3.	Trading Companies

Investments in Affiliated Trading Companies – The Partnership's assets identified as "Investments in Affiliated Trading Companies" reflected on the Statements of Financial Condition represent the Partnership's pro rata share of each Trading Company's net asset value. The net assets of each Trading Company are equal to the total assets of the Trading Company (including, but not limited to all cash and cash equivalents, accrued interest, and the fair value of all open Futures Interests contract positions and other assets) less all liabilities of the Trading Company (including, but not limited to, brokerage commissions that would be payable upon the closing of open Futures Interests positions, management fees, incentive fees, and extraordinary expenses), determined in accordance with U.S. GAAP.

The clearing commodity brokers for the Trading Companies are MS&Co. and MSIP. Collectively, MS&Co. and MSIP are referred to as the "Commodity Brokers". MSIP serves as the commodity broker for trades on the London Metal Exchange. MS&Co. acts as the counterparty on all trading of foreign currency forward contracts for all the Trading Companies. MSCG acts as the counterparty on all trading of options on foreign currency forward contracts for all the Trading Companies MS&Co. and its affiliates act as custodians of the Trading Companies assets. MS&Co., MSIP, and MSCG are wholly-owned subsidiaries of Morgan Stanley.

Each Trading Company pays a brokerage fee to MS&Co. as described below. Each Trading Company's cash is on deposit in commodity brokerage accounts with Morgan Stanley.

The following tables summarize the Partnership's investments in affiliated Trading Companies as of December 31, 2012 and 2011. Each Trading Company pays each Trading Advisor a monthly management fee and a quarterly incentive fee equal to 20% of the trading profits earned (refer to Note 5. Trading Advisors to the Trading Companies) for further information.

December 31, 2012

Investment	% of LV's Partners' Capital		Fair Value		LV's pro rata Net Income/(Loss)			LV's Management Fees		LV's Incentive Fees		LV's Administrative Fees
			$		$			$		$		$
TT II, LLC		37.0		12,246,448		(23,003	)		247,227		4,069		49,445
WNT I, LLC		21.4		7,072,401		(401,771	)		124,221		232		28,985
Chesapeake I, LLC		13.3		4,408,930		(1,151,518	)		99,845		–		17,473
Rotella I, LLC		10.2		3,383,788		(218,126	)		44,554		–		15,594
Kaiser I, LLC		9.6		3,186,918		(74,042	)		73,604		–		15,863
Augustus I, LLC		7.4		2,433,314		281,992			49,184		–		11,476
GLC I, LLC		7.1		2,359,140		154,061			51,848		–		12,098

December 31, 2011

Investment	% of LV's Partners' Capital		Fair Value		LV's pro rata Net Income/(Loss)			LV's Management Fees		LV's Incentive Fees		LV's Administrative Fees
			$		$			$		$		$
TT II, LLC		28.5		14,111,867		(1,664,435	)		273,205		1,319		51,306
Kaiser I, LLC		21.4		10,573,213		(820,064	)		301,052		–		52,684
WNT I, LLC		18.1		8,959,457		302,748			107,555		81,715		18,822
Augustus I, LLC		10.3		5,112,295		(516,309	)		86,378		1,718		20,155
Rotella I, LLC		10.3		5,082,011		(253,281	)		120,017		19,966		25,533
Chesapeake I, LLC		9.9		4,910,449		(753,265	)		94,741		103,139		16,580
GLC I, LLC		8.0		3,942,919		(381,969	)		71,600		–		16,707
DKR I, LLC		–		–		(496,954	)		102,838		4,110		18,333

The strategy for each Trading Company is disclosed in Note 5. Trading Advisors to the Trading Companies.

For all Trading Companies, contributions and withdrawals are permitted on a monthly basis. As of December 31, 2012 and 2011, there have been no suspended redemptions, "lock up" periods or gate provisions imposed before a withdrawal can be made by the Partnership.

Valuation – Futures Interests are open commitments until the settlement date, at which time they are realized. They are valued at fair value, generally on a daily basis, and the unrealized gains and losses on open contracts (the difference between contract trade price and market price) are reported in the Statements of Financial Condition as net unrealized gain or loss on open contracts. The resulting net change in unrealized gains and losses is reflected in the net change in unrealized trading profit (loss) from one period to the next on the Statements of Income and Expenses. The fair value of exchange-traded futures, options and forwards contracts is determined by the various futures exchanges, and reflects the settlement price for each contract as of the close of business on the last business day of the reporting period. The fair value of foreign currency forward contracts is extrapolated on a forward basis from the spot prices quoted as of approximately 3:00 P.M. (E.T.) of the last business day of the reporting period. The fair value of non-exchange-traded foreign currency option contracts is calculated by applying an industry standard model application for options valuation of foreign currency options, using as input, the spot prices, interest rates, and option implied volatilities quoted as of approximately 3:00 p.m. (E.T.) on the last business day of the reporting period. Risk arises from changes in the value of these contracts and the potential inability of counterparties to perform under the terms of the contracts. There are numerous factors which may significantly influence the fair value of these contracts, including interest rate volatility.

The Trading Companies may buy or write put and call options through listed exchanges and the over-the-counter market. The buyer of an option has the right to purchase (in the case of a call option) or sell (in the case of a put option) a specified quantity of a specific Futures Interest on the underlying asset at a specified price prior to or on a specified expiration date. The writer of an option is exposed to the risk of loss if the fair value of a Futures Interest on the underlying asset declines (in the case of a put option) or increases (in the case of a call option). The writer of an option can never profit by more than the premium paid by the buyer but can potentially lose an unlimited amount.

Premiums received/premiums paid from writing/purchasing options are recorded as liabilities/assets on the Trading Companies' Statements of Financial Condition and are subsequently adjusted to fair values. The difference between the fair value of an option and the premiums received/premiums paid is treated as an unrealized gain or loss.

Revenue Recognition – Monthly, MS&Co. pays each Trading Company interest income on 100% of its average daily equity maintained in cash in the Trading Companies' accounts during each month at a rate equal to the monthly average of the 4-week U.S. Treasury bill discount rate less 0.15% during such month but in no event less than zero. When the effective rate is less than zero, no interest is earned. For purposes of such interest payments, daily funds do not include monies due to each Trading Company on Futures Interests that have not been received. MS&Co. and Ceres will retain any excess interest not paid to each Trading Company in permitted investments.

Fair Value of Financial Instruments – The fair value of each Trading Company's assets and liabilities that qualify as financial instruments under the FASB ASC guidance relating to Financial Instruments approximates the carrying amount presented in the Trading Company's Statements of Financial Condition.

Foreign Currency Transactions and Translation - The Trading Companies' functional currency is the U.S. dollar; however, the Trading Companies may transact business in currencies other than the U.S. dollar. Assets and liabilities denominated in currencies other than the U.S. dollar are translated into U.S. dollars at the rate in effect at the date of the Statements of Financial Condition. Income and expense items denominated in currencies other than the U.S. dollar are translated into U.S. dollars at the rate in effect during the period. Gains and losses resulting from the translation to U.S. dollars are reported in net change in unrealized appreciation (depreciation) on investments in the Statements of Income and Expenses.

Brokerage, Clearing and Transaction Fees – Each Trading Company accrues and pays brokerage, clearing and transaction fees to MS&Co. Brokerage fees and transaction costs are paid as they are incurred on a half-turn basis at 100% of the rates MS&Co. charges retail commodity customers and parties that are not clearinghouse members. In addition, the Trading Companies pay transactional and clearing fees as they are incurred.

Trading Company Administrative Fee – Each Trading Company pays Ceres a monthly fee to cover all administrative and operating expenses (the "Trading Company Administrative Fee"). The monthly Trading Company Administrative Fee is equal to 1/12th of 0.35% (a 0.35% annual rate) of the beginning of the month net asset of each Trading Company.