies, 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. Based on its analysis, the Managing Member has determined that the adoption of FIN 48 did not have a material impact on the Company’s financial statements. However, the Managing Member’s determination regarding FIN 48 may be subject to review and adjustment at a later date based upon factors including, but not limited to, further implementation guidance expected from the FASB, and ongoing analysis of tax laws, regulations and interpretations thereof.

In September, 2006, the FASB released Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”), which provides enhanced guidance for using fair value to measure assets and liabilities. FAS 157 requires companies to provide expanded information about the assets and liabilities measured at fair value and the potential effect of these fair valuations of an entity’s financial performance. FAS 157 does not expand the use of fair value in any new circumstances, but provides clarification on acceptable fair valuation methods and applications. FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods with those fiscal years. As of December 31, 2007, management does not believe the adoption of FAS 157 will materially impact the amounts reported in the Financial Statements, however, additional disclosures will be required about the inputs used to develop the measurements of fair value and the effect of certain of the measurements reported in the Statement of Operations for a fiscal period.

Note 8 – Members’ equity

At December 31, 2007 and 2006, the Company had Class A Units outstanding. Each series of Class A Units is identical in every regard except with respect to its individualized incentive allocation base. Effective January 1, 2007, Class A Series 21 through 32 units were converted into Class A Series 1 units and effective January 1, 2006, Class A Series 9 through Class A Series 20 units were converted into Class A Series 1 units. Transactions in units for

F-14

non-managing members for the year ended December 31, 2007, 2006 and 2005 are as follows:

	Year ended December 31, 2007						Year ended December 31, 2006						Year ended December 31, 2005
	Units			Amount			Units			Amount			Units			Amount
Share Class
Conversion
Class A
Series 1		319,714.29		$	43,832,922			1,747,528.47		$	219,744,215			911,205.28		$	109,573,710
Series 2		—			—			—			—			(687.41	)		(71,818	)
Series 3		—			—			—			—			(83,221.74	)		(8,734,155	)
Series 4		—			—			—			—			(12,734.34	)		(1,346,355	)
Series 5		—			—			—			—			(17,500.00	)		(1,850,110	)
Series 6		—			—			—			—			(298,400.00	)		(31,325,187	)
Series 7		—			—			—			—			(412,100.00	)		(42,863,013	)
Series 8		—			—			—			—			(231,250.00	)		(23,383,072	)
Series 9		—			—			(210,475.70	)		(22,009,240	)		—			—
Series 10		—			—			(494,654.82	)		(52,022,308	)		—			—
Series 11		—			—			(303,250.00	)		(31,573,596	)		—			—
Series 12		—			—			(263,000.00	)		(27,533,177	)		—			—
Series 13		—			—			(279,367.65	)		(29,690,733	)		—			—
Series 14		—			—			(276,499.99	)		(29,272,927	)		—			—
Series 15		—			—			(128,500.00	)		(13,455,578	)		—			—
Series 16		—			—			(52,500.00	)		(5,421,351	)		—			—
Series 17		—			—			(10,000.00	)		(1,023,103	)		—			—
Series 18		—			—			(51,262.50	)		(5,179,803	)		—			—
Series 19		—			—			(12,000.00	)		(1,233,270	)		—			—
Series 20		—			—			(13,100.00	)		(1,329,129	)		—			—
Series 21		(20,000.00	)		(2,180,597	)		—			—			—			—
Series 22		(126,060.00	)		(13,362,621	)		—			—			—			—
Series 23		(17,500.00	)		(1,846,363	)		—			—			—			—
Series 24		(16,500.00	)		(1,713,051	)		—			—			—			—
Series 25		(26,000.00	)		(2,660,197	)		—			—			—			—
Series 26		(5,000.00	)		(521,404	)		—			—			—			—
Series 27		(19,000.00	)		(1,990,075	)		—			—			—			—
Series 28		(79,750.00	)		(8,361,171	)		—			—			—			—
Series 29		(20,000.00	)		(2,081,244	)		—			—			—			—
Series 30		(6,020.00	)		(630,689	)		—			—			—			—
Series 31		(39,000.00	)		(4,025,172	)		—			—			—			—
Series 32		(44,000.00	)		(4,460,338	)		—			—			—			—
		(99,115.71	)	$	—			(347,082.19	)	$	—			(144,688.21	)	$	—

F-15

	Year ended December 31, 2007				Year ended December 31, 2006				Year ended December 31, 2005
	Units		Amount		Units		Amount		Units		Amount
Subscriptions Class A
Series 9		—	$	—		—	$	—		244,566.36	$	24,456,636
Series 10		—		—		—		—		546,895.41		54,689,541
Series 11		—		—		—		—		313,250.00		31,325,000
Series 12		—		—		—		—		282,000.00		28,200,000
Series 13		—		—		—		—		305,217.66		30,521,766
Series 14		—		—		—		—		294,000.00		29,400,000
Series 15		—		—		—		—		128,500.00		12,850,000
Series 16		—		—		—		—		52,500.00		5,250,000
Series 17		—		—		—		—		10,000.00		1,000,000
Series 18		—		—		—		—		51,262.50		5,126,250
Series 19		—		—		—		—		12,000.00		1,200,000
Series 20		—		—		—		—		13,100.00		1,310,000
Series 21		—		—		20,000.00		2,000,000		—		—
Series 22		—		—		126,060.00		12,606,000		—		—
Series 23		—		—		17,500.00		1,750,000		—		—
Series 24		—		—		16,500.00		1,650,000		—		—
Series 25		—		—		26,000.00		2,600,000		—		—
Series 26		—		—		5,000.00		500,000		—		—
Series 27		—		—		19,000.00		1,900,000		—		—
Series 28		—		—		79,750.00		7,975,000		—		—
Series 29		—		—		20,000.00		2,000,000		—		—
Series 30		—		—		6,020.00		602,000		—		—
Series 31		—		—		39,000.00		3,900,000		—		—
Series 32		—		—		44,000.00		4,400,000		—		—
Series 33		10,000.00		1,000,000		—		—		—		—
Series 34		10,010.00		1,001,000		—		—		—		—
Series 35		27,595.00		2,759,500		—		—		—		—
Series 36		37,000.00		3,700,000		—		—		—		—
Series 37		34,000.00		3,400,000		—		—		—		—
Series 38		38,700.00		3,870,000		—		—		—		—
Series 39		31,750.00		3,175,000		—		—		—		—
Series 40		51,000.00		5,100,000		—		—		—		—
Series 41		75,000.00		7,500,000		—		—		—		—
Series 42		54,000.00		5,400,000		—		—		—		—
Series 43		27,750.00		2,775,000		—		—		—		—
Series 44		34,000.00		3,400,000		—		—		—		—
Total		430,805.00	$	43,080,500		418,830.00	$	41,883,000		2,253,291.93	$	225,329,193

F-16

	Year ended December 31, 2007				Year ended December 31, 2006				Year ended December 31, 2005
	Units		Amount		Units		Amount		Units		Amount
Redemptions Class A
Series 1		671,424.67	$	98,845,744		1,650,633.46	$	217,648,572		3,549,600.61	$	441,034,885
Series 9		—		—		—		—		34,090.66		3,553,991
Series 10		—		—		—		—		52,240.59		5,492,810
Series 11		—		—		—		—		10,000.00		1,041,174
Series 12		—		—		—		—		19,000.00		1,989,089
Series 13		—		—		—		—		25,850.01		2,747,295
Series 14		—		—		—		—		17,500.01		1,852,717
		671,424.67	$	98,845,744		1,650,633.46	$	217,648,572		3,708,281.88	$	457,711,961

At December 31, 2007, 2006 and 2005, members’ equity consists of the following:

	Year ended December 31, 2007				Year ended December 31, 2006				Year ended December 31, 2005
	Units		Amount		Units		Amount		Units		Amount
Non-managing members Class A
Series 1		4,157,699.15	$	635,635,467		4,509,409.53	$	618,241,552		4,412,514.52	$	554,854,668
Series 9		—		—		—		—		210,475.70		22,009,240
Series 10		—		—		—		—		494,654.82		52,022,308
Series 11		—		—		—		—		303,250.00		31,573,596
Series 12		—		—		—		—		263,000.00		27,533,177
Series 13		—		—		—		—		279,367.65		29,690,733
Series 14		—		—		—		—		276,499.99		29,272,927
Series 15		—		—		—		—		128,500.00		13,455,578
Series 16		—		—		—		—		52,500.00		5,421,351
Series 17		—		—		—		—		10,000.00		1,023,103
Series 18		—		—		—		—		51,262.50		5,179,803
Series 19		—		—		—		—		12,000.00		1,233,270
Series 20		—		—		—		—		13,100.00		1,329,129
Series 21		—		—		20,000.00		2,180,597		—		—
Series 22		—		—		126,060.00		13,362,621		—		—
Series 23		—		—		17,500.00		1,846,363		—		—
Series 24		—		—		16,500.00		1,713,051		—		—
Series 25		—		—		26,000.00		2,660,197		—		—
Series 26		—		—		5,000.00		521,404		—		—
Series 27		—		—		19,000.00		1,990,075		—		—
Series 28		—		—		79,750.00		8,361,171		—		—
Series 29		—		—		20,000.00		2,081,244		—		—
Series 30		—		—		6,020.00		630,689		—		—
Series 31		—		—		39,000.00		4,025,172		—		—
Series 32		—		—		44,000.00		4,460,338		—		—
Series 33		10,000.00		1,115,107		—		—		—		—
Series 34		10,010.00		1,098,794		—		—		—		—
Series 35		27,595.00		3,005,067		—		—		—		—
Series 36		37,000.00		3,993,991		—		—		—		—

F-17

	Year ended December 31, 2007				Year ended December 31, 2006				Year ended December 31, 2005
	Units		Amount		Units		Amount		Units		Amount
Series 37		34,000.00		3,611,289		—		—		—		—
Series 38		38,700.00		4,022,981		—		—		—		—
Series 39		31,750.00		3,283,841		—		—		—		—
Series 40		51,000.00		5,280,566		—		—		—		—
Series 41		75,000.00		7,918,349		—		—		—		—
Series 42		54,000.00		5,608,852		—		—		—		—
Series 43		27,750.00		2,785,064		—		—		—		—
Series 44		34,000.00		3,424,714		—		—		—		—
Subtotal		4,588,504.15	$	680,784,082		4,928,239.53	$	662,074,474		6,507,125.18	$	774,598,883
Managing member				—				—				—
Total members’ equity			$	680,784,082			$	662,074,474			$	774,598,883

Note 9 – Financial highlights

Financial highlights for the Company for the year ended December 31, 2007, 2006 and 2005 are as follows:

	2007			2006			2005
	Class A			Class A			Class A
	Series 1			Series 1			Series 1
Per unit operating performance:
Net asset value, beginning of period	$	137.10		$	125.75		$	120.25
Income from operations:
Net trading profit/(loss)		18.63			13.67			7.44
Net investment income/(loss)(1)(2)		(2.85	)		(2.32	)		(1.94	)
Total income/(loss) from operations		15.78			11.35			5.50
Net asset value, end of period	$	152.88		$	137.10		$	125.75
Ratios to average net assets(3)
Expenses		1.42	%		1.36	%		1.36	%
Incentive allocation		0.57	%		0.46	%		0.22	%
Total expenses and incentive allocation		1.99	%		1.82	%		1.58	%
Net investment income/(loss)		(1.95	)%		(1.76	)%		(1.57	)%
Total return (prior to incentive allocation)(4)		12.12	%		9.51	%		4.79	%
Incentive allocation(4)		(0.61	)%		(0.48	)%		(0.22	)%
Total return(4)		11.51	%		9.03	%		4.57	%

(1)	Net investment income/(loss) is calculated based on average units outstanding during the period.
(2)	Includes incentive allocation.
(3)	The ratios of expenses and net investment/(loss) to average net assets are calculated by dividing total expenses and net investment income/(loss), respectively, by the month end average net assets for the period. The ratios to average net assets calculated above do not include the Company’s proportionate share of the net investment income and expenses of the Investees. The ratios to average net assets for each member may vary based on individualized fee structures and the timing of capital transactions.

F-18

(4) The components of total return are calculated by dividing the change in the per share value of each component for the period by the NAV per share at the beginning of the period. The total return for Class A Series 1 is calculated taken as a whole. The total return for each member may vary based on individualized fee structures and the timing of capital transactions.

Per share operating performance, expense ratio and total return are calculated and presented for the initial series.

Note 10 – Subsequent events

Effective January 1, 2008, Class A Series 33 through Class A Series 44 units were collapsed into Class A Series 1 units, as provided in the Company’s private placement memorandum.

F-19

EX-10.2

Execution Copy

SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY
AGREEMENT

OF

GOLDMAN SACHS GLOBAL EQUITY LONG/SHORT, LLC

Dated as of January 1, 2008

TABLE OF CONTENTS

		Page
ARTICLE I General Provisions			1
Section 1.01	Company Name and Address		1
Section 1.02	Fiscal Year		1
Section 1.03	Liability of Members		1
Section 1.04	Purposes of the Company		2
Section 1.05	Assignability of Units; Assignment by Managing Member		3
Section 1.06	Registered Office and Agent for Service of Process		3
ARTICLE II Management of the Company			3
Section 2.01	Management Generally		3
Section 2.02	Delegation by Managing Member		3
Section 2.03	Authority of the Managing Member		3
Section 2.04	Reliance by Third Parties		5
Section 2.05	Activity of the Managing Member		5
Section 2.06	Standard of Care; Indemnification		6
Section 2.07	Management Fee; Payment of Costs and Expenses		8
Section 2.08	Principal Transactions and Other Related Party Transactions		9
ARTICLE III Series of Units; Admission of New Members			9
Section 3.01	Classes and Series of Units		9
Section 3.02	Conversion of Series		10
Section 3.03	New Members		10
Section 3.04	Adjustment to Number of Units Issued		10
Section 3.05	Additional Classes of Units		10
ARTICLE IV Capital Accounts of Members and Operation Thereof			11
Section 4.01	Definitions		11
Section 4.02	Capital Contributions		11
Section 4.03	Capital Accounts		12
Section 4.04	Membership Percentages		12
Section 4.05	Allocation of Net Capital Appreciation or Net Capital Depreciation		13
Section 4.06	Amendment of Incentive Allocation		14
Section 4.07	Determination of Net Assets		14
Section 4.08	Determination of Net Asset Value		15
Section 4.09	Allocation for Tax Purposes		16
Section 4.10	Determination by Managing Member of Certain Matters; Managing Member’s Discretion		16
Section 4.11	Adjustments to Take Account of Interim Year Events		17

i

		Page
Section 4.12	Tax Withholding		17
ARTICLE V Redemptions and Distributions			17
Section 5.01	Redemptions and Distributions in General		17
Section 5.02	Redemptions		17
Section 5.03	Limitation on Redemptions		19
Section 5.04	Distributions		20
ARTICLE VI Withdrawal, Death, Disability			20
Section 6.01	Withdrawal, Death, etc. of Members		20
Section 6.02	Required Withdrawals		21
Section 6.03	Effective Date of Withdrawal		21
ARTICLE VII Duration and Dissolution of the Company			21
Section 7.01	Duration		21
Section 7.02	Dissolution		23
ARTICLE VIII Tax Returns; Reports to Members			24
Section 8.01	Independent Auditors		24
Section 8.02	Filing of Tax Returns		24
Section 8.03	Tax Matters Partner		24
Section 8.04	Financial Reports to Current Members		24
Section 8.05	Tax Reports to Members and Former Members		24
ARTICLE IX Miscellaneous			24
Section 9.01	General		24
Section 9.02	Power of Attorney		25
Section 9.03	Amendments to Limited Liability Company Agreement		25
Section 9.04	Instruments		26
Section 9.05	No Personal Liability For Return of Capital		26
Section 9.06	Choice of Law		26
Section 9.07	Venue; Inconvenient Forum		27
Section 9.08	No Third Party Rights		27
Section 9.09	Notices		27
Section 9.10	Grantors of Revocable Trusts		27
Section 9.11	Goodwill		27
Section 9.12	Headings		27
Section 9.13	Pronouns		27
Section 9.14	Confidentiality		27

ii

SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF

GOLDMAN SACHS GLOBAL EQUITY LONG/SHORT, LLC

Dated as of January 1, 2008

     The undersigned (herein called the “Members,” which term shall include any Persons (as defined below) hereafter admitted to the Company (as defined below) pursuant to Article III of this Agreement (as defined below) and shall exclude any Persons who cease to be Members pursuant to Article V or Article VI of this Agreement) hereby agree to form and hereby form, as of the date and year first above written, a limited liability company (herein called the “Company”), pursuant to the provisions of the Limited Liability Company Act of the State of Delaware (6 Del. Code § 18-101, et seq.) (the “Act”), which shall be governed by, and operated pursuant to, the terms and provisions of this Amended and Restated Limited Liability Company Agreement (herein called this “Agreement”).

ARTICLE I

General Provisions

     Section 1.01 Company Name and Address. The name of the Company is Goldman Sachs Global Equity Long/Short, LLC. Its principal office is located at 701 Mount Lucas Road, Princeton, New Jersey 08540, or at such other location as the Managing Member (as defined in Section 1.03) in the future may designate. The Managing Member shall promptly notify the Non-Managing Members (as defined in Section 1.03) of any change in the Company’s address.

     Section 1.02 Fiscal Year. The fiscal year of the Company (herein called the “fiscal year”) shall end on December 31 of each calendar year; provided, however, that the Managing Member may change the Company’s fiscal year-end, without the consent of the Non-Managing Members, as deemed appropriate by the Managing Member, in its sole discretion.

     Section 1.03 Liability of Members. The names of all of the Members and the amounts of their respective contributions to the Company (herein called the “Capital Contributions”) are set forth in a schedule (herein called the “Schedule”), which shall be filed with the records of the Company at the Company’s principal office (as set forth in Section 1.01) and is hereby incorporated by reference and made a part of this Agreement.

     The Member designated in Part I of the Schedule as the Managing Member (herein called the “Managing Member”) shall manage the operations of the Company. The Members designated in Part II of the Schedule are referred to herein as the “Non-Managing Members.” The Managing Member, the Non-Managing Members and the former Non-Managing Members shall be liable to the extent provided herein for the repayment and discharge of all debts and obligations of the Company attributable to any fiscal year (or relevant portion thereof) during which they are or were Members of the Company to the extent of their respective

limited liability company interests (the “Units”) in the Company in the fiscal year (or relevant portion thereof) to which any such debts and obligations are attributable.

     The Members and all former Members shall share all losses, liabilities or expenses suffered or incurred by virtue of the operation of the preceding paragraph of this Section 1.03 in the proportions of their respective Capital Accounts (determined as provided in Section 4.03) for the fiscal year (or relevant portion thereof) to which any debts or obligations of the Company are attributable. A Member’s or former Member’s share of all losses, liabilities or expenses shall not be greater than its respective interest in the Company for such fiscal year (or relevant portion thereof).

     As used in this Agreement, the terms “interests in the Company” and “interest in the Company” shall mean with respect to any fiscal year (or relevant portion thereof) and with respect to each Member (or former Member), the Capital Account (or, in the case of a Member with more than one series of Units (as defined below), the Capital Accounts) that such Member (or former Member) would have received (or in fact did receive) pursuant to the terms and provisions of Article VI upon withdrawal from the Company as of the end of such fiscal year (or relevant portion thereof).

     Notwithstanding any other provision of this Agreement to the contrary, in no event shall any Member (or former Member) be obligated to make any additional contribution or payment whatsoever to the Company, or have any liability for the repayment and discharge of the debts and obligations of the Company (apart from its interest in the Company), except that a Non-Managing Member (or former Non-Managing Member) shall, in the discretion of the Managing Member, be required, for purposes of meeting such Member’s (or former Member’s) obligations under this Section 1.03, to make additional contributions or payments, respectively, up to, but in no event in excess of, the aggregate amount of returns of capital and other amounts actually received by it from the Company during or after the fiscal year to which any debt or obligation is attributable.

     As used in this Agreement, the terms “former Non-Managing Member” and “former Member” refer to such Persons as hereafter from time to time cease to be a Non-Managing Member or Member, respectively, pursuant to the terms and provisions of this Agreement.

     Section 1.04 Purposes of the Company. The Company is organized for the purposes of allocating its assets directly or indirectly to a group of investment managers (the “Advisors”) (that may or may not be Affiliates (as defined in Section 2.05) of the Managing Member) that employ strategies primarily within the equity long/short hedge fund sector, engaging in any other lawful act or activity for which limited liability companies may be organized under the Act, and engaging in any and all activities and transactions as the Managing Member may deem necessary or advisable in connection therewith.

2

     Section 1.05 Assignability of Units; Assignment by Managing Member,

     (a) Except as provided in paragraph (b) below, without the prior written consent of the Managing Member, which may be withheld in its sole and absolute discretion, with or without cause, a Member may not pledge, transfer or assign its Units in the Company in whole or in part to any Person except by operation of law pursuant to the death, adjudication of incompetency, insolvency or bankruptcy of the Member, nor substitute any other Person as a Member. Any attempted pledge, transfer, assignment or substitution not made in accordance with this Section 1.05 shall be void.

     (b) Without the consent of the Non-Managing Members, the Managing Member may assign or otherwise transfer its Managing Member interest in the Company to any corporation, partnership, limited liability company or other entity controlling, controlled by or under common control with the Managing Member, as long as such transfer does not, as determined by the Managing Member in its sole discretion, cause the Company to be taxable as a corporation.

     Section 1.06 Registered Office and Agent for Service of Process. The registered office of the Company shall be: Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, and the registered agent for service of process at such office shall be The Corporation Trust Company. The Company may from time to time have such other place or places of business within or without the State of Delaware as may be designated by the Managing Member.

ARTICLE II

Management of the Company

     Section 2.01 Management Generally. The management of the Company shall be vested exclusively in the Managing Member. Except as authorized by the Managing Member, or as expressly set forth in this Agreement, the Non-Managing Members shall have no part in the management of the Company, and shall have no authority or right to act on behalf of the Company in connection with any matter. The Managing Member, and any Affiliate of the Managing Member, may engage in any other business venture, whether or not such business is similar to the business of the Company, and neither the Company nor any Non-Managing Member shall have any rights in or to such ventures or the income or profits derived therefrom.

     Section 2.02 Delegation by Managing Member. The Managing Member shall have the power and authority to delegate to one or more Persons (as defined in Section 2.03(d)), including, without limitation, any officer, employee or agent of the Company or the Managing Member, the Managing Member’s rights and powers to manage and control the business and affairs of the Company. The Managing Member may, by written instrument, authorize any Person to enter into and perform under any document on behalf of the Company.

     Section 2.03 Authority of the Managing Member. The Managing Member shall have the power on behalf of and in the name of the Company to carry out any and all of the

3

objects and purposes of the Company set forth in Section 1.04 and Section 2.01, and to perform all acts and enter into and perform all contracts and other undertakings, which it may deem necessary or advisable or incidental thereto, including, without limitation, the power to:

     (a) open, maintain and close accounts, including custodial accounts, with banks, including banks located inside and outside the United States, and draw checks or other orders for the payment of monies;

     (b) lend, either with or without security, funds or other properties of the Company, borrow or raise funds (including borrowing from the Managing Member or its Affiliates), and secure the obligations of the Company by pledges or hypothecation of all or any part of the property of the Company;

     (c) do any and all acts on behalf of the Company, and exercise all rights, powers, privileges and other incidents of ownership or possession with respect to the Company’s assets (including any interest therein) and other property and funds held or owned by the Company, including, without limitation, participation in arrangements with creditors, the institution and settlement or compromise of suits and administrative proceedings and all other like or similar matters;

     (d) engage any person, general partnership, limited partnership, limited liability company, corporation, joint venture, trust, business trust, cooperative, association or other entity (each, a “Person” and collectively, “Persons”) (including the Managing Member and any of its Affiliates) pursuant to an administration agreement to provide certain administrative services (any such Person providing such services being referred to herein as the “Administrator”), including, without limitation, calculating the net asset value (the “NAV”) of each series of Units and Members’ Capital Accounts, valuing the Company’s assets, assisting with the valuation of securities which are not readily marketable, assisting in the preparation of the Company’s financial statements, assisting in the preparation and distribution of reports to each Member, maintaining a registry for the ownership of each series of Units and providing other administrative services to the Company;

     (e) consent on behalf of the Company to any changes in the members, directors or officers of the Managing Member, if such consent is required by applicable law;

     (f) engage any personnel, whether part time or full time, attorneys, financial advisers, underwriters, accountants, consultants, appraisers, custodians of the assets of the Company or other Persons as the Managing Member may deem necessary or desirable, whether or not any such Person may be an Affiliate of the Managing Member or may also be employed by any Affiliate of the Managing Member;

     (g) allocate the Company’s assets, directly or indirectly, to Advisors and limited liability companies or other entities managed by the Managing Member through which the Company accesses Advisors (“Portfolio Companies”) and investment funds in the manner set forth in the Company’s Confidential Private Placement Memorandum (as amended or supplemented from time to time, the “Memorandum”) oversee such allocations and, from time to

4

time, in the sole discretion of the Managing Member, reallocate the Company’s assets among existing or new Advisors, Portfolio Companies or investment funds;

     (h) invest any of the Company’s cash balances which it determines at any time, in its sole discretion, not to allocate to the Advisors, Portfolio Companies or investment funds, in any instruments it deems appropriate in its sole discretion, including, without limitation, money market funds sponsored by Goldman, Sachs & Co. or its Affiliates;

     (i) redeem the Company’s interests in any investment fund or Portfolio Company in order to obtain cash necessary to meet the redemption requests of the Members, or for any other reason in its sole discretion;

     (j) bring and defend actions and proceedings at law or equity and before any governmental, administrative or other regulatory agency, body or commission;

     (k) make distributions to Members in cash or (to the extent permitted hereunder) otherwise;

     (l) prepare and file all necessary returns and statements, pay all taxes, assessments and other impositions applicable to the assets of the Company and withhold amounts with respect thereto from funds otherwise distributable to any Member;

     (m) determine the accounting methods and conventions to be used in the preparation of any accounting or financial records of the Company;

     (n) make any and all tax elections permitted to be made under the Internal Revenue Code of 1986, as amended (the “Code”), and any applicable state, local or foreign tax law;

     (o) determine the tax treatment of any Company transaction or item for purposes of completing the Company’s federal, state, local or foreign tax returns; and

     (p) take all actions, and authorize any member, employee, officer, director or other agent of the Managing Member or agent or employee of the Company, to act for and on behalf of the Company, in all matters necessary to, in connection with, or incidental to, any of the foregoing.

     Section 2.04 Reliance by Third Parties. Persons dealing with the Company are entitled to rely conclusively upon the certification of the Managing Member, to the effect that it is then acting as the Managing Member and upon the power and authority of the Managing Member as herein set forth.

     Section 2.05 Activity of the Managing Member. The Managing Member and Persons controlling, controlled by or under common control with the Managing Member and any of such Person’s directors, members, stockholders, partners, officers, employees and controlling persons (each, an “Affiliate” and collectively, “Affiliates”), shall devote so much of their time to the affairs of the Company as in the judgment of the Managing Member the conduct of its

5

business shall reasonably require, and none of the Managing Member or its Affiliates shall be obligated to do or perform any act or thing in connection with the business of the Company not expressly set forth herein. Nothing contained in this Section 2.05 shall be deemed to preclude the Managing Member or its Affiliates from exercising investment responsibility, from engaging directly or indirectly in any other business or from directly or indirectly purchasing, selling or holding securities, options, separate accounts, investment contracts, currency, currency units or any other asset and any interest therein for the account of any such other business, for their own accounts, for any of their family members or for other clients.

     Section 2.06 Standard of Care; Indemnification.

     (a) None of the Managing Member or its Affiliates (each, an “Indemnified Person” and collectively the “Indemnified Persons”) shall be liable to the Company or to the Members for (i) any act or omission performed or failed to be performed by such person (other than any criminal wrongdoing), or for any losses, claims, costs, damages, or liabilities arising therefrom, in the absence of any criminal wrongdoing, willful misfeasance or gross negligence on the part of such person, (ii) any tax liability imposed on the Company or any Member or (iii) any losses due to the actions or omissions of the Advisors, any brokers or other agents of the Company.

     In the event that any Indemnified Person becomes involved in any capacity in any action, proceeding or investigation brought by or against any Person (including any Non-Managing Member) in connection with any matter arising out of or in connection with the Company’s business or affairs (including a breach of this Agreement by any Member), the Company will periodically reimburse such Indemnified Person for its legal and other expenses (including the costs of any investigation and preparation) incurred in connection therewith, provided that such Indemnified Person shall promptly repay to the Company the amount of any such reimbursed expenses paid to it if it shall ultimately be determined by a court having appropriate jurisdiction in a decision that is not subject to appeal, that such Indemnified Person is not entitled to be indemnified by the Company in connection with such action, proceeding or investigation as provided in the exception contained in the next succeeding sentence.

     To the fullest extent permitted by applicable law, the Company shall also indemnify any Indemnified Person, jointly and severally, against any losses, claims, costs, damages or liabilities to which such Indemnified Person may become subject in connection with any matter arising out of or in connection with the Company’s business or affairs, except to the extent that any such loss, claim, cost, damage, or liability results solely from the willful misfeasance, bad faith or gross negligence of, or any criminal wrongdoing by, such Indemnified Person. If for any reason (other than the willful misfeasance, bad faith or gross negligence of, or any criminal wrongdoing by, such Indemnified Person) the foregoing indemnification is unavailable to such Indemnified Person, or is insufficient to hold it harmless, then the Company shall contribute to the amount paid or payable to the Indemnified Person as a result of such loss, claim, cost, damage, or liability in such proportion as is appropriate to reflect not only the relative benefits received by the Company on the one hand and such Indemnified Person on the other hand but also the relative fault of the Company and such Indemnified Person, as well as any relevant equitable considerations.

6

     The reimbursement, indemnity and contribution obligations of the Company under this Section 2.06 shall be in addition to any liability which the Company may otherwise have and shall be binding upon and inure to the benefit of any successors, assigns, heirs, and personal representatives of the Company, the Managing Member and any other Indemnified Person. The foregoing provisions shall survive any termination of this Agreement.

     (b) The reimbursement, indemnification and contribution rights provided by this Section 2.06 shall not be deemed to be exclusive of any other rights to which the Indemnified Person may be entitled under any agreement or as a matter of law, or otherwise, both as to action in an Indemnified Person’s official capacity and to action in any other capacity, and shall continue as to an Indemnified Person who has ceased to have an official capacity for acts or omissions during such official capacity or otherwise when acting at the request of the Managing Member and shall inure to the benefit of the successors, assigns, heirs and personal representatives of such Indemnified Person.

     (c) Notwithstanding any of the foregoing to the contrary, the provisions of this Section 2.06 shall not be construed as to relieve (or attempt to relieve) from liability or to provide for the indemnification of any Indemnified Person for any liability (including liability under federal securities law which, under certain circumstances, impose liability even on persons that act in good faith), to the extent (but only to the extent) that such liability may not be waived, modified or limited under applicable law or such indemnification would be in violation of applicable law, but shall be construed so as to effectuate the provisions of this Section 2.06 to the fullest extent permitted by law.

     (d) The Managing Member shall have power to purchase and maintain insurance on behalf of the Managing Member and the Indemnified Persons at the expense of the Company against any liability asserted against or incurred by them in any such capacity or arising out of the Managing Member’s status as such, whether or not the Company would have the power to indemnify the Indemnified Persons against such liability under the provisions of this Agreement.

     (e) An Indemnified Person may rely upon and shall be protected in acting or refraining from action upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond debenture, or other document believed by it to be genuine and to have been signed or presented by the proper party or parties.

     (f) An Indemnified Person may consult with counsel, accountants and other experts reasonably selected by it, and any opinion of an independent counsel, accountant or expert retained with reasonable care shall be full and complete protection in respect of any action taken or suffered or omitted by the Indemnified Person hereunder in good faith and in accordance with such opinion.

     (g) The Managing Member may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, and the Managing Member shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with reasonable care by it hereunder.

7

     Section 2.07 Management Fee; Payment of Costs and Expenses. The Company shall pay to the Managing Member a management fee (the “Management Fee”) in respect of each series of Units, payable in arrears, for investment management and other management services accruing daily and calculated and paid on a monthly basis of one-twelfth of 1.25% of the Net Assets (as defined in Section 4.01(d)) of the Company in respect of each such series of Units as of the end of each month, appropriately adjusted to reflect capital appreciation or depreciation and any contributions, redemptions or distributions. For purposes of determining the Management Fee for any month, Net Assets shall not be reduced to reflect any Management Fee for such month and any accrued Incentive Allocation (as defined in Section 4.05(b)), including any Incentive Allocation that is allocated to the Managing Member’s Incentive Allocation Account as of such date, provided that Net Assets shall be reduced for any amounts which have been previously allocated to the Managing Member’s Incentive Allocation Account. The Management Fee will reduce the Capital Account of the series of Units to which it relates, as described in Section 4.03.

     If a Member is admitted to, withdraws from (including any partial withdrawal), or acquires additional Units of, the Company as of a date other than the first day of a calendar month, the portion of the Management Fee determined with respect to such Member’s Capital Account shall be appropriately pro-rated to take into account the number of days in such month during which such Member was a Member or during which such Units were outstanding, as applicable.

     The Managing Member has the right, in its sole discretion, to waive fees or impose different fees on any Member, as may be agreed to by the Managing Member and the Member.

     The Company bears all of its operating expenses, including, but not limited to, legal expenses; professional fees (including, without limitation, fees and expenses of consultants and experts) relating to investments; costs and expenses relating to any amendment of this Agreement or the Company’s other organizational documents or subscription agreement or any modification or supplement to the Memorandum, and any distribution of such documentation to the Members; accounting, auditing and tax preparation expenses; fees and expenses of other agents of the Company (including, without limitation, fees which may be payable to and expenses of an Administrator or sub-administrator of the Company); taxes and governmental fees; printing and mailing expenses; expenses relating to transfers and redemptions of Units; fees and out-of-pocket expenses of any service company retained to provide accounting and bookkeeping services to the Company; quotation or valuation expenses; expenses relating to the acquisition, holding and disposition of investments (e.g., expenses which the Managing Member determines to be related to the investment of the assets of the Company, including, among others, research expenses, such as fees to the Advisors, brokerage fees and commissions, expenses relating to short sales, clearing and settlement charges, custodial fees and expenses, costs and charges for equipment or services used in communicating information regarding the Company’s transactions between the Managing Member and other agents, bank service fees, interest expenses, borrowing costs and extraordinary expenses); insurance premiums; costs incurred in connection with any claim, litigation, arbitration, mediation, government investigation or dispute in connection with the business of the Company and the amount of any judgment or settlement paid in connection therewith, or the enforcement of the Company’s rights against any Person; costs and expenses for

8

indemnification or contribution payable by the Company to any Person (including, without limitation, pursuant to the indemnification obligations described herein under Section 2.06); and all costs and expenses incurred as a result of dissolution, winding-up and termination of the Company.

     In addition, the Company will bear the expenses incurred in connection with the offer and sale of Units, including printing costs and legal fees and expenses of the Company, the Managing Member and any placement agent and other expenses of the offering of Units. In addition, the Company will bear, indirectly through its investment in each Portfolio Company or investment fund in which it invests, its pro rata portion of the offering, organizational and operating expenses of each Portfolio Company or investment fund, including, without limitation, the expenses of the type described in this and the preceding paragraph.

     To the extent that expenses to be borne by the Company are paid by the Managing Member, the Company shall reimburse the Managing Member for the payment of any such expenses. The Managing Member may elect, from time to time, to bear certain of the Company’s expenses described above. The Managing Member shall bear its own overhead costs and expenses.

     Section 2.08 Principal Transactions and Other Related Party Transactions. Each Non-Managing Member hereby authorizes the Managing Member, on behalf of such Non-Managing Member, to select one or more Persons, who shall not be affiliated with the Managing Member, to serve on a committee, the purpose of which will be to consider and, on behalf of the Non-Managing Members, approve or disapprove, to the extent required by applicable law, of principal transactions and certain other related party transactions. In no event shall any such transaction be entered into unless it complies with applicable law.

ARTICLE III

Series of Units; Admission of New Members

     Section 3.01 Classes and Series of Units.

     (a) Units may be divided into different classes of Units, and each class may be further divided into different series of Units (each such series being referred to in this Agreement as a “series,” provided always that in the case of a class which has not been divided into two or more series, the expression “series” shall, where the context so requires, mean, for the purposes of this Agreement, the Units of such class), in the discretion of the Managing Member. In this Agreement, except when referred to under their separate classes or series or where the context otherwise requires, the term “Units” shall mean all classes and all series of each class of Units.

     (b) An initial series of Units of a class (the “Initial Series”) will be issued on the initial closing date of each class. The initial purchase price per Unit for the Initial Series of Units of a class shall be $100. The Managing Member may, at any time and from time to time, in its sole discretion, elect to raise additional capital for the Company from Members and from new subscribers on such terms and conditions as may be determined by the Managing Member

9

in its sole discretion. Generally, a new series of Units will be issued on each date an existing Member makes an additional Capital Contribution in accordance with Section 4.02 and on each date a new Member is admitted to the Company in accordance with Section 3.03, except that the Managing Member may issue additional Units of an existing series provided that such issuance does not have an adverse effect on the NAV or Prior High NAV (as defined in Section 4.05(b)(i)) of the Units of any Member. Each Unit will carry equal rights and privileges with each other Unit of the same series. Units of a class issued at the beginning of any fiscal year will be offered at the then current NAV per Unit of the Initial Series of such class if such Initial Series is at or above its Prior High NAV per Unit. If the Initial Series of such class is not at or above its Prior High NAV per Unit, Units will be issued in the next offered series of such class that is at or above its Prior High NAV. If no series of Units of such class is at or above its Prior High NAV at such time, such additional Units will be issued as a separate series at a price per Unit determined by the Managing Member, in its sole discretion. Fractions of Units may be issued to one ten-thousandth of a Unit.

     Section 3.02 Conversion of Series. Following the end of each fiscal year, any issued and outstanding series of Units of a class (other than the Initial Series of such class) that is at or above its Prior High NAV shall be exchanged (after reduction for the Management Fee and any Incentive Allocation) into Units of the Initial Series of such class (or if such Initial Series is not at or above its Prior High NAV per Unit, the next offered series of such class that is at or above its Prior High NAV) at the prevailing NAV per Unit of the Initial Series or such other series of Units (as applicable).

     Section 3.03 New Members. Subject to the condition that each new Member shall execute an appropriate counterpart to this Agreement pursuant to which it agrees to be bound by the terms and provisions hereof, the Managing Member may admit one or more new Members on the first day of each calendar quarter or at such other times as the Managing Member may determine in its sole discretion. Admission of a new Member shall not be a cause for dissolution or termination of the Company.

     Section 3.04 Adjustment to Number of Units Issued. If at any time the Managing Member determines, in its sole discretion, that an incorrect number of Units was issued to a Member because the NAV in effect on the date of issuance was materially incorrect, the Company will adjust such Member’s Units by increasing or decreasing them (by means of issuances of additional Units or compulsory redemptions of Units, in each case without additional consideration), as appropriate, to such number of Units as would have been issued at the correct NAV.

     Section 3.05 Additional Classes of Units. The Company may issue additional classes of Units, including, without limitation, classes of Units that are subject to different fee arrangements or seek to maximize total returns in other currencies. The Managing Member may, without the prior consent of or notice to the Members, make appropriate amendments to or supplement this Agreement to the extent necessary or desirable to effect the issuance of Units of any such class, including, without limitation, to account for different fee arrangements or the separate currency-related transactions engaged in with respect to such a class.

10

ARTICLE IV

Capital Accounts of Members
and Operation Thereof

     Section 4.01 Definitions. For the purposes of this Agreement, unless the context otherwise requires:

     (a) The term “Accounting Period” shall mean the following periods: The initial Accounting Period commenced upon the commencement of operations of the Company. Each subsequent Accounting Period shall commence immediately after the close of the preceding Accounting Period. Each Accounting Period hereunder shall close at the close of business on the first to occur of (i) the last day of each calendar month, (ii) the last day of each fiscal year of the Company, (iii) the date immediately prior to the effective date of the admission of a new Member pursuant to Section 3.03, (iv) the date immediately prior to the effective date of an additional Capital Contribution pursuant to Section 4.02, or (v) the date immediately prior to the effective date of any redemption or complete withdrawal pursuant to Article V or Article VI hereof. The final Accounting Period shall end on the date the Company dissolves.

     (b) The term “Beginning Value” shall, with respect to any Accounting Period, mean the value of the Company’s Net Assets (as defined below) at the beginning of such Accounting Period.

     (c) The term “Ending Value” shall, with respect to any Accounting Period, mean the value of the Company’s Net Assets at the end of such Accounting Period (before giving effect to the Incentive Allocation and the Management Fee for such Accounting Period, but after giving effect to all other expenses for such Accounting Period).

     (d) The term “Net Assets” shall mean the excess of the Company’s total assets over its total liabilities, determined in accordance with Section 4.07.

     (e) The term “Net Capital Appreciation,” with respect to any Accounting Period, shall mean the excess, if any, of the Ending Value over the Beginning Value.

     (f) The term “Net Capital Depreciation,” with respect to any Accounting Period, shall mean the excess, if any, of the Beginning Value over the Ending Value.

     Section 4.02 Capital Contributions. Each Member has paid or conveyed by way of contribution to the Company in exchange for the issuance of Units cash and/or marketable securities having an aggregate value equal to the amount set forth opposite such Member’s name in Part I or II of the Schedule (herein called the “Initial Capital Contribution”). Additional Capital Contributions may be made by Members only in accordance with the provisions of this Section 4.02.

     Upon the approval of the Managing Member, any existing or prospective Member may purchase additional or newly-issued Units by contributing cash and/or marketable securities to the Company on the first day of any calendar quarter or at such other times as the Managing

11

Member may determine in its sole discretion. The Managing Member and any of its Affiliates may make additional Capital Contributions to the Company in cash and/or marketable securities at any time and in any amounts.

     Whether marketable securities shall be accepted as a contribution to the Company shall be determined in the sole discretion of the Managing Member.

     Section 4.03 Capital Accounts.

     (a) A separate capital account (herein called a “Capital Account”) shall be established on the books of the Company for each series of Units. The Capital Account of each series shall initially be an amount equal to the Initial Capital Contributions with respect to such series. The Capital Account of a series shall be (i) increased to reflect any additional Capital Contributions pursuant to Section 4.02 in respect of such series; (ii) increased to reflect the Net Capital Appreciation of such series for each Accounting Period; (iii) decreased to reflect the redemption of any Units of such series, pursuant to Section 5.02; (iv) decreased to reflect the amount of any distributions (other than in redemption of Units pursuant to Section 5.02) pursuant to Section 5.04 in respect of such series (including any deemed distributions of taxes paid by the Company pursuant to Section 5.04(c) in respect of such series); (v) decreased for any Incentive Allocation pursuant to Section 4.05(b) and any Management Fee in respect of such series; and (vi) decreased to reflect the Net Capital Depreciation of such series for each Accounting Period.

     (b) At the time of the conversion of any series of Units into Units of the Initial Series or any other series of Units pursuant to Section 3.02, the Capital Account of the converted series of Units shall be reduced to zero, and the Capital Account of the series of Units into which such Units were converted shall be increased by the balance of the Capital Account of the converted series of Units immediately prior to the conversion.

     (c) A separate Capital Account shall also be established on the books of the Company for each Member with respect to each series of Units held by such Member. Each Member’s Capital Account with respect to a series of Units shall equal the Capital Account of such series times the Member’s Membership Percentage (as defined in Section 4.04) with respect to such series of Units.

     (d) The Managing Member shall have a separate Capital Account (the “Incentive Allocation Account”), which shall initially be equal to zero, and which shall be (i) increased by any Incentive Allocation at the time such Incentive Allocation is made, and (ii) decreased to reflect the amount of any distributions (including any deemed distributions in connection with the withholding of taxes in respect of such Incentive Allocation pursuant to Section 5.04(c)) made to, or withdrawals made by, the Managing Member in respect of such Incentive Allocation Account.

     Section 4.04 Membership Percentages. A membership percentage (a “Membership Percentage”) shall be determined for each Member for any given series of Units for each Accounting Period of the Company by dividing (i) the number of Units owned by such Member within a given series by (ii) the aggregate number of outstanding Units of such series as of the beginning of such Accounting Period, after taking into account, in the case of both clause

12

(i) and clause (ii), any Units issued or redeemed as of (or the day immediately after) the beginning of such Accounting Period. The aggregate Membership Percentages for each series of Units shall equal 100%.

     Section 4.05 Allocation of Net Capital Appreciation or Net Capital Depreciation.

     (a) Any Net Capital Appreciation or Net Capital Depreciation, as the case may be, for an Accounting Period shall be allocated among the different series of Units pro rata in accordance with the relative Capital Accounts (determined prior to any year-to-date accrued Incentive Allocation) of each series at the beginning of such Accounting Period, after taking into account any contributions, distributions or redemptions as of the beginning of such Accounting Period.

     (b) (i) At the end of each fiscal year of the Company, or at such other date during a fiscal year as of which the following determination is required pursuant to this Section 4.05, five percent (5%) of the amount by which the NAV of a series of Units (determined prior to any applicable Incentive Allocation accrual with respect to such series of Units and appropriately adjusted as determined by the Managing Member in its sole discretion for contributions, distributions and redemptions, but after giving effect to the allocation, pursuant to Section 4.05(a), of Net Capital Appreciation and Net Capital Depreciation for the Accounting Period then ending) exceeds such series’ Prior High NAV at such date shall be reallocated to the Incentive Allocation Account (the “Incentive Allocation”). The “Prior High NAV” with respect to a series of Units initially shall mean an amount equal to the NAV of such series as of the date of its initial issue. The new Prior High NAV with respect to a series of Units immediately following the end of any period for which an Incentive Allocation has been made with respect to such series shall be reset to equal the NAV of such series, unless the series is exchanged pursuant to Section 3.02 into the Initial Series or another series, in which case the new Prior High NAV shall be reset to equal the NAV of the Initial Series or such other series. If the NAV of such series at the end of any fiscal year of the Company, and such other date during a fiscal year as of which the determination of the Incentive Allocation is required pursuant to Section 4.05(c) is less than its Prior High NAV, the Prior High NAV of that series shall not change. The Prior High NAV for each series of Units shall be appropriately adjusted as determined by the Managing Member in its sole discretion to account for contributions, distributions and redemptions made with respect to such series of Units.

          (ii) The Incentive Allocation with respect to a series of Units accrues daily and the Company shall credit the Incentive Allocation Account as of December 31 of each year for the Incentive Allocation.

     (c) In the event that the Company is dissolved other than at the end of a fiscal year, or the effective date of a Member’s redemption of Units is other than a fiscal year-end, then the Incentive Allocation described above shall be determined and made as if the date of such dissolution or redemption was a fiscal year-end (but only in respect of the Units being redeemed).

13

     (d) Notwithstanding anything to the contrary herein, to the extent that the Company invests in “New Issues” (as defined below), and there are Members who are restricted persons within the meaning of the National Association of Securities Dealers, Inc. (the “NASD”) Conduct Rule 2790 (the “NASD Rule”), investments in New Issues will be made through a special account and profits and losses attributable to New Issues will not be allocated to the Capital Accounts of Members who are restricted from participating in New Issues under the NASD Rule. One or more additional classes (or sub-classes) of Units may be created and offered only to those Members who are not restricted persons, and only those Members who are not restricted persons shall have any beneficial interest in such classes (or sub-classes). Notwithstanding anything in this Agreement to the contrary, the Managing Member shall have the right, without the consent of the Members, to make such amendments to this Agreement, and to take such other actions, as it deems advisable and appropriate, in its sole discretion, to implement the purposes of this Section 4.05(d). A “New Issue” is any equity securities of an initial public offering as described in the NASD Rule, or otherwise as such term may be interpreted from time to time under the then current rules of the NASD.

     Section 4.06 Amendment of Incentive Allocation. The Managing Member shall have the right to amend, without the consent of the Non-Managing Members, Section 4.05 of this Agreement so that the Incentive Allocation (or other performance-based allocation) therein provided conforms to any applicable requirements of the Securities and Exchange Commission and other regulatory authorities; provided, however, that no such amendment shall increase the Incentive Allocation (or other performance-based allocation) as so amended to more than the amount payable in accordance with Section 4.05 of this Agreement (or, in the case of any other performance-based allocation arrangement, the specific arrangement set forth in a written agreement between the affected Non-Managing Member and the Company), without the written consent of the affected Non-Managing Member. The Managing Member reserves the right, in its sole discretion, to apply different performance-based percentage allocations and performance-based compensation arrangements to any Member, as may be agreed by the Managing Member and such Member.

     Section 4.07 Determination of Net Assets.

     (a) The Company’s Net Assets shall be determined in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) consistently applied as a guideline and the following principles:

          (i) The value of the Company’s investment in an investment fund shall be equal to the Company’s proportionate interest in the NAV of the investment fund, determined in accordance with the terms and conditions of the respective governing agreement of each investment fund as reported by its respective Advisor or other designee to the Company, as it may be amended, supplemented or otherwise modified from time to time (or based on such other information deemed relevant by the Managing Member).

          (ii) The assets of the Company that are invested pursuant to investment management agreements or in Portfolio Companies shall be valued at fair value in a commercially reasonable manner.

14

          (iii) All other assets or liabilities of the Company shall be assigned such value as the Managing Member may reasonably determine.

          (iv) The amount of the Company’s assets and liabilities (including, without limitation, indebtedness for money borrowed and the Management Fee) shall be determined in accordance with U.S. GAAP and guidelines, applied on a consistent basis, provided that the Managing Member in its discretion may provide reserves for estimated accrued expenses, liabilities and contingencies, even if such reserves are not required by U.S. GAAP.

          (v) The amount payable to a Member or former Member in redemption of part or all of such Member’s or former Member’s Units pursuant to Section 5.02 shall be treated as a liability of the Company, until paid, from (but not prior to) the beginning of the Accounting Period that begins immediately after the close of business on the day immediately prior to the Redemption Date (as defined in Section 5.02(a)) for such Units.

          (vi) The amount to be received by the Company on account of any Capital Contributions pursuant to Section 4.02 shall be treated as an asset of the Company from (but not before) the beginning of the Accounting Period that begins immediately after the close of business on the day immediately prior to the effective date of such Capital Contributions.

          (vii) Distributions (other than in redemption of Units pursuant to Section 5.02) made pursuant to Section 5.04 (including deemed tax distributions pursuant to Section 5.04(c)) other than as of the beginning of an Accounting Period shall be treated as an advance and as an asset of the Company, until the beginning of the Accounting Period following the date of distribution.

          (viii) The Incentive Allocation, if any, credited to the Incentive Allocation Account shall be treated as a liability, until distributed, from the beginning of the Accounting Period immediately following the Accounting Period in which the Incentive Allocation was credited to such Incentive Allocation Account.

     (b) The Company may suspend the valuation of its assets and liabilities, and any distributions or redemptions of any amounts from Capital Accounts, for any period during which a Portfolio Company or other investment fund with which the Company has made an investment has suspended the valuation of its assets and liabilities. The Managing Member shall promptly notify Members of any such suspension, and the termination of any such suspension, by means of a written notice.

     (c) All values assigned to securities and other assets by the Managing Member or the Administrator pursuant to this Section 4.07 shall be final and conclusive as to all of the Members. The Managing Member may consult with and rely upon valuations of the Company’s securities and other assets provided by the Administrator.

     Section 4.08 Determination of Net Asset Value. The NAV of a series of Units shall be equal to the balance of the Capital Account with respect to such series of Units. The NAV per Unit of a series shall be equal to the NAV of such series divided by the number of outstanding Units of such series.

15

     Section 4.09 Allocation for Tax Purposes. For each taxable year, items of income, deduction, gain, loss or credit actually recognized by the Company for federal income tax purposes shall be allocated for federal income tax purposes among the Members in such manner as to equitably reflect the amounts credited or debited to each Member’s Capital Account for the current and prior taxable years (or relevant portions thereof). Allocations under this Section 4.09 shall be made by the Managing Member in accordance with the principles of Sections 704(b) and 704(c) of the Code and in conformity with applicable Treasury Regulations promulgated thereunder (including, without limitation, Treasury Regulations Sections 1.704-l(b)(2)(iv)(f)(4), 1.704-l(b)(4)(i) and 1.704-3(e)). Notwithstanding the foregoing, the Managing Member in its sole discretion may adjust the allocation of items of Company taxable income, gain, loss and deduction among the Members as it shall deem to be equitable, and necessary or desirable.

     If, during or immediately following the end of a taxable year, any Member redeems all of its Units in the Company or the Managing Member withdraws any amount from its Incentive Allocation Account, and the Member would (absent this sentence) recognize gain or loss under Section 731 of the Code as a result of such redemption or withdrawal, the Managing Member may, in its sole discretion, elect to specially allocate to such Member, for U.S. federal income tax purposes, any income and gain or loss and deduction (including short-term capital gain or loss) recognized by the Company during such taxable year, through and including the date of redemption or withdrawal, in an amount up to that amount of income and gain or loss and deduction which if so allocated would avoid the Member recognizing gain or loss on the redemption or withdrawal under Section 731 of the Code (ignoring for this purpose, in the sole discretion of the Managing Member, any adjustments that have been made to the tax basis of the redeeming Member’s Units resulting from any transfers or assignment of the Units (other than the original issue of the Units), including by reason of death). Any such election by the Managing Member shall, to the extent reasonably practicable as determined by the Managing Member in its sole discretion, be applied on an equitable basis to all Members that redeem all of their Units during or immediately following the end of such taxable year.

     Section 4.10 Determination by Managing Member of Certain Matters; Managing Member’s Discretion.

     (a) All matters concerning the valuation of securities and other assets and liabilities of the Company, the allocation of profits, gains and losses among the Members (including for tax purposes) and accounting procedures not expressly provided for by the terms of this Agreement (including, without limitation, allocation and accounting procedures in the event a Member that has an account managed by the Managing Member in a manner similar to the investment program utilized by the Company which causes the assets and liabilities in such account to be transferred to the Company) shall be determined by the Managing Member (or such Person as the Managing Member may authorize to make such determination), whose determination shall be final, binding and conclusive as to all of the Members.

     (b) Whenever in this Agreement the Managing Member is permitted or required to make a decision (i) in its “sole discretion” or “discretion,” or under a similar grant of authority or latitude, the Managing Member shall be entitled to consider only such interests and

16

factors as it desires and may consider its own interests and the interests of its Affiliates and its determination shall be final, binding and conclusive as to all of the Members, or (ii) in its “good faith” the Managing Member shall act under such express standards and shall not be subject to any other or different standards imposed by this Agreement or by law or any other agreement contemplated herein.

     Section 4.11 Adjustments to Take Account of Interim Year Events. If the Code or regulations promulgated thereunder require an adjustment to the Capital Account of a Member or some other interim year event occurs necessitating in the Managing Member’s judgment an equitable adjustment, the Managing Member shall make such adjustments in the determination and allocation among the Members of Net Capital Appreciation, Net Capital Depreciation, Capital Accounts, Membership Percentages, Incentive Allocation, the Management Fee, Company expenses, items of income, deduction, gain, loss, credit or withholding for tax purposes, accounting procedures or such other financial or tax items as shall equitably take into account such interim year event and applicable provisions of law, and the determination thereof by the Managing Member shall be final, binding and conclusive as to all of the Members.

     Section 4.12 Tax Withholding. If the Company is required to withhold taxes on any distribution to, or to pay or incur any tax with respect to any income allocable to or otherwise on account of, any Member or series of Units, the Company may withhold such amounts and make such payments to such taxing authorities as are necessary to ensure compliance with such tax laws.

ARTICLE V

Redemptions and Distributions

     Section 5.01 Redemptions and Distributions in General. No Member shall be entitled (i) to receive distributions from the Company, except as provided in Section 5.04 and Section 7.02; or (ii) to redeem any of its Units (other than upon such Member’s withdrawal from the Company), except as provided in Sections 5.02 and 6.01 or upon the consent of, or as may be required by, and upon such terms as may be determined by, the Managing Member in its sole discretion. In no event shall a Member be entitled to demand to receive property other than cash.

     Section 5.02 Redemptions.

     (a) Subject to this Section 5.02(a) and Sections 5.02(c) and 5.03, each Member shall have the right to redeem some or all of its Units as of the time immediately prior to the opening of business on each January 1, April 1, July 1 and October 1 (each, a “Redemption Date”), upon written notice received by the Managing Member at least 61 days prior to the respective Redemption Date (unless such notice is waived by the Managing Member in its sole discretion). No partial redemption shall be permitted if thereafter the aggregate NAV of the remaining Units held by the redeeming Member would be less than $500,000, unless such limitation is waived by the Managing Member in its sole discretion.

17

     If outstanding redemption requests from all Members with respect to any Redemption Date (an “Initial Holdover Redemption Date”) (including, without limitation, any Held Over Units (as defined below)) would result in redemption proceeds in excess of the Maximum Redemption Amount (as defined below), the Managing Member shall be entitled in its sole discretion to refuse to redeem Units requested for redemption that would have resulted in redemption proceeds in an amount equal to or less than such excess. The “Maximum Redemption Amount,” with respect to any Redemption Date, means 25% of the aggregate NAV, determined as of the time immediately prior to such Redemption Date, of all of the Units outstanding immediately prior to such Redemption Date. If the Managing Member refuses to redeem Units as set forth above, the requests for redemption on such Initial Holdover Redemption Date by Members shall be reduced ratably, and the requested Units not so redeemed (the “Held Over Units”) shall be redeemed on subsequent Redemption Dates subject to the Maximum Redemption Amount calculation for such subsequent Redemption Date and the Managing Member’s rights to refuse redemptions in connection therewith, provided that Held Over Units shall be redeemed in priority to any subsequently received redemption requests.

     Units of a particular series will be redeemed at a per Unit price (the “Redemption Price”) based upon the NAV of such series as of the close of business on the day (a “Valuation Date”) immediately preceding the applicable Redemption Date (taking into account the allocation of any Net Capital Appreciation or Net Capital Depreciation under Section 4.05, and any distributions under Section 5.04 for the Accounting Period then ending), after reduction for any Management Fee and Incentive Allocation (calculated as if the applicable Valuation Date was the last day of the fiscal year) and other liabilities of the Company to the extent accrued or otherwise attributable to the Units being redeemed, and the amount of any such reduction for the Management Fee shall be paid to the Managing Member, and the amount of any such reduction for any Incentive Allocation shall be allocated to the Capital Account of the Managing Member. If a redeeming Member owns Units of more than one series, unless otherwise specified by such Member in writing, Units shall be redeemed on a “first in-first out” basis for purposes of determining the Redemption Price. The Company will endeavor to pay 90% of the redemption proceeds (calculated on the basis of estimated, unaudited data), valued as the close of business on the day immediately preceding the Redemption Date, within 10 days following the applicable Redemption Date, without interest. The balance of the redemption proceeds will be paid, without interest, within 30 days of the applicable Redemption Date. The Managing Member may permit redemptions at other times and in other amounts, subject to any conditions that it may impose in its sole discretion.

     (b) The Managing Member shall have the right, in its sole discretion, as of any date that it determines (including during a fiscal year) and for any reason (including, without limitation, pursuant to Article VI, for regulatory or tax reasons, or for any other reason), to redeem any or all of a Member’s Units. Any redemptions made pursuant to this Section 5.02(b) shall be paid out in accordance with Section 5.02(a).

     (c) The Managing Member, and any Affiliate of the Managing Member, shall have the right at any time (including during a fiscal year or other period) to redeem any and all of its interest or withdraw all or a portion of the assets in its Capital Account without notice to the Members.

18

     (d) If at any time after a redemption of Units (including in connection with any withdrawal of a Member from the Company pursuant to Article VI) the Managing Member determines, in its sole discretion, that the amount paid to such Member or former Member pursuant to such redemption was materially incorrect (including because the NAV at which the Member or former Member purchased such Units was incorrect), the Company will pay to such Member or former Member any additional amount that it determines such Member or former Member would have been entitled to receive had the redemption been effected at the correct NAV, or, in its sole discretion, seek payment from such Member or former Member of (and such Member or former Member shall be required to pay) the amount of any excess payment that the Managing Member determines such Member or former Member received (including, without limitation, by compulsorily redeeming without consideration a number of Units held by such Member having a NAV equal to the amount of such excess payment), in each case without interest.

     Section 5.03 Limitation on Redemptions.

     (a) The right of any Member to redeem some or all of its Units pursuant to the provisions of Section 5.02 is subject to the provision by the Managing Member for all Company liabilities in accordance with the Act, and for reserves for estimated accrued expenses, liabilities and contingencies in accordance with Section 4.07.

     (b) The Managing Member may suspend redemptions, at any time prior to the effective date of the redemption, and notwithstanding the fact that a timely redemption request has previously been made, for the whole, or any part, of any of the following periods: (i) during the closure of the principal stock exchanges or other markets on which any substantial portion of the Company’s direct or indirect investments, in the opinion of the Managing Member, is quoted or dealt in other than for ordinary holidays, or the restriction of suspension of dealings therein; (ii) during the existence of any state of affairs which, in the opinion of the Managing Member, constitutes an emergency as a result of which the determination of the price, value or disposition of the Company’s direct or indirect investments would be impractical or prejudicial to Members; (iii) during which redemptions would, in the opinion of the Managing Member, result in a violation of applicable law; (iv) during any breakdown in the means of communication or computation normally employed in determining the price or value of any of the investments of the Company or the current price or values on any stock exchange in respect of assets of the Company; (v) during the occurrence of any period when the Company is unable to withdraw sufficient funds from Portfolio Companies or otherwise to meet redemption requests or in circumstances when the disposal of part or all of the Company’s assets to meet such redemption requests would be prejudicial to Members; (vi) during which any transfer of funds involved in the realization or acquisition of investments or payments due on redemption of Units cannot, in the opinion of the Managing Member, be effected at advantageous rates of exchange; and (vii) during any period in which any investment fund or Portfolio Company in which the Company has invested has suspended redemptions or the calculation of its net asset value. Postponed redemptions shall be effected on the first day of the month immediately following the termination of the suspension. Any part of a redemption request that is postponed shall take precedence over later-received redemption requests until the postponed request or requests have been satisfied in full. Members shall be given notice in writing of the suspension of redemptions

19

and the termination of any such suspension. Units shall be held by the Member during the suspension period as if no redemption request had been made.

     Section 5.04 Distributions.

     (a) The Managing Member may, in its discretion, make distributions in cash or in-kind (i) in connection with redemptions from the Company by a Member or in connection with a Member’s complete withdrawal from the Company pursuant to Article VI, (ii) at any time to the Managing Member in an amount not in excess of the then positive balance in the Incentive Allocation Account and (iii) at any time to all of the Members on a pro rata basis in accordance with the Members’ Capital Accounts.

     (b) If a distribution is made in-kind, immediately prior to such distribution, the Managing Member shall determine the fair market value of the property distributed and adjust the Capital Accounts of all Members upwards or downwards to reflect the difference between the book value and the fair market value thereof, as if such gain or loss had been recognized upon an actual sale of such property and allocated pursuant to Section 4.05. Each such distribution shall reduce the Capital Account of the Member to which the distribution was made by the fair market value thereof.

     (c) Any taxes paid over to a governmental authority by the Company pursuant to Section 4.12 with respect to any Member (other than on account of all Members equally) shall be deemed to be a distribution to such Member. If a Member who receives a deemed distribution of taxes under this Section owns more than one series of Units, the Managing Member in its sole discretion may allocate such deemed distribution among such Member’s different series of Units. Notwithstanding the foregoing, the Managing Member in its sole discretion may elect to treat any deemed distribution to a Member under this Section 5.04(c), not as a distribution, but as an advance to the Member and a partial redemption of such Member’s Units as of the next Redemption Date following the deemed distribution, and such Member’s Units shall be reduced thereby as appropriately determined by the Managing Member.

ARTICLE VI

Withdrawal, Death, Disability

     Section 6.01 Withdrawal, Death, etc. of Members.

     (a) The withdrawal, death, disability, incapacity, adjudication of incompetency, termination, bankruptcy, insolvency or dissolution of a Member shall not dissolve the Company. Subject to the restrictions set forth in Section 1.05(a), the legal representatives or successors of such Member shall succeed as assignee to the Member’s interest in the Company upon the death, disability, incapacity, adjudication of incompetency, termination, bankruptcy, insolvency or dissolution of such Member, but shall not be admitted as a substituted member without the consent of the Managing Member.

     (b) In the event of the death, disability, incapacity, adjudication of incompetency, termination, bankruptcy, insolvency or dissolution of a Member, the interest of

20

such Member shall continue at the risk of the Company’s business until the last day of the calendar month following the calendar month in which the Managing Member received written notice of such event, provided, however, that if the Managing Member determines, in its sole discretion, that the termination or dissolution of a Member was not involuntary, the interest of such Member shall continue at the risk of the Company’s business until the last day of the next calendar quarter that is at least 61 days from the date on which the Managing Member received written notice of such event. At the end of such period, the Managing Member may, in its sole discretion (i) take no action, (ii) substitute the legal representatives or successors of such Member as Members of the Company, provided that the Managing Member determines in its sole discretion that such legal representatives or successors are qualified to become Members of the Company, or (iii) compulsorily redeem such Member’s interest in the Company in accordance with the redemption provisions set forth in this Article VI.

     (c) The interest of a Member that gives notice of a withdrawal pursuant to Section 6.01(a) shall not be included in calculating the Membership Percentages required to take any action under this Agreement.

     Section 6.02 Required Withdrawals. The Managing Member may at any time and for any reason, in its discretion, terminate the interest of any Member in the Company or require a Member to withdraw any part of its Capital Account. A Member required to withdraw under this Section 6.02 shall be treated for all purposes of distribution of redemption proceeds as a Member who has given notice of withdrawal under Section 6.01(a).

     Section 6.03 Effective Date of Withdrawal. The Capital Account of a withdrawing Member shall be determined as of the effective date of its withdrawal. For purposes of this Section 6.03, the effective date of a Member’s withdrawal shall mean (as the case may be) (i) the Redemption Date pursuant Section 6.01(a) or (ii) the date determined by the Managing Member if such Member shall be required to withdraw from the Company pursuant to Section 6.02. In the event the effective date of a Member’s withdrawal shall be a date other than the last day of a fiscal year of the Company, the Capital Account of the withdrawing Member shall be adjusted pursuant to Section 4.05(c).

ARTICLE VII

Duration and Dissolution of the Company

     Section 7.01 Duration.

     (a) The Company shall continue until the earlier of (i) a determination by the Managing Member that the Company should be dissolved and wound-up; (ii) the termination, bankruptcy, insolvency, dissolution or withdrawal by the Managing Member other than by assignment of the Managing Member’s interest as provided in Section 1.05(b); or (iii) a vote of a majority of the Members pursuant to Section 7.01(b). Upon a determination to dissolve the Company, redemptions, and distributions in respect thereof, may not be made.

     (b) Dissolution of the Company by the Members:

21

          (i) For purposes of this Agreement:

               (A) The term “Meeting Request” shall mean a written request from Members holding (as of the date of such request) at least 20% of the voting power, based on NAV, of the outstanding Units (excluding for purposes of calculating such percentage any Units held by the Managing Member and any affiliate or employee of the Managing Member or Goldman, Sachs & Co. (collectively, the “Managing Member Units”)) to the Managing Member requesting that the Managing Member call a meeting for the purpose of dissolving the Company.

               (B) The term “Dissolution Record Date” shall mean with respect to a meeting at which the dissolution of the Company is to be considered, a date selected by the Managing Member, which is no later than 15 days following the date on which the Managing Member receives a Meeting Request.

          (ii) Upon the written request of one or more Members holding at least 1% of the voting power, based on NAV, of the outstanding Units (excluding for purposes of calculating such percentage the Managing Member Units), solely for purposes of soliciting other Members in connection with making a Meeting Request, the Managing Member shall use commercially reasonable efforts to send to all other Members a solicitation to make a Meeting Request, subject to the Managing Member’s right to impose reasonable conditions upon any such solicitation.

          (iii) Upon receipt by the Managing Member of a Meeting Request, the Managing Member shall set a Dissolution Record Date and shall schedule a meeting of the Members for no later than 60 days after the Dissolution Record Date for the purpose of voting on the dissolution of the Company (such meeting, the “Dissolution Meeting”). The quorum for such meeting shall require attendance, in person or by proxy, of Members holding at least a majority of the voting power, based on NAV, of the outstanding Units (excluding for purposes of calculating such percentage the Managing Member Units) as of the Dissolution Record Date. If a quorum is not achieved for the meeting, the meeting shall be cancelled and no vote shall be held. The dissolution of the Company by the Members may only be voted upon at a meeting properly called in accordance with this Section 7.01(b) and will be approved only upon the affirmative vote of Members holding at least a majority of the voting power, based on NAV, of the outstanding Units (excluding for purposes of calculating such percentage the Managing Member Units).

          (iv) In the event of an affirmative vote in favor of dissolution of the Company, (A) the Managing Member shall seek to liquidate the Company as soon as reasonably practicable (including by submitting redemption requests to Portfolio Funds and Portfolio Companies within 30 days of such vote), and (B) the Company shall be dissolved and terminated in accordance with the provisions of Section 7.02.

          (v) On or prior to August 25, 2006, the Managing Member may, in its sole discretion, amend, delete or waive any of the provisions relating to the dissolution of the Company by the Members described in this Section 7.01(b); provided that, if the Managing Member has received a written request from one or more Members representing at least 1% of

22

the voting power, based on NAV, of the outstanding Units (excluding for purposes of calculating such percentage the Managing Member Units) to facilitate the solicitation of other Members in connection with making a Meeting Request or has received a Meeting Request in accordance with paragraphs (ii) or (iii) above, any such amendment, deletion or waiver shall not become effective until the earliest of the date on which (A) the solicitations to make such Meeting Request have been terminated or have expired in accordance with such conditions as have been attached by the Managing Member to the said solicitations pursuant to paragraph (ii) above, or (B) the Dissolution Meeting referred to in such Meeting Request has been held and there were insufficient votes to dissolve the Company or cancelled for lack of a quorum pursuant to paragraph (iii) above. Notwithstanding anything in the foregoing to the contrary, the Managing Member may amend or waive any of the provisions relating to the dissolution of the Company described in this Section 7.01(b) at any time in its sole discretion, so long as such amendment or waiver does not adversely affect the right of the Members to dissolve the Company. If the Managing Member makes any permitted amendment, deletion or waiver, it will give written notice thereof to the Members following such amendment, deletion or waiver.

     Section 7.02 Dissolution.

     (a) On dissolution of the Company, the Managing Member shall, within no more than 30 days after completion of a final audit of the Company’s financial statements, make distributions out of Company assets, in the following manner and order:

          (i) to creditors, including Members who are creditors, to the extent otherwise permitted by law, in satisfaction of liabilities of the Company (whether by payment or by establishment of reserves); and

          (ii) to the Members in the proportion of their respective Capital Accounts.

     (b) The Managing Member, in its discretion, at any time and from time to time, may designate one or more liquidators, including, without limitation, one or more partners, members or officers of the Managing Member, who shall have full authority to wind up and liquidate the business of the Company and to make final distributions as provided in this Section 7.02. The appointment of any liquidator may be revoked or a successor or additional liquidator or liquidators may be appointed at any time by an instrument in writing signed by the Managing Member. Any such liquidator may receive compensation as shall be fixed, from time to time, by the Managing Member.

     (c) In the event that the Company is dissolved on a date other than the last day of a fiscal year, the date of such dissolution shall be deemed to be the last day of a fiscal year for purposes of adjusting the Capital Accounts of the Members pursuant to Section 4.03. For purposes of distributing the assets of the Company upon dissolution, the Managing Member shall be entitled to a return, on a pari passu basis with the Non-Managing Members, of the amount standing to its credit in its Capital Account and, with respect to its share of profits, based upon its Membership Percentage.

23

ARTICLE VIII

Tax Returns; Reports to Members

     Section 8.01 Independent Auditors. The financial statements of the Company shall be audited by Ernst & Young LLP, or such other certified public accountants of similar standing selected by the Managing Member, as of the end of each fiscal year of the Company.

     Section 8.02 Filing of Tax Returns. The Managing Member shall prepare and file, or cause the accountants of the Company to prepare and file, a federal information tax return in compliance with Section 6031 of the Code, and any required state and local income tax and information returns for each tax year of the Company.

     Section 8.03 Tax Matters Partner. The Managing Member shall be designated on the Company’s annual federal information tax return, and have full powers and responsibilities, as the “Tax Matters Partner” of the Company for purposes of Section 6231(a)(7) of the Code. In the event the Company shall be the subject of an income tax audit by any federal, state or local authority, to the extent the Company is treated as an entity for purposes of such audit, including administrative settlement and judicial review, the Tax Matters Partner shall be authorized to act for, and its decision shall be final and binding upon, the Company and each Member thereof. All expenses incurred in connection with any such audit, investigation, settlement or review shall be borne by the Company.

     Section 8.04 Financial Reports to Current Members. The Company shall prepare and mail to each Non-Managing Member (i) annual audited financial statements after the end of the Company’s fiscal year and (ii) information necessary for such Member to complete its U.S. federal, state and local income tax returns (including such information that such Member may reasonably require annually to complete its tax filing obligations, provided that the Managing Member may provide the same without undue effort or expense).

     Section 8.05 Tax Reports to Members and Former Members. The Company shall use its best efforts to prepare and mail, or cause its accountants to prepare and mail, to each Member and, to the extent necessary, to each former Member (or its legal representatives), not more than 90 days after the close of each taxable year of the Company, a report setting forth in sufficient detail such information as shall enable such Member or former Member (or such Member’s legal representatives) to prepare their respective federal income tax returns and/or extensions in accordance with the laws, rules and regulations then prevailing.

ARTICLE IX

Miscellaneous

     Section 9.01 General. This Agreement (i) shall be binding on the permitted transferees, assigns, executors, administrators, estates, heirs, and legal successors and representatives of the Members and (ii) may be executed, through the use of separate signature pages or supplemental agreements in any number of counterparts with the same effect as if the parties executing such counterparts had all executed one counterpart; provided, however, that

24

each such counterpart shall have been executed by the Managing Member and that the counterparts, in the aggregate, shall have been signed by, or on behalf of, all of the Members.

     Section 9.02 Power of Attorney. Each of the Members hereby appoints the Managing Member as its true and lawful representative and attorney-in-fact, in its name, place and stead to make, execute, sign, acknowledge, swear to and file:

     (a) a Certificate of Formation of the Company and any amendments thereto as may be required under the Act;

     (b) any duly adopted amendment to this Agreement;

     (c) any and all instruments, certificates, and other documents that may be deemed necessary or desirable to effect the dissolution and winding-up of the Company (including, but not limited to, a Certificate of Cancellation of the Certificate of Formation); and

     (d) any business certificate, fictitious name certificate, amendment thereto, or other instrument or document of any kind whatsoever necessary, desirable or convenient to accomplish the business, purpose and objectives of the Company, or required by any applicable federal, state, local or foreign law.

     The power of attorney hereby granted by each of the Non-Managing Members is coupled with an interest, is irrevocable, and shall survive, and shall not be affected by, the subsequent death, disability, incapacity, incompetency, termination, bankruptcy, insolvency or dissolution of such Non-Managing Member; provided, however, that such power of attorney shall terminate upon the substitution of another non-managing member for all of such Non-Managing Member’s interest in the Company or upon the complete withdrawal of such Non-Managing Member from participation in the Company.

     Section 9.03 Amendments to Limited Liability Company Agreement. The terms and provisions of this Agreement may be modified or amended at any time and from time to time with the written consent of Members having in excess of 50% of the voting power of the outstanding Units, (or, if an amendment affects only a particular series of Units, with the written consent of Members having in excess of 50% of that series of Units), based on the NAV of such Units, and the affirmative vote of the Managing Member insofar as is consistent with the laws governing this Agreement; provided, however, that without the consent of the Non-Managing Members, the Managing Member may amend this Agreement or the Schedule hereto to (i) reflect changes validly made in the membership of the Company, the Capital Contributions, Membership Percentages and changes in the number of Units held by the Members; (ii) change the provisions relating to the Incentive Allocation so that such provisions conform to the applicable requirements of the Securities and Exchange Commission and other regulatory authorities, so long as such amendment does not increase the Incentive Allocation to more than the amount that would otherwise be determined absent such amendment; (iii) reflect a change in the name of the Company; (iv) make a change that is necessary or, in the opinion of the Managing Member, advisable to qualify the Company as a limited liability company or other entity in which the Members have limited liability under the laws of any state, or ensure that the Company shall not be treated as an association or a publicly traded partnership taxable as a

25

corporation for federal income tax purposes; (v) make any change that does not adversely affect the Members in any material respect; (vi) make a change that is necessary or desirable to satisfy any requirements, conditions or guidelines contained in any opinion, directive, order, ruling or regulation of any federal, state or foreign statute, so long as such change is made in a manner which minimizes to the extent practicable, as determined by the Managing Member in its sole discretion, any adverse effect on the Members or that is required or contemplated by this Agreement; (vii) make a change in any provision of this Agreement that requires any action to be taken by or on behalf of the Managing Member or the Company pursuant to the requirements of applicable Delaware law if the provisions of applicable Delaware law are amended, modified or revoked so that the taking of such action is no longer required; (viii) prevent the Company or the Managing Member from in any manner being deemed an “investment company” subject to the provisions of the Investment Company Act of 1940, as amended; (ix) correct mistakes or clarify ambiguities; (x) in the event of adverse changes in the tax law or interpretations thereof applicable to the Company, amend this Agreement as determined by the Managing Member if it deems it advisable or necessary to address such changes; (xi) conform this Agreement to the disclosure provided in the Memorandum; (xii) correct or supplement any conflicting provisions and delete or add provisions as may be required by applicable law or regulations, in each case, as determined by the Managing Member in its sole discretion; (xiii) make any other amendment provided such amendment does not become effective until after such affected Members have been given prior written notice of such change and have had the right following receipt of such notice to request the redemption of their Units and such redemption shall have become effective; (xiv) amend, delete or waive the provisions of Section 7.01(b) in accordance with Section 7.01 (b)(v); or (xv) make any other amendments similar to the foregoing. Each Member, however, must consent to any amendment that would (a) reduce its Capital Account or rights of redemption or withdrawal; or (b) amend the provisions of this Agreement relating to amendments.

     Section 9.04 Instruments. The parties agree to execute and deliver any further instruments or perform any acts which are or may become necessary to carry on the Company created by this Agreement or to effectuate its purposes.

     Section 9.05 No Personal Liability For Return of Capital. The Managing Member shall not be personally liable for the return or repayment of all or any portion of Capital Contribution or profits of any Member, it being expressly agreed that any such return of Capital Contribution or profits made pursuant to this Agreement shall be made solely from the assets (which shall not include any right of contribution from the Managing Member) of the Company.

     Section 9.06 Choice of Law. Notwithstanding the place where this Agreement may be executed by any of the parties hereto, the parties expressly agree that all the terms and provisions hereof shall be construed under the laws of the State of Delaware and, without limitation thereof, that the Act as now adopted or as may be hereafter amended shall govern the limited liability company aspects of this Agreement. The parties also expressly agree that all actions and proceedings brought by a party against a Member or the Company, in connection with the Company’s business or affairs (including a breach of this Agreement by a party hereto) shall be brought in and be subject to the jurisdiction of a court of the State of New York or any federal district court in the State of New York.

26

     Section 9.07 Venue; Inconvenient Forum. The parties hereto irrevocably waive to the fullest extent permitted by law any objection that they may now or hereafter have to the laying of venue of any such action or proceeding in the courts of the State of New York located in the City of New York or of the United States District Court for the Southern District of New York and any claim that any such action or proceeding brought in any such court has been brought in an inconvenient forum.

     Section 9.08 No Third Party Rights. The provisions of this Agreement, including, without limitation, the provisions of Section 1.03, are not intended to be for the benefit of any creditor or other Person (other than the Members in their capacities as such) to whom any debts, liabilities or obligations are owed by (or who otherwise have a claim against or dealings with) the Company or any Member, and no such creditor or other Person shall obtain any rights under any of such provisions (whether as a third party beneficiary or otherwise) or shall obtain any rights under any of such provisions (whether as a third party beneficiary or otherwise) or shall by reason of any such provisions make any claim in respect to any debt, liability or obligation (or otherwise) including any debt, liability or obligation pursuant to Section 1.03, against the Company or any Member.

     Section 9.09 Notices. Each notice relating to this Agreement shall be in writing and delivered in person or by registered or certified mail. All notices to the Company shall be addressed to its principal office and place of business. All notices addressed to a Member shall be addressed to such Member at the address set forth in the Schedule. Any Member may designate a new address by notice to that effect given to the Company. Unless otherwise specifically provided in this Agreement, a notice shall be deemed to have been effectively given when mailed by registered or certified mail to the proper address or delivered in person.

     Section 9.10 Grantors of Revocable Trusts. Each Non-Managing Member that is a revocable trust agrees that, if the trustee of such revocable trust and the grantor of such revocable trust are the same person, the trustee’s execution of this Agreement and any other documents executed in connection with the Company shall bind such Person in his or her capacity both as trustee and as grantor of such revocable trust.

     Section 9.11 Goodwill. No value shall be placed on the name or goodwill of the Company, which shall belong exclusively to the Managing Member.

     Section 9.12 Headings. The titles of the Articles and the headings of the Sections of this Agreement are for convenience of reference only, and are not to be considered in construing the terms and provisions of this Agreement.

     Section 9.13 Pronouns. All pronouns shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the Person or Persons may require in the context thereof.

     Section 9.14 Confidentiality. The Managing Member and the Company may, in their discretion, keep confidential and not disclose to the Non-Managing Members any proprietary information concerning the Company, including, without limitation, investments, valuations, information regarding potential investments, financial information, trade secrets and

27

the like which is proprietary in nature and non-public, or any information about any investment, to the extent that such information is required to be kept confidential or is otherwise subject to disclosure restrictions imposed by the issuer of the investment or the Managing Member, in its reasonable discretion (collectively, “Confidential Information”). Each Non-Managing Member shall not disclose or cause to be disclosed any Confidential Information to any other Person, except as otherwise required by any regulatory authority, law or regulation, or by legal process, without the prior written consent of the Managing Member. Notwithstanding anything in the foregoing or anything else contained in this Agreement to the contrary, except as reasonably necessary to comply with applicable securities laws, each Member (and any employee, representative or other agent thereof) may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of the offering and ownership of Units and any transaction described in this Section 9.14 or elsewhere in this Agreement and all materials of any kind (including opinions and other tax analyses) that are provided to such Member relating to such tax treatment and tax structure. For this purpose, “tax structure” means any facts relevant to the federal income tax treatment of the offering and ownership of Units and any transaction described in this Section 9.14 or elsewhere in this Agreement, and does not include information relating to the identity of the Company or its Affiliates.

28

     IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the date first set forth above.

MANAGING MEMBER: GOLDMAN SACHS HEDGE FUND STRATEGIES LLC
By:	/s/ KENT A. CLARK
	Name:	KENT A. CLARK
	Title:	MANAGING DIRECTOR

NON-MANAGING MEMBERS:
By:	GOLDMAN SACHS HEDGE FUND STRATEGIES LLC, on behalf of each Member as attorney-in-fact
By:	/s/ KENT A. CLARK
	Name:	KENT A. CLARK
	Title:	MANAGING DIRECTOR

29

EX-10.5

FORM OF

SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY
AGREEMENT

OF

GOLDMAN SACHS GLOBAL FUNDAMENTAL STRATEGIES, LLC

Dated as of April 1, 2008

TABLE OF CONTENTS

		Page
ARTICLE I General Provisions			1
Section 1.01	Company Name and Address		1
Section 1.02	Fiscal Year		1
Section 1.03	Liability of Members		1
Section 1.04	Purposes of the Company		2
Section 1.05	Assignability of Units; Assignment by Managing Member		3
Section 1.06	Registered Office and Agent for Service of Process.		3
ARTICLE II Management of the Company			3
Section 2.01	Management Generally		3
Section 2.02	Delegation by Managing Member		3
Section 2.03	Authority of the Managing Member		4
Section 2.04	Reliance by Third Parties		5
Section 2.05	Activity of the Managing Member		6
Section 2.06	Standard of Care; Indemnification		6
Section 2.07	Management Fee; Payment of Costs and Expenses		8
Section 2.08	Principal Transactions and Other Related Party Transactions		9
ARTICLE III Series of Units; Admission of New Members			9
Section 3.01	Classes and Series of Units		9
Section 3.02	Conversion of Series		10
Section 3.03	New Members		10
Section 3.04	Adjustment to Number of Units Issued		10
Section 3.05	Additional Classes of Units		10
ARTICLE IV Capital Accounts of Members and Operation Thereof			11
Section 4.01	Definitions		11
Section 4.02	Capital Contributions		11
Section 4.03	Capital Accounts		12
Section 4.04	Membership Percentages		13
Section 4.05	Allocation of Net Capital Appreciation or Net Capital Depreciation		13
Section 4.06	Amendment of Incentive Allocation		14
Section 4.07	Determination of Net Assets		14
Section 4.08	Determination of Net Asset Value		15
Section 4.09	Allocation for Tax Purposes		16
Section 4.10	Determination by Managing Member of Certain Matters; Managing Member’ Discretion		16

i

		Page
Section 4.11	Adjustments to Take Account of Interim Year Events		17
Section 4.12	Tax Withholding		17
ARTICLE V Redemptions and Distributions			17
Section 5.01	Redemptions and Distributions in General		17
Section 5.02	Redemptions		18
Section 5.03	Limitation on Redemptions		19
Section 5.04	Distributions		20
ARTICLE VI Withdrawal, Death, Disability			21
Section 6.01	Withdrawal, Death, etc. of Members		21
Section 6.02	Required Withdrawals		21
ARTICLE VII Duration and Dissolution of the Company			21
Section 7.01	Duration		21
Section 7.02	Dissolution		23
ARTICLE VIII Tax Returns; Reports to Members			24
Section 8.01	Independent Auditors		24
Section 8.02	Filing of Tax Returns		24
Section 8.03	Tax Matters Partner		24
Section 8.04	Financial Reports to Current Members		24
Section 8.05	Tax Reports to Members and Former Members		24
ARTICLE IX Miscellaneous			25
Section 9.01	General		25
Section 9.02	Power of Attorney		25
Section 9.03	Amendments to Limited Liability Company Agreement		25
Section 9.04	Instruments		26
Section 9.05	No Personal Liability For Return of Capital		26
Section 9.06	Choice of Law		27
Section 9.07	Venue; Inconvenient Forum		27
Section 9.08	No Third Party Rights		27
Section 9.09	Notices		27
Section 9.10	Grantors of Revocable Trusts		27
Section 9.11	Goodwill		28
Section 9.12	Headings		28
Section 9.13	Pronouns		28
Section 9.14	Confidentiality		28

ii

SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF

GOLDMAN SACHS FUNDAMENTAL STRATEGIES, LLC

Dated as of April 1,2008

          The undersigned (herein called the “Members,” which term shall include any Persons (as defined below) hereafter admitted to the Company (as defined below) pursuant to Article III of this Agreement (as defined below) and shall exclude any Persons who cease to be Members pursuant to Article V or Article VI of this Agreement) hereby agree to form and hereby form, as of the date and year first above written, a limited liability company (herein called the “Company”), pursuant to the provisions of the Limited Liability Company Act of the State of Delaware (6 Del. Code § 18-101, et seq.) (the “Act”), which shall be governed by, and operated pursuant to, the terms and provisions of this Second Amended and Restated Limited Liability Company Agreement (herein called this “Agreement”).

ARTICLE I

General Provisions

          Section 1.01 Company Name and Address. The name of the Company is Goldman Sachs Global Fundamental Strategies, LLC. Its principal office is located at 701 Mount Lucas Road, Princeton, New Jersey 08540, or at such other location as the Managing Member (as defined in Section 1.03) in the future may designate. The Managing Member shall promptly notify the Non-Managing Members (as defined in Section 1.03) of any change in the Company’s address.

          Section 1.02 Fiscal Year. The fiscal year of the Company (herein called the “fiscal year”) shall end on December 31 of each calendar year; provided, however, that the Managing Member may change the Company’s fiscal year-end, without the consent of the Non-Managing Members, as deemed appropriate by the Managing Member, in its sole discretion.

          Section 1.03 Liability of Members. The names of all of the Members and the amounts of their respective contributions to the Company (herein called the “Capital Contributions”) are set forth in a schedule (herein called the “Schedule”), which shall be filed with the records of the Company at the Company’s principal office (as set forth in Section 1.01) and is hereby incorporated by reference and made a part of this Agreement.

          The Member designated in Part I of the Schedule as the Managing Member (herein called the “Managing Member”) shall manage the operations of the Company. The Members designated in Part II of the Schedule are referred to herein as the “Non-Managing Members.” The Managing Member, the Non-Managing Members and the former Non-Managing Members shall be liable to the extent provided herein for the repayment and discharge of all debts and obligations of the Company attributable to any fiscal year (or relevant portion thereof)

during which they are or were Members of the Company to the extent of their respective limited liability company interests (the “Units”) in the Company in the fiscal year (or relevant portion thereof) to which any such debts and obligations are attributable.

          The Members and all former Members shall share all losses, liabilities or expenses suffered or incurred by virtue of the operation of the preceding paragraph of this Section 1.03 in the proportions of their respective Capital Accounts (determined as provided in Section 4.03) for the fiscal year (or relevant portion thereof) to which any debts or obligations of the Company are attributable. A Member’s or former Member’s share of all losses, liabilities or expenses shall not be greater than its respective interest in the Company for such fiscal year (or relevant portion thereof).

          As used in this Agreement, the terms “interests in the Company” and “interest in the Company” shall mean with respect to any fiscal year (or relevant portion thereof) and with respect to each Member (or former Member), the Capital Account (or, in the case of a Member with more than one series of Units (as defined below), the Capital Accounts) that such Member (or former Member) would have received (or in fact did receive) pursuant to the terms and provisions of Article VI upon withdrawal from the Company as of the end of such fiscal year (or relevant portion thereof).

          Notwithstanding any other provision of this Agreement to the contrary, in no event shall any Member (or former Member) be obligated to make any additional contribution or payment whatsoever to the Company, or have any liability for the repayment and discharge of the debts and obligations of the Company (apart from its interest in the Company), except that a Non-Managing Member (or former Non-Managing Member) shall, in the discretion of the Managing Member, be required, for purposes of meeting such Member’s (or former Member’s) obligations under this Section 1.03, to make additional contributions or payments, respectively, up to, but in no event in excess of, the aggregate amount of returns of capital and other amounts actually received by it from the Company during or after the fiscal year to which any debt or obligation is attributable.

          As used in this Agreement, the terms “former Non-Managing Member” and “former Member” refer to such Persons as hereafter from time to time cease to be a Non-Managing Member or Member, respectively, pursuant to the terms and provisions of this Agreement.

          Section 1.04 Purposes of the Company. The Company is organized for the purposes of allocating its assets directly or indirectly to a group of investment managers (the “Advisors”) (that may or may not be Affiliates (as defined in Section 2.05) of the Managing Member) that employ strategies within the event driven hedge fund sector, engaging in any other lawful act or activity for which limited liability companies may be organized under the Act, and engaging in any and all activities and transactions as the Managing Member may deem necessary or advisable in connection therewith.

2

          Section 1.05 Assignability of Units; Assignment by Managing Member.

          (a) Except as provided in paragraph (b) below, without the prior written consent of the Managing Member, which may be withheld in its sole and absolute discretion, with or without cause, a Member may not pledge, transfer or assign its Units in the Company in whole or in part to any Person except by operation of law pursuant to the death, adjudication of incompetency, insolvency or bankruptcy of the Member, nor substitute any other Person as a Member. Any attempted pledge, transfer, assignment or substitution not made in accordance with this Section 1.05 shall be void.

          (b) Without the consent of the Non-Managing Members, the Managing Member may assign or otherwise transfer its Managing Member interest in the Company to any corporation, partnership, limited liability company or other entity controlling, controlled by or under common control with the Managing Member, as long as such transfer does not, as determined by the Managing Member in its sole discretion, cause the Company to be taxable as a corporation.

          Section 1.06 Registered Office and Agent for Service of Process. The registered office of the Company shall be: Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, and the registered agent for service of process at such office shall be The Corporation Trust Company. The Company may from time to time have such other place or places of business within or without the State of Delaware as may be designated by the Managing Member.

ARTICLE II

Management of the Company

          Section 2.01 Management Generally. The management of the Company shall be vested exclusively in the Managing Member. Except as authorized by the Managing Member, or as expressly set forth in this Agreement, the Non-Managing Members shall have no part in the management of the Company, and shall have no authority or right to act on behalf of the Company in connection with any matter. The Managing Member, and any Affiliate of the Managing Member, may engage in any other business venture, whether or not such business is similar to the business of the Company, and neither the Company nor any Non-Managing Member shall have any rights in or to such ventures or the income or profits derived therefrom.

          Section 2.02 Delegation by Managing Member. The Managing Member shall have the power and authority to delegate to one or more Persons (as defined in Section 2.03(d)), including, without limitation, any officer, employee or agent of the Company or the Managing Member, the Managing Member’s rights and powers to manage and control the business and affairs of the Company. The Managing Member may, by written instrument, authorize any Person to enter into and perform under any document on behalf of the Company.

3

          Section 2.03 Authority of the Managing Member. The Managing Member shall have the power on behalf of and in the name of the Company to carry out any and all of the objects and purposes of the Company set forth in Section 1.04 and Section 2.01, and to perform all acts and enter into and perform all contracts and other undertakings, other than any actions to be taken in connection with investment of the Company’s investable assets, which it may deem necessary or advisable or incidental thereto, including, without limitation, the power to:

          (a) open, maintain and close accounts, including custodial accounts, with banks, including banks located inside and outside the United States, and draw checks or other orders for the payment of monies;

          (b) lend, either with or without security, funds or other properties of the Company, borrow or raise funds (including borrowing from the Managing Member or its Affiliates), and secure the obligations of the Company by pledges or hypothecation of all or any part of the property of the Company;

          (c) do any and all acts on behalf of the Company, and exercise all rights, powers, privileges and other incidents of ownership or possession with respect to the Company’s assets (including any interest therein) and other property and funds held or owned by the Company, including, without limitation, participation in arrangements with creditors, the institution and settlement or compromise of suits and administrative proceedings and all other like or similar matters;

          (d) engage any person, general partnership, limited partnership, limited liability company, corporation, joint venture, trust, business trust, cooperative, association or other entity (each, a “Person” and collectively, “Persons”) (including the Managing Member and any of its Affiliates) pursuant to an administration agreement to provide certain administrative services (any such Person providing such services being referred to herein as the “Administrator”), including, without limitation, calculating the net asset value (the “NAV”) of each series of Units and Members’ Capital Accounts, valuing the Company’s assets, assisting with the valuation of securities which are not readily marketable, assisting in the preparation of the Company’s financial statements, assisting in the preparation and distribution of reports to each Member, maintaining a registry for the ownership of each series of Units and providing other administrative services to the Company;

          (e) consent on behalf of the Company to any changes in the members, directors or officers of the Managing Member, if such consent is required by applicable law;

          (f) engage any personnel, whether part time or full time, attorneys, financial advisers, underwriters, accountants, consultants, appraisers, custodians of the assets of the Company or other Persons as the Managing Member may deem necessary or desirable, whether or not any such Person may be an Affiliate of the Managing Member or may also be employed by any Affiliate of the Managing Member;

          (g) allocate the Company’s assets, directly or indirectly, to Advisors and limited liability companies or other entities managed by the Managing Member through which

4

the Company accesses Advisors (“Portfolio Companies”) and investment funds in the manner set forth in the Company’s Confidential Private Placement Memorandum (as amended or supplemented from time to time, the “Memorandum”) oversee such allocations and, from time to time, in the sole discretion of the Managing Member, reallocate the Company’s assets among existing or new Advisors, Portfolio Companies or investment funds;

          (h) invest any of the Company’s cash balances which it determines at any time, in its sole discretion, not to allocate to the Advisors, Portfolio Companies or investment funds, in any instruments it deems appropriate in its sole discretion, including, without limitation, money market funds sponsored by Goldman, Sachs & Co. or its Affiliates;

          (i) redeem the Company’s interests in any investment fund or Portfolio Company in order to obtain cash necessary to meet the redemption requests of the Members, or for any other reason in its sole discretion;

          (j) bring and defend actions and proceedings at law or equity and before any governmental, administrative or other regulatory agency, body or commission;

          (k) make distributions to Members in cash or (to the extent permitted hereunder) otherwise;

          (l) prepare and file all necessary returns and statements, pay all taxes, assessments and other impositions applicable to the assets of the Company and withhold amounts with respect thereto from funds otherwise distributable to any Member;

          (m) determine the accounting methods and conventions to be used in the preparation of any accounting or financial records of the Company;

          (n) make any and all tax elections permitted to be made under the Internal Revenue Code of 1986, as amended (the “Code”), and any applicable state, local or foreign tax law;

          (o) determine the tax treatment of any Company transaction or item for purposes of completing the Company’s federal, state, local or foreign tax returns; and

          (p) take all actions, and authorize any member, employee, officer, director or other agent of the Managing Member or agent or employee of the Company, to act for and on behalf of the Company, in all matters necessary to, in connection with, or incidental to, any of the foregoing.

          Section 2.04 Reliance by Third Parties. Persons dealing with the Company are entitled to rely conclusively upon the certification of the Managing Member, to the effect that it is then acting as the Managing Member and upon the power and authority of the Managing Member as herein set forth.

5

          Section 2.05 Activity of the Managing Member. The Managing Member and Persons controlling, controlled by or under common control with the Managing Member and any of such Person’s directors, members, stockholders, partners, officers, employees and controlling persons (each, an “Affiliate” and collectively, “Affiliates”), shall devote so much of their time to the affairs of the Company as in the judgment of the Managing Member the conduct of its business shall reasonably require, and none of the Managing Member or its Affiliates shall be obligated to do or perform any act or thing in connection with the business of the Company not expressly set forth herein. Nothing contained in this Section 2.05 shall be deemed to preclude the Managing Member or its Affiliates from exercising investment responsibility, from engaging directly or indirectly in any other business or from directly or indirectly purchasing, selling or holding securities, options, separate accounts, investment contracts, currency, currency units or any other asset and any interest therein for the account of any such other business, for their own accounts, for any of their family members or for other clients.

          Section 2.06 Standard of Care; Indemnification.

          (a) None of the Managing Member or its Affiliates (each, an “Indemnified Person” and collectively the “Indemnified Persons”) shall be liable to the Company or to the Members for (i) any act or omission performed or failed to be performed by such person (other than any criminal wrongdoing), or for any losses, claims, costs, damages, or liabilities arising therefrom, in the absence of any criminal wrongdoing, willful misfeasance or gross negligence on the part of such person, (ii) any tax liability imposed on the Company or any Member or (iii) any losses due to the actions or omissions of the Advisors, any brokers or other agents of the Company.

          In the event that any Indemnified Person becomes involved in any capacity in any action, proceeding or investigation brought by or against any Person (including any Non-Managing Member) in connection with any matter arising out of or in connection with the Company’s business or affairs (including a breach of this Agreement by any Member), the Company will periodically reimburse such Indemnified Person for its legal and other expenses (including the costs of any investigation and preparation) incurred in connection therewith, provided that such Indemnified Person shall promptly repay to the Company the amount of any such reimbursed expenses paid to it if it shall ultimately be determined by a court having appropriate jurisdiction in a decision that is not subject to appeal, that such Indemnified Person is not entitled to be indemnified by the Company in connection with such action, proceeding or investigation as provided in the exception contained in the next succeeding sentence.

          To the fullest extent permitted by applicable law, the Company shall also indemnify any Indemnified Person, jointly and severally, against any losses, claims, costs, damages or liabilities to which such Indemnified Person may become subject in connection with any matter arising out of or in connection with the Company’s business or affairs, except to the extent that any such loss, claim, cost, damage, or liability results solely from the willful misfeasance, bad faith or gross negligence of, or any criminal wrongdoing by, such Indemnified Person. If for any reason (other than the willful misfeasance, bad faith or gross negligence of, or any criminal wrongdoing by, such Indemnified Person) the foregoing indemnification is

6

unavailable to such Indemnified Person, or is insufficient to hold it harmless, then the Company shall contribute to the amount paid or payable to the Indemnified Person as a result of such loss, claim, cost, damage, or liability in such proportion as is appropriate to reflect not only the relative benefits received by the Company on the one hand and such Indemnified Person on the other hand but also the relative fault of the Company and such Indemnified Person, as well as any relevant equitable considerations.

          The reimbursement, indemnity and contribution obligations of the Company under this Section 2.06 shall be in addition to any liability which the Company may otherwise have and shall be binding upon and inure to the benefit of any successors, assigns, heirs, and personal representatives of the Company, the Managing Member and any other Indemnified Person. The foregoing provisions shall survive any termination of this Agreement.

          (b) The reimbursement, indemnification and contribution rights provided by this Section 2.06 shall not be deemed to be exclusive of any other rights to which the Indemnified Person may be entitled under any agreement or as a matter of law, or otherwise, both as to action in an Indemnified Person’s official capacity and to action in any other capacity, and shall continue as to an Indemnified Person who has ceased to have an official capacity for acts or omissions during such official capacity or otherwise when acting at the request of the Managing Member and shall inure to the benefit of the successors, assigns, heirs and personal representatives of such Indemnified Person.

          (c) Notwithstanding any of the foregoing to the contrary, the provisions of this Section 2.06 shall not be construed as to relieve (or attempt to relieve) from liability or to provide for the indemnification of any Indemnified Person for any liability (including liability under federal securities law which, under certain circumstances, impose liability even on persons that act in good faith), to the extent (but only to the extent) that such liability may not be waived, modified or limited under applicable law or such indemnification would be in violation of applicable law, but shall be construed so as to effectuate the provisions of this Section 2.06 to the fullest extent permitted by law.

          (d) The Managing Member shall have power to purchase and maintain insurance on behalf of the Managing Member and the Indemnified Persons at the expense of the Company against any liability asserted against or incurred by them in any such capacity or arising out of the Managing Member’s status as such, whether or not the Company would have the power to indemnify the Indemnified Persons against such liability under the provisions of this Agreement.

          (e) An Indemnified Person may rely upon and shall be protected in acting or refraining from action upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond debenture, or other document believed by it to be genuine and to have been signed or presented by the proper party or parties.

          (f) An Indemnified Person may consult with counsel, accountants and other experts reasonably selected by it, and any opinion of an independent counsel, accountant or expert retained with reasonable care shall be full and complete protection in respect of any action

7

taken or suffered or omitted by the Indemnified Person hereunder in good faith and in accordance with such opinion.

          (g) The Managing Member may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, and the Managing Member shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with reasonable care by it hereunder.

          Section 2.07 Management Fee: Payment of Costs and Expenses. The Company shall pay to the Managing Member a management fee (the “Management Fee”) in respect of each series of Units, payable in arrears, for investment management and other management services accruing daily and calculated and paid on a monthly basis of one-twelfth of 1.25% of the Net Assets (as defined in Section 4.01(d)) of the Company in respect of each such series of Units as of the end of each month, appropriately adjusted to reflect capital appreciation or depreciation and any contributions, redemptions or distributions. For purposes of determining the Management Fee for any month, Net Assets shall not be reduced to reflect any Management Fee for such month and any accrued Incentive Allocation (as defined in Section 4.05(b)), including any Incentive Allocation that is allocated to the Managing Member’s Incentive Allocation Account as of such date, provided that Net Assets shall be reduced for any amounts which have been previously allocated to the Managing Member’s Incentive Allocation Account. The Management Fee will reduce the Capital Account of the series of Units to which it relates, as described in Section 4.03.

          If a Member is admitted to, withdraws from (including any partial withdrawal), or acquires additional Units of, the Company as of a date other than the first day of a calendar month, the portion of the Management Fee determined with respect to such Member’s Capital Account shall be appropriately pro-rated to take into account the number of days in such month during which such Member was a Member or during which such Units were outstanding, as applicable.

          The Managing Member has the right, in its sole discretion, to waive fees or impose different fees on any Member, as may be agreed to by the Managing Member and the Member.

          The Company bears all of its operating expenses, including, but not limited to, legal expenses; professional fees (including, without limitation, fees and expenses of consultants and experts) relating to investments; costs and expenses relating to any amendment of this Agreement or the Company’s other organizational documents or subscription agreement or any modification or supplement to the Memorandum, and any distribution of such documentation to the Members; accounting, auditing and tax preparation expenses; fees and expenses of other agents of the Company (including, without limitation, fees which may be payable to and expenses of an Administrator or sub-administrator of the Company); taxes and governmental fees; printing and mailing expenses; expenses relating to transfers and redemptions of Units; fees and out-of-pocket expenses of any service company retained to provide accounting and bookkeeping services to the Company; quotation or valuation expenses; expenses relating to the acquisition, holding and disposition of investments (e.g., expenses which the Managing Member determines to be related to the investment of the assets of the Company, including, among others, research expenses, such as fees to the Advisors, brokerage fees and commissions, expenses relating to short sales, clearing and settlement charges, custodial fees and expenses, costs and charges for

8

equipment or services used in communicating information regarding the Company’s transactions between the Managing Member and other agents, bank service fees, interest expenses, borrowing costs and extraordinary expenses); insurance premiums; costs incurred in connection with any claim, litigation, arbitration, mediation, government investigation or dispute in connection with the business of the Company and the amount of any judgment or settlement paid in connection therewith, or the enforcement of the Company’s rights against any Person; costs and expenses for indemnification or contribution payable by the Company to any Person (including, without limitation, pursuant to the indemnification obligations described herein under Section 2.06); and all costs and expenses incurred as a result of dissolution, winding-up and termination of the Company.

          In addition, the Company will bear the expenses incurred in connection with the offer and sale of Units, including printing costs and legal fees and expenses of the Company, the Managing Member and any placement agent and other expenses of the offering of Units. In addition, the Company will bear, indirectly through its investment in each Portfolio Company or investment fund in which it invests, its pro rata portion of the offering, organizational and operating expenses of each Portfolio Company or investment fund, including, without limitation, the expenses of the type described in this and the preceding paragraph.

          To the extent that expenses to be borne by the Company are paid by the Managing Member, the Company shall reimburse the Managing Member for the payment of any such expenses. The Managing Member may elect, from time to time, to bear certain of the Company’s expenses described above. The Managing Member shall bear its own overhead costs and expenes.

          Section 2.08 Principal Transactions and Other Related Party Transactions. Each Non-Managing Member hereby authorizes the Managing Member, on behalf of such Non-Managing Member, to select one or more Persons, who shall not be affiliated with the Managing Member, to serve on a committee, the purpose of which will be to consider and, on behalf of the Non-Managing Members, approve or disapprove, to the extent required by applicable law, of principal transactions and certain other related party transactions. In no event shall any such transaction be entered into unless it complies with applicable law.

ARTICLE III

Series of Units; Admission of New Members

          Section 3.01 Classes and Series of Units.

          (a) Units may be divided into different classes of Units, and each class may be further divided into different series of Units (each such series being referred to in this Agreement as a “series,” provided always that in the case of a class which has not been divided into two or more series’, the expression “series” shall, where the context so requires, mean, for the purposes of this Agreement, the Units of such class), in the discretion of the Managing Member. In this Agreement, except when referred to under their separate classes or series or where the context otherwise requires, the term “Units” shall mean all classes and all series of each class of Units.

9

          (b) An initial series of Units of a class (the “Initial Series”) will be issued on the initial closing date of each class. The initial purchase price per Unit for the Initial Series of Units of a class shall be $100. The Managing Member may, at any time and from time to time, in its sole discretion, elect to raise additional capital for the Company from Members and from new subscribers on such terms and conditions as may be determined by the Managing Member in its sole discretion. Generally, a new series of Units will be issued on each date an existing Member makes an additional Capital Contribution in accordance with Section 4.02 and on each date a new Member is admitted to the Company in accordance with Section 3.03, except that the Managing Member may issue additional Units of an existing series provided that such issuance does not have an adverse effect on the NAV or Prior High NAV (as defined in Section 4.05(b)(i)) of the Units of any Member. Each Unit will carry equal rights and privileges with each other Unit of the same series. Units of a class issued at the beginning of any fiscal year will be offered at the then current NAV per Unit of the Initial Series of such class if such Initial Series is at or above its Prior High NAV per Unit. If the Initial Series of such class is not at or above its Prior High NAV per Unit, Units will be issued in the next offered series of such class that is at or above its Prior High NAV. If no series of Units of such class is at or above its Prior High NAV at such time, such additional Units will be issued as a separate series at a price per Unit determined by the Managing Member, in its sole discretion. Fractions of Units may be issued to one ten-thousandth of a Unit.

          Section 3.02 Conversion of Series. Following the end of each fiscal year, any issued and outstanding series of Units of a class (other than the Initial Series of such class) that is at or above its Prior High NAV shall be exchanged (after reduction for the Management Fee and any Incentive Allocation) into Units of the Initial Series of such class (or if such Initial Series is not at or above its Prior High NAV per Unit, the next offered series of such class that is at or above its Prior High NAV) at the prevailing NAV per Unit of the Initial Series or such other series of Units (as applicable).

          Section 3.03 New Members. Subject to the condition that each new Member shall execute an appropriate counterpart to this Agreement pursuant to which it agrees to be bound by the terms and provisions hereof, the Managing Member may admit one or more new Members on the first day of each calendar quarter or at such other times as the Managing Member may determine in its sole discretion. Admission of a new Member shall not be a cause for dissolution or termination of the Company.

          Section 3.04 Adjustment to Number of Units Issued. If at any time the Managing Member determines, in its sole discretion, that an incorrect number of Units was issued to a Member because the NAV in effect on the date of issuance was materially incorrect, the Company will adjust such Member’s Units by increasing or decreasing them (by means of issuances of additional Units or compulsory redemptions of Units, in each case without additional consideration), as appropriate, to such number of Units as would have been issued at the correct NAV.

          Section 3.05 Additional Classes of Units. The Company may issue additional classes of Units, including, without limitation, classes of Units that are subject to different fee

10

arrangements or seek to maximize total returns in other currencies. The Managing Member may, without the prior consent of or notice to the Members, make appropriate amendments to or supplement this Agreement to the extent necessary or desirable to effect the issuance of Units of any such class, including, without limitation, to account for the different fee arrangements or the separate currency-related transactions engaged in with respect to such a class.

ARTICLE IV

Capital Accounts of Members
and Operation Thereof

          Section 4.01 Definitions. For the purposes of this Agreement, unless the context otherwise requires:

          (a) The term “Accounting Period” shall mean the following periods: The initial Accounting Period commenced upon the commencement of operations of the Company. Each subsequent Accounting Period shall commence immediately after the close of the preceding Accounting Period. Each Accounting Period hereunder shall close at the close of business on the first to occur of (i) the last day of each calendar month, (ii) the last day of each fiscal year of the Company, (iii) the date immediately prior to the effective date of the admission of a new Member pursuant to Section 3.03, (iv) the date immediately prior to the effective date of an additional Capital Contribution pursuant to Section 4.02, or (v) the date immediately prior to the effective date of any redemption or complete withdrawal pursuant to Article V or Article VI hereof. The final Accounting Period shall end on the date the Company dissolves.

          (b) The term “Beginning Value” shall, with respect to any Accounting Period, mean the value of the Company’s Net Assets (as defined below) at the beginning of such Accounting Period.

          (c) The term “Ending Value” shall, with respect to any Accounting Period, mean the value of the Company’s Net Assets at the end of such Accounting Period (before giving effect to the Incentive Allocation and the Management Fee for such Accounting Period, but after giving effect to all other expenses for such Accounting Period).

          (d) The term “Net Assets” shall mean the excess of the Company’s total assets over its total liabilities, determined in accordance with Section 4.07.

          (e) The term “Net Capital Appreciation,” with respect to any Accounting Period, shall mean the excess, if any, of the Ending Value over the Beginning Value.

          (f) The term “Net Capital Depreciation,” with respect to any Accounting Period, shall mean the excess, if any, of the Beginning Value over the Ending Value.

          Section 4.02 Capital Contributions. Each Member has paid or conveyed by way of contribution to the Company in exchange for the issuance of Units cash and/or marketable securities having an aggregate value equal to the amount set forth opposite such Member’s name

11

in Part I or II of the Schedule (herein called the “Initial Capital Contribution”). Additional Capital Contributions may be made by Members only in accordance with the provisions of this Section 4.02.

          Upon the approval of the Managing Member, any existing or prospective Member may purchase additional or newly-issued Units by contributing cash and/or marketable securities to the Company on the first day of any calendar quarter or at such other times as the Managing Member may determine in its sole discretion. The Managing Member and any of its Affiliates may make additional Capital Contributions to the Company in cash and/or marketable securities at any time and in any amounts.

          Whether marketable securities shall be accepted as a contribution to the Company shall be determined in the sole discretion of the Managing Member.

          Section 4.03 Capital Accounts.

          (a) A separate capital account (herein called a “Capital Account”) shall be established on the books of the Company for each series of Units. The Capital Account of each series shall initially be an amount equal to the Initial Capital Contributions with respect to such series. The Capital Account of a series shall be (i) increased to reflect any additional Capital Contributions pursuant to Section 4.02 in respect of such series; (ii) increased to reflect the Net Capital Appreciation of such series for each Accounting Period; (iii) decreased to reflect the redemption of any Units of such series, pursuant to Section 5.02; (iv) decreased to reflect the amount of any distributions (other than in redemption of Units pursuant to Section 5.02) pursuant to Section 5.04 in respect of such series (including any deemed distributions of taxes paid by the Company pursuant to Section 5.04(c) in respect of such series); (v) decreased for any Incentive Allocation pursuant to Section 4.05(b) and any Management Fee in respect of such series; and (vi) decreased to reflect the Net Capital Depreciation of such series for each Accounting Period.

          (b) At the time of the conversion of any series of Units into Units of the Initial Series or any other series of Units pursuant to Section 3.02, the Capital Account of the converted series of Units shall be reduced to zero, and the Capital Account of the series of Units into which such Units were converted shall be increased by the balance of the Capital Account of the converted series of Units immediately prior to the conversion.

          (c) A separate Capital Account shall also be established on the books of the Company for each Member with respect to each series of Units held by such Member. Each Member’s Capital Account with respect to a series of Units shall equal the Capital Account of such series times the Member’s Membership Percentage (as defined in Section 4.04) with respect to such series of Units.

          (d) The Managing Member shall have a separate Capital Account (the “Incentive Allocation Account”), which shall initially be equal to zero, and which shall be (i) increased by any Incentive Allocation at the time such Incentive Allocation is made, and (ii) decreased to reflect the amount of any distributions (including any deemed distributions in connection with the withholding of taxes in respect of such Incentive Allocation pursuant to

12

Section 5.04(c)) made to, or withdrawals made by, the Managing Member in respect of such Incentive Allocation Account.

          Section 4.04 Membership Percentages. A membership percentage (a “Membership Percentage”) shall be determined for each Member for any given series of Units for each Accounting Period of the Company by dividing (i) the number of Units owned by such Member within a given series by (ii) the aggregate number of outstanding Units of such series as of the beginning of such Accounting Period, after taking into account, in the case of both clause (i) and clause (ii), any Units issued or redeemed as of (or the day immediately after) the beginning of such Accounting Period. The aggregate Membership Percentages for each series of Units shall equal 100%.

          Section 4.05 Allocation of Net Capital Appreciation or Net Capital Depreciation.

          (a) Any Net Capital Appreciation or Net Capital Depreciation, as the case may be, for an Accounting Period shall be allocated among the different series of Units pro rata in accordance with the relative Capital Accounts (determined prior to any year-to-date accrued Incentive Allocation) of each series at the beginning of such Accounting Period, after taking into account any contributions, distributions or redemptions as of the beginning of such Accounting Period.

          (b) (i) At the end of each fiscal year of the Company, or at such other date during a fiscal year as of which the following determination is required pursuant to this Section 4.05, five percent (5%) of the amount by which the NAV of a series of Units (determined prior to any applicable Incentive Allocation accrual with respect to such series of Units and appropriately adjusted as determined by the Managing Member in its sole discretion for contributions, distributions and redemptions, but after giving effect to the allocation, pursuant to Section 4.05(a), of Net Capital Appreciation and Net Capital Depreciation for the Accounting Period then ending) exceeds such series’ Prior High NAV at such date shall be reallocated to the Incentive Allocation Account (the “Incentive Allocation”). The “Prior High NAV” with respect to a series of Units initially shall mean an amount equal to the NAV of such series as of the date of its initial issue. The new Prior High NAV with respect to a series of Units immediately following the end of any period for which an Incentive Allocation has been made with respect to such series shall be reset to equal the NAV of such series, unless the series is exchanged pursuant to Section 3.02 into the Initial Series or another series, in which case the new Prior High NAV shall be reset to equal the NAV of the Initial Series or such other series. If the NAV of such series at the end of any fiscal year of the Company, and such other date during a fiscal year as of which the determination of the Incentive Allocation is required pursuant to Section 4.05(c) is less than its Prior High NAV, the Prior High NAV of that series shall not change. The Prior High NAV for each series of Units shall be appropriately adjusted as determined by the Managing Member in its sole discretion to account for contributions, distributions and redemptions made with respect to such series of Units.

13

               (ii) The Incentive Allocation with respect to a series of Units accrues daily and the Company shall credit the Incentive Allocation Account as of December 31 of each year for the Incentive Allocation.

          (c) In the event that the Company is dissolved other than at the end of a fiscal year, or the effective date of a Member’s redemption of Units is other than a fiscal year-end, then the Incentive Allocation described above shall be determined and made as if the date of such dissolution or redemption was a fiscal year-end (but only in respect of the Units being redeemed).

          (d) Notwithstanding anything to the contrary herein, to the extent that the Company invests in “New Issues” (as defined below), and there are Members who are restricted persons within the meaning of the National Association of Securities Dealers, Inc. (the “NASD”) Conduct Rule 2790 (the “NASD Rule”), investments in New Issues will be made through a special account and profits and losses attributable to New Issues will not be allocated to the Capital Accounts of Members who are restricted from participating in New Issues under the NASD Rule. One or more additional classes (or sub-classes) of Units may be created and offered only to those Members who are not restricted persons, and only those Members who are not restricted persons shall have any beneficial interest in such classes (or sub-classes). Notwithstanding anything in this Agreement to the contrary, the Managing Member shall have the right, without the consent of the Members, to make such amendments to this Agreement, and to take such other actions, as it deems advisable and appropriate, in its sole discretion, to implement the purposes of this Section 4.05(d). A “New Issue” is any equity securities of an initial public offering as described in the NASD Rule, or otherwise as such term may be interpreted from time to time under the then current rules of the NASD.

          Section 4.06 Amendment of Incentive Allocation. The Managing Member shall have the right to amend, without the consent of the Non-Managing Members, Section 4.05 of this Agreement so that the Incentive Allocation (or other performance-based allocation) therein provided conforms to any applicable requirements of the Securities and Exchange Commission and other regulatory authorities; provided, however, that no such amendment shall increase the Incentive Allocation (or other performance-based allocation) as so amended to more than the amount payable in accordance with Section 4.05 of this Agreement (or, in the case of any other performance-based allocation arrangement, the specific arrangement set forth in a written agreement between the affected Non-Managing Member and the Company), without the written consent of the affected Non-Managing Member. The Managing Member reserves the right, in its sole discretion, to apply different performance-based percentage allocations and performance-based compensation arrangements to any Member, as may be agreed by the Managing Member and such Member.

          Section 4.07 Determination of Net Assets.

          (a) The Company’s Net Assets shall be determined in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) consistently applied as a guideline and the following principles:

14

               (i) The value of the Company’s investment in an investment fund shall be equal to the Company’s proportionate interest in the NAV of the investment fund, determined in accordance with the terms and conditions of the respective governing agreement of each investment fund as reported by its respective Advisor or other designee to the Company, as it may be amended, supplemented or otherwise modified from time to time (or based on such other information deemed relevant by the Managing Member).

               (ii) The assets of the Company that are invested pursuant to investment management agreements shall be valued at fair value in a commercially reasonable manner.

               (iii) All other assets or liabilities of the Company shall be assigned such value as the Managing Member may reasonably determine.

               (iv) The amount of the Company’s assets and liabilities (including, without limitation, indebtedness for money borrowed and the Management Fee) shall be determined in accordance with U.S. GAAP and guidelines, applied on a consistent basis, provided that the Managing Member in its discretion may provide reserves for estimated accrued expenses, liabilities and contingencies, even if such reserves are not required by U.S. GAAP.

               (v) The amount payable to a Member or former Member in redemption of part or all of such Member’s or former Member’s Units pursuant to Section 5.02 shall be treated as a liability of the Company, until paid, from (but not prior to) the beginning of the Accounting Period that begins immediately after the close of business on the day immediately prior to the Redemption Date (as defined in Section 5.02(a)) for such Units.

               (vi) The amount to be received by the Company on account of any Capital Contributions pursuant to Section 4.02 shall be treated as an asset of the Company from (but not before) the beginning of the Accounting Period that begins immediately after the close of business on the day immediately prior to the effective date of such Capital Contributions.

               (vii) Distributions made pursuant to Section 5.04 (including deemed tax distributions pursuant to Section 5.04(c)) other than as of the beginning of an Accounting Period shall be treated as an advance and as an asset of the Company, until the beginning of the Accounting Period following the date of distribution.

               (viii) The Incentive Allocation, if any, credited to the Incentive Allocation Account shall be treated as a liability, until distributed, from the beginning of the Accounting Period immediately following the Accounting Period in which the Incentive Allocation was credited to such Incentive Allocation Account.

          (b) The Company may suspend the valuation of its assets and liabilities, and any distributions or redemptions of any amounts from Capital Accounts, for any period during which a Portfolio Company or other investment fund with which the Company has made an investment has suspended the valuation of its assets and liabilities. The Managing Member shall promptly notify Members of any such suspension, and the termination of any such suspension, by means of a written notice.

15

          (c) All values assigned to securities and other assets by the Managing Member or the Administrator pursuant to this Section 4.07 shall be final and conclusive as to all of the Members. The Managing Member may consult with and rely upon valuations of the Company’s securities and other assets provided by the Administrator.

          Section 4.08 Determination of Net Asset Value. The NAV of a series of Units shall be equal to the balance of the Capital Account with respect to such series of Units. The NAV per Unit of a series shall be equal to the NAV of such series divided by the number of outstanding Units of such series.

          Section 4.09 Allocation for Tax Purposes. For each taxable year, items of income, deduction, gain, loss or credit actually recognized by the Company for federal income tax purposes shall be allocated for federal income tax purposes among the Members in such manner as to equitably reflect the amounts credited or debited to each Member’s Capital Account for the current and prior taxable years (or relevant portions thereof). Allocations under this Section 4.09 shall be made by the Managing Member in accordance with the principles of Sections 704(b) and 704(c) of the Code and in conformity with applicable Treasury Regulations promulgated thereunder (including, without limitation, Treasury Regulations Sections 1.704-l(b)(2)(iv)(f)(4), 1.704-l(b)(4)(i) and 1.704-3(e)). Notwithstanding the foregoing, the Managing Member in its sole discretion may adjust the allocation of items of Company taxable income, gain, loss and deduction among the Members as it shall deem to be equitable, and necessary or desirable.

          If, during or immediately following the end of a taxable year, any Member redeems all of its Units in the Company or the Managing Member withdraws any amount from its Incentive Allocation Account, and the Member would (absent this sentence) recognize gain or loss under Section 731 of the Code as a result of such redemption or withdrawal, the Managing Member may, in its sole discretion, elect to specially allocate to such Member, for U.S. federal income tax purposes, any income and gain or loss and deduction (including short-term capital gain or loss) recognized by the Company during such taxable year, through and including the date of redemption or withdrawal, in an amount up to that amount of income and gain or loss and deduction which if so allocated would avoid the Member recognizing gain or loss on the redemption or withdrawal under Section 731 of the Code (ignoring for this purpose, in the sole discretion of the Managing Member, any adjustments that have been made to the tax basis of the redeeming Member’s Units resulting from any transfers or assignment of the Units (other than the original issue of the Units), including by reason of death). Any such election by the Managing Member shall, to the extent reasonably practicable as determined by the Managing Member in its sole discretion, be applied on an equitable basis to all Members that redeem all of their Units during or immediately following the end of such taxable year.

          Section 4.10 Determination by Managing Member of Certain Matters; Managing Member’s Discretion.

          (a) All matters concerning the valuation of securities and other assets and liabilities of the Company, the allocation of profits, gains and losses among the Members (including for tax purposes) and accounting procedures not expressly provided for by the terms

16

of this Agreement (including, without limitation, allocation and accounting procedures in the event a Member that has an account managed by the Managing Member in a manner similar to the investment program utilized by the Company which causes the assets and liabilities in such account to be transferred to the Company) shall be determined by the Managing Member (or such Person as the Managing Member may authorize to make such determination), whose determination shall be final, binding and conclusive as to all of the Members.

          (b) Whenever in this Agreement the Managing Member is permitted or required to make a decision (i) in its “sole discretion” or “discretion,” or under a similar grant of authority or latitude, the Managing Member shall be entitled to consider only such interests and factors as it desires and may consider its own interests and the interests of its Affiliates and its determination shall be final, binding and conclusive as to all of the Members, or (ii) in its “good faith” the Managing Member shall act under such express standards and shall not be subject to any other or different standards imposed by this Agreement or by law or any other agreement contemplated herein.

          Section 4.11 Adjustments to Take Account of Interim Year Events. If the Code or regulations promulgated thereunder require an adjustment to the Capital Account of a Member or some other interim year event occurs necessitating in the Managing Member’s judgment an equitable adjustment, the Managing Member shall make such adjustments in the determination and allocation among the Members of Net Capital Appreciation, Net Capital Depreciation, Capital Accounts, Membership Percentages, Incentive Allocation, the Management Fee, Company expenses, items of income, deduction, gain, loss, credit or withholding for tax purposes, accounting procedures or such other financial or tax items as shall equitably take into account such interim year event and applicable provisions of law, and the determination thereof by the Managing Member shall be final, binding and conclusive as to all of the Members.

          Section 4.12 Tax Withholding. If the Company is required to withhold taxes on any distribution to, or to pay or incur any tax with respect to any income allocable to or otherwise on account of, any Member or series of Units, the Company may withhold such amounts and make such payments to such taxing authorities as are necessary to ensure compliance with such tax laws.

ARTICLE V

Redemptions and Distributions

          Section 5.01 Redemptions and Distributions in General. No Member shall be entitled (i) to receive distributions from the Company, except as provided in Section 5.04 and Section 7.02; or (ii) to redeem any of its Units (other than upon such Member’s withdrawal from the Company), except as provided in Sections 5.02 and 6.01 or upon the consent of, or as may be required by, and upon such terms as may be determined by, the Managing Member in its sole discretion. In no event shall a Member be entitled to demand to receive property other than cash.

17

          Section 5.02 Redemptions.

          (a) Subject to this Section 5.02(a) and Sections 5.02(c) and 5.03, each Member shall have the right to redeem some or all of its Units as of the time immediately prior to the opening of business on each January 1, April 1, July 1 and October 1 (each, a “Redemption Date”), upon written notice received by the Managing Member at least 91 days prior to the Valuation Date (as defined below) in respect of the redemption (unless such notice is waived by the Managing Member in its sole discretion); provided, however, that Units purchased on or after January 1, 2008 may only be redeemed on or after the first anniversary of the purchase of such Units by the Member. No partial redemption shall be permitted if thereafter the aggregate NAV of the remaining Units held by the redeeming Member would be less than $500,000, unless such limitation is waived by the Managing Member in its sole discretion.

          If outstanding redemption requests from all Members with respect to any Redemption Date (an “Initial Holdover Redemption Date”) (including, without limitation, any Held Over Units (as defined below)) would result in redemption proceeds in excess of the Maximum Redemption Amount (as defined below), the Managing Member shall be entitled in its sole discretion to refuse to redeem Units requested for redemption that would have resulted in redemption proceeds in an amount equal to or less than such excess. The “Maximum Redemption Amount,” with respect to any Redemption Date, means 25% of the aggregate NAV, determined as of time immediately prior to such Redemption Date, of all of the Units outstanding immediately prior to such Redemption Date. If the Managing Member refuses to redeem Units as set forth above, the requests for redemption on such Initial Holdover Redemption Date by Members shall be reduced ratably, and the requested Units not so redeemed (the “Held Over Units”) shall be redeemed on subsequent Redemption Dates subject to the Maximum Redemption Amount calculation for such subsequent Redemption Date and the Managing Member’s rights to refuse redemptions in connection therewith, provided that Held Over Units shall be redeemed in priority to any subsequently received redemption requests.

          Units of a particular series will be redeemed at a per Unit price (the “Redemption Price”) based upon the NAV of such series as of the close of business on the day (a “Valuation Date”) immediately preceding the applicable Redemption Date (taking into account the allocation of any Net Capital Appreciation or Net Capital Depreciation under Section 4.05, and any distributions under Section 5.04 for the Accounting Period then ending), after reduction for any Management Fee and Incentive Allocation (calculated as if the applicable Valuation Date was the last day of the fiscal year) and other liabilities of the Company to the extent accrued or otherwise attributable to the Units being redeemed, and the amount of any such reduction for the Management Fee shall be paid to the Managing Member, and the amount of any such reduction for any Incentive Allocation shall be allocated to the Capital Account of the Managing Member. If a redeeming Member owns Units of more than one series, unless otherwise specified by such Member in writing, Units shall be redeemed on a “first in-first out” basis for purposes of determining the Redemption Price. The Company will endeavor to pay the redemption proceeds within 45 days following the applicable Redemption Date, without interest. The Managing Member may permit redemptions at other times and in other amounts, subject to any conditions that it may impose in its sole discretion.

18

          (b) The Managing Member shall have the right, in its sole discretion, as of any date that it determines (including during a fiscal year) and for any reason (including, without limitation, pursuant to Article VI, for regulatory or tax reasons, or for any other reason), to redeem any or all of a Member’s Units. Any redemptions made pursuant to this Section 5.02(b) shall be paid out in accordance with Section 5.02(a).

          (c) The Managing Member, and any Affiliate of the Managing Member, shall have the right at any time (including during a fiscal year or other period) to redeem any and all of its interest or withdraw all or a portion of the assets in its Capital Account without notice to the Members.

          (d) If at any time after a redemption of Units (including in connection with any withdrawal of a Member from the Company pursuant to Article VI) the Managing Member determines, in its sole discretion, that the amount paid to such Member or former Member pursuant to such redemption was materially incorrect (including because the NAV at which the Member or former Member purchased such Units was incorrect), the Company will pay to such Member or former Member any additional amount that it determines such Member or former Member would have been entitled to receive had the redemption been effected at the correct NAV, or, in its sole discretion, seek payment from such Member or former Member of (and such Member or former Member shall be required to pay) the amount of any excess payment that the Managing Member determines such Member or former Member received (including, without limitation, by compulsorily redeeming without consideration a number of Units held by such Member having a NAV equal to the amount of such excess payment), in each case without interest.

          Section 5.03 Limitation on Redemptions.

          (a) The right of any Member to redeem some or all of its Units pursuant to the provisions of Section 5.02 is subject to the provision by the Managing Member for all Company liabilities in accordance with the Act, and for reserves for estimated accrued expenses, liabilities and contingencies in accordance with Section 4.07.

          (b) The Managing Member may suspend redemptions, at any time prior to the effective date of the redemption, and notwithstanding the fact that a timely redemption request has previously been made, for the whole, or any part, of any of the following periods: (i) during the closure of the principal stock exchanges or other markets on which any substantial portion of the Company’s direct or indirect investments, in the opinion of the Managing Member, is quoted or dealt in other than for ordinary holidays, or the restriction of suspension of dealings therein; (ii) during the existence of any state of affairs which, in the opinion of the Managing Member, constitutes an emergency as a result of which the determination of the price, value or disposition of the Company’s direct or indirect investments would be impractical or prejudicial to Members; (iii) during which redemptions would, in the opinion of the Managing Member, result in a violation of applicable law; (iv) during any breakdown in the means of communication or computation normally employed in determining the price or value of any of the investments of the Company or the current price or values on any stock exchange in respect of assets of the Company; (v) during the occurrence of any period when the Company is unable to withdraw

19

sufficient funds from Portfolio Companies or otherwise to meet redemption requests or in circumstances when the disposal of part or all of the Company’s assets to meet such redemption requests would be prejudicial to Members; (vi) during which any transfer of funds involved in the realization or acquisition of investments or payments due on redemption of Units cannot, in the opinion of the Managing Member, be effected at advantageous rates of exchange; and (vii) during any period in which any investment fund or Portfolio Company in which the Company has invested has suspended redemptions or the calculation of its net asset value. Postponed redemptions shall be effected on the first day of the month immediately following the termination of the suspension. Any part of a redemption request that is postponed shall take precedence over later-received redemption requests until the postponed request or requests have been satisfied in full. Members shall be given notice in writing of the suspension of redemptions and the termination of any such suspension. Units shall be held by the Member during the suspension period as if no redemption request had been made.

          Section 5.04 Distributions.

          (a) The Managing Member may, in its discretion, make distributions in cash or in-kind (i) in connection with redemptions from the Company by a Member or in connection with a Member’s complete withdrawal from the Company pursuant to Article VI, (ii) at any time to the Managing Member in an amount not in excess of the then positive balance in the Incentive Allocation Account and (iii) at any time to all of the Members on a pro rata basis in accordance with the Members’ Capital Accounts.

          (b) If a distribution is made in-kind, immediately prior to such distribution, the Managing Member shall determine the fair market value of the property distributed and adjust the Capital Accounts of all Members upwards or downwards to reflect the difference between the book value and the fair market value thereof, as if such gain or loss had been recognized upon an actual sale of such property and allocated pursuant to Section 4.05. Each such distribution shall reduce the Capital Account of the Member to which the distribution was made by the fair market value thereof.

          (c) Any taxes paid over to a governmental authority by the Company pursuant to Section 4.12 with respect to any Member (other than on account of all Members equally) shall be deemed to be a distribution to such Member. If a Member who receives a deemed distribution of taxes under this Section owns more than one series of Units, the Managing Member in its sole discretion may allocate such deemed distribution among such Member’s different series of Units. Notwithstanding the foregoing, the Managing Member in its sole discretion may elect to treat any deemed distribution to a Member under this Section 5.04(c), not as a distribution, but as an advance to the Member and a partial redemption of such Member’s Units as of the next Redemption Date following the deemed distribution, and such Member’s Units shall be reduced thereby as appropriately determined by the Managing Member.

20

ARTICLE VI

Withdrawal, Death, Disability

          Section 6.01 Withdrawal, Death, etc. of Members.

          (a) The withdrawal, death, disability, incapacity, adjudication of incompetency, termination, bankruptcy, insolvency or dissolution of a Member shall not dissolve the Company. Subject to the restrictions set forth in Section 1.05(a), the legal representatives or successors of such Member shall succeed as assignee to the Member’s interest in the Company upon the death, disability, incapacity, adjudication of incompetency, termination, bankruptcy, insolvency or dissolution of such Member, but shall not be admitted as a substituted member without the consent of the Managing Member.

          (b) In the event of the death, disability, incapacity, adjudication of incompetency, termination, bankruptcy, insolvency or dissolution of a Member, the interest of such Member shall continue at the risk of the Company’s business until the last day of the calendar month following the calendar month in which the Managing Member received written notice of such event, provided, however, that if the Managing Member determines, in its sole discretion, that the termination or dissolution of a Member was not involuntary, the interest of such Member shall continue at the risk of the Company’s business until the last day of the next calendar quarter that it at least 91 days from the date on which the Managing Member received written notice of such event. At the end of such period, the Managing Member may, in its sole discretion (i) take no action, (ii) substitute the legal representatives or successors of such Member as Members of the Company, provided that the Managing Member determines in its sole discretion that such legal representatives or successors are qualified to become Members of the Company, or (iii) compulsorily redeem such Member’s interest in the Company in accordance with the redemption provisions set forth in this Article VI.

          Section 6.02 Required Withdrawals. The Managing Member may at any time and for any reason, in its discretion, terminate the interest of any Member in the Company or require a Member to withdraw any part of its Capital Account. A Member required to withdraw under this Section 6.02 shall be treated for all purposes of distribution of redemption proceeds as a Member who has given notice of redemption of all its capital under Article V.

ARTICLE VII

Duration and Dissolution of the Company

          Section 7.01 Duration.

          (a) The Company shall continue until the earlier of (i) a determination by the Managing Member that the Company should be dissolved and wound-up; (ii) the termination, bankruptcy, insolvency, dissolution or withdrawal by the Managing Member other than by assignment of the Managing Member’s interest as provided in Section 1.05(b); or (iii) a vote of a

21

majority of the Members pursuant to Section 7.01(b). Upon a determination to dissolve the Company, redemptions, and distributions in respect thereof, may not be made.

          (b) Dissolution of the Company by the Members:

               (i) For purposes of this Agreement:

                    (A) The term “Meeting Request” shall mean a written request from Members holding (as of the date of such request) at least 20% of the voting power, based on NAV, of the outstanding Units (excluding for purposes of calculating such percentage any Units held by the Managing Member and any affiliate or employee of the Managing Member or Goldman, Sachs & Co. (collectively, the “Managing Member Units”)) to the Managing Member requesting that the Managing Member call a meeting for the purpose of dissolving the Company.

                    (B) The term “Dissolution Record Date” shall mean with respect to a meeting at which the dissolution of the Company is to be considered, a date selected by the Managing Member, which is no later than 15 days following the date on which the Managing Member receives a Meeting Request.

               (ii) Upon the written request of one or more Members holding at least 1% of the voting power, based on NAV, of the outstanding Units (excluding for purposes of calculating such percentage the Managing Member Units), solely for purposes of soliciting other Members in connection with making a Meeting Request, the Managing Member shall use commercially reasonable efforts to send to all other Members a solicitation to make a Meeting Request, subject to the Managing Member’s right to impose reasonable conditions upon any such solicitation.

               (iii) Upon receipt by the Managing Member of a Meeting Request, the Managing Member shall set a Dissolution Record Date and shall schedule a meeting of the Members for no later than 60 days after the Dissolution Record Date for the purpose of voting on the dissolution of the Company (such meeting, the “Dissolution Meeting”). The quorum for such meeting shall require attendance, in person or by proxy, of Members holding at least a majority of the voting power, based on NAV, of the outstanding Units (excluding for purposes of calculating such percentage the Managing Member Units) as of the Dissolution Record Date. If a quorum is not achieved for the meeting, the meeting shall be cancelled and no vote shall be held. The dissolution of the Company by the Members may only be voted upon at a meeting properly called in accordance with this Section 7.01(b) and will be approved only upon the affirmative vote of Members holding at least a majority of the voting power, based on NAV, of the outstanding Units (excluding for purposes of calculating such percentage the Managing Member Units).

               (iv) In the event of an affirmative vote in favor of dissolution of the Company, (A) the Managing Member shall seek to liquidate the Company as soon as reasonably practicable (including by submitting redemption requests to Portfolio Funds and Portfolio

22

Companies within 30 days of such vote), and (B) the Company shall be dissolved and terminated in accordance with the provisions of Section 7.02.

               (v) On or prior to August 25, 2006, the Managing Member may, in its sole discretion, amend, delete or waive any of the provisions relating to the dissolution of the Company by the Members described in this Section 7.01(b); provided that, if the Managing Member has received a written request from one or more Members representing at least 1% of the voting power, based on NAV, of the outstanding Units (excluding for purposes of calculating such percentage the Managing Member Units) to facilitate the solicitation of other Members in connection with making a Meeting Request or has received a Meeting Request in accordance with paragraphs (ii) or (iii) above, any such amendment, deletion or waiver shall not become effective until the earliest of the date on which (A) the solicitations to make such Meeting Request have been terminated or have expired in accordance with such conditions as have been attached by the Managing Member to the said solicitations pursuant to paragraph (ii) above, or (B) the Dissolution Meeting referred to in such Meeting Request has been held and there were insufficient votes to dissolve the Company or cancelled for lack of a quorum pursuant to paragraph (iii) above. Notwithstanding anything in the foregoing to the contrary, the Managing Member may amend or waive any of the provisions relating to the dissolution of the Company described in this Section 7.01(b) at any time in its sole discretion, so long as such amendment or waiver does not adversely affect the right of the Members to dissolve the Company. If the Managing Member makes any permitted amendment, deletion or waiver, it will give written notice thereof to the Members following such amendment, deletion or waiver.

          Section 7.02 Dissolution.

          (a) On dissolution of the Company, the Managing Member shall, within no more than 30 days after completion of a final audit of the Company’s financial statements, make distributions out of Company assets, in the following manner and order:

               (i) to creditors, including Members who are creditors, to the extent otherwise permitted by law, in satisfaction of liabilities of the Company (whether by payment or by establishment of reserves); and

               (ii) to the Members in the proportion of their respective Capital Accounts.

          (b) The Managing Member, in its discretion, at any time and from time to time, may designate one or more liquidators, including, without limitation, one or more partners, members or officers of the Managing Member, who shall have full authority to wind up and liquidate the business of the Company and to make final distributions as provided in this Section 7.02. The appointment of any liquidator may be revoked or a successor or additional liquidator or liquidators may be appointed at any time by an instrument in writing signed by the Managing Member. Any such liquidator may receive compensation as shall be fixed, from time to time, by the Managing Member.

23

          (c) In the event that the Company is dissolved on a date other than the last day of a fiscal year, the date of such dissolution shall be deemed to be the last day of a fiscal year for purposes of adjusting the Capital Accounts of the Members pursuant to Section 4.03. For purposes of distributing the assets of the Company upon dissolution, the Managing Member shall be entitled to a return, on a pari passu basis with the Non-Managing Members, of the amount standing to its credit in its Capital Account and, with respect to its share of profits, based upon its Membership Percentage.

ARTICLE VIII

Tax Returns; Reports to Members

          Section 8.01 Independent Auditors. The financial statements of the Company shall be audited by Ernst & Young LLP, or such other certified public accountants of similar standing selected by the Managing Member, as of the end of each fiscal year of the Company.

          Section 8.02 Filing of Tax Returns. The Managing Member shall prepare and file, or cause the accountants of the Company to prepare and file, a federal information tax return in compliance with Section 6031 of the Code, and any required state and local income tax and information returns for each tax year of the Company.

          Section 8.03 Tax Matters Partner. The Managing Member shall be designated on the Company’s annual federal information tax return, and have full powers and responsibilities, as the “Tax Matters Partner” of the Company for purposes of Section 6231(a)(7) of the Code. In the event the Company shall be the subject of an income tax audit by any federal, state or local authority, to the extent the Company is treated as an entity for purposes of such audit, including administrative settlement and judicial review, the Tax Matters Partner shall be authorized to act for, and its decision shall be final and binding upon, the Company and each Member thereof. All expenses incurred in connection with any such audit, investigation, settlement or review shall be borne by the Company.

          Section 8.04 Financial Reports to Current Members. The Company shall prepare and mail to each Non-Managing Member (i) annual audited financial statements after the end of the Company’s fiscal year and (ii) information necessary for such Member to complete its U.S. federal, state and local income tax returns (including such information that such Member may reasonably require annually to complete its tax filing obligations, provided that the Managing Member may provide the same without undue effort or expense).

          Section 8.05 Tax Reports to Members and Former Members. The Company shall use reasonable efforts to prepare and mail, or cause its accountants to prepare and mail, to each Member and, to the extent necessary, to each former Member (or its legal representatives), as soon as possible after the close of each taxable year of the Company, a report setting forth in sufficient detail such information as shall enable such Member or former Member (or such Member’s legal representatives) to prepare their respective federal income tax returns and/or extensions in accordance with the laws, rules and regulations then prevailing.

24

ARTICLE IX

Miscellaneous

          Section 9.01 General. This Agreement (i) shall be binding on the permitted transferees, assigns, executors, administrators, estates, heirs, and legal successors and representatives of the Members and (ii) may be executed, through the use of separate signature pages or supplemental agreements in any number of counterparts with the same effect as if the parties executing such counterparts had all executed one counterpart; provided, however, that each such counterpart shall have been executed by the Managing Member and that the counterparts, in the aggregate, shall have been signed by, or on behalf of, all of the Members.

          Section 9.02 Power of Attorney. Each of the Members hereby appoints the Managing Member as its true and lawful representative and attorney-in-fact, in its name, place and stead to make, execute, sign, acknowledge, swear to and file:

          (a) a Certificate of Formation of the Company and any amendments thereto as may be required under the Act;

          (b) any duly adopted amendment to this Agreement;

          (c) any and all instruments, certificates, and other documents that may be deemed necessary or desirable to effect the dissolution and winding-up of the Company (including, but not limited to, a Certificate of Cancellation of the Certificate of Formation); and

          (d) any business certificate, fictitious name certificate, amendment thereto, or other instrument or document of any kind whatsoever necessary, desirable or convenient to accomplish the business, purpose and objectives of the Company, or required by any applicable federal, state, local or foreign law.

          The power of attorney hereby granted by each of the Non-Managing Members is coupled with an interest, is irrevocable, and shall survive, and shall not be affected by, the subsequent death, disability, incapacity, incompetency, termination, bankruptcy, insolvency or dissolution of such Non-Managing Member; provided, however, that such power of attorney shall terminate upon the substitution of another non-managing member for all of such Non-Managing Member’s interest in the Company or upon the complete withdrawal of such Non-Managing Member from participation in the Company.

          Section 9.03 Amendments to Limited Liability Company Agreement. The terms and provisions of this Agreement may be modified or amended at any time and from time to time with the written consent of Members having in excess of 50% of the voting power of the outstanding Units, (or, if an amendment affects only a particular series of Units, with the written consent of Members having in excess of 50% of that series of Units), based on the NAV of such Units, and the affirmative vote of the Managing Member insofar as is consistent with the laws governing this Agreement; provided, however, that without the consent of the Non-Managing Members, the Managing Member may amend this Agreement or the Schedule hereto to (i) reflect

25

changes validly made in the membership of the Company, the Capital Contributions, Membership Percentages and changes in the number of Units held by the Members; (ii) change the provisions relating to the Incentive Allocation so that such provisions conform to the applicable requirements of the Securities and Exchange Commission and other regulatory authorities, so long as such amendment does not increase the Incentive Allocation to more than the amount that would otherwise be determined absent such amendment; (iii) reflect a change in the name of the Company; (iv) make a change that is necessary or, in the opinion of the Managing Member, advisable to qualify the Company as a limited liability company or other entity in which the Members have limited liability under the laws of any state, or ensure that the Company shall not be treated as an association or a publicly traded partnership taxable as a corporation for federal income tax purposes; (v) make any change that does not adversely affect the Members in any material respect; (vi) make a change that is necessary or desirable to satisfy any requirements, conditions or guidelines contained in any opinion, directive, order, ruling or regulation of any federal, state or foreign statute, so long as such change is made in a manner which minimizes to the extent practicable, as determined by the Managing Member in its sole discretion, any adverse effect on the Members or that is required or contemplated by this Agreement; (vii) make a change in any provision of this Agreement that requires any action to be taken by or on behalf of the Managing Member or the Company pursuant to the requirements of applicable Delaware law if the provisions of applicable Delaware law are amended, modified or revoked so that the taking of such action is no longer required; (viii) prevent the Company or the Managing Member from in any manner being deemed an “investment company” subject to the provisions of the Investment Company Act of 1940, as amended; (ix) correct mistakes or clarify ambiguities; (x) in the event of adverse changes in the tax law or interpretations thereof applicable to the Company, amend this Agreement as determined by the Managing Member if it deems it advisable or necessary to address such changes; (xi) conform this Agreement to the disclosure provided in the Memorandum; (xii) correct or supplement any conflicting provisions and delete or add provisions as may be required by applicable law or regulations, in each case, as determined by the Managing Member in its sole discretion; (xiii) make any other amendment provided such amendment does not become effective until after the affected Members have been given prior written notice of such change and have had the right following receipt of such notice to request the redemption of their Units and any requested redemption shall have become effective; (xiv) amend, delete or waive the provisions of Section 7.01(b) in accordance with Section 7.01(b)(v); or (xv) make any other amendments similar to the foregoing. Each Member, however, must consent to any amendment that would (a) reduce its Capital Account or rights of redemption or withdrawal; or (b) amend the provisions of this Agreement relating to amendments.

          Section 9.04 Instruments. The parties agree to execute and deliver any further instruments or perform any acts which are or may become necessary to carry on the Company created by this Agreement or to effectuate its purposes.

          Section 9.05 No Personal Liability For Return of Capital. The Managing Member shall not be personally liable for the return or repayment of all or any portion of Capital Contribution or profits of any Member, it being expressly agreed that any such return of Capital

26

Contribution or profits made pursuant to this Agreement shall be made solely from the assets (which shall not include any right of contribution from the Managing Member) of the Company.

          Section 9.06 Choice of Law. Notwithstanding the place where this Agreement may be executed by any of the parties hereto, the parties expressly agree that all the terms and provisions hereof shall be construed under the laws of the State of Delaware and, without limitation thereof, that the Act as now adopted or as may be hereafter amended shall govern the limited liability company aspects of this Agreement. The parties also expressly agree that all actions and proceedings brought by a party against a Member or the Company, in connection with the Company’s business or affairs (including a breach of this Agreement by a party hereto) shall be brought in and be subject to the jurisdiction of a court of the State of New York or any federal district court in the State of New York.

          Section 9.07 Venue: Inconvenient Forum. The parties hereto irrevocably waive to the fullest extent permitted by law any objection that they may now or hereafter have to the laying of venue of any such action or proceeding in the courts of the State of New York located in the City of New York or of the United States District Court for the Southern District of New York and any claim that any such action or proceeding brought in any such court has been brought in an inconvenient forum.

          Section 9.08 No Third Party Rights. The provisions of this Agreement, including, without limitation, the provisions of Section 1.03, are not intended to be for the benefit of any creditor or other Person (other than the Members in their capacities as such) to whom any debts, liabilities or obligations are owed by (or who otherwise have a claim against or dealings with) the Company or any Member, and no such creditor or other Person shall obtain any rights under any of such provisions (whether as a third party beneficiary or otherwise) or shall obtain any rights under any of such provisions (whether as a third party beneficiary or otherwise) or shall by reason of any such provisions make any claim in respect to any debt, liability or obligation (or otherwise) including any debt, liability or obligation pursuant to Section 1.03, against the Company or any Member.

          Section 9.09 Notices. Each notice relating to this Agreement shall be in writing and delivered in person or by registered or certified mail. All notices to the Company shall be addressed to its principal office and place of business. All notices addressed to a Member shall be addressed to such Member at the address set forth in the Schedule. Any Member may designate a new address by notice to that effect given to the Company. Unless otherwise specifically provided in this Agreement, a notice shall be deemed to have been effectively given when mailed by registered or certified mail to the proper address or delivered in person.

          Section 9.10 Grantors of Revocable Trusts. Each Non-Managing Member that is a revocable trust agrees that, if the trustee of such revocable trust and the grantor of such revocable trust are the same person, the trustee’s execution of this Agreement and any other documents executed in connection with the Company shall bind such Person in his or her capacity both as trustee and as grantor of such revocable trust.

27

          Section 9.11 Goodwill. No value shall be placed on the name or goodwill of the Company, which shall belong exclusively to the Managing Member.

          Section 9.12 Headings. The titles of the Articles and the headings of the Sections of this Agreement are for convenience of reference only, and are not to be considered in construing the terms and provisions of this Agreement.

          Section 9.13 Pronouns. All pronouns shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the Person or Persons may require in the context thereof.

          Section 9.14 Confidentiality. The Managing Member and the Company may, in their discretion, keep confidential and not disclose to the Non-Managing Members any proprietary information concerning the Company, including, without limitation, investments, valuations, information regarding potential investments, financial information, trade secrets and the like which is proprietary in nature and non-public, or any information about any investment, to the extent that such information is required to be kept confidential or is otherwise subject to disclosure restrictions imposed by the issuer of the investment or the Managing Member, in its reasonable discretion (collectively, “Confidential Information”). Each Non-Managing Member shall not disclose or cause to be disclosed any Confidential Information to any other Person, except as otherwise required by any regulatory authority, law or regulation, or by legal process, without the prior written consent of the Managing Member. Notwithstanding anything in the foregoing or anything else contained in this Agreement to the contrary, except as reasonably necessary to comply with applicable securities laws, each Member (and any employee, representative or other agent thereof) may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of the offering and ownership of Units and any transaction described in this Section 9.14 or elsewhere in this Agreement and all materials of any kind (including opinions and other tax analyses) that are provided to such Member relating to such tax treatment and tax structure. For this purpose, “tax structure” means any facts relevant to the federal income tax treatment of the offering and ownership of Units and any transaction described in this Section 9.14 or elsewhere in this Agreement, and does not include information relating to the identity of the Company or its Affiliates.

28

          IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the date first set forth above.

MANAGING MEMBER: GOLDMAN SACHS HEDGE FUND STRATEGIES LLC
By:
	Name:
	Title:
NON-MANAGING MEMBERS:
By:	GOLDMAN SACHS HEDGE FUND STRATEGIES LLC, on behalf of each Member as attorney-in-fact
By:
	Name:
	Title:

29

EX-10.6

Execution Copy

LIMITED LIABILITY COMPANY AGREEMENT

OF

GOLDMAN SACHS HFP OPPORTUNISTIC FUND, LLC

Dated as of June 25, 2007

TABLE OF CONTENTS

		Page
ARTICLE I General Provisions			1
Section 1.01	Company Name and Address		1
Section 1.02	Fiscal Year		1
Section 1.03	Liability of Members		1
Section 1.04	Purposes of the Company		2
Section 1.05	Assignability of Interests; Assignment by Managing Member		2
Section 1.06	Registered Office and Agent for Service of Process		3
ARTICLE II Management of the Company			3
Section 2.01	Management Generally		3
Section 2.02	Delegation by Managing Member		3
Section 2.03	Authority of the Managing Member		3
Section 2.04	Reliance by Third Parties		5
Section 2.05	Activity of the Managing Member		5
Section 2.06	Standard of Care; Indemnification		6
Section 2.07	Payment of Costs and Expenses		7
Section 2.08	Principal Transactions and Other Related Party Transactions		9
ARTICLE III Admission of New Members			9
Section 3.01	Admission of New Members		9
Section 3.02	Additional Classes of Interests		9
ARTICLE IV Capital Accounts of Members and Operation Thereof			9
Section 4.01	Definitions		9
Section 4.02	Capital Contributions		10
Section 4.03	Capital Accounts		10
Section 4.04	Membership Percentages		11
Section 4.05	Allocation of Net Capital Appreciation or Net Capital Depreciation		11
Section 4.06	Determination of Net Assets		11
Section 4.07	Allocation for Tax Purposes		12
Section 4.08	Determination by Managing Member of Certain Matters; Managing Member’s Discretion		13
Section 4.09	Adjustments to Take Account of Interim Year Events		13
Section 4.10	Tax Withholding		13
ARTICLE V Redemptions and Distributions			13
Section 5.01	Redemptions and Distributions in General		13
Section 5.02	Redemptions		14
Section 5.03	Limitation on Redemptions		15
Section 5.04	Distributions		16

-i-

		Page
ARTICLE VI Withdrawal, Death, Disability			16
Section 6.01	Withdrawal, Death, etc		16
ARTICLE VII Duration and Dissolution of the Company			17
Section 7.01	Duration		17
Section 7.02	Dissolution		17
ARTICLE VII Tax Returns; Reports to Members			18
Section 8.01	Independent Auditors		18
Section 8.02	Filing of Tax Returns		18
Section 8.03	Tax Matters Partner		18
Section 8.04	Financial Reports to Current Members		18
Section 8.05	Tax Reports to Members and Former Members		18
Section 8.06	Partnership Status of Company		18
ARTICLE IX Miscellaneous			19
Section 9.01	General		19
Section 9.02	Power of Attorney		19
Section 9.03	Amendments to Limited Liability Company Agreement		19
Section 9.04	Instruments		20
Section 9.05	No Personal Liability For Return of Capital		20
Section 9.06	Choice of Law		20
Section 9.07	Venue; Waiver of Trial by Jury		21
Section 9.08	No Third Party Rights		21
Section 9.09	Notices		21
Section 9.10	Grantors of Revocable Trusts		21
Section 9.11	Each Interest in the Company is a Security		21
Section 9.12	Goodwill and Use of Name		21
Section 9.13	Headings		22
Section 9.14	Pronouns		22
Section 9.15	Confidentiality		22

-ii-

FORM OF LIMITED LIABILITY COMPANY AGREEMENT OF

GOLDMAN SACHS HFP OPPORTUNISTIC FUND, LLC

Dated as of June 25,2007

               The undersigned (herein called the “Members,” which term shall include any persons hereafter admitted to the Company (as defined below) pursuant to Article III of this Agreement (as defined below) and shall exclude any persons who cease to be Members pursuant to Article V or VI of this Agreement) hereby agree to form and hereby form, as of the date and year first above written, a limited liability company (herein called the “Company”), pursuant to the provisions of the Limited Liability Company Act of the State of Delaware (6 Del. Code § 18-101, et seq.) (the “Act”), which shall be governed by, and operated pursuant to, the terms and provisions of this Limited Liability Company Agreement (herein called this “Agreement”).

ARTICLE I
General Provisions

          Section 1.01 Company Name and Address. The name of the Company is Goldman Sachs HFP Opportunistic Fund, LLC. Its principal office is located at 701 Mount Lucas Road, Princeton, New Jersey 08540, or at such other location as the Managing Member (as defined in Section 1.03(a)) in the future may designate. The Managing Member shall promptly notify the Non-Managing Members (as defined in Section 1.03(a)) of any change in the Company’s address.

          Section 1.02 Fiscal Year. The fiscal year of the Company (herein called the “Fiscal Year”) shall end on December 31 of each calendar year; provided, however, that the Managing Member may change the Company’s Fiscal Year-end, without the consent of the Non-Managing Members, as deemed appropriate by the Managing Member, in its sole discretion.

          Section 1.03 Liability of Members.

          (a) The names of all of the Members and the amounts of their respective contributions to the Company (herein called the “Capital Contributions”) are set forth in a schedule (herein called the “Schedule”), which shall be filed with the records of the Company at the Company’s principal office (as set forth in Section 1.01) and is hereby incorporated by reference and made a par of this Agreement. The Member designated in Par I of the Schedule as the Managing Member (herein called the “Managing Member”) shall manage the operations of the Company. The Members designated in Par II of the Schedule are referred to herein as the “Non-Managing Members.”

          (b) The Managing Member, the Non-Managing Members and the former Non-Managing Members shall be liable for the repayment and discharge of all debts and obligations of the Company attributable to any Fiscal Year (or relevant portion thereof) during which they are or were Members of the Company. The Members and all former Members shall share all losses, liabilities or expenses suffered or incurred by virtue of the operation of paragraph (a) above in proportion to their respective Capital Account (as defined and determined as provided in Section 4.03) balances for the Fiscal Year (or relevant portion thereof) to which any debts or obligations of the Company are attributable.

          (c) Notwithstanding any other provision of this Agreement to the contrary, (i) a Member’s or former Member’s share of all losses, liabilities or expenses shall not be greater than its respective Capital Account balance in the Company for such Fiscal Year (or relevant portion thereof), and (ii) in no event shall any Member (or former Member) be obligated to make any additional contribution or payment whatsoever to the Company, or have any liability for the repayment and discharge of the debts and obligations of the Company (apart from its Interest, as defined below, in the Company), except that a Non-Managing Member (or former Non-Managing Member) shall, in the discretion of the Managing Member, be required, for purposes of meeting such Member’s (or former Member’s) obligations under this Section 1.03, to make additional contributions or payments, respectively, up to, but in no event in excess of, the aggregate amount of returns of capital and other amounts actually received by it from the Company during or after the Fiscal Year to which any debt or obligation is attributable.

          (d) As used in this Agreement, the term “Interest” shall mean, as to any Member, such Member’s limited liability company interest in the Company (including any rights to distributions and to the receipt of information concerning the business and affairs of the Company, subject to the provisions of this Agreement and the Act). As used in this Agreement, the terms “former Non-Managing Member” and “former Member” refer to such persons or entities as hereafter from time to time cease to be a Non-Managing Member or Member, respectively, pursuant to the terms and provisions of this Agreement.

          Section 1.04 Purposes of the Company. The Company is organized for the purposes of (i) allocating its assets to, or investing in, directly or indirectly, entities managed by investment managers (collectively, the “Advisors”), (ii) engaging in any other lawful act or activity for which limited liability companies may be organized under the Act, and (iii) engaging in any and all activities and transactions as the Managing Member may deem necessary or advisable in connection therewith.

          For purposes of clause (i) above, the Company may allocate its assets to Advisors by, among other means, (A) investing in investment funds that are managed by Advisors (collectively, the “Portfolio Funds”), (B) investing with Advisors pursuant to investment management agreements in respect of discretionary managed accounts (collectively, the “Managed Accounts”), or (C) investing with Advisors pursuant to investment management agreements in respect of discretionary managed accounts indirectly through the Company’s investments in separate limited liability companies or other entities managed by the Managing Member or an Affiliate (as defined below) thereof (“Portfolio Companies”).

          Section 1.05 Assignability of Interests; Assignment by Managing Member.

          (a) Except as provided in paragraph (b) below, without the prior written consent of the Managing Member, which may be withheld in its sole and absolute discretion, with or without cause, a Member may not assign, pledge or otherwise transfer its Interest in whole or in par to any person except by operation of law pursuant to the death, adjudication of incompetency, insolvency or bankruptcy of the Member, nor substitute any other person as a Member. Any attempted assignment, pledge, transfer or substitution not made in accordance with this Section 1.05 shall be void.

2

          (b) Without the consent of the Non-Managing Members, the Managing Member may, subject to applicable law, assign its rights, obligations, responsibilities and interests in, or arising under, this Agreement to (i) any Affiliate (as defined in Section 2.05) of the Managing Member, provided that such an assignment does not constitute an “assignment” for purposes of the Investment Advisers Act of 1940, as amended, (ii) a corporation, partnership or other entity which succeeds to the business of Goldman, Sachs & Co. or The Goldman Sachs Group, Inc. substantially as an entirety, (iii) The Goldman Sachs Group, Inc. or any corporation, partnership or other entity the ownership of which is substantially the same as that of The Goldman Sachs Group, Inc., or (iv) any corporation, partnership or other entity of which at least 50% of the voting securities or general partnership interests or membership interests are owned, directly or indirectly, by The Goldman Sachs Group, Inc., by any corporation, partnership or other entity the ownership of which is substantially the same as that of The Goldman Sachs Group, Inc. or by any person described in clause (ii) or (iii) above.

          Section 1.06 Registered Office and Agent for Service of Process. The registered office of the Company shall be: Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, and the registered agent for service of process at such office shall be The Corporation Trust Company. The Company may from time to time have such other place or places of business within or without the State of Delaware as may be designated by the Managing Member.

ARTICLE II
Management of the Company

          Section 2.01 Management Generally. The management of the Company shall be vested exclusively in the Managing Member. Except as authorized by the Managing Member, or as expressly set forth in this Agreement, the Non-Managing Members shall have no par in the management of the Company, and shall have no authority or right to act on behalf of the Company in connection with any matter. The Managing Member, and any Affiliate of the Managing Member, may engage in any other business venture, whether or not such business is similar to the business of the Company, and neither the Company nor any Non-Managing Member shall have any rights in or to such ventures or the income or profits derived therefrom.

          Section 2.02 Delegation by Managing Member. The Managing Member shall have the power and authority to delegate to one or more Persons (as defined in Section 2.03(d)), including, without limitation, any officer, employee or agent of the Company or the Managing Member, the Managing Member’s rights and powers to manage and control the business and affairs of the Company. The Managing Member may, by written instrument, authorize any Person to enter into and perform under any document on behalf of the Company.

          Section 2.03 Authority of the Managing Member. The Managing Member shall have the power and authority on behalf of and in the name of the Company to carry out any and all of the objects and purposes of the Company set forth in Section 1.04, and to perform all acts and enter into and perform all contracts and other undertakings, which it may deem necessary or advisable or incidental thereto, including, without limitation, the power and authority to:

          (a) open, maintain and close accounts, including custodial accounts, with banks, including banks located inside and outside the United States, and draw checks or other orders for the payment of monies;

3

          (b) lend, either with or without security, funds or other properties of the Company, borrow or raise funds (including borrowing from the Managing Member or its Affiliates), and secure the obligations of the Company by pledges or hypothecation of all or any par of the property of the Company;

          (c) do any and all acts on behalf of the Company, and exercise all rights, powers, privileges and other incidents of ownership or possession with respect to the Company’s assets (including any interest therein) and other property and funds held or owned by the Company, including, without limitation, participation in arrangements with creditors, the institution and settlement or compromise of suits and administrative proceedings and all other like or similar matters;

          (d) engage any person, general partnership, limited partnership, limited liability company, corporation, joint venture, trust, business trust, cooperative, association or other entity (each, a “Person”) (including the Managing Member and any of its Affiliates) pursuant to an administration agreement to provide certain administrative services (any such person, firm or entity providing such services being referred to herein as the “Administrator”), including, without limitation, calculating the net asset value (the “NAV”) of the Company and Members’ Capital Accounts, valuing the Company’s assets, assisting with the valuation of securities which are not readily marketable, assisting in the preparation of the Company’s financial statements, assisting in the preparation and distribution of reports to each Member, maintaining a registry for the ownership of Interests and providing other administrative services to the Company;

          (e) consent on behalf of the Company to any changes in the members, directors or officers of the Managing Member, if such consent is required by applicable law;

          (f) engage any personnel, whether par time or full time, attorneys, financial advisers, underwriters, accountants, consultants, appraisers, custodians of the assets of the Company or other Persons as the Managing Member may deem necessary or desirable, whether or not any such Person may be an Affiliate of the Managing Member or may also be employed by any Affiliate of the Managing Member;

          (g) allocate the Company’s assets, directly or indirectly, to Advisors, Portfolio Companies and Portfolio Funds, oversee such allocations and, from time to time, in the sole discretion of the Managing Member, reallocate the Company’s assets among existing or new Advisors, Portfolio Companies or Portfolio Funds;

          (h) purchase, acquire or otherwise enter into (directly or indirectly) structured notes, swaps, options or other derivative instruments with respect to, or indirect investments in, Portfolio Funds or other assets, and dispose of any of the foregoing;

          (i) invest any of the Company’s cash balances which it determines at any time, in its sole discretion, not to allocate to the Advisors, Portfolio Companies or Portfolio Funds, in any instruments it deems appropriate in its sole discretion, including, without limitation, money market funds sponsored by Goldman, Sachs & Co. or its Affiliates (“Goldman Sachs”);

4

          (j) redeem the Company’s interests in any Portfolio Fund or Portfolio Company in order to obtain cash necessary to meet the redemption requests of the Members, or for any other reason in its sole discretion;

          (k) bring and defend actions and proceedings at law or equity and before any governmental, administrative or other regulatory agency, body or commission;

          (l) make distributions to Members in cash or (to the extent permitted hereunder and by applicable law) otherwise;

          (m) prepare and file all necessary returns and statements, pay all taxes, assessments and other impositions applicable to the assets of the Company and withhold amounts with respect thereto from funds otherwise distributable to any Member;

          (n) determine the accounting methods and conventions to be used in the preparations of any accounting or financial records of the Company;

          (o) make any and all tax elections permitted to be made under the Internal Revenue Code of 1986, as amended (the “Code”), and any applicable state, local or foreign tax law;

          (p) determine the tax treatment of any Company transaction or item for purposes of completing the Company’s federal, state, local or foreign tax returns; and

          (q) take all actions, and authorize any member, employee, officer, director or other agent of the Managing Member or agent or employee of the Company, to act for and on behalf of the Company, in all matters necessary to, in connection with, or incidental to, any of the foregoing.

          Section 2.04 Reliance by Third Parties. Persons dealing with the Company are entitled to rely conclusively upon the certificate of the Managing Member, to the effect that it is then acting as the Managing Member and upon the power and authority of the Managing
Member as herein set forth.

          Section 2.05 Activity of the Managing Member. The Managing Member and persons controlling, controlled by or under common control with the Managing Member and any of such person’s directors, members, stockholders, partners, officers, employees and controlling persons (each, an “Affiliate” and collectively, “Affiliates”), shall devote so much of their time to the affairs of the Company as in the judgment of the Managing Member the conduct of its business shall reasonably require, and none of the Managing Member or its Affiliates shall be obligated to do or perform any act or thing in connection with the business of the Company not expressly set forth herein. Nothing contained in this Section 2.05 shall be deemed to preclude the Managing Member or its Affiliates from exercising investment responsibility, from engaging directly or indirectly in any other business or from directly or indirectly purchasing, selling or holding securities, options, separate accounts, investment contracts, currency, currency units or any other asset and any interest therein for the account of any such other business, for their own accounts, for any of their family members or for other clients. No Non-Managing Member shall, by reason of being a Member of the Company, have any right to participate in any manner in any profits or income earned or derived by or accruing to the Managing Member or any of its

5

Affiliates from the conduct of any business other than the business of the Company (and only to the extent provided herein) or from the conduct of any activities for any account other than that of the Company (and only to the extent provided herein).

          Section 2.06 Standard of Care; Indemnification.

          (a) None of the Managing Member or its Affiliates (each, an “Indemnified Person” and collectively the “Indemnified Persons”) shall be liable to the Company or to the Members for (i) any act or omission performed or failed to be performed by such person (other than any criminal wrongdoing), or for any losses, claims, costs, damages, or liabilities arising therefrom, in the absence of any criminal wrongdoing, willful misfeasance or gross negligence on the par of such person, (ii) any tax liability imposed on the Company or any Member or (iii) any losses due to the actions or omissions of any brokers or other agents of the Company.

          In the event that any Indemnified Person becomes involved in any capacity in any action, proceeding or investigation brought by or against any person (including any Non-Managing Member) in connection with any matter arising out of or in connection with the Company’s business or affairs (including a breach of this Agreement by any Member), the Company will periodically reimburse such Indemnified Person for its legal and other expenses (including the costs of any investigation and preparation) incurred in connection therewith, provided that such Indemnified Person shall promptly repay to the Company the amount of any such reimbursed expenses paid to it if it shall ultimately be determined by a court having appropriate jurisdiction in a decision that is not subject to appeal, that such Indemnified Person is not entitled to be indemnified by the Company in connection with such action, proceeding or investigation as provided in the exception contained in the next succeeding sentence.

          To the fullest extent permitted by applicable law, the Company shall also indemnify any Indemnified Person, jointly and severally, against any losses, claims, costs, damages or liabilities to which such Indemnified Person may become subject in connection with any matter arising out of or in connection with the Company’s business or affairs, except to the extent that any such loss, claim, cost, damage, or liability results solely from the willful misfeasance, bad faith or gross negligence of, or any criminal wrongdoing by, such Indemnified Person. If for any reason (other than the willful misfeasance, bad faith or gross negligence of, or any criminal wrongdoing by, such Indemnified Person) the foregoing indemnification is unavailable to such Indemnified Person, or is insufficient to hold it harmless, then the Company shall contribute to the amount paid or payable to the Indemnified Person as a result of such loss, claim, cost, damage, or liability in such proportion as is appropriate to reflect not only the relative benefits received by the Company on the one hand and such Indemnified Person on the other hand but also the relative fault of the Company and such Indemnified Person, as well as any relevant equitable considerations.

          The reimbursement, indemnity and contribution obligations of the Company under this Section 2.06 shall be in addition to any liability which the Company may otherwise have and shall be binding upon and inure to the benefit of any successors, assigns, heirs, and personal representatives of the Company, the Managing Member and any other Indemnified Person. The foregoing provisions shall survive any termination of this Agreement.

          (b) The reimbursement, indemnification and contribution rights provided by this Section 2.06 shall not be deemed to be exclusive of any other rights to which the

6

Indemnified Person may be entitled under any agreement or as a matter of law, or otherwise, both as to action in an Indemnified Person’s official capacity and to action in any other capacity, and shall continue as to an Indemnified Person who has ceased to have an official capacity for acts or omissions during such official capacity or otherwise when acting at the request of the Managing Member and shall inure to the benefit of the successors, assigns, heirs and personal representatives of such Indemnified Person.

          (c) Notwithstanding any of the foregoing to the contrary, the provisions of this Section 2.06 shall not be construed as to relieve (or attempt to relieve) from liability or to provide for the indemnification of any Indemnified Person for any liability (including liability under federal securities law which, under certain circumstances, impose liability even on persons that act in good faith), to the extent (but only to the extent) that such liability may not be waived, modified or limited under applicable law or such indemnification would be in violation of applicable law, but shall be construed so as to effectuate the provisions of this Section 2.06 to the fullest extent permitted by applicable law.

          (d) The Managing Member shall have the power and authority to purchase and maintain, at the expense of the Company, insurance on behalf of the Managing Member and the Indemnified Persons against any liability asserted against or incurred by them in any such capacity or arising out of the Managing Member’s status as such, whether or not the Company would have the power to indemnify the Indemnified Persons against such liability under the provisions of this Agreement.

          (e) An Indemnified Person may rely upon and shall be protected in acting or refraining from action upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond debenture, or other document believed by it to be genuine and to have been signed or presented by the proper party or parties.

          (f) An Indemnified Person may consult with counsel, accountants and other experts reasonably selected by it, and any opinion of an independent counsel, accountant or expert retained with reasonable care shall be full and complete protection in respect of any action taken or suffered or omitted by the Indemnified Person hereunder in good faith and in accordance with such opinion.

          (g) The Managing Member may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, and the Managing Member shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with reasonable care by it hereunder.

          Section 2.07 Payment of Costs and Expenses.

          (a) The Company will bear its operating expenses, including but not limited to legal expenses, professional fees (including, without limitation, fees and expenses of consultants and experts) relating to investments; costs and expenses relating to any amendment of this Agreement or the Company’s other organizational documents or subscription agreement or any modification or supplement to the Company’s confidential private placement memorandum (if any), and any distribution of such documentation to the Members; accounting, auditing and tax preparation expenses; fees and expenses of other agents of the Company; taxes and governmental fees; printing and mailing expenses; expenses relating to transfers and redemptions

7

of Interests; fees and out-of-pocket expenses of any service company retained to provide accounting and bookkeeping services to the Company; quotation or valuation expenses; expenses relating to the acquisition, holding and disposition of investments (e.g., expenses which the Managing Member determines to be related to the investment of the assets of the Company, including, among others, research expenses, brokerage fees and commissions, expenses relating to short sales, clearing and settlement charges, fees to Advisors with respect to Managed Accounts, custodial fees and expenses, costs and charges for equipment or services used in communicating information regarding the Company’s transactions between the Managing Member and other agents, bank service fees, interest expenses, borrowing costs and extraordinary expenses); insurance premiums; costs incurred in connection with any claim, litigation, arbitration, mediation, government investigation or dispute in connection with the business of the Company and the amount of any judgment or settlement paid in connection therewith, or the enforcement of the Company’s rights against any person or entity; costs and expenses for indemnification or contribution payable by the Company to any person or entity (including, without limitation, pursuant to the indemnification obligations described herein under Section 2.06); and all costs and expenses incurred as a result of dissolution, winding-up and termination of the Company.

          (b) The Company will bear its organizational expenses and the expenses incurred in connection with the offer and sale of Interests, including printing costs and legal fees and expenses of the Company, the Managing Member and any placement agent and other expenses of the offering of Interests. The Company’s organizational expenses and expenses incurred in connection with the initial offer and sale of Interests shall be amortized over the course of the Company’s first 60 months of operations, or such other period as the Managing Member may determine; provided, however, that if at any time the Managing Member determines, in its sole discretion, that the effect of this accounting treatment is material to the financial statements of the Company, any unamortized balance of such expenses may then be written off if required pursuant to U.S. generally accepted accounting principles (“U.S. GAAP”).

          (c) In addition, the Company will bear, indirectly through each Portfolio Company or Portfolio Fund in which it invests, its pro rata portion of the offering, organizational and operating expenses of such Portfolio Company or Portfolio Fund, including, without limitation, expenses similar to those enumerated in this paragraph and the preceding paragraph, and expenses related to the investment of such assets, such as Advisor, Portfolio Fund and Portfolio Company fees and expenses, brokerage commissions, expenses relating to short sales, clearing and settlement charges, custodial fees, bank service fees, interest expenses, borrowing costs and extraordinary expenses.

          (d) The Managing Member, in its sole discretion, may elect for the Members to pay (or reimburse the Company for) their pro rata share of some or all of the then current expenses of the Company, in which case the Managing Member shall provide each Member with an invoice setting forth the amount owing by such Member. Each Member shall be obligated to promptly pay all amounts identified in any such invoice and amounts not promptly paid shall accrue interest as determined by the Managing Member in its sole discretion.

          (e) The Managing Member may elect, from time to time, to bear certain of the Company expenses. To the extent that Company expenses are paid by the Managing Member,

8

the Company shall reimburse the Managing Member for such expenses. The Managing Member shall bear its own overhead costs and expenses.

          Section 2.08 Principal Transactions and Other Related Party Transactions. Each Non-Managing Member hereby authorizes the Managing Member, on behalf of such Non-Managing Member, to select one or more persons, who shall not be affiliated with the Managing Member, to serve on a committee, the purpose of which will be to consider and, on behalf of the Non-Managing Members, approve or disapprove, to the extent required by applicable law, of principal transactions and certain other related party transactions. In no event shall any such transaction be entered into unless it complies with applicable law.

ARTICLE III
Admission of New Members

          Section 3.01 Admission of New Members. Subject to the condition that each new Member shall execute an appropriate counterpart to this Agreement pursuant to which it agrees to be bound by the terms and provisions hereof and of any applicable supplement hereto, the Managing Member may admit one or more new Members on the first day of each calendar month or at such other times as the Managing Member may determine in its sole discretion. Admission of a new Member shall not be a cause for dissolution or termination of the Company.

          Section 3.02 Additional Classes of Interests. The Company may issue one or more additional classes or series of Interests. Certain of such classes or series may be subject to fees, charges, redemption rights and other characteristics different from those of other classes or series of Interests. The Managing Member shall, without the prior consent of the Non-Managing Members, be entitled to make appropriate amendments to this Agreement to effect the issuance of any such class or series.

ARTICLE IV
Capital Accounts of Members and Operation Thereof

          Section 4.01 Definitions. For the purposes of this Agreement, unless the context otherwise requires:

          (a) The term “Accounting Period” shall mean the following periods: The initial Accounting Period shall commence upon the commencement of operations of the Company. Each subsequent Accounting Period shall commence immediately after the close of the preceding Accounting Period. Each Accounting Period hereunder shall close at the close of business on the first to occur of (i) the last day of each calendar month, (ii) the last day of each Fiscal Year of the Company, (iii) the date immediately prior to the effective date of the admission of a new Member pursuant to Section 3.01, (iv) the date immediately prior to the effective date of an additional Capital Contribution pursuant to Section 4.02, or (v) the date immediately prior to the effective date of any redemption or complete withdrawal pursuant to Articles V or VI hereof. The final Accounting Period shall end on the date the Company dissolves.

          (b) The term “Beginning Value” shall, with respect to any Accounting Period, mean the value of the Company’s Net Assets (as defined in paragraph (d) below) at the beginning of such Accounting Period.

9

          (c) The term “Ending Value” shall, with respect to any Accounting Period, mean the value of the Company’s Net Assets at the end of such Accounting Period (after giving effect to all Company expenses for such Accounting Period that have not been separately invoiced to the Members as described in Section 2.07(d)).

          (d) The term “Net Assets” shall mean the excess of the Company’s total assets over its total liabilities, determined in accordance with Section 4.06.

          (e) The term “Net Capital Appreciation,” with respect to any Accounting Period, shall mean the excess, if any, of the Ending Value over the Beginning Value.

          (f) The term “Net Capital Depreciation,” with respect to any Accounting Period, shall mean the excess, if any, of the Beginning Value over the Ending Value.

          Section 4.02 Capital Contributions.

          (a) Upon the approval of the Managing Member, on the first day of any calendar month or at such other times as the Managing Member may determine in its sole discretion, any prospective Member may purchase an Interest by making a Capital Contribution (herein called the “Initial Capital Contribution”) in the form of cash and/or, in the sole discretion of the Managing Member, non-cash assets to the Company and each existing Member may make an additional Capital Contribution in the same manner. Whether non-cash assets shall be accepted as a contribution to the Company shall be determined in the sole discretion of the Managing Member.

          (b) The minimum Initial Capital Contribution for purchasers of an Interest shall be $1,000,000 unless such amount is reduced by the Managing Member in its sole discretion. The minimum additional Capital Contribution for Members shall be $100,000 unless such amount is reduced by the Managing Member in its sole discretion.

          (c) The Managing Member and any of its Affiliates may make additional Capital Contributions to the Company in cash and/or non-cash assets at any time and in any amounts.

          Section 4.03 Capital Accounts. A separate capital account (herein called a “Capital Account”) shall be established on the books of the Company for each Member upon such Member making its Initial Capital Contribution. The Capital Account of each Member shall initially be equal to the amount of the Initial Capital Contribution of such Member. The Capital Account of a Member shall be (i) increased to reflect any additional Capital Contributions made by such Member pursuant to Section 4.02, (ii) increased to reflect such Member’s share of the Net Capital Appreciation for each Accounting Period, (iii) decreased to reflect the redemption of such Member’s Interest (or portion thereof), pursuant to Section 5.02, (iv) decreased to reflect the amount of any distributions (other than in redemption of an Interest pursuant to Section 5.02) in respect of such Member (including any deemed distributions of taxes paid by the Company pursuant to Section 5.04(c) in respect of such Member); and (v) decreased to reflect such Member’s share of the Net Capital Depreciation for each Accounting Period.

10

          Section 4.04 Membership Percentages. A membership percentage (a “Membership Percentage”) shall be determined for each Member for each Accounting Period of the Company by dividing (i) the amount of such Member’s Capital Account by (ii) the aggregate amount of the Capital Accounts of all Members as of the beginning of such Accounting Period, after taking into consideration, in the case of both clauses (i) and (ii), Capital Contributions, redemptions and distributions as of (or the day immediately after) the beginning of such Accounting Period. The aggregate Membership Percentages for the Company shall equal 100 percent.

          Section 4.05 Allocation of Net Capital Appreciation or Net Capital Depreciation.

          (a) Any Net Capital Appreciation or Net Capital Depreciation, as the case may be, for an Accounting Period shall be allocated among the Members pro rata in accordance with the relative Capital Accounts at the beginning of such Accounting Period, after adjustment for any Capital Contributions, distributions and redemptions as of the beginning of such Accounting Period.

          (b) Notwithstanding anything to the contrary herein, to the extent that the Company invests in New Issues (as defined below), and there are Members who are restricted persons within the meaning of the National Association of Securities Dealers, Inc. (the “NASD”) Conduct Rule 2790 (the “NASD Rule”), investments in New Issues will be made through a special account and profits and losses attributable to New Issues will not be allocated to the Capital Accounts of Members who are restricted from participating in New Issues under the NASD Rule. Only those Members who are not restricted persons shall have any beneficial interest in such an account. Notwithstanding anything in this Agreement to the contrary, the Managing Member shall have the right, without the consent of the Members, to make such amendments to this Agreement, and to take such other actions, as it deems advisable and appropriate, in its sole discretion, to implement the purposes of this Section 4.05(b). A “New Issue” is any equity securities of an initial public offering as described in the NASD Rule, or otherwise as such term may be interpreted from time to time under the then current rules of the NASD.

          Section 4.06 Determination of Net Assets.

               (i) The Company’s Net Assets shall be determined in accordance with U.S. GAAP consistently applied as a guideline and according to such procedures as may be established from time to time by the Managing Member, in its sole discretion; provided that the Managing Member in its sole discretion may provide reserves for estimated accrued expenses, liabilities and contingencies, even if such reserves are not required by U.S. GAAP

          (b) The amount payable to a Member or former Member in redemption of part or all of such Member’s or former Member’s Interest pursuant to Section 5.02 shall be treated as a liability of the Company, until paid, from (but not prior to) the beginning of the Accounting Period that begins immediately after the close of business on the day immediately prior to the Redemption Date (as defined in Section 5.02(a)) for such Interest.

          (c) The amount to be received by the Company on account of any Capital Contributions pursuant to Section 4.02 shall be treated as an asset of the Company from (but not

11

before) the beginning of the Accounting Period that begins immediately after the close of business on the day immediately prior to the effective date of such Capital Contributions.

          (d) Distributions (other than in redemption of an Interest pursuant to Section 5.02) in respect of a Member (including deemed tax distributions pursuant to Section 5.04(c)) other than as of (or the day immediately after) the beginning of an Accounting Period shall be treated as an advance and as an asset of the Company, through the end of the Accounting Period following the date of the distribution.

          (e) The Company may suspend the valuation of its assets and liabilities, and any distributions or redemptions of any amounts from Capital Accounts, for any period during which a Portfolio Company or Portfolio Fund with which the Company has made an investment has suspended the valuation of its assets and liabilities. The Managing Member shall promptly notify Members of any such suspension, and the termination of any such suspension, by means of a written notice.

          (f) All values assigned to securities and other assets by the Managing Member (or the Administrator acting on behalf of the Managing Member) pursuant to this Section 4.06 shall be final and conclusive as to all of the Members. The Managing Member may consult with and rely upon valuations of the Company’s securities and other assets provided by the Administrator.

          Section 4.07 Allocation for Tax Purposes. For each taxable year, items of income, deduction, gain, loss or credit actually recognized by the Company for federal income tax purposes shall be allocated for federal income tax purposes among the Members in such manner as to equitably reflect the amounts credited or debited to each Member’s Capital Account for the current and prior taxable years (or relevant portions thereof). Allocations under this Section 4.07 shall be made by the Managing Member in accordance with the principles of Sections 704(b) and 704(c) of the Code and in conformity with applicable Treasury Regulations promulgated thereunder (including, without limitation, Treasury Regulations Sections 1.704-1(b)(2)(iv)(f)(4), 1.704-1(b)(4)(i) and 1.704-3(e)). Notwithstanding the foregoing, the Managing Member, in its sole discretion, may adjust the allocation of items of Company taxable income, gain, loss and deduction among the Members as it shall deem to be equitable, and necessary or desirable.

          If, during or immediately following the end of a taxable year, any Member redeems all of its Interest in the Company, and the Member would (absent this sentence) recognize gain or loss under Section 731 of the Code as a result of such redemption or withdrawal, the Managing Member may, in its sole discretion, elect to specially allocate to such Member, for U.S. federal income tax purposes, any income and gain or loss and deduction (including short-term capital gain or loss) recognized by the Company during such taxable year, through and including the date of redemption or withdrawal, in an amount up to that amount of income and gain or loss and deduction which if so allocated would avoid the Member recognizing gain or loss on the redemption or withdrawal under Section 731 of the Code (ignoring for this purpose, in the sole discretion of the Managing Member, any adjustments that have been made to the tax basis of the redeeming Member’s Interest as a result of any transfers or assignment of the Interest prior to the redemption (other than the original issue of the Interest), including by reason of death). Any such election by the Managing Member shall, to the extent

12

reasonably practicable as determined by the Managing Member in its sole discretion, be applied on an equitable basis to all Members that redeem their entire Interest during or immediately following the end of such taxable year.

          Section 4.08 Determination by Managing Member of Certain Matters: Managing Member’s Discretion.

          (a) All matters concerning the valuation of securities and other assets and liabilities of the Company, the allocation of profits, gains and losses among the Members (including for tax purposes) and accounting procedures not expressly provided for by the terms of this Agreement shall be determined by the Managing Member (or such person as the Managing Member may authorize to make such determination), whose determination shall be final, binding and conclusive as to all of the Members.

          (b) Whenever in this Agreement the Managing Member is permitted or required to make a decision (i) in its “sole discretion” or “discretion,” or under a similar grant of authority or latitude, the Managing Member shall be entitled to consider only such interests and factors as it desires and may consider its own interests and the interests of its Affiliates and its determination shall be final, binding and conclusive as to all of the Members, or (ii) in its “good faith” the Managing Member shall act under such express standards and shall not be subject to any other or different standards imposed by this Agreement or by law or any other agreement contemplated herein.

          Section 4.09 Adjustments to Take Account of Interim Year Events. If the Code or regulations promulgated thereunder require a withholding or other adjustment to the Capital Account of a Member or some other interim year event occurs necessitating in the Managing Member’s judgment an equitable adjustment, the Managing Member shall make such adjustments in the determination and allocation among the Members of Net Capital Appreciation, Net Capital Depreciation, Capital Accounts, Membership Percentages, Company expenses, items of income, deduction, gain, loss, credit or withholding for tax purposes, accounting procedures or such other financial or tax items as shall equitably take into account such interim year event and applicable provisions of law, and the determination thereof by the Managing Member shall be final, binding and conclusive as to all of the Members.

          Section 4.10 Tax Withholding. If the Company is required to withhold taxes on any distribution to, or to pay or incur any tax with respect to any income allocable to or otherwise on account of, any Member, the Company may withhold such amounts and make such payments to such taxing authorities as are necessary to ensure compliance with such tax laws.

ARTICLE V
Redemptions and Distributions

          Section 5.01 Redemptions and Distributions in General. No Member shall be entitled (i) to receive distributions from the Company, except as provided in Sections 5.04 and 7.02; or (ii) to redeem its Interest, or any portion thereof, except as provided in Sections 5.02 and 6.01 or upon the consent of, or as may be required by, and upon such terms as may be determined by, the Managing Member in its sole discretion. In no event shall a Member be entitled to demand to receive property other than cash.

13

          Section 5.02 Redemptions.

          (a) Subject to this Section 5.02 and Section 5.03, each Member shall have the right to redeem some or all of its Interest as of the time immediately prior to the opening of business on each January 1, April 1, July 1, and October 1 occurring on or after the first anniversary of the purchase of such Interest by the Member (each, a “Redemption Date”), upon prior written notice received by the Managing Member at least ninety-one (91) calendar days prior to the Valuation Date (as defined below) in respect of the redemption (unless such notice is waived by the Managing Member in its sole discretion). Interests will be redeemed based upon the NAV of the Company as of the close of business on the day (a “Valuation Date”) immediately preceding the applicable Redemption Date. A redemption request may not be revoked by a Member without the consent of the Managing Member. No partial redemption shall be permitted if thereafter the redeeming Member’s Capital Account balance (after giving effect to the partial redemption) would be less than $1,000,000, unless such requirement is waived by the Managing Member in its sole discretion. The Managing Member may permit redemptions at such other times, and upon such other terms, as may be determined by the Managing Member in its sole discretion.

          If outstanding redemption requests from all Members with respect to any Redemption Date (an “Initial Holdover Redemption Date”) (including, without limitation, any Held Over Interests (as defined below)) would result in redemption proceeds in excess of the Maximum Redemption Amount (as defined below), subject to the succeeding paragraph, the Managing Member may, in its sole discretion, refuse to redeem Interests requested for redemption that would have resulted in redemption proceeds in an amount equal to or less than such excess. The “Maximum Redemption Amount,” with respect to any Redemption Date, means 25% of the aggregate NAV of the Company, determined as of the time immediately prior to such Redemption Date, immediately prior to such Redemption Date. If the Managing Member refuses to redeem Interests as set forth above, other than as set forth in the succeeding paragraph, the requests for redemption on such Initial Holdover Redemption Date by Members shall be reduced ratably, and the requested Interests not so redeemed (the “Held Over Interests”) shall be redeemed on subsequent Redemption Dates, subject to the Maximum Redemption Amount calculation for such subsequent Redemption Date and the Managing Member’s rights to refuse redemptions in connection therewith, provided that Held Over Interests shall be redeemed in priority to any subsequently received redemption requests.

          (b) The Company will endeavor to pay redemption proceeds within forty-five (45) calendar days following the applicable Redemption Date, without interest. The Managing Member may, in its sole discretion, withhold or delay the payment of all or a portion of the redemption proceeds payable to a redeeming Member until the NAV of the Company as of the applicable Valuation Date has been determined.

          (c) The Managing Member shall have the right, in its sole discretion, as of any date that it determines (including during a Fiscal Year) and for any reason (including, without limitation, pursuant to Article VI, for regulatory or tax reasons, or for any other reason), to compulsorily redeem all (or a portion) of a Member’s Interest. Any redemptions made pursuant to this Section 5.02(c) shall be paid out in accordance with paragraphs (a) and (b) above.

14

          (d) The Managing Member, and any Affiliate of the Managing Member, shall have the right at any time (including during a Fiscal Year or other period) to redeem any and all of its Interest, in accordance with the applicable provisions of this Article V, without notice to the Non-Managing Members.

          (e) If at any time after a redemption of a Member’s Interest (or any portion thereof), including in connection with any withdrawal of a Member from the Company pursuant to Article VI, the Managing Member determines, in its sole discretion, that the amount paid to such Member or former Member pursuant to such redemption was materially incorrect (including because the NAV of the Company at the time the redemption was effected was incorrect), the Company will pay to such Member or former Member any additional amount that it determines such Member or former Member would have been entitled to receive had the redemption been effected at the correct Capital Account balance, or, in its sole discretion, seek payment from such Member or former Member of (and such Member or former Member shall be required to pay) the amount of any excess payment that the Managing Member determines such Member or former Member received (including, without limitation, by compulsorily redeeming without consideration a portion of such Member’s Interest equal to the amount of such excess payment), in each case without interest.

          Section 5.03 Limitation on Redemptions.

          (a) The right of any Member to redeem all or a portion of its Interest pursuant to the provisions of Section 5.02 is subject to the provision by the Managing Member for all Company liabilities in accordance with the Act, and for reserves for estimated accrued Company expenses, liabilities and contingencies in accordance with Section 4.06, even if such reserves are not required by U.S. GAAP.

          (b) The Managing Member may, in its sole discretion, suspend redemptions, at any time prior to the effective date of the redemption, and notwithstanding the fact that a timely redemption request has previously been made, for the whole, or any par, of any of the following periods: (i) during the closure of the principal stock exchange or other markets on which any substantial portion of the Company’s direct or indirect investments, in the opinion of the Managing Member, is quoted or dealt in other than for ordinary holidays, or the restriction or suspension of dealings therein; (ii) during the existence of any state of affairs which, in the opinion of the Managing Member, constitutes an emergency as a result of which the determination of the price, value or disposition of the Company’s direct or indirect investments would be impractical or prejudicial to Members; (iii) during which redemptions would, in the opinion of the Managing Member, result in a violation of applicable law; (iv) during any breakdown in the means of communication or computation normally employed in determining the price or value of any of the investments of the Company or the current price or values on any stock exchange in respect of assets of the Company; (v) during the occurrence of any period when the Company is unable to withdraw sufficient funds from Portfolio Funds or Portfolio Companies or otherwise to meet redemption requests or in circumstances when the disposal of par or all of the Company’s assets to meet such redemption requests would be, in the opinion of the Managing Member, prejudicial to Members; (vi) during which any transfer of funds involved in the realization or acquisition of investments or payments due on redemption of Interests cannot, in the opinion of the Managing Member, be effected at advantageous rates of exchange; and (vii) during any period in which any Portfolio Fund or Portfolio Company in which the

15

Company has invested has suspended redemptions or the calculation of its net asset value. Postponed redemptions shall be effected at the month-end following the termination of the suspension. Any par of a redemption request that is postponed shall take precedence over later-received redemption requests until the postponed request or requests have been satisfied in full. Members shall be given notice in writing of the suspension of redemptions and the termination of any such suspension. A Member’s Interest shall be held by such Member during the suspension period as if no redemption request had been made.

          Section 5.04 Distributions.

          (a) The Managing Member may, in its sole discretion, make distributions in cash or in-kind (i) in connection with redemptions from the Company by a Member or in connection with a Member’s complete withdrawal from the Company pursuant to Article VI, and (ii) at any time to all of the Members on a pro rata basis in accordance with the Members’ Capital Accounts.

          (b) If a distribution is made in-kind, immediately prior to such distribution, the Managing Member shall determine the fair market value of the property distributed and adjust the Capital Accounts of all Members upwards or downwards to reflect the difference between the book value and the fair market value thereof, as if such gain or loss had been recognized upon an actual sale of such property and allocated pursuant to Section 4.05. Each such distribution shall reduce the Capital Account of the Member to which the distribution was made by the fair market value thereof.

          (c) Any taxes paid over to a governmental authority by the Company pursuant to Section 4.10 with respect to any Member (other than on account of all Members equally) shall be deemed to be a distribution to such Member. Notwithstanding the foregoing, the Managing Member in its sole discretion may elect to treat any deemed distribution to a Member under this Section 5.04(c), not as a distribution, but as an advance to the Member and a partial redemption of such Member’s Interest as of a date selected by the Managing Member either on or following the deemed distribution, and such Member’s Interest shall be reduced thereby as appropriately determined by the Managing Member.

ARTICLE VI
Withdrawal, Death, Disability

          Section 6.01 Withdrawal, Death, etc. of Members.

          (a) The withdrawal, death, disability, incapacity, adjudication of incompetency, termination, bankruptcy, insolvency or dissolution of a Member shall not dissolve the Company. Subject to the restrictions set forth in Section 1.05(a), the legal representatives or successors of such Member shall succeed as assignee to the Member’s interest in the Company upon the death, disability, incapacity, adjudication of incompetency, termination, bankruptcy, insolvency or dissolution of such Member, but shall not be admitted as a substituted member without the consent of the Managing Member.

          (b) In the event of the death, disability, incapacity, adjudication of incompetency, termination, bankruptcy, insolvency or dissolution of a Member, the legal representatives or successors of such Member shall promptly provide written notice of such

16

event to the Company. The Interest of such Member shall continue at the risk of the Company’s business until the last day of the calendar month following the calendar month in which the Managing Member received written notice of such event. At the end of such period, the Managing Member may, in its sole discretion (i) take no action, (ii) substitute the legal representatives or successors of such Member as Members of the Company, provided that the Managing Member determines in its sole discretion that such legal representatives or successors are qualified to become Members of the Company, or (iii) compulsorily redeem such Member’s Interest in the Company in accordance with the redemption provisions set forth in this Article VI.

ARTICLE VII
Duration and Dissolution of the Company

          Section 7.01 Duration. The Company shall dissolve upon the earlier of (i) a determination by the Managing Member that the Company should be dissolved and wound-up; or (ii) the termination, bankruptcy, insolvency, dissolution or withdrawal by the Managing Member other than by assignment of the Managing Member’s Interest as provided in Section 1.05(b). Upon a determination to dissolve the Company, redemptions, and distributions in respect thereof, may not be made.

          Section 7.02 Dissolution.

          (a) Upon dissolution of the Company, the Company shall cease to engage in further business except to the extent necessary to promptly wind up its affairs, perform existing contracts and preserve the value of the Company’s assets. The Company shall terminate upon the final distribution of liquidation proceeds by the Managing Member and the filing of a certificate of cancellation with the Secretary of State of the State of Delaware.

          (b) Upon dissolution, any distributions out of Company assets shall be made in the following manner and order:

               (i) to creditors, including Members who are creditors, to the extent otherwise permitted by law, in satisfaction of liabilities of the Company (whether by payment or by establishment of reserves); and

               (ii) to the Members in the proportion of their respective Capital Accounts.

          (c) The Managing Member, in its discretion, at any time and from time to time, may designate one or more liquidators, including, without limitation, one or more partners, members or officers of the Managing Member, who shall have full authority to wind up and liquidate the business of the Company and to make final distributions as provided in this Section 7.02. The appointment of any liquidator may be revoked or a successor or additional liquidator or liquidators may be appointed at any time by an instrument in writing signed by the Managing Member. Any such liquidator may receive compensation as shall be fixed, from time to time, by the Managing Member.

          (d) In the event that the Company is dissolved on a date other than the last day of a Fiscal Year, the date of such dissolution shall be deemed to be the last day of a Fiscal Year for purposes of adjusting the Capital Accounts of the Members pursuant to Section 4.03. For

17

purposes of distributing the assets of the Company upon dissolution, the Managing Member shall be entitled to a return, on a pari passu basis with the Non-Managing Members, of the amount standing to its credit in its Capital Account.

ARTICLE VIII
Tax Returns; Reports to Members

          Section 8.01 Independent Auditors. The financial statements of the Company shall be audited by Ernst & Young LLP, or such other certified public accountants of similar standing selected by the Managing Member, as of the end of each Fiscal Year of the Company.

          Section 8.02 Filing of Tax Returns. The Managing Member shall prepare and file, or cause the accountants of the Company to prepare and file, a federal information tax return in compliance with Section 6031 of the Code, and any required state and local income tax and information returns for each tax year of the Company.

          Section 8.03 Tax Matters Partner. The Managing Member shall be designated on the Company’s annual federal information tax return, and have full powers and responsibilities, as the “Tax Matters Partner” of the Company for purposes of Section 6231(a)(7) of the Code. In the event the Company shall be the subject of an income tax audit by any federal, state or local authority, to the extent the Company is treated as an entity for purposes of such audit, including administrative settlement and judicial review, the Tax Matters Partner shall be authorized to act for, and its decision shall be final and binding upon, the Company and each Member thereof. All expenses incurred in connection with any such audit, investigation, settlement or review shall be borne by the Company. Each Member does hereby agree that any action taken by the Managing Member in connection with audits of the Company under the Code will, to the extent permitted by law, be binding upon the Members. Each Member further agrees such Member will not independently act with respect to tax audits or tax litigation affecting the Company, unless previously authorized to do so in writing by the Managing Member, which authorization may be withheld in the complete discretion of the Managing Member.

          Section 8.04 Financial Reports to Current Members. The Company shall prepare and mail to each Non-Managing Member (i) annual audited financial statements after the end of the Company’s Fiscal Year, and (ii) information necessary for such Member to complete its U.S. federal, state and local income tax returns (including, at the request of a Member, such information that such Member may reasonably require annually to complete its tax filing obligations, provided that the Managing Member can provide the same without undue effort or expense).

          Section 8.05 Tax Reports to Members and Former Members. The Company shall use reasonable efforts to prepare and mail, or cause its accountants to prepare and mail, to each Member and, to the extent necessary, to each former Member (or its legal representatives), as soon as possible after the close of each taxable year of the Company, a report setting forth in sufficient detail such information as shall enable such Member or former Member (or such Member’s legal representatives) to prepare their respective federal income tax returns and/or extensions in accordance with the laws, rules and regulations then prevailing.

          Section 8.06 Partnership Status of Company. The Managing Member intends for the Company to be treated as a partnership for U.S. federal income tax purposes.

18

Notwithstanding anything herein to the contrary, neither the Company nor the Managing Member shall make an election (i.e., check-the-box) under Treasury Regulations Section 301.7701-3 for the Company to be classified for federal income tax purposes as an association taxable as a corporation.

ARTICLE IX
Miscellaneous

          Section 9.01 General. This Agreement (i) shall be binding on the permitted transferees, assigns, executors, administrators, estates, heirs, and legal successors and representatives of the Members and (ii) may be executed, through the use of separate signature pages or supplemental agreements in any number of counterparts with the same effect as if the parties executing such counterparts had all executed one counterpart; provided, however, that each such counterpart shall have been executed by the Managing Member and that the counterparts, in the aggregate, shall have been signed by all of the Members.

          Section 9.02 Power of Attorney. Each of the Members hereby appoints the Managing Member as its true and lawful representative and attorney-in-fact, in its name, place and stead to make, execute, sign, acknowledge, swear to and file:

          (a) a Certificate of Formation of the Company and any amendments thereto as may be required under the Act;

          (b) any duly adopted amendment or supplement to this Agreement;

          (c) any and all instruments, certificates, and other documents that may be deemed necessary or desirable to effect the dissolution and winding-up of the Company (including, but not limited to, a Certificate of Cancellation of the Certificate of Formation); and

          (d) any business certificate, fictitious name certificate, amendment thereto, or other instrument or document of any kind whatsoever necessary, desirable or convenient to accomplish the business, purpose and objectives of the Company, or required by any applicable federal, state, local or foreign law.

          The power of attorney hereby granted by each of the Non-Managing Members is coupled with an interest, is irrevocable, and shall survive, and shall not be affected by, the subsequent death, disability, incapacity, incompetency, termination, bankruptcy, insolvency or dissolution of such Non-Managing Member; provided, however, that such power of attorney shall terminate upon the substitution of another non-managing member for all of such Non- Managing Member’s interest in the Company or upon the complete withdrawal of such Non- Managing Member from participation in the Company.

          Section 9.03 Amendments to Limited Liability Company Agreement. The terms and provisions of this Agreement may be modified or amended at any time and from time to time with the written consent of Members having in excess of 50% of the Membership Percentages of the Members and the affirmative vote of the Managing Member insofar as is consistent with the laws governing this Agreement; provided, however, that without the consent of the Non-Managing Members, the Managing Member may amend this Agreement or the Schedule hereto to (i) reflect changes validly made in the membership of the Company, the

19

Capital Contributions, Membership Percentages and changes in the Interests held by the Members, including any adjustments as a result of an incorrect calculation of the Company’s NAV; (ii) reflect a change in the name of the Company; (iii) make a change that is necessary or, in the opinion of the Managing Member, advisable to qualify the Company as a limited liability company or other entity in which the Members have limited liability under the laws of any state, or ensure that the Company shall not be treated as an association or a publicly traded partnership taxable as a corporation for federal income tax purposes; (iv) make any change that does not adversely affect the Members in any material respect; (v) make a change that is necessary or desirable to satisfy any requirements, conditions or guidelines contained in any opinion, directive, order, ruling or regulation of any federal, state or foreign statute, so long as such change is made in a manner which minimizes to the extent practicable, as determined by the Managing Member in its sole discretion, any adverse effect on the Members or that is required or contemplated by this Agreement; (vi) make a change in any provision of this Agreement that requires any action to be taken by or on behalf of the Managing Member or the Company pursuant to the requirements of applicable Delaware law if the provisions of applicable Delaware law are amended, modified or revoked so that the taking of such action is no longer required; (vii) prevent the Company or the Managing Member from in any manner being deemed an “investment company” subject to the provisions of the Investment Company Act of 1940, as amended; (viii) correct mistakes or clarify ambiguities; (ix) in the event of adverse changes in the tax law or interpretations thereof applicable to the Company, amend this Agreement as determined by the Managing Member if it deems it advisable or necessary to address such changes; (x) conform this Agreement to the disclosure provided in the Company’s Confidential Private Placement Memorandum; (xi) correct or supplement any conflicting provisions and delete or add provisions as may be required by applicable law or regulations, in each case, as determined by the Managing Member in its sole discretion; (xii) make any other amendment provided such amendment does not become effective until after the affected Members have been given prior written notice of such change and have had the right following receipt of such notice to request the redemption of their Interest and any requested redemption shall have become effective; or (xiii) make any other amendments similar to the foregoing. Each Member, however, must consent to any amendment that would (a) reduce its Capital Account or (b) amend the provisions of this Agreement relating to amendments.

          Section 9.04 Instruments. The parties agree to execute and deliver any further instruments or perform any acts which are or may become necessary to carry on the Company created by this Agreement or to effectuate its purposes.

          Section 9.05 No Personal Liability For Return of Capital. The Managing Member shall not be personally liable for the return or repayment of all or any portion of Capital Contribution or profits of any Member, it being expressly agreed that any such return of Capital Contribution or profits made pursuant to this Agreement shall be made solely from the assets (which shall not include any right of contribution from the Managing Member) of the Company.

          Section 9.06 Choice of Law. Notwithstanding the place where this Agreement may be executed by any of the parties hereto, the parties expressly agree that all the terms and provisions hereof shall be governed by and construed in accordance with the laws of the State of Delaware and, without limitation thereof, that the Act as now adopted or as may be hereafter amended shall govern the limited liability company aspects of this Agreement.

20

          Section 9.07 Venue; Waiver of Trial by Jury. The parties expressly agree that all actions and proceedings brought by a party against a Member or the Company in connection with the Company’s business or affairs (including a breach of this Agreement by a party hereto) shall be brought in and be subject to the jurisdiction of a court of the State of New York located in the City of New York or the United States District Court for the Southern District of New York. The parties hereto irrevocably waive to the fullest extent permitted by law any objection that they may now or hereafter have to the laying of venue of any such action or proceeding in the courts of the State of New York located in the City of New York or of the United States District Court for the Southern District of New York and any claim that any such action or proceeding brought in any such court has been brought in an inconvenient forum. THE PARTIES HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUCH ACTION OR PROCEEDING.

          Section 9.08 No Third Party Rights. The provisions of this Agreement, including, without limitation, the provisions of Section 1.03, are not intended to be for the benefit of any creditor or other person (other than the Members in their capacities as such) to whom any debts, liabilities or obligations are owed by (or who otherwise have a claim against or dealings with) the Company or any Member, and no such creditor or other Person shall obtain any rights under any of such provisions (whether as a third party beneficiary or otherwise) or shall by reason of any such provisions make any claim in respect to any debt, liability or obligation (or otherwise) including any debt, liability or obligation pursuant to Section 1.03, against the Company or any Member.

          Section 9.09 Notices. Each notice relating to this Agreement shall be in writing and delivered in person or by registered or certified mail. All notices to the Company shall be addressed to its principal office and place of business. All notices addressed to a Member shall be addressed to such Member at the address set forth in the Schedule. Any Member may designate a new address by notice to that effect given to the Company. Unless otherwise specifically provided in this Agreement, a notice shall be deemed to have been effectively given when mailed by registered or certified mail to the proper address or delivered in person.

          Section 9.10 Grantors of Revocable Trusts. Each Non-Managing Member that is a revocable trust agrees that, if the trustee of such revocable trust and the grantor of such revocable trust are the same person, the trustee’s execution of this Agreement and any other documents executed in connection with the Company shall bind such person in his or her capacity both as trustee and as grantor of such revocable trust.

          Section 9.11 Each Interest in the Company is a Security. The parties expressly agree that each Interest in the Company, including without limitation the Interest of the Managing Member in the Company, is a security governed by Article 8 of the Uniform Commercial Code of the State of Delaware, and the Company, each Member and any other party hereto expressly agrees that (i) this establishes the terms of the Interests in the Company, and (ii) Interests in the Company shall not be represented or evidenced by certificates.

          Section 9.12 Goodwill and Use of Name. No value shall be placed on the name or goodwill of the Company, which shall belong exclusively to the Managing Member. The Company acknowledges that it adopted its name through the permission of the Managing Member and its Affiliates, and agrees to the use of the name “Goldman Sachs HFP Opportunistic

21

Fund, LLC or any name containing any combination of the foregoing or the words “Goldman Sachs” only so long as the Managing Member serves as the Managing Member of the Company, unless otherwise agreed to by the Managing Member. The Company further agrees that, in the event that neither Goldman Sachs Hedge Fund Strategies LLC nor any other affiliate of Goldman, Sachs & Co. serves as Managing Member of the Company, the Company will immediately (i) change its name so that such name will not thereafter include the words “Goldman Sachs,” “GS,” or any other service mark or brand name affiliated with Goldman Sachs, and (ii) cease using said words or variations thereof for any reason whatsoever. The Company agrees to indemnify and hold harmless the Managing Member and its Affiliates from and against any and all costs, losses, claims, damages or liabilities, joint or several, including, without limitation, attorneys’ fees and disbursements, which may arise out of the Company’s use or misuse of the names “Goldman Sachs HFP Opportunistic Fund, LLC,” any name containing any combination of the foregoing or the words “Goldman Sachs” or out of any breach or failure to comply with this Section 9.12.

          Section 9.13 Headings. The titles of the Articles and the headings of the Sections of this Agreement are for convenience of reference only, and are not to be considered in construing the terms and provisions of this Agreement.

          Section 9.14 Pronouns. All pronouns shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons, firm or corporation may require in the context thereof.

          Section 9.15 Confidentiality. The Managing Member and the Company may, in their discretion, keep confidential and not disclose to the Non-Managing Members any proprietary information concerning the Company, including, without limitation, investments, valuations, information regarding potential investments, financial information, trade secrets and the like which is proprietary in nature and non-public, or any information about any investment, to the extent that such information is required to be kept confidential or is otherwise subject to disclosure restrictions imposed by the issuer of the investment or the Managing Member, in its reasonable discretion (collectively, “Confidential Information”). Each Non-Managing Member shall not disclose or cause to be disclosed any Confidential Information to any other Person, except as otherwise required by any regulatory authority, law or regulation, or by legal process, without the prior written consent of the Managing Member. Notwithstanding anything in the foregoing or anything else contained in this Agreement to the contrary, except as reasonably necessary to comply with applicable securities laws, each Member (and any employee, representative or other agent thereof) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the offering and ownership of Interests and any transaction described in this Section 9.15 or elsewhere in this Agreement and all materials of any kind (including opinions and other tax analyses) that are provided to such Member relating to such tax treatment and tax structure. For this purpose, “tax structure” means any facts relevant to the federal income tax treatment of the offering and ownership of Interests and any transaction described in this Section 9.15 or elsewhere in this Agreement, and does not include information relating to the identity of the Company or its Affiliates.

22

          IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the date first set forth above.

MANAGING MEMBER: GOLDMAN SACHS HEDGE FUND STRATEGIES LLC
By:	/s/ Kent A. Clark
	Name:	KENT A. CLARK
	Title:	MANAGING DIRECTOR

NON-MANAGING MEMBERS:
By:	GOLDMAN SACHS HEDGE FUND STRATEGIES LLC on behalf of each Member as attorney-in-fact
By:	/s/ Kent A. Clark
	Name:	KENT A. CLARK
	Title:	MANAGING DIRECTOR

23

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Omar Asali, certify that:

1.  I have reviewed this Annual Report on Form 10-K for the period ended December 31, 2007 of Goldman Sachs Hedge Fund Partners, LLC;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flow of the registrant as of, and for, the periods presented in this report;

4.  The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the board of directors of Goldman Sachs Hedge Fund Strategies LLC:

a.  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/  Omar Asali

Name:     Omar Asali

Title:  Co-Head

Date:  March 31, 2008

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Peter Ort, certify that:

1.  I have reviewed this Annual Report on Form 10-K for the period ended December 31, 2007 of Goldman Sachs Hedge Fund Partners, LLC;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flow of the registrant as of, and for, the periods presented in this report;

4.  The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the board of directors of Goldman Sachs Hedge Fund Strategies LLC:

a.  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/  Peter Ort

Name:     Peter Ort

Title:  Co-Head

Date:  March 31, 2008

EX-31.3

EXHIBIT 31.3

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jennifer Barbetta, certify that:

1.  I have reviewed this Annual Report on Form 10-K for the period ended December 31, 2006 of Goldman Sachs Hedge Fund Partners, LLC;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flow of the registrant as of, and for, the periods presented in this report;

4.  The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the board of directors of Goldman Sachs Hedge Fund Strategies LLC:

a.  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/  Jennifer Barbetta

Name:     Jennifer Barbetta

Title:  Chief Financial Officer

Date: March 31, 2008

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. § 1350, the undersigned officer of Goldman Sachs Hedge Fund Strategies LLC, hereby certifies that Goldman Sachs Hedge Fund Partners, LLC’s (the “Company’s”) Form 10-K for the period ended December 31, 2007 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/  Omar Asali

Name:     Omar Asali

Title:  Co-Head

Dated:  March 31, 2008

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. § 1350, the undersigned officer of Goldman Sachs Hedge Fund Strategies LLC, hereby certifies that Goldman Sachs Hedge Fund Partners, LLC’s (the “Company’s”) Form 10-K for the period ended December 31, 2007 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/  Peter Ort

Name:     Peter Ort

Title:  Co-Head

Dated:  March 31, 2008

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

EX-32.3

EXHIBIT 32.3

CERTIFICATION BY THE CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. § 1350, the undersigned officer of Goldman Sachs Hedge Fund Strategies LLC, hereby certifies that Goldman Sachs Hedge Fund Partners, LLC’s (the “Company’s”) Form 10-K for the period ended December 31, 2007 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/  Jennifer Barbetta

Name:     Jennifer Barbetta

Title:  Chief Financial Officer

Date:  March 31, 2008

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.