UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HODLINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number: 811-10593

Morgan Stanley Institutional Fund of Hedge Funds LP

(Exact Name of Registrant as specified in Charter)

One Tower Bridge

100 Front Street, Suite 1100

West Conshohocken, Pennsylvania 19428-2881

(Address of principal executive offices)

Arthur Lev, Esq.

Morgan Stanley Investment Management Inc.

1221 Avenue of the Americas

New York, NY 10020

(Name and address of agent for service)

Registrant’s Telephone Number, including Area Code: (610) 260-7600

Date of fiscal year end: December 31

Date of reporting period: March 31, 2007

Item 1. Schedule of Investments.

The Registrant’s schedule of investments as of the close of the reporting period prepared pursuant to Rule 12-12 of Regulation S-X is as follows:

MORGAN STANLEY ALTERNATIVE INVESTMENT PARTNERS LP

Morgan Stanley Institutional Fund of Hedge Funds LP

Schedule of Investments (Unaudited)

March 31, 2007

Description	First Acquisition Date	Cost		Fair Value			Percent of Partners’ Capital
Investment Funds
Convertible Arbitrage
KBC Convertible Opportunities Fund L.P.	7/1/2002	$	304,213	$	307,911		0.01	%
Lydian Partners II L.P.	7/1/2002		53,750,000		67,491,776		2.30
Total Convertible Arbitrage			54,054,213		67,799,687		2.31
Distressed
Avenue Asia Investments, L.P.	7/1/2002		18,100,000		27,290,562		0.93
Avenue Europe Investments, L.P.	8/1/2004		38,000,000		46,557,146		1.59
Total Distressed			56,100,000		73,847,708		2.52
Equity Long/Short - High Hedge
Highbridge Long/Short Equity Fund, L.P.	1/1/2005		59,000,000		66,896,293		2.28
Total Equity Long/Short - High Hedge			59,000,000		66,896,293		2.28
Equity Long/Short - Opportunistic
Atlas Advantage Fund, L.P.	7/1/2006		27,000,000		32,854,854		1.12
Blackstone Kailix Fund L.P.	10/1/2006		68,000,000		77,880,100		2.65
Delta Institutional, LP	3/1/2004		47,400,000		69,691,041		2.38
Karsch Capital II, LP	5/1/2004		64,000,000		79,955,723		2.72
Lancer Partners, L.P.	7/1/2002		15,625,000		—	(a)	0.00
Lansdowne Global Financials Fund, L.P.	10/1/2004		52,000,000		85,226,097		2.90
Tiger Global, L.P.	1/1/2003		18,500,000		31,362,250		1.07
Value Partners China Hedge Fund LLC	2/1/2005		25,965,961		34,239,730		1.17
Visium Balanced Fund, LP	12/1/2005		60,000,000		72,792,737		2.48
Total Equity Long/Short - Opportunistic			378,490,961		484,002,532		16.49

MORGAN STANLEY ALTERNATIVE INVESTMENT PARTNERS LP

Morgan Stanley Institutional Fund of Hedge Funds LP

Schedule of Investments (Unaudited) (continued)

March 31, 2007

Description	First Acquisition Date	Cost		Fair Value			Percent of Partners’ Capital
Investment Funds (continued)
Event Driven Credit
Fir Tree Recovery Fund, L.P.	7/1/2002	$	721,281	$	721,281		0.03	%
Plainfield Special Situations Onshore Feeder Fund LP	8/1/2005		75,000,000		86,075,271		2.93
Q Funding III, L.P.	7/1/2002		7,052,089		15,877,203		0.54
Total Event Driven Credit			82,773,370		102,673,755		3.50
Fixed Income Arbitrage
Platinum Grove Contingent Capital Partners, L.P.	2/1/2005		80,000,000		89,342,703		3.04
Total Fixed Income Arbitrage			80,000,000		89,342,703		3.04
Macro
Brevan Howard L.P.	8/1/2004		79,500,000		89,896,376		3.06
D.E. Shaw Oculus Fund, L.L.C.	11/1/2004		61,000,000		80,206,579		2.73
Peloton Multi-Strategy Fund, LP	6/1/2006		38,500,000		43,147,815		1.47
Total Macro			179,000,000		213,250,770		7.26
Mortgage Arbitrage
Ellington Mortgage Partners, L.P.	7/1/2002		65,750,000		88,011,545		3.00
Highland Spectrum Fund, LP	4/1/2006		70,427,065		70,132,433		2.39
New Ellington Credit Partners, LP	2/1/2006		90,000,000		93,935,367		3.20
Safe Harbor Fund, L.P. (b)	7/1/2002		18,750,000		8,800,416	(a)	0.30
Sorin Fund, L.P.	10/1/2006		34,500,000		38,463,717		1.31
Structured Servicing Holdings, L.P.	7/1/2002		40,825,940		55,467,952		1.89
Total Mortgage Arbitrage			320,253,005		354,811,430		12.09

MORGAN STANLEY ALTERNATIVE INVESTMENT PARTNERS LP

Morgan Stanley Institutional Fund of Hedge Funds LP

Schedule of Investments (Unaudited) (continued)

March 31, 2007

Description	First Acquisition Date	Cost		Fair Value		Percent of Partners’ Capital
Investment Funds (continued)
Multi-Strategy
Amaranth Partners L.L.C.	11/1/2004	$	21,806,292	$	8,660,752	0.30	%
Citadel Wellington LLC	7/1/2002		101,250,000		169,314,441	5.77
D.E. Shaw Composite Fund, L.L.C.	9/1/2005		115,171,336		140,839,028	4.80
HBK Fund L.P.	7/1/2002		104,161,678		137,558,000	4.69
OZ Domestic Partners, L.P.	7/1/2002		115,500,000		147,811,127	5.03
Perry Partners, L.P.	12/1/2006		37,500,000		39,539,330	1.35
Polygon Global Opportunities Fund LP	7/1/2005		140,000,000		190,584,185	6.49
QVT Associates LP	9/1/2006		119,000,000		139,979,855	4.77
Total Multi-Strategy			754,389,306		974,286,718	33.20
Relative Value Credit
Artesian GMSCAF (Onshore) Series LP - OP2	2/1/2006		28,126,034		31,492,227	1.07
Par-Four Fund, L.P. (formerly, Par IV Fund, L.P.)	11/1/2004		12,000,000		15,510,705	0.53
Trilogy Financial Partners, L.P.	1/1/2003		25,000,000		33,612,160	1.15
Total Relative Value Credit			65,126,034		80,615,092	2.75
Restructurings and Value
Empyrean Capital Fund, LP	7/1/2004		9,750,661		12,533,868	0.43
Laxey Investors L.P.	9/1/2004		56,000,000		71,584,748	2.44
One East Partners, LP	8/1/2006		58,000,000		63,801,758	2.17
Western Investment Activism Partners LLC	1/1/2006		52,124,131		58,583,846	2.00
Total Restructurings and Value			175,874,792		206,504,220	7.04

MORGAN STANLEY ALTERNATIVE INVESTMENT PARTNERS LP

Morgan Stanley Institutional Fund of Hedge Funds LP

Schedule of Investments (Unaudited) (continued)

March 31, 2007

Description	Cost		Fair Value		Percent of Partners’ Capital
Investment Funds (continued)
Total Investments in Investment Funds	$	2,205,061,681	$	2,714,030,908	92.48	%
Short-Term Investments
State Street Eurodollar Time Deposit 4.25% due 4/2/07		152,390		152,390	0.01
Total Short-Term Investments		152,390		152,390	0.01
Total Investments in Investment Funds and Short-Term Investments	$	2,205,214,071		2,714,183,298	92.49
Other Assets, less Liabilities				220,534,706	7.51
Total Partners’ Capital			$	2,934,718,004	100.00	%

Detailed information about all of the Investment Funds’ portfolios is not available.

(a) Fair valued by Morgan Stanley AIP GP LP, the Registrant’s investment adviser.

(b) In liquidation.

Item 2. Controls and Procedures

(a) The Registrant’s principal executive officer and principal financial officer have concluded that the Registrant’s disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Registrant in the form N-Q was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, based upon such officers’ evaluation of these controls and procedures as of a date within 90 days of the filing date of the report.

(b) There were no changes or corrective actions during the Registrant’s first fiscal quarter with regard to significant deficiencies or material weaknesses in the Registrant’s internal controls over financial reporting or in other factors that could materially affect the Registrant’s internal controls over financial reporting.

Item 3. Exhibits

(a) Certifications of Principal Executive Officer and Principal Financial Officer attached to the report as part of EX-99. CERT.

SIGNATURES

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

(Registrant)	Morgan Stanley Institutional Fund of Hedge Funds LP
By:	/s/ Ronald E. Robison
Name:	Ronald E. Robison
Title:	Principal Executive Officer
Date:	May 30, 2007

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

By:	/s/ Ronald E. Robison
Name:	Ronald E. Robison
Title:	Principal Executive Officer
Date:	May 30, 2007

By:	/s/ James Garrett
Name:	James Garrett
Title:	Principal Financial Officer
Date:	May 30, 2007