Form 486BPOS AB Multi-Manager Alterna

THE SECURITIES ACT OF 1933		☒
PRE-EFFECTIVE AMENDMENT NO.		☐
POST-EFFECTIVE AMENDMENT NO. 1		☒

THE INVESTMENT COMPANY ACT OF 1940		☒
AMENDMENT NO. 24		☒

☐	when declared effective pursuant to section 8(c) of the Securities Act

☒	immediately upon filing pursuant to paragraph (b) of Rule 486

☐	on (date) pursuant to paragraph (b) of Rule 486

☐	60 days after filing pursuant to paragraph (a) of Rule 486

☐	on (date) pursuant to paragraph (a) of Rule 486

☐	This [post-effective] amendment designates a new effective date for a previously filed [post-effective amendment] [registration statement].

☐	This Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, and the Securities Act registration statement number of the earlier effective registration statement for the same offering is:     .

☐	This Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, and the Securities Act registration statement number of the earlier effective registration statement for the same offering is:     .

☐	This Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, and the Securities Act registration statement number of the earlier effective registration statement for the same offering is:     .

☒	Registered Closed-End Fund (closed-end company that is registered under the Investment Company Act of 1940 (the “Investment Company Act”)).

☐	Business Development Company (closed-end company that intends or has elected to be regulated as a business development company under the Investment Company Act).

☐	Interval Fund (Registered Closed-End Fund or a Business Development Company that makes periodic repurchase offers under Rule 23c-3 under the Investment Company Act).

☐	A.2 Qualified (qualified to register securities pursuant to General Instruction A.2 of this Form).

☐	Well-Known Seasoned Issuer (as defined by Rule 405 under the Securities Act).

☐	Emerging Growth Company (as defined by Rule 12b-2 under the Securities and Exchange Act of 1934).

☐	If an Emerging Growth Company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.

☐	New Registrant (registered or regulated under the Investment Company Act for less than 12 calendar months preceding this filing).

		Per Share				Total
Public offering price(1)		$	11.2			$	95,546,626.56
Maximum Sales Load(2)			None				None
Proceeds, before expenses, to the Fund(3)		$	11.2			$	95,546,626.56

(1)

Public offering price as of June 28, 2024. The Fund offers its shares at a price equal to their net asset value next determined after a subscription for shares is accepted by the Fund, which will change over time. The net asset value of the Fund’s shares have ranged from $9.92 to $12.35 per share between October 1, 2012 (commencement of operations) and June 28, 2024. The minimum initial investment in the shares by an investor is $20,000. Subsequent investments (excluding reinvestment of distributions) must be at least $5,000.

(2)

The Fund may engage one or more distributors to solicit investments in the Fund. The Fund currently does not make payments out of its own assets for distribution services in connection with the sale of Fund shares, but any such payments made in the future will comply with the sales charge and compensation limitations in the rules administered by the Financial Industry Regulatory Authority, I relating to open-end investment companies. The Fund’s investment manager and/or its affiliates may make payments out of their own resources to distributors. See “Distributors and Shareholder Servicing Arrangements.”

(3)	These estimated proceeds assume the sale of all of the shares registered under the offering. Shares of the Fund are offered continuously on a monthly basis. As a result, the proceeds to the Fund will initially be less than the amount shown.

SUMMARY OF TERMS			1
SUMMARY OF FEES AND EXPENSES			26
CONSOLIDATED FINANCIAL HIGHLIGHTS			28
OVERVIEW OF THE FUND			32
THE OFFERING			32
USE OF PROCEEDS			32
STRUCTURE			32
INVESTMENT OBJECTIVE			33
INVESTMENT STRATEGY			33
RISK FACTORS AND SPECIAL CONSIDERATIONS			40
INVESTMENT RESTRICTIONS			70
TRUSTEES AND OFFICERS			73
INVESTMENT ADVISORY AND MANAGEMENT ARRANGEMENTS			82
ADMINISTRATOR			90
TRANSFER AGENT AND CUSTODIAN			91
DISTRIBUTORS AND SHAREHOLDER SERVICING ARRANGEMENTS			91
PROXY VOTING POLICIES AND PROCEDURES			91
CODE OF ETHICS			92
BROKERAGE TRANSACTIONS			93
NET ASSET VALUATION			95
CONFLICTS OF INTEREST			98
SUBSCRIPTIONS FOR SHARES			102
WHO SHOULD INVEST			103
ELIGIBLE INVESTORS			103
REDEMPTIONS, REPURCHASES AND TRANSFER RESTRICTIONS			104
U.S. FEDERAL INCOME TAX CONSIDERATIONS			108
BENEFIT PLAN INVESTOR CONSIDERATIONS			116
DISTRIBUTIONS			118
AUTOMATIC REINVESTMENT PLAN			119
ADDITIONAL INFORMATION REGARDING THE DECLARATION OF TRUST AND BYLAWS			119
REPORTS TO SHAREHOLDERS			120
TERM			121
FISCAL YEAR			121

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			121
LEGAL COUNSEL			121
BENEFICIAL OWNERS			121
INQUIRIES AND FINANCIAL INFORMATION			121

Overview of the Fund

The Fund is a statutory trust formed under the laws of the State of Delaware and is registered with the U.S. Securities and Exchange Commission (the “SEC”), under the Investment Company Act of 1940, as amended (the “Investment Company Act”), as a closed-end, diversified management investment company. The Fund is operated as a fund-of-funds. The Fund sells shares of beneficial interest (the “shares”) to certain eligible individual and institutional investors. The Fund has registered under the Investment Company Act and has registered its shares under the Securities Act of 1933, as amended (the “Securities Act”).

The Offering

Shares are offered continuously on a monthly basis at their net asset value (“NAV”) per share determined as of the last business day of each month. Because the Fund expects to promptly begin to invest the money it receives in each monthly offering, the offering prices in such monthly offerings will vary, and an investor subscribing for shares will likely pay more or less than the current offering price. Shares are intended for sale only to prospective investors who meet the criteria set out in Appendix A. See “Eligible Investors.” An investor must invest at least $20,000 when making an initial investment. See “Distributors and Shareholder Servicing Arrangements.” Only an investor whose subscription for shares is accepted by the Fund will become a shareholder of the Fund. The shares have substantial restrictions on transfers. See “Redemptions, Repurchases and Transfer Restrictions.”

Investment Objective

The Fund’s investment objective is to seek long-term capital appreciation. There can be no assurance that the Fund will achieve its investment objective, be able to structure its investments as anticipated, or that its returns will be positive over any period of time. The Fund is not intended as a complete investment program for investors.

Investment Strategy

The Fund seeks to achieve its investment objective primarily by allocating its assets among investments in private investment vehicles (“Portfolio Funds”), commonly referred to as hedge funds, that are managed by unaffiliated asset managers (“Portfolio Fund Managers”) that employ a broad range of investment strategies (“Portfolio Fund Strategies”). As a secondary strategy, the Fund will also make direct investments in securities and other financial instruments. The Investment Manager seeks to manage the Fund so that its volatility is less than that of the broad equity markets and so as to limit the correlation between the Fund’s returns and those of the broad equity and fixed-income markets.

The Fund invests principally with Portfolio Fund Managers pursuing the following Portfolio Fund Strategies: (i) long/short equity, (ii) event driven, (iii) credit/ distressed, (iv) global macro and (v) multi-strategy. The Investment Manager generally allocates the Fund’s assets among a variety of Portfolio Funds, seeking to gain exposure across various Portfolio Fund Strategies, but may focus the Fund’s investments in particular strategies in order to take advantage of perceived investment opportunities or based on its current market outlook. Likewise, the Investment Manager may allocate little or none of the Fund’s assets to particular Portfolio Fund Strategies from time to time based on its current view of those

Portfolio Fund Strategies. The Fund expects that its investments in Portfolio Funds will be accomplished primarily through investment in international entities classified as passive foreign investment companies (“PFICs”) under the Internal Revenue Code of 1986, as amended (the “Code”).

In pursuing direct investments, the Fund principally pursues event driven investment strategies focusing on companies that are expected to become the subject of major corporate events or that are the subject of shareholder activism. The Fund may also pursue a systematic, multi-strategy approach that is primarily effectuated by directly investing a portion of the Fund’s assets in securities and derivatives.

Portfolio Fund Strategies

•

Long/Short Equity - A long/short equity strategy typically involves buying and/ or selling securities believed to be significantly under- or over-priced by the market in relation to their potential value. Portfolio Fund Managers employing a long/short equity strategy generally seek to buy securities in the expectation that they will increase in value (called “going long”) and sell securities short in the expectation that they will decrease in value (called “going short”). Long/ short equity managers may invest in one or more countries, including developed and emerging market countries and may specialize in one or more specific sectors. Portfolio Fund Managers may specialize in a geographic area, industry, or market capitalization. Many long/short equity Portfolio Fund Managers hedge portfolios through the use of short sales and/or the use of index options and futures and other derivative products.

•

Event Driven - Event driven strategies seek to take advantage of information inefficiencies resulting from a particular corporate event. Portfolio Fund Managers will take positions in companies that are expected to become the subject of takeovers, liquidations, bankruptcies, tender offers, buybacks, spinoffs, exchange offers, mergers or other types of corporate reorganizations in the hope of profiting on results from the specific event. The goal of an event driven investment strategy is to profit when the price of a security changes to reflect more accurately the likelihood and potential impact of the occurrence, or non-occurrence, of an extraordinary event. The prices of securities of the companies involved in these events are typically influenced by the dynamics of the particular event or situation. For example, the result and timing of factors such as legal decisions and deal negotiations are a key element in the success of any event driven discipline. The relevant Portfolio Fund Manager may take an active role in determining the event’s outcome. Typically, event driven Portfolio Fund Managers rely on fundamental research that extends beyond the evaluation of the issues affecting a single company to include an assessment of the legal and structural issues surrounding the extraordinary event or transaction. The Fund’s assets are expected to be allocated among Portfolio Fund Managers that focus on a variety of event driven strategies in diverse geographic regions thereby effectively allocating capital between merger arbitrage, distressed securities, restructurings and other areas of focus for event driven strategies. Portfolio Fund Managers employing an event driven approach may employ a broad range of investment strategies and techniques to attempt to take advantage of specific events (for example, by using a long/short strategy driven by events), and may do so through almost any type of security or instrument, including investments in equities, fixed-income securities, currencies, commodities and other financial instruments.

•

Credit/Distressed - Portfolio Fund Managers that employ credit/distressed strategies generally invest in a variety of fixed-income and other securities, including bonds (corporate and government), bank debt, asset-backed financial instruments, mortgage-backed securities and mezzanine and distressed securities. This strategy also includes opportunistic trading and investing in securities of distressed companies and high-yield securities (also known as “junk bonds”). The Fund may be invested in various credit/distressed strategies that involve being long and short in different financial instruments, and the credits involved will range from high grade to high-yield and distressed debt.

•

Global Macro - Global macro strategies aim to identify and exploit imbalances in global economies and asset classes. Though encompassing many approaches and styles, macro strategies are linked by the utilization of macroeconomic and technical market factors, rather than “bottom-up” individual security analysis, as the primary basis for management. Portfolio Funds using these strategies generally may invest in all major markets–equities, bonds, currencies and commodities–though not always at the same time, and will typically include long and short positions, leverage and the use of derivatives. Some Portfolio Fund Managers using a global macro approach will base their investments on their fundamental determinations of market conditions and market evolutions (the discretionary approach), while others will use quantitative or pre-defined rules to do so (the systematic approach).

•

Multi-Strategy - Multi-strategy Portfolio Fund Managers may invest across multiple strategies, including long/short equity, event driven, global macro, credit/distressed and emerging markets. Portfolio Fund Managers in this category may use a broad range of strategies in which the investment process is predicated on movements in underlying economic variables and the impact these variables have on equity, fixed-income, currency, commodity and other financial instrument markets. Strategies used by these Portfolio Fund Managers may take a variety of forms, including systematic approaches relying exclusively on quantitative measures or pre-defined rules and approaches where the Portfolio Fund Manager makes decisions based primarily on its discretionary analysis. These strategies may be effectuated through investment in various types of securities, derivatives and other financial instruments.

Direct Investment Strategies.

Event Driven - Event driven strategies seek to take advantage of information inefficiencies resulting from a particular corporate event. The Fund may make direct investments in companies, including special purpose acquisition corporations (“SPACs”), that are expected to become the subject of major corporate events, or in companies where an active role in the company’s management has been taken or sought by a third-party investor and the Investment Manager believes that such role will benefit the company and its shareholders.

Systematic Multi-Strategy - The Fund may invest directly across a number of asset classes and types of securities and financial instruments. In employing a multi- strategy direct investment program, the Investment Manager expects to use a systematic approach that is primarily effectuated by directly investing a portion of the Fund’s assets in securities and derivatives. Under this approach, the Fund will take long and short positions in various asset classes in an effort to access alternative sources of return, where the use of such sources is supported by academic and empirical research. For example, the Investment Manager may

attempt to take advantage of supply/demand imbalances in the market or market biases favoring or disfavoring particular investment styles.

In implementing its direct investment program, the Fund may gain exposure to futures contracts and other commodity instruments. While the Fund may seek to gain exposure to commodities traded in the commodities markets through investments in a variety of derivative instruments, the Investment Manager expects that the Fund will seek any such exposure to commodities and commodities-related instruments and derivatives primarily through investments in the AB Multi- Manager Alternative Fund (Cayman), Ltd., a wholly-owned subsidiary of the Fund organized under the laws of the Cayman Islands (the “Subsidiary”). The Subsidiary is advised by the Investment Manager and has the same investment objective and substantially similar investment policies and restrictions as the Fund except that the Subsidiary, unlike the Fund, may invest, without limitation, in commodities and commodities-related instruments. The Fund’s principal investment strategies and principal risks also include the Subsidiary’s principal investment strategies and principal risks.

The Fund and the Subsidiary test for compliance with certain investment restrictions and limitations on a consolidated basis. The Fund will be subject to the risks associated with the commodities, derivatives and other instruments in which the Subsidiary invests, to the extent of its investment in the Subsidiary. The Fund limits its investment in the Subsidiary to no more than 25% of its total assets. Investment in the Subsidiary is expected to provide the Fund with commodity exposure within the limitations of federal tax requirements that apply to the Fund.

Potential for Investment in Other Portfolio Fund Strategies. The Investment Manager may seek to identify and exploit other strategies and sub-strategies that it believes may generate attractive long-term risk-adjusted returns, and may invest in Portfolio Funds utilizing any number of Portfolio Fund Strategies, including, but not limited to, currency, high-frequency trading, quantitative, commodities, real estate and real estate-related assets. The foregoing list of Portfolio Fund Strategies is not intended to be exhaustive and it is anticipated that the different types of strategies employed by Portfolio Fund Managers will evolve over time. The Investment Manager will implement and incorporate new Portfolio Fund Strategies and sub-strategies in a manner it deems advisable from time to time.

The Investment Manager may also employ other direct investment strategies, including through investments in options, futures, options on futures, swap contracts, or other derivatives or financial instruments. The Fund also may make investments in public investment vehicles (including registered investment companies). The Fund believes that the ability to invest directly in these types of securities and financial instruments provides the Investment Manager with greater investment flexibility and may allow the Investment Manager to take advantage of investment opportunities more quickly and efficiently than would otherwise be the case. These investments are subject to the limitations imposed by the Investment Company Act, the rules thereunder, and any exemptive orders issued by the SEC on which the Fund may rely.

The Fund’s assets that are not currently allocated to Portfolio Fund Strategies or employed in direct investment strategies may be held in cash, cash equivalents (including affiliated money market funds to the extent permitted by law) or short- term interest-bearing investments. The management of the Fund’s assets is subject to the Fund’s investment restrictions. See “Investment Restrictions.”

Portfolio Fund Manager Selection and Review

The Investment Manager identifies potential Portfolio Fund Managers through a variety of sources. The Portfolio Fund Manager selection process is driven by both quantitative and qualitative analysis. For each prospective allocation to a new Portfolio Fund Manager, the Investment Manager will first conduct an evaluation of the Portfolio Fund Manager and its strategy, team, and approach through analysis of, among other criteria, its prior investment returns, portfolio exposures, current assets under management, and investment strategy outlook. The Investment Manager may also (i) conduct background checks; (ii) analyze whether the Portfolio Fund Manager has the personnel, research and technology resources to effectively implement its investment strategy; and (iii) conduct additional due diligence as the Investment Manager deems appropriate.

Selected Risk Factors

The following discussion of selected risk factors associated with an investment is intended to offer a summary of certain principal risks of investing in Fund shares. Investors should review the broader discussion of Fund risks included in the “Risk Factors and Special Considerations” section of this prospectus before making an investment in the Fund. Different risks may be more significant at different times depending on market conditions.

General Market Risks

General . Investing in the Fund involves certain risks and the Fund may not be able to achieve its intended results for a variety of reasons, including, among others, the possibility that the Investment Manager may not be able to structure the Fund’s investment program as anticipated.

Any investment in financial instruments carries certain market risks. An investment in the Fund is highly speculative and involves a high degree of risk due to the nature of the Fund’s investments and the investment strategies and trading strategies to be employed by the Fund and the Portfolio Funds. An investment in the Fund should not in itself be considered a balanced investment program. Investors should be able to withstand the loss of their entire investment.

General Economic and Market Conditions. The success of the Fund will be affected by general economic and market conditions, such as changes in interest rates, availability of credit, credit defaults, inflation rates, economic uncertainty, changes in laws (including laws relating to taxation of the Fund’s and the Portfolio Funds’ investments), trade barriers and sanctions, currency exchange controls, market structure, liquidity, transparency and access, capital and margin requirements affecting the Fund and Portfolio Funds and their intermediaries and national and international political circumstances (including wars, terrorist acts or security operations). These factors may affect the level and volatility of financial instruments’ prices and the liquidity of the Fund’s and the Portfolio Funds’ investments. Volatility or illiquidity could impair the Fund’s and the Portfolio Funds’ profitability or result in losses. The Fund and the Portfolio Funds may maintain substantial trading positions that can be adversely affected by the level of volatility in the financial markets — the larger the positions, the greater the potential for loss.

Market Disruptions and Geopolitical Events. Market disruption can be caused by economic, financial or political events and factors, including but not limited to, international wars or conflicts (including Russia’s military invasion of Ukraine and the conflict in Israel, Gaza and surrounding areas), geopolitical developments (including trading and tariff arrangements, sanctions, cybersecurity attacks and

uncertain election outcomes in the world’s major democracies), instability in regions such as Asia, Eastern Europe and the Middle East, terrorism, recessions, natural disasters and public health epidemics. The extent and duration of such events and resulting market disruptions cannot be predicted, but could be substantial and could magnify the impact of other risks to the Fund. These and other similar events could adversely affect the U.S. and foreign financial markets and lead to increased market volatility, reduced liquidity in the securities markets, significant negative impacts on issuers and the markets for certain securities and commodities and/or government intervention. They may also cause short- or long- term economic uncertainties in the United States and worldwide. As a result, whether or not the Fund or a Portfolio Fund invests in securities of issuers located in or with significant exposure to the countries directly affected, the value and liquidity of the Fund’s or a Portfolio Fund’s investments may be negatively impacted. Further, due to closures of certain markets and restrictions on trading certain securities, the value of certain securities held by the Fund or a Portfolio Fund could be significantly impacted.

Global economies and financial markets have become increasingly interconnected, which increases the possibility that economic, financial or political events and factors in one country or region might adversely impact issuers in a different country or region or worldwide. The occurrence, reoccurrence and pendency of public health epidemics could also adversely affect the economies and financial markets either in specific countries or worldwide.

Limited Liquidity of Fund Shares. It is anticipated that the Fund’s shares will not be listed on any securities exchange or traded in other markets, and shares will be subject to substantial restrictions on transfer. Although the Fund intends to offer to repurchase shares periodically, at the sole discretion of the Board of Trustees, no assurance can be given that these repurchases will occur on a regular basis or at all or that all of an investor’s shares will be purchased in any offer to repurchase. If a repurchase offer is made by the Fund, it will normally be four to six months between the time an investor tenders shares for repurchase ( i.e. , requests that the Fund repurchase shares as part of a repurchase offer) and the investor’s receipt of any cash proceeds associated with the repurchase. The interests in Portfolio Funds held by the Fund will generally be subject to legal or other restrictions on transfer or sale and there likely will be no liquid market for their sale. These investments may make it difficult for the Fund to liquidate positions in the Portfolio Funds in order to facilitate Fund share repurchases. In addition, a redemption by the Fund from a Portfolio Fund could involve expenses to the Fund under the terms of the Fund’s investment with that Portfolio Fund.

Certain Risks Related to Investments by Portfolio Funds and Direct Investments by the Fund

The performance of many of the Portfolio Funds will be highly volatile and subject to a number of substantial risks. The Portfolio Funds in which the Fund invests utilize a wide variety of investments and investment strategies, many of which are very complex and specialized. Some of the risks relating to Portfolio Fund investments and investment strategies and direct investments by the Fund are as follows:

Leverage. Portfolio Funds generally utilize leverage in their investment programs, meaning that their market exposure can be substantially in excess of their net assets, and the Fund generally does not limit its exposure to leverage in selecting

individual Portfolio Funds or by Portfolio Funds in the aggregate. The Fund may take on additional leverage in connection with its direct investment strategies.

Leverage may be achieved by trading on margin, trading in derivative instruments that are inherently leveraged, and other forms of direct and indirect borrowing. Leverage increases both the possibilities for profit and the risk of loss. The cumulative effect of the use of leverage by the Fund and the Portfolio Funds in a market that moves adversely to the Fund or Portfolio Funds could result in a substantial loss to the Fund that would be greater than if the Fund or Portfolio Funds were not leveraged. As a result, the Fund could lose its entire investment in a Portfolio Fund and, in connection with its direct investment strategies, could lose an amount in excess of the value of its investments made under those strategies.

Use of Financing Arrangements. Portfolio Funds and/or the Fund may depend on the availability of credit to engage in their investment activities. Lenders can apply essentially discretionary margin and valuation policies, and may change those policies. A Portfolio Fund and/or the Fund may lose financing, or may be forced to liquidate positions at disadvantageous prices as a result of these policies or changes to them.

Lending Portfolio Securities. Portfolio Funds may lend their portfolio securities to brokers, dealers and financial institutions in order to generate income for the Portfolio Fund. However, securities loans involve risks in the event of a delay in the return of the securities loaned or the default or insolvency of the borrower.

Counterparty Risk. The Portfolio Funds are expected to, and the Fund may, establish relationships with third parties to obtain financing, engage in derivative transactions, and obtain prime and other brokerage services that permit the Portfolio Funds or the Fund, respectively, to trade in any variety of markets or asset classes. If a Portfolio Fund or the Fund is unable to establish or maintain such relationships, such inability may limit the Portfolio Fund’s or the Fund’s transactions and trading activity, prevent it from trading at optimal rates and terms, and result in losses. In light of increased capital requirements imposed on many financial intermediaries, prime brokerage and trading costs for Portfolio Funds and the Fund have been increasing in many markets. As a result of these increases, it may be increasingly difficult for Portfolio Funds and the Fund to earn positive returns.

Some of the markets in which the Portfolio Funds or the Fund may effect transactions are not “exchange-based” or regulated trading platforms, such as swap execution facilities or alternative trading systems, and may include “over-the-counter,” and “interdealer” markets. The participants in certainover-the-counter markets may not be subject to the same level of credit evaluation and regulatory oversight to which members of “exchange-based” or regulated trading platforms generally are subject. This lack of regulation could expose the Portfolio Funds or the Fund to the risk that a counterparty will not settle a transaction in accordance with its terms and conditions. Such “counterparty risk” is heightened for contracts with longer maturities where events may intervene to prevent settlement, or where a Portfolio Fund or the Fund has concentrated its transactions with a single or small group of counterparties. Counterparty risk may also be heightened by new global regulations seeking to concentrate holdings of certain instruments with a central counterparty. Although the regulations are designed to reduce counterparty risk, they are untested and there is a possibility that the new structure will increase systemic and counterparty risk, including for the Portfolio Funds and the Fund. Furthermore, there is a risk that any of a Portfolio Fund’s or the Fund’s

counterparties, including a central counterparty or one or more members of a central counterparty, could become insolvent and/or the subject of insolvency proceedings. If one or more of a Portfolio Fund’s or the Fund’s counterparties were to become insolvent or the subject of insolvency proceedings, there exists the risk that the recovery of the Portfolio Fund’s or the Fund’s assets from the counterparty will be delayed or be of a value less than the value of the assets originally entrusted to the counterparty. The Federal Reserve has adopted regulations that may restrict the close-out and default rights of a Portfolio Fund or the Fund upon certain insolvencies of a counterparty to an over-the- counter derivatives transaction or its affiliates. In addition, in the event of an insolvency of a central counterparty or one or more of its members, there is the possibility that margin and other assets of the Portfolio Fund or the Fund held with the central counterparty or one or more of its members might be used to satisfy obligations of the member to the clearinghouse or of the clearinghouse and not applied to meet obligations of the Portfolio Funds or the Fund or returned to the Portfolio Funds or the Fund. These situations, if they were to occur, could have a materially adverse effect on one or more of the Portfolio Funds or the Fund.

Hedging Transactions. The Portfolio Funds and the Fund may invest in securities and utilize financial instruments to seek to hedge fluctuations in the values of the Portfolio Funds’ or the Fund’s positions. However, hedging transactions will typically limit the opportunity for gain if the value of such positions should increase, and may not work as intended and actually compound losses. It may not be possible to hedge against certain price fluctuations at a reasonable cost. The Portfolio Funds and the Fund generally are not required to enter into hedging transactions and may choose not to do so.

Illiquid Investments. The Portfolio Funds and the Fund may invest in securities and other instruments for which no readily available market exists and/or that are subject to restrictions on resale. Portfolio Fund Managers and the Fund’s Investment Manager may not be able to liquidate these positions promptly or at all, which may subject the Fund to substantial losses. The valuation of certain illiquid investments is inherently subjective, which may lead to inaccurate pricing of the Portfolio Funds and the Fund not receiving the full value of its investment upon its sale of Portfolio Fund or Fund interests.

Short Sales. The Portfolio Funds and the Fund may engage in short-selling, which involves the sale of a security that a fund does not own in the hope of purchasing the same or equivalent security at a later date at a lower price. A short sale involves the risk of an increase in the market price of the security, and therefore the possibility of a theoretically unlimited loss. The Portfolio Fund and the Fund must borrow the security to initiate the short sale, and it may be difficult and costly to effect the purchase of the security in order to return it to the lender, particularly if the security is illiquid. A Portfolio Fund and the Fund may for a number of reasons be forced to unwind a short sale at a disadvantageous price.

Concentration of Portfolio Funds’ Investments. Portfolio Fund Managers may create, or market conditions may result in, concentrated investment portfolios. The overall effect on the Portfolio Fund, and correspondingly on the Fund, of adverse movements in the value of securities of a single issuer, industry, sector, market, strategy, country or geographic region in which a Portfolio Fund is concentrated will be considerably greater than if the Portfolio Fund did not concentrate its investment to such an extent.

Volatility. Portfolio Funds will, and the Fund may, frequently be subject to substantial volatility, which could result from a number of causes. Concentration of Portfolio Fund investments may give rise to volatility. Furthermore, there is the risk that a disproportionate share of the Fund’s assets may be committed to one or more investment strategies or techniques, which would result in less diversification than would be suggested by the number of Portfolio Fund Managers being employed. In addition, the use of leverage by the Fund or a Portfolio Fund will tend to increase its volatility. The allocation of Fund assets to Portfolio Fund Managers in response to particular market conditions could increase volatility and potential for loss if such market conditions continue to worsen or react in a manner not anticipated by the Investment Manager.

Portfolio Turnover. Certain Portfolio Fund Managers or the Fund’s Investment Manager may invest and trade securities on the basis of certain short-term market considerations. The resultant high portfolio turnover could potentially involve substantial brokerage commissions and fees.

Event Driven Investment. Event driven investing requires a Portfolio Fund Manager or the Fund’s Investment Manager to make predictions about the likelihood that an event will occur and the impact such event will have on the value of a company’s securities. If the event fails to occur or it does not have the effect foreseen, losses can result.

Fixed-Income Securities. The Portfolio Funds and the Fund may invest in debt or other fixed-income securities of U.S. and non-U.S. issuers. The value of fixed- income securities will change in response to fluctuations in interest rates and changes in market perception of the issuer’s creditworthiness or other factors. Portfolio Funds may invest to a substantial degree in debt securities rated below investment grade, otherwise known as high-yield securities or “junk bonds.” High- yield securities may rank junior to other outstanding securities and obligations of the issuer. Moreover, high-yield securities may not be protected by financial covenants or limitations on additional indebtedness. Companies that issue high- yield securities are often highly leveraged and may not have available to them more traditional methods of financing. High-yield securities face ongoing uncertainties and exposure to adverse business, financial or economic conditions that could lead to the issuer’s inability to meet timely interest and principal payments.

Distressed Investments. Portfolio Funds and the Fund may invest in companies that are in poor financial condition, lack sufficient capital or that are involved in bankruptcy or reorganization proceedings. These securities and obligations often trade at a discount to the expected enterprise value that can be achieved through a restructuring but risk the possibility that no restructuring will occur, or will occur on terms less favorable than anticipated. Debt obligations of distressed companies are typically unrated, lower-rated or close to default. Securities of distressed companies are generally more likely to experience significant losses (including a full loss of value) than the securities of more financially stable companies.

Derivative Instruments. The Portfolio Funds and the Fund may enter into options, futures, forwards, swaps and other derivative instruments. Derivative instruments may be subject to various types of risks, including market risk, liquidity risk, the risk of non-performance by the counterparty, including risks relating to the financial soundness and creditworthiness of the counterparty, legal risk and operations risk. The prices of derivative instruments can be highly volatile. Depending on the nature of the derivative, price movements may be influenced by

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. Additional regulation of derivatives may make derivatives more costly, limit their availability or utility, otherwise adversely affect their performance, or disrupt markets.

Investments in Real Assets. The Fund may make investments in Portfolio Funds that directly and indirectly invest in real assets, such as real estate, natural resources and commodities, and infrastructure assets. Investments in real assets involve a substantial degree of risk, including significant financial, operating and competitive risks. Also, real asset investments involve exposure to business cycles, local economic conditions and other factors that may not be present with other types of investments.

Small Capitalization and Recently Organized Companies. Portfolio Fund or Fund assets may be exposed, long and short, to securities of small capitalization companies and recently organized companies. Historically, such securities have been more volatile in price than those of larger capitalized, more established companies. These companies may have limited product lines, distribution channels and financial and managerial resources. Further, there is often less publicly available information concerning such companies than for larger, more established businesses. The equity securities of small capitalization companies may be traded in volumes that are lower than are typical of larger company securities.

Non-U.S. Investments. The Portfolio Funds and the Fund may invest in securities of non-U.S. companies and non-U.S. countries. Investing in the securities of such companies and countries involves political and economic considerations, such as: the potential difficulty of repatriating funds, general social, political and economic instability and adverse diplomatic developments; the possibility of imposition of withholding or other taxes on income or capital gains; the small size of the securities markets in such countries and the low volume of trading, resulting in potential lack of liquidity and price volatility; fluctuations in the rate of exchange between currencies and costs associated with currency conversion; and certain government policies that may restrict the Portfolio Funds’ or the Fund’s investment opportunities. The economies of non-U.S. countries may differ favorably or unfavorably from the United States economy in such respects as growth of gross domestic product, rate of inflation, currency depreciation, asset reinvestment, resource self-sufficiency and balance of payments position. In addition, accounting and financial reporting standards that prevail in non-U.S. countries generally are not equivalent to U.S. standards and, consequently, less information may be available to investors in companies located in non-U.S. countries than is available to investors in companies located in the United States.

The United Kingdom (“UK”) has formally withdrawn from the European Union (“EU”) and one or more other countries may withdraw from the EU and/or abandon the Euro, the common currency of the EU. The UK and EU reached an agreement effective January 1, 2021 on the terms of their future trading relationship relating to the trading of goods; however, this does not cover financial services. The Fund and the Portfolio Funds may face risks associated with the potential uncertainty and consequences of the new relationship between the UK and EU, including volatility in exchange and interest rates and politically divergent national laws and regulations.

In addition, Russia launched a large-scale invasion of Ukraine on February 24, 2022, significantly amplifying already-existing geopolitical tensions. The United States and many other countries have instituted various economic sanctions against Russian individuals and entities (including corporate and banking). The extent and duration of the military action, sanctions imposed and other punitive action taken and resulting future market disruptions in Europe and globally cannot be easily predicted, but could have severe ongoing adverse effects on Russia, Europe and the world in general, including significant negative impacts on economies, sovereign debt, the markets for certain securities and commodities, such as oil and natural gas, and the world food supply. Reductions in the supply, and increased cost, of commodities, including food, could in turn lead to social instability in certain countries, with unpredictable effects on financial markets. Similarly, the war between Israel and Hamas, and responses to such conflicts by governments and intergovernmental organizations have resulted, and may continue to result, in market disruptions in the regions and globally. Future market disruptions are impossible to predict, but could be significant and have a severe adverse effect on the regions and beyond, including significant negative impacts on the economy and the markets for certain securities and commodities, such as oil and natural gas. These conflicts may expand and military attacks could occur elsewhere. The potential for wider conflict may increase financial market volatility and could have severe adverse effects on regional and global economic markets. Europe has also been struggling with mass migration. The impact of these matters, especially if they occur in a disorderly fashion, is not clear but could be significant and far-reaching. Whether or not the Fund or a Portfolio Fund invests in securities of issuers located in or with significant exposure to the issuers or countries most directly affected, these events could negatively affect the value and relative liquidity of the Fund’s or a Portfolio Fund’s investments. Following Russia’s invasion of Ukraine, Russian stocks lost all, or nearly all, of their market value. Other securities or markets could be similarly affected by past or future geopolitical or other events or conditions.

Currency. The Portfolio Funds and the Fund may invest a portion of their assets in instruments denominated in currencies other than the U.S. dollar, the prices of which are determined with reference to currencies other than the U.S. dollar. However, the Fund, and generally the Portfolio Funds, value their securities and other assets in U.S. dollars. To the extent unhedged, the value of a Portfolio Fund’s and the Fund’s assets will fluctuate with currency exchange rates as well as with the price changes of the Portfolio Fund’s and the Fund’s investments. Thus, an increase in the value of the U.S. dollar compared to the other currencies in which the Portfolio Fund and the Fund makes its investments will reduce the effect of increases and magnify the effect of decreases in the prices of the Portfolio Fund’s and the Fund’s securities in their local markets. The Portfolio Funds and the Fund may utilize financial instruments such as currency options and forward contracts (either physically or cash settled) to hedge currency fluctuations, but there can be no assurance that such hedging transactions (if implemented) will be effective.

Emerging Markets. The risks of non-U.S. investments are greater for investments in or exposed to emerging markets. Emerging markets are generally located in countries that the World Bank, the International Finance Corporation or the United Nations or its authorities has determined to have a low or middle income economy. Investment in emerging market securities involves a greater degree of risk than investment in securities of issuers based in developed countries. Emerging market countries typically have economic and political systems that are less fully

developed, and can be expected to be less stable, than those of more developed countries. Among other things, emerging market securities investments may carry the risks of less publicly available information, more volatile markets, less strict securities market regulation, less favorable tax provisions, and a greater likelihood of rapid and unpredictable rates of inflation or deflation, unstable currency, war and expropriation of personal property than investments in securities of issuers based in developed countries. Low trading volumes may result in a lack of liquidity and price volatility. Emerging market countries may have policies that restrict investment by foreign investors, or that prevent foreign investors from withdrawing their money at will. In addition, some emerging market countries may be more susceptible to changes in commodity and food prices globally, and may be heavily dependent on international trade, which can materially affect their securities markets.

Portfolio Funds and the Fund may invest in some emerging markets that subject it to risks such as those associated with illiquidity, custody of assets, different settlement and clearance procedures and asserting legal title under a developing legal and regulatory regime to a greater degree than in developed markets or even in other emerging markets.

Undervalued Securities . The Portfolio Funds and the Fund may make certain investments in securities that the Portfolio Fund Managers or the Fund’s Investment Manager, respectively, believe to be undervalued. However, there are no assurances that the securities will in fact be undervalued. In addition, it may take a substantial period of time before the securities realize their anticipated value, and such securities may never appreciate to the level anticipated by the Portfolio Fund Managers or the Fund’s Investment Manager.

Quantitative Investment. Portfolio Fund Managers will typically use quantitative investment models to varying degrees in making investment decisions. The success of a Portfolio Fund Manager’s quantitative investment models is heavily dependent on the mathematical models used by the Portfolio Fund Manager. Models that have been formulated on the basis of past market data may not be predictive of future price movements. Models also may have hidden biases or exposure to broad structural or sentiment shifts. Furthermore, the effectiveness of such models tends to deteriorate over time as more traders seek to exploit the same market inefficiencies through the use of similar models.

Certain Risks Related to Portfolio Fund Operations

By investing in Portfolio Funds, the Fund will be subject to various risks relating to hedge fund operations, including the following:

•

Investments in Portfolio Funds will generally be illiquid. The ability of the Fund to withdraw amounts invested in the Portfolio Funds often will be subject to certain restrictions, and there will normally be no secondary market for trading Portfolio Fund shares.

•

In addition to the fees and expenses of the Fund, shareholders will indirectly bear the Fund’s proportionate share of the asset-based and performance-based fees and other expenses of the Portfolio Funds. The asset-based fees of the Portfolio Funds generally are expected to be up to 3% of the Fund’s investment in any Portfolio Fund, and the performance-based fees of the Portfolio Funds generally are expected to be up to 30% of net profits earned on that investment. Performance-based compensation arrangements give rise to certain conflicts of

interest, including the incentive for Portfolio Fund Managers to make investments that are riskier or more speculative than would be the case if such arrangements were not in effect.

•

Portfolio Fund Managers may place limitations on the amount of, or number of persons whose, money they will manage. These limitations could prevent the Investment Manager from allocating Fund assets to certain Portfolio Fund Managers and Portfolio Funds with which the Investment Manager would otherwise choose to invest, and may subject the Investment Manager to conflicts of interest relating to the allocation of Portfolio Fund investments among the various accounts that it manages.

•

The success of a particular Portfolio Fund is dependent on the expertise of its Portfolio Fund Manager. Certain Portfolio Fund Managers may have only one or a limited number of key individuals responsible for managing Portfolio Funds. The loss of one or more key individuals from a Portfolio Fund Manager could have a materially adverse effect on the performance of a Portfolio Fund, which could adversely affect the performance of the Fund.

•

The Investment Manager attempts to measure and monitor risks of the Portfolio Funds. The amount and quality of the Investment Manager’s risk due diligence, measurement and monitoring depends on its access, if any, to information regarding the Portfolio Funds’ investments and the risk management systems of the Portfolio Fund Managers. This information will not typically be publicly available, and there is no assurance that the Portfolio Fund Managers will give the Investment Manager access to this data.

•

The Fund may invest in Portfolio Funds that are managed by Portfolio Fund Managers that have not managed Portfolio Funds for a substantial period of time. This means that there generally will be less information available on which the Investment Manager can base an opinion on the expertise of these Portfolio Fund Managers.

•

Portfolio Funds generally will not be registered as investment companies under the Investment Company Act, and will not be subject to the protections provided by the Investment Company Act, such as requirements for independent board members, restrictions on transactions with affiliates, and limitations on fund borrowings and leverage. Portfolio Funds and Portfolio Fund Managers formed or operated outside of the United States may not be subject to a comprehensive or effective regulatory scheme.

Certain Regulatory, Legal and Operational Risks

Business and Regulatory Risks of Hedge Funds. The financial services industry generally, and the activities of hedge funds and their managers in particular, have been subject to intense and increasing regulatory scrutiny. Such scrutiny may increase the Fund’s and the Portfolio Funds’ exposure to potential liabilities and to legal, compliance and other related costs. Increased regulatory oversight may also impose additional administrative requirements on the Portfolio Fund Managers, including, without limitation, responding to examinations and investigations, implementing new policies and procedures and complying with recordkeeping and reporting obligations. Such requirements may divert the Portfolio Fund Managers’ time, attention and resources from portfolio management activities.

Dependence on the Investment Manager and Portfolio Fund Managers . The Investment Manager invests the assets of the Fund primarily by allocating Fund

assets to the Portfolio Funds and also invests a portion of the Fund’s assets directly. The success of the Fund depends upon the ability of the Investment Manager and the Portfolio Fund Managers to develop and implement investment strategies that achieve the Fund’s allocation goals and the Portfolio Funds’ investment objectives. Subjective decisions made by the Investment Manager ( e.g. , with respect to asset allocation) and/or the Portfolio Fund Managers may cause the Fund to incur losses or to miss profit opportunities on which it might otherwise have capitalized. The success of the Fund’s investment program depends significantly on the trading and investing skills of the Portfolio Fund Managers. To the extent that the Investment Manager is unable to select, manage, allocate appropriate levels of capital to, and invest with Portfolio Fund Managers that, in the aggregate, are able to produce consistently positive returns for the Fund and provide the necessary liquidity and transparency, or to the extent that the Investment Manager does not adequately monitor Portfolio Fund Managers, the performance of the Fund may be impaired.

In addition, to the extent the Investment Manager invests the Fund’s assets directly, the Fund may incur losses if the Investment Manager fails to select and allocate appropriate levels of assets to market favorable strategies. Direct investments in securities by the Investment Manager will cause the Fund to be subject to many of the risks described above relating to investments by the Portfolio Funds.

Review and Oversight of Portfolio Funds . Because of the nature of Portfolio Funds, it is expected that the Investment Manager generally will have limited ability to (i) monitor Portfolio Fund investments, (ii) obtain full and current information regularly, and (iii) exercise control rights over such investments. Although the Investment Manager attempts to monitor the performance of all of the Fund’s investments, the Investment Manager may not have sufficient information to be able to confirm or review the accuracy of valuations provided by Portfolio Funds in which the Fund invests.

The Investment Manager must ultimately rely on (i) a Portfolio Fund Manager to operate in accordance with the investment guidelines governing the Portfolio Fund; (ii) the accuracy of the information provided to the Investment Manager by a Portfolio Fund Manager or other service providers of the Portfolio Fund; and (iii) any available public or reported information relating to the Portfolio Fund. A failure of a Portfolio Fund Manager to operate within the guidelines of a Portfolio Fund or to provide accurate information with respect to the Portfolio Fund could subject the Fund to losses. There is a risk that the Fund may ultimately be overcharged and pay more in management fees and/or carried interest to a Portfolio Fund Manager than it should have due to inaccurate calculations of such fees by a Portfolio Fund Manager ( e.g. , the calculation of such fees does not incorporate fee reductions in connection with a triggering event). Moreover, many of the strategies implemented by the Portfolio Funds rely on the financial information made available by the issuers in which the Portfolio Funds invest. The Investment Manager relies on the Portfolio Fund Managers to evaluate information disseminated by the issuers in which the Portfolio Funds invest and is dependent upon the integrity of both the management of these issuers and the financial reporting process in general. Past events have demonstrated that investors such as the Fund can incur material losses as a result of corporate mismanagement, fraud and accounting or other irregularities.

The Investment Manager has broad and flexible authority to invest the Fund’s assets in Portfolio Funds, and Portfolio Fund Managers in turn typically have broad and flexible authority to invest in whatever securities and other instruments that the

Portfolio Fund Managers believe will help the Portfolio Funds achieve their respective investment objectives. Additionally, Portfolio Fund Managers generally have broad latitude with respect to the degree of risk that may be undertaken by the Portfolio Funds. While the Investment Manager conducts a robust investment allocation process that focuses on selecting Portfolio Funds with well-defined investment objectives, risk parameters and investment guidelines, the flexibility on the part of Portfolio Funds and the fact that the Investment Manager relies primarily on information provided by Portfolio Fund Managers in assessing Portfolio Fund Strategies means that the Fund is subject to the possibility that Portfolio Funds in which it invests are not managed in the manner that the Investment Manager anticipated. In particular, there is the risk of “style drift” by the Portfolio Funds, which is the risk that a Portfolio Fund Manager may deviate from the Portfolio Fund’s stated or expected investment strategy. Style drift may cause the Fund to be exposed to particular markets or strategies to a greater extent than was anticipated by the Investment Manager when it allocated assets to a Portfolio Fund and which may result in the Fund being exposed to overlapping investment strategies among various Portfolio Funds.

Allocation Risk . The Investment Manager has the discretion to allocate Fund assets among various Portfolio Fund Strategies and make direct investments. There is no assurance that the Investment Manager’s decisions in this regard will result in the desired effects. In addition, the Fund may be limited in its ability to make changes to its investment allocations due to the subscription and redemption provisions of the Portfolio Funds, including notice periods, limited subscription and redemption dates, the ability of the Portfolio Funds to suspend and postpone redemptions, and lockups on redemptions imposed by certain Portfolio Funds. Moreover, investment allocations among the Portfolio Funds will be made by the Investment Manager based on information previously provided by the Portfolio Funds. If such information is inaccurate or incomplete, it is possible that the allocation of Fund assets to the Portfolio Funds may not reflect the Investment Manager’s investment intentions. This could have a material adverse effect on the ability of the Investment Manager to implement investment strategies of the Fund.

Concentration of Fund Portfolio . Although it does not currently intend to do so, the Fund may invest a large percentage of its assets in a limited number of Portfolio Funds. In addition, the Fund may invest its assets in Portfolio Funds focusing their investments in a specific industry or economic sector. Consequently, the aggregate return of the Fund may be materially affected by the performance of a single Portfolio Fund, a particular Portfolio Fund Strategy, or a particular industry or sector. The Fund may be concentrated in the securities of an industry to the extent that the Portfolio Funds concentrate their investment in an industry. If the Portfolio Funds concentrate their investments in an industry the Fund may be subject to a greater risk of loss than an investment in a more diversified portfolio.

Correlation Risk. While the Investment Manager seeks to manage the Fund so as to limit the correlation between the Fund’s returns and those of the broad equity and fixed-income markets, the Fund may be exposed to unintended correlation with these markets. This means that the value of an investment in the Fund may decline when an investor’s other holdings are also declining in value. Similarly, the Fund’s investments may have a strong correlation to one another, which could result in most or all of such investments declining over the same time period.

Limitations on Investments Due to Regulatory Considerations . The Fund is registered as an investment company under the Investment Company Act. Due to its status as a registered investment company under the Investment Company Act, the Fund may be limited in its ability to, among other things, transact with affiliates, use leverage in its investments, make investments in other investment companies, and purchase securities of brokers, underwriters or other securities- related issuers. Moreover, the Fund intends to be treated as a regulated investment company (“RIC”) under Subchapter M of the Code. In seeking to maintain a RIC classification, the Fund intends to invest primarily in Portfolio Funds organized outside of the United States that will be treated as PFICs for federal income tax purposes. As a result of restricting its investments in Portfolio Funds primarily to PFICs, the Fund may be limited as to the Portfolio Funds in which it may invest.

Subsidiary Risk . By investing in the Subsidiary, the Fund is indirectly exposed to the risks associated with the Subsidiary. The derivatives and other investments held by the Subsidiary are generally similar to those that are permitted to be held by the Fund and the Portfolio Funds and are subject to the same risks that apply to similar investments if held directly by the Fund or through an interest in the Portfolio Funds. The Subsidiary is not registered as an investment company under the Investment Company Act and is not subject to all of the investor protections of the Investment Company Act. In addition, changes in federal tax laws applicable to the Fund or interpretations thereof could limit the Fund’s ability to gain exposure to commodities investments through investments in the Subsidiary.

Tax Risks. The Fund intends to be treated as a RIC under Subchapter M of the Code. In order to qualify as a RIC, however, the Fund will be subject to certain limitations on making investments that do not apply to unregulated pools of assets such as certain hedge funds and private equity funds. Satisfaction of the various tests and recordkeeping requirements that must be met to elect and maintain the Fund’s tax status as a RIC under Subchapter M of the Code, including the qualifying income test, the asset diversification test and the minimum distribution requirements, requires significant support and information from the underlying Portfolio Funds, and such support and information may not be available, timely, complete, verifiable or sufficient. In addition, the Fund is required to make certain “excise tax” distributions annually based on income and gain information that must be obtained from the Portfolio Funds. The Fund will attempt to make such distributions as are necessary in order to limit or avoid the application of this nondeductible federal excise tax, although there is no guarantee that it will in fact avoid the application of such tax. The risks of not receiving accurate or timely information from the Portfolio Funds include failing to satisfy the tests to qualify as a RIC under Subchapter M of the Code and incurring the excise tax on undistributed income, which may significantly and negatively impact shareholder returns. The Fund may choose to invest in Portfolio Funds organized using investment structures that are otherwise disadvantageous from an investment perspective because of the Subchapter M RIC qualification tests or the excise tax on undistributed income. In addition, the Fund may choose to limit or reduce investments in Portfolio Funds that would be otherwise desirable from an investment perspective because of the Subchapter M RIC qualification tests or the excise tax on undistributed income. Based on final regulations on which taxpayers may rely for taxable years beginning after September 28, 2016, the Fund expects its income with respect to the Subsidiary to be qualifying income. However, in the future, if the IRS issues regulations or other guidance, or Congress enacts legislation, limiting the circumstances in which the Fund may treat income with

respect to the Subsidiary as “qualifying income,” the Fund may be required to make changes to its operations, which may reduce the Fund’s ability to gain investment exposure to commodities.

If the Fund fails to qualify as a RIC, the Fund will be subject to nondeductible federal income tax on its net income at regular corporate rates (without reduction for distributions to shareholders). If the Fund were to fail to qualify as a RIC and were to become subject to federal income tax or were to become subject to the excise tax on undistributed income, shareholders of the Fund would be subject to the risk of diminished returns.

The Fund’s Board of Trustees would consider what actions it may take in the event that the Fund fails to qualify as a RIC.

The Fund’s annual calculations of its taxable income and realized gains will be dependent upon the self-reported valuations of the Portfolio Funds. Inaccuracies in or revisions to such valuations could cause the Fund to become subject to tax, interest charges and/or penalties with respect to its own taxable income reporting. For federal income tax and excise purposes, the Fund may choose in many cases to annually mark to market as ordinary income its investments in Portfolio Funds classified as PFICs, which would accelerate recognition of taxable income. In addition, because the Portfolio Funds in many cases will be classified as PFICs for tax purposes, the Fund’s investments in the Portfolio Funds may be ineligible for long-term or short-term capital gain treatment upon disposition, thereby increasing the amount of ordinary taxable income to be distributed to shareholders.

Custody Risks of Investments in Portfolio Funds . The Portfolio Funds typically 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 under SEC rules. It is anticipated that the Portfolio Funds in which the Fund invests generally will maintain custody of their assets with brokerage firms that do not separately segregate such customer assets as would be required for registered investment companies. It is possible that the bankruptcy of any such brokerage firm could have a greater adverse effect on the Portfolio Fund than would be the case if custody of assets were maintained in accordance with the requirements applicable to registered investment companies.

There can be no assurance that the Portfolio Fund Managers or the entities they manage will comply with all applicable laws and that the Portfolio Funds will be protected. In this regard, there is a risk that a Portfolio Fund Manager could convert assets committed to it by the Fund to its own use or that a custodian could convert assets committed to it by a Portfolio Fund Manager to its own use.

Ability to Invest Directly . An investor in the Fund meeting the eligibility conditions imposed by the Portfolio Funds, including minimum net worth and initial investment requirements that may be substantially higher than those imposed by the Fund, may be able to invest directly in the Portfolio Funds. By investing in the Portfolio Funds indirectly through the Fund, an investor bears a portion of the Fund’s management fee and other expenses of the Fund, and also indirectly bears a portion of the asset-based fees, performance compensation and other expenses borne by the Fund as an investor in the Portfolio Funds.

Valuation Calculation Risk . The Fund values its investments in Portfolio Funds at fair value in accordance with policies and procedures approved by the Board of Trustees. The valuations reported by the Portfolio Fund Managers of the Portfolio

Funds, upon which the Fund calculates its month-end NAV and NAV per share, may be subject to later adjustment, based on information reasonably available at that time. The Fund will accept subscriptions, pay redemption proceeds and also calculate management fees on the basis of net asset valuations determined using the best information available as of the valuation date. In the event a Portfolio Fund subsequently corrects, revises or adjusts a valuation after the Fund has determined a NAV, the Fund generally will not make any retroactive adjustment to its NAV, or to any amounts paid based on that NAV determination, to reflect a revised valuation. This may have the effect of diluting or increasing the economic interest of other shareholders. These adjustments or revisions, whether increasing or decreasing the NAV at the time they occur, because they relate to information available only at the time of the adjustment or revision, will not affect the amount of the repurchase proceeds received by shareholders who had their shares repurchased prior to the adjustments and received their repurchase proceeds. As a result, to the extent that subsequently adjusted valuations from the Portfolio Fund Managers or revisions to NAV of a Portfolio Fund reduce the Fund’s NAV, the outstanding shares of the Fund will be adversely affected by prior repurchases to the benefit of shareholders who had their shares repurchased at a NAV per share higher than the adjusted amount. Conversely, any increases in the NAV per share resulting from such subsequently adjusted valuations will be entirely for the benefit of the holders of the outstanding shares and to the detriment of shareholders who previously had their shares repurchased at a NAV per share lower than the adjusted amount. New shareholders, as well as shareholders purchasing additional shares, may be affected in a similar way because the same principles apply to the subscription for shares.

Investor Suitability Risk . An investment in the Fund is not suitable for all investors. Prospective investors in the Fund should review carefully the discussion of risks in this prospectus for specific risks associated with the Fund and the Portfolio Fund Managers’ styles of investing. The Fund is not intended to be a complete investment program. An investment in the Fund should be made only by investors who understand the nature of the investment and do not require more than limited liquidity in this investment. An investor could sustain a loss of a portion or all of their investment in the Fund.

Board of Trustees

The Fund has a Board of Trustees (each member a “Trustee” and collectively, the “Board of Trustees”) that has overall responsibility for monitoring and overseeing the Fund’s investment program and its management and operations. Each investor whose subscription for shares is accepted by the Board of Trustees or its designee will become a “shareholder” of the Fund. Any vacancy on the Board of Trustees may be filled by the remaining Trustees, except to the extent the Investment Company Act requires the election of Trustees by the shareholders.

Investment Manager

AllianceBernstein L.P., a Delaware limited partnership, serves as the Fund’s investment manager and adviser (the “Investment Manager”) and will provide investment advisory services to the Fund. The Investment Manager is registered as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”).

Investment Advisory and Management Arrangements

The Investment Manager is responsible for providing investment advisory services to the Fund and, on behalf of the Fund, conducts relations with the service providers, all pursuant to a management agreement. In consideration of the

investment advisory services provided by the Investment Manager to the Fund, the Fund pays the Investment Manager a monthly management fee at an annual rate of 1.00% of the Fund’s net assets determined as of the last day of each calendar month and adjusted for subscriptions and repurchases accepted as of the first day of the subsequent month. As of June 30, 2024, the Investment Manager had approximately $769 billion of assets under management. Under a separate Administrative Reimbursement Agreement, the Fund may use the Investment Manager and its personnel to provide certain administrative services to the Fund and, in such event, the services will be provided at cost and payments will be subject to approval by the Board of Trustees.

Administrator

The Fund and the Subsidiary have entered into Administration Agreements with International Fund Services (N.A.), L.L.C. (the “Administrator”), a subsidiary of State Street Bank and Trust Company, the Fund’s custodian. The services provided to the Fund and the Subsidiary by the Administrator are separate from and in addition to the administrative services provided by the Investment Manager under the Administrative Reimbursement Agreement.

Transfer Agent and Custodian

The Fund has entered into a transfer agency agreement with AllianceBernstein Investor Services, Inc., an indirect, wholly-owned subsidiary of the Investment Manager (the “Transfer Agent”), under which the Transfer Agent will provide transfer agency services to the Fund. The Fund has also entered into a custody agreement with State Street Bank and Trust Company (the “Custodian”) under which the Custodian will provide custodian services to the Fund. The Custodian is also the custodian of the Subsidiary.

Distributors and Shareholder Servicing Arrangements

The Fund may engage one or more distributors to solicit investments in the Fund. As of the date of this prospectus, Sanford C. Bernstein & Company, LLC (“SCB”) and AllianceBernstein Investments, Inc. (“ABI”), each an affiliate of the Investment Manager, have been selected as distributors of the Fund (each, a “Distributor” and together, the “Distributors”) and each serves in that capacity on a best efforts basis, subject to various conditions. A Distributor may engage one or more sub-distributors.

The Fund has entered into non-exclusive distribution services agreements with SCB and ABI, respectively (each, a “Distribution Services Agreement”). Under the terms of each Distribution Services Agreement, the Distributor has been engaged to distribute shares of the Fund and service shareholder accounts. ABI also is authorized to retain and compensate sub-distributors to provide ongoing distribution and sales support services as well as investor and shareholder services. In addition, the Investment Manager, in its discretion and from its own assets, may make payments to a Distributor or sub-distributors in respect of investments in the Fund by the Distributor’s or the sub-distributor’s customers. The Distribution Services Agreements do not call for any payments to be made to the Distributors or sub-distributors by the Fund.

Conflicts of Interest

General. The Fund (including the Subsidiary) is subject to a number of actual and potential conflicts of interest involving the Investment Manager and its affiliates (collectively, the “AB Group”) and the AB Group is subject to a range of conflicts of interest in its management of the Fund and other accounts. While the potential for conflicts of interest is inherent to the relationships among the AB Group and the

entities, including the Fund and the Subsidiary, it manages, merely because an actual or potential conflict of interest exists does not mean that it will be acted upon to the detriment of the Fund or the Subsidiary.

Investment Manager . The Fund is expected to be sold to, among others, investment advisory clients of the Bernstein division of the Investment Manager. Because the Investment Manager receives fees based on the amount of assets invested in the Fund, the Investment Manager has an interest in having its clients invest in the Fund. Additionally, Fund shares are not redeemable by investors but may be subject to periodic repurchases by the Fund made, in part, on the recommendation of the Investment Manager. The Investment Manager has a conflict of interest in determining whether to recommend that the Fund repurchase its shares.

AB Group Advisory Accounts . The AB Group manages a number of different accounts, including other investment funds, for which investing in Portfolio Funds may be desirable and consistent with their investment objectives and policies. In addition, the AB Group and its employees may wish to invest their own assets in Portfolio Funds. Accordingly, the Fund may invest in Portfolio Funds in which another account has already invested, is seeking to invest contemporaneously with the Fund, or is expected to invest. However, Portfolio Fund Managers may limit the size or number of investors in Portfolio Funds or the amount of assets that they manage. Often a Portfolio Fund may only permit one entity managed by the same adviser to invest or may otherwise limit access. Portfolio Fund Managers may also limit withdrawal opportunities (for instance, through the imposition of a gate). It is possible that a withdrawal request by another account managed by the AB Group could cause a Portfolio Fund Manager to impose a gate or suspend withdrawals, which may negatively affect the ability of the Fund to withdraw its investment. Consequently, if the Investment Manager is required in its Portfolio Fund selections to allocate availability among the Fund and the other accounts it manages, it may have a conflict of interest in doing so. Certain of the other accounts managed by the AB Group pay members of the AB Group (including the Investment Manager) performance-based compensation, which could create an incentive for the Investment Manager or other members of the AB Group to favor those investment funds or accounts over the Fund.

The Investment Manager will allocate limited Portfolio Fund capacity and limited withdrawal opportunities in a manner that it considers to be fair, reasonable and equitable in accordance with the AB Group’s allocation policies and procedures. In certain cases, these policies result in allocations based on the size of each advisory client’s account, but in other cases the allocations could reflect numerous other factors based upon the AB Group’s good faith assessment of the best use of such limited opportunities relative to the objectives, limitations and requirements of each account.

The AB Group seeks to treat all clients reasonably in light of the factors relevant to managing an account, and in some cases it is possible that the application of the factors described above may result in allocations in which certain accounts receive an allocation when other accounts do not.

Transactions in securities by multiple accounts may have the effect of diluting or otherwise negatively affecting the values, prices, liquidity or investment strategies associated with investments held by the Fund or the Portfolio Funds, particularly, but not limited to, in small capitalization, emerging market or less liquid strategies. When members of the AB Group implement a portfolio investment decision or

strategy on behalf of another account ahead of, or contemporaneously with, similar decisions or strategies for the Fund, market impact, liquidity constraints, or other factors could result in the Fund receiving less favorable trading results and the costs of implementing such decisions or strategies could be increased or the Fund could otherwise be disadvantaged. The Investment Manager and other members of the AB Group may, in certain cases, elect to implement internal policies and procedures designed to limit such consequences, which may cause the Fund 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. Any such policies and procedures will necessarily have limited impact with respect to transactions by Portfolio Funds, as the Investment Manager will not generally have knowledge of the decisions made or strategies used for a Portfolio Fund at the time such decisions are made or strategies are used.

The Investment Manager, its portfolio management team, and other members of the AB Group have proprietary interests in accounts or funds that have investment objectives similar to those of the Fund or a Portfolio Fund and/or that engage in transactions in the same types of securities, currencies and instruments as the Fund or the Portfolio Funds. One or more members of the AB Group may also be participants in the global currency, equities, swap and fixed-income markets, in each case both on a proprietary basis and for the accounts of customers. As such, one or more members of the AB Group are or may be actively engaged in transactions in the same securities, currencies, and instruments in which the Fund or a Portfolio Fund invests. Such activities could affect the prices and availability of the securities, currencies, and instruments in which the Fund or a Portfolio Fund invests, which could have an adverse impact on the Fund’s performance. These transactions, particularly in respect of most proprietary accounts or customer accounts, will be executed independently of the Fund’s or a Portfolio Fund’s transactions and thus at prices or rates that may be more or less favorable than those obtained by the Fund.

Conflicts of Interest Involving the Portfolio Fund Managers . Each Portfolio Fund Manager and its principals are entitled to engage in other activities, including managing other discretionary accounts and investment funds. Accordingly, conflicts may arise with respect to the time and resources that a Portfolio Fund Manager and its principals devote to a Portfolio Fund, allocation of investment opportunities between a Portfolio Fund and other accounts managed by a Portfolio Fund Manager, or actions between a Portfolio Fund Manager and its affiliates on behalf of a Portfolio Fund.

Conflicts of interest may arise from the fact that the Portfolio Fund Managers and their affiliates generally will be carrying on substantial investment activities for other clients, including other investment funds, in which the Fund will have no interest. The Portfolio Fund Managers may have financial incentives to favor certain of such accounts over the Portfolio Funds. Any of their proprietary accounts and other customer accounts may compete with the Portfolio Funds for specific trades, or may hold positions opposite to positions maintained on behalf of the Portfolio Funds. The Portfolio Fund Managers may give advice and recommend securities to, or buy or sell securities for, Portfolio Funds, which advice, recommendation, purchase or sale may differ from advice given to, or securities recommended or bought or sold for, other accounts and customers, even though their investment objectives may be the same as, or similar to, those of the Portfolio Funds.

Market quotations regarding certain investments by Portfolio Funds may not always be available. In such cases, valuations of such Portfolio Funds’ investments may be made by the applicable Portfolio Fund Manager in its sole discretion. The Portfolio Fund Managers will have a conflict of interest in making such valuations, because such valuations will affect the Portfolio Fund’s NAV and, consequently, the incentive compensation and the amount of management fees that such Portfolio Fund Manager receives for its services. See “Conflicts of Interest.”

Subscription for Shares

Shares are offered at their NAV. The minimum initial investment of each investor is $20,000, and the minimum additional investment (excluding reinvestment of distributions) is $5,000. Shares are intended for sale only to investors that meet all requirements to invest in the Fund. See “Eligible Investors.” The Fund intends to accept subscriptions for shares as of the first business day of each calendar month (a “Subscription Date”) (a “business day” being any day on which the New York Stock Exchange is open), except that the Fund may offer shares more frequently as determined by the Board of Trustees. In order to subscribe for shares, an investor’s completed subscription agreement must be returned by the investor (or its financial advisor) to the Transfer Agent in good order, no later than the 15th calendar day of the month preceding the Subscription Date (the “Agreement Deadline”). Funds with respect to any subscription must be received by the Transfer Agent or held in an account with the Distributor over which the Investment Manager has discretion no later than the 23rd calendar day of such month (or, if such day is not a business day, the immediately preceding business day) (the “Funding Deadline”). In the case of funds in an account with the Distributor, such funds may take the form of securities having a value at least equal to the subscription amount.

An existing shareholder generally may subscribe for additional shares by completing an additional subscription agreement by the Agreement Deadline and funding such amount by the Funding Deadline. Monies held by the Transfer Agent will not bear interest. The Fund reserves the right to reject any subscription for shares, and the Fund may, in its sole discretion, suspend subscriptions for shares at any time. Because funds transmitted for a subscription may not bear interest and will not participate in the performance of the Fund prior to the Subscription Date, investors may wish to consider the timing of their subscription and discuss with their advisor the potential disadvantages of submitting a subscription at a time substantially prior to a Funding Deadline.

Who Should Invest

The Fund is designed for investors who meet the criteria for eligibility, are seeking long-term capital appreciation, and are able to accept a high level of risk. There can be no assurance that the Fund will achieve its investment objective.

Shareholders in the Fund may incur substantial, or even total, losses on an investment in the Fund. The shares will have limited liquidity because they will not be listed on any securities exchange or traded in other markets, and will be subject to substantial restrictions on transfer. Investors must meet the eligibility requirements set forth on Appendix A, which generally limit the sale of shares to those investors that meet the definition of “accredited investor” in Regulation D under the Securities Act. A prospective investor should read this prospectus in its entirety and consult his, her or its own professional advisors as to the legal, tax, financial or other matters relevant to the suitability of an investment in the Fund for the investor. An investment in the Fund is not suitable for all investors. The Fund is not intended to be a complete investment program for investors. See “Risk Factors and Special Considerations.”

Eligible Investors

The staff of the SEC generally has required registered funds of hedge funds (such as the Fund) to be sold only to investors that meet the definition of “accredited investor” in Regulation D under the Securities Act. Accordingly, the Fund currently intends to limit the sale of its shares in this manner. If the SEC or its staff modifies this eligibility limitation, the Fund may elect to offer its shares more broadly to the public or, conversely, impose stricter eligibility requirements. The Fund also reserves the right to place additional limitations on investor eligibility in the discretion of the Board of Trustees.

Investors eligible to subscribe for shares of the Fund (referred to in this prospectus as “Eligible Investors”) are investors who are “accredited investors” as defined in Regulation D (generally, individuals having an individual income in excess of $200,000 in each of the two most recent years or a joint income with that person’s spouse or spousal equivalent in excess of $300,000 in each of those years and having a reasonable expectation of reaching the same income level in the current year; any natural person whose individual net worth, or joint net worth with that person’s spouse or spousal equivalent, exceeds $1 million (exclusive of their primary residence); or entities not formed for the specific purpose of acquiring the securities offered having total assets of at least $5 million or entities all of whose beneficial owners are themselves accredited investors). Existing shareholders subscribing for additional shares must be Eligible Investors at the time of each additional subscription. The qualifications necessary for an investor to be an Eligible Investor are described in more detail in Appendix A to this prospectus.

Redemptions and Repurchases of Shares by the Fund

As a closed-end management investment company, the Fund differs from open-end management investment companies ( e.g. , mutual funds) in that investors in a closed-end fund, such as the Fund, do not have the right to redeem their shares. No public market for shares exists, and none is likely to develop in the future. Shareholders may not be able to liquidate their investment other than as a result of repurchases of shares by the Fund.

The Fund intends to repurchase shares from shareholders in accordance with written tenders by shareholders at those times, in those amounts, and on such terms and conditions as the Board of Trustees may determine in its sole discretion. Each repurchase offer will generally be limited to an amount equal to or less than 15% of the outstanding shares of the Fund. In determining whether the Fund should offer to repurchase shares from shareholders, the Board of Trustees will consider the recommendations of the Investment Manager as to the size and timing of such an offer, as well as a variety of operational, business and economic factors. The Investment Manager expects that it will recommend to the Board of Trustees that the Fund offer to repurchase shares from shareholders quarterly.

The Declaration of Trust grants the Board of Trustees the authority to repurchase the shares, or any portion of them, of a shareholder or any person acquiring shares from or through a shareholder, without consent or other action by the shareholder or other person. The Fund’s ability to repurchase its shares may be limited by the Investment Company Act.

Transfer Restrictions

There is no public market for the Fund’s shares and none is expected to develop. The Fund does not list its shares on a stock exchange or similar market. With very limited exceptions, shares are not transferable, and liquidity for investments in shares may be provided only through periodic repurchase offers by the Fund. If a

shareholder attempts to transfer shares in violation of the Fund’s transfer restrictions, the transfer will not be permitted and will be void. An investment in the Fund is therefore suitable only for investors that can bear the risks associated with the limited liquidity of shares and should be viewed as a long-term investment.

The Fund reserves the right to revise the transfer restrictions on the shares at any time.

Tax Aspects

The Fund intends to qualify as a RIC for U.S. federal income tax purposes. Please refer to the “U.S. Federal Income Tax Considerations” section of this prospectus for additional information on the potential U.S. federal income tax consequences of the acquisition, ownership and disposition of shares of the Fund. Investors should consult their own tax advisors regarding any potential state, local, foreign or other tax consequences of an investment in the Fund. Investors in the Fund will receive tax information annually on IRS Form 1099.

Benefit Plan Investor Considerations

The Fund may accept investments from employee benefit plans subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), such as corporate pension plans (each, an “ERISA Plan”); plans and accounts subject to Section 4975 of the Code, such as individual retirement accounts (“IRAs”) and Keogh plans (each, a “Tax-Qualified Plan”); and entities the underlying assets of which include “plan assets” subject to ERISA or Section 4975 of the Code (such entities, together with ERISA Plans and Tax-Qualified Plans, “Benefit Plan Investors”). Under current law, because the Fund is a registered investment company under the Investment Company Act, it is anticipated that the Fund’s assets should not be deemed “plan assets” for purposes of ERISA or Section 4975 of the Code.

Investment in the Fund by Benefit Plan Investors may subject such investors to certain taxes and other risks. Additionally, plans, arrangements, and accounts subject to provisions of federal, state, local, or other laws or regulations that are similar to Title I of ERISA or Section 4975 of the Code (“Similar Laws”), such as foreign pension plans, governmental plans, and certain church plans (together with Benefit Plan Investors, “Plans”), may be subject to similar risks. Consequently, fiduciaries of Plans are cautioned that an investment in the Fund requires special consideration and should not be undertaken without reviewing carefully the matters discussed in this prospectus and consulting legal, tax and accounting advisors. See “Benefit Plan Investor Considerations.”

Distributions

The Fund intends to make distributions on an annual basis in aggregate amounts representing substantially all of the Fund’s taxable income (including realized short-term gains), if any, earned during the year. Any long-term capital gains will be paid out once a year (unless otherwise permitted by the Investment Company Act or any exemptive relief provided by the SEC).

The Fund also may pay a special distribution in any calendar year if necessary to comply with U.S. federal income tax requirements. The Fund will make distributions only if authorized by the Fund’s Board of Trustees and declared by the Fund out of assets legally available for these distributions. Distributions to a shareholder that constitute a tax-free return of capital ( i.e. , distributions in excess of the Fund’s current or accumulated earnings and profits) will be tax-free up to the amount of the shareholder’s current tax basis in his or her shares, with any distribution amounts exceeding such basis treated as capital gain. See “U.S. Federal

Income Tax Considerations.” Any amount treated as a tax-free return of capital will reduce the shareholder’s adjusted tax basis in its shares thereby increasing the shareholder’s taxable gain or reducing the potential taxable loss on the sale of shares.

Shareholders who receive the payment of a distribution consisting of a return of capital may be under the impression that they are receiving net profits when they are not. Shareholders should not assume that a source of a distribution from the Fund is net profits. Section 19(a) of the Investment Company Act generally provides that it is unlawful for any investment company to pay any distribution from any source other than its accumulated undistributed net income (not including profits or losses realized on the sale of securities) or its net income for the current or preceding fiscal year unless the payment is accompanied by a written statement disclosing the source of the payment. If the Fund pays any distribution that is characterized as a return of capital or from another source requiring disclosure, the Fund will provide shareholders with a notice in compliance with Rule 19a-1 under the Investment Company Act. Shareholders are encouraged to review such notices carefully. Section 19(b) of the Investment Company Act and Rule 19b-1 thereunder generally prohibit multiple long-term capital gains distributions throughout the year (with certain exceptions).

Automatic Reinvestment Plan

All distributions are reinvested in additional shares of the Fund unless a shareholder elects to receive dividends in cash. The tax status of any distribution is the same regardless of whether or not the distribution is reinvested or taken as cash. The Fund may limit the extent to which any distributions that are returns of capital may be reinvested in the Fund.

Term	The Fund’s term is perpetual unless the Fund is otherwise terminated under the terms of the Fund’s Declaration of Trust.

Fiscal Year

For accounting purposes, the Fund’s fiscal year is the 12-month period ending on March 31. For tax purposes, the Fund will adopt the 12-month period ending March 31 of each year as its taxable year, unless otherwise required by applicable law.

Independent Accountants

The Board of Trustees has selected PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Fund. PricewaterhouseCoopers LLP is responsible for the auditing of the annual financial statements of the Fund.

		Year Ended March 31, 2024				Year Ended March 31, 2023				Year Ended March 31, 2022				Year Ended March 31, 2021				Year Ended March 31, 2020
Net asset value, beginning of period		$	11.16			$	11.66			$	12.01			$	10.62			$	11.26
Income From Investment Operations
Net investment loss(a)(b)			(.12	)			(.12	)			(.14	)			(.14	)			(.13	)
Net realized and unrealized gain on investment transactions			.69				.24				.29				2.25				(.29	)
Contribution from Affiliates			0				.00	(c)			.00	(c)			.00	(c)			.00	(c)
Net increase in net asset value from operations			.57				.12				.15				2.11				(.42	)
Less: Dividends and Distributions
Dividends from net investment income			(.47	)			(.28	)			(.46	)			(.62	)			(.06	)
Distributions from net realized gain on investment transactions			(.06	)			(.34	)			(.04	)			(.10	)			(.16	)
Total dividends and distributions			(.53	)			(.62	)			(.50	)			(.72	)			(.22	)
Net asset value, end of period		$	11.20			$	11.16			$	11.66			$	12.01			$	10.62
Total Return
Total investment return based on net asset value(d)			5.29	%			1.07	%^			1.22	%			19.99	%			(3.87	)%
Ratios/Supplemental Data
Net assets, end of period (000’s omitted)		$	1,119,930			$	1,109,424			$	1,049,305			$	1,038,013			$	904,329
Ratio to average net assets of:
Expenses, net of waivers/ reimbursements(e)(f)			1.22	%			1.15	%			1.16	%			1.17	%			1.17	%
Expenses, before waivers/ reimbursements(e)(f)			1.22	%			1.16	%			1.16	%			1.18	%			1.18	%
Net investment loss(b)(f)			(1.02	)%			(1.03	)%			(1.16	)%			(1.17	)%			(1.10	)%
Portfolio turnover rate			33	%			12	%			15	%			27	%			20	%

a.	Based on average shares outstanding.

b.	Net of expenses waived/reimbursed by the Investment Manager.

c.	Amount is less than $.005.

d.

Total investment return is calculated assuming a purchase of beneficial shares on the opening of the first day and a sale on the closing of the last day of each period reported. Dividends and distributions, if any, are assumed for purposes of this calculation, to be reinvested at prices obtained under the Fund’s dividend reinvestment plan. Total investment return calculated for a period of less than one year is not annualized.

e.	The expense ratios presented below exclude interest expense:

		Year Ended March 31,
		2024				2023				2022				2021				2020
Net of waivers/reimbursements			1.21	%			1.15	%			1.16	%			1.17	%			1.17	%
Before waivers/reimbursements			1.22	%			1.16	%			1.16	%			1.18	%			1.18	%

f.	The expense and net investment income loss ratios do not include income earned or expenses incurred by the Fund through its Underlying Portfolios.

^	The net asset value and total return include adjustments in accordance with accounting principles generally accepted in the United States of America for financial reporting purposes. As such, the net asset value and total return for shareholder transactions may differ from financial statements.

		Year Ended March 31, 2019‡				Year Ended March 31, 2018				Year Ended March 31, 2017				Year Ended March 31, 2016				Year Ended March 31, 2015
Net asset value, beginning of period		$	11.20			$	10.87			$	10.05			$	11.64			$	11.41
Income From Investment Operations
Net investment loss(a)			(.13	)(b)			(.19	)(b)			(.18	)			(.19	)			(.20	)(b)
Net realized and unrealized gain (loss) on investment transactions			.19				.66				1.09				(1.12	)			.56
Net increase (decrease) in net asset value from operations			.06				.47				.91				(1.31	)			.36
Less: Dividends and Distributions
Dividends from net investment income			-0-				(.12	)			(.02	)			(.01	)			(.02	)
Distributions from net realized gain on investment transactions			-0-				-0-				(.07	)			(.27	)			(.11	)
Return of Capital			-0-				(.02	)			-0-				-0-				-0-
Total dividends and distributions			-0-				(.14	)			(.09	)			(.28	)			(.13	)
Net asset value, end of period		$	11.26			$	11.20			$	10.87			$	10.05			$	11.64
Total Return
Total investment return based on net asset value(c)			.54	%			4.33	%			9.06	%			(11.38	)%			3.16	%
Ratios/Supplemental Data
Net assets, end of period (000’s omitted)		$	1,039,586			$	1,155,060			$	1,248,818			$	1,310,647			$	1,376,552
Ratio to average net assets of:
Expenses, net of waivers/ reimbursements(d)(e)(f)			1.28	%			1.68	%			1.67	%			1.66	%			1.75	%(b)
Expenses, before waivers/ reimbursements(d)(e)(f)			1.50	%			1.68	%			1.67	%			1.66	%			1.75	%
Net investment loss(e)			(1.17	)%(b)			(1.66	)%(b)			(1.67	)%			(1.66	)%			(1.75	)%(b)
Portfolio turnover rate			33	%			19	%			3	%			7	%			8	%
Asset coverage ratio.			N/A				N/A				N/A				N/A				33,674	%
Bank borrowing outstanding (in millions)			N/A				N/A				N/A				N/A			$	4

a.	Based on average shares outstanding.

b.	Net of fees and expenses waived/reimbursed by the Investment Manager.

c.

Total investment return is calculated assuming a purchase of beneficial shares on the opening of the first day and a sale on the closing of the last day of each period reported. Dividends and distributions, if any, are assumed for purposes of this calculation, to be reinvested at prices obtained under the Fund’s dividend reinvestment plan.

d.	The expense ratios presented below exclude interest expense:

		Year Ended March 31,
		2019				2018				2017				2016				2015
Net of waivers/reimbursements			1.28	%			1.68	%			1.66	%			1.66	%			1.75	%
Before waivers/reimbursements			1.50	%			1.68	%			1.66	%			1.66	%			1.75	%

e.	The expense and net investment loss ratios do not include income earned by the Underlying Portfolios or expenses incurred by the Fund through its Underlying Portfolios.

f.

In connection with the Fund’s investments in affiliated underlying portfolios, the Fund incurs no direct expenses, but bears proportionate shares of the fees and expenses ( i.e. , operating, administrative and investment advisory fees) of the affiliated underlying portfolios. The Investment Manager has contractually agreed to waive its fees from the Fund in an amount equal to the Fund’s pro rata share of certain acquired fund fees and expenses, and for the year ended March 31, 2019, such waiver amounted to .01%.

‡	Consolidated.

 

69

The Fund’s investment objective is a non-fundamental policy, meaning it can be changed by the Board of Trustees of the Fund without the vote of shareholders. The investment restrictions set forth below are fundamental policies of the Fund and may not be changed without the approval of the holders of a majority of the Fund’s outstanding shares (which for this purpose and under the Investment Company Act means the lesser of (i) 67% of the shares represented at a meeting at which more than 50% of the outstanding shares are represented or (ii) more than 50% of the outstanding shares).

In applying the investment restrictions and other policies described in this prospectus, other than for certain tax compliance monitoring and as described below under “Concentration,” the Fund will not “look through” to the investments and trading activity of the Portfolio Funds. In addition, if a percentage restriction or policy is met at the time of an investment or transaction, a later change in percentage resulting from a change in the values of investments or the value of the Fund’s total assets, unless otherwise stated in this prospectus, will not constitute a deviation from the restriction or policy.

As a matter of fundamental policy, subject to (i) the Investment Company Act and the rules and regulations thereunder, or other successor law governing the regulation of registered investment companies, or interpretations or modifications thereof by the SEC, SEC staff or other authority of competent jurisdiction, or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority of competent jurisdiction (collectively, “Investment Company Act Provisions, Interpretations and Exemptions”), the Fund:

 

 

 

 

 

 

 

 

70

The following descriptions of the Investment Company Act and accompanying notations are intended to assist investors in understanding the above policies and restrictions. These descriptions and notations are not considered to be part of the Fund’s fundamental investment restrictions and are subject to change without shareholder approval.

. With respect to the fundamental policy relating to investments in commodities set out in number 3 above, the Investment Company Act does not directly restrict an investment company’s ability to invest in commodities, but does require that every investment company have a fundamental investment policy governing such investments.

. With respect to the fundamental policy relating to issuing senior securities and borrowing money set out in number 4 above, the Investment Company Act restricts the ability of a closed-end investment company from issuing senior securities or borrowing money. The Investment Company Act, however, permits (among other things) the Fund to borrow money subject to initial asset coverage requirements, and to borrow up to an additional 5% of the Fund’s total assets from banks or other lenders for temporary purposes. (The Fund’s total assets include the amounts being borrowed.) The policy in number 4 above will be interpreted to permit the Fund to engage in trading practices and investments that may be considered to be borrowings or involve leverage or the issuance of senior securities to the extent permitted by the Investment Company Act (or guidance or interpretations of the Investment Company Act) and the rules thereunder. Rule 18f-4 under the Investment Company Act provides an exemption from certain limitations on the issuance of senior securities for transactions in derivatives instruments where the Fund complies with the requirements of the rule. Short-term credits necessary for the settlement of securities transactions and arrangements with respect to securities lending will not be considered to be borrowings under the policy. Practices and investments that may involve leverage but are not considered to be borrowings are not subject to the policy.

. With respect to the fundamental policy relating to underwriting securities set out in number 5 above, it is not believed that the application of the Securities Act would cause the Fund to be engaged in the business of underwriting. The policy in number 5 above, however, will be interpreted not to prevent the Fund from engaging in transactions involving the acquisition or disposition of portfolio securities, regardless of whether the Fund may be considered to be an underwriter under the Securities Act or is otherwise engaged in the underwriting business to the extent permitted by applicable law.

. With respect to the fundamental policy relating to lending set out in number 6 above, the Investment Company Act does not prohibit the Fund from making loans (including lending its securities); however, SEC staff interpretations currently prohibit investment companies from lending more than one-third of their total assets (including lending its securities), except through the purchase of debt obligations or the use of repurchase agreements. In addition, collateral arrangements with respect to options, forward and futures transactions and other derivative instruments (as applicable), as well as delays in the settlement of securities transactions, will not be considered loans.

. With respect to the fundamental policy relating to concentration set out in number 7 above, the Investment Company Act does not define what constitutes “concentration” in an industry. The SEC staff has taken the position that investment of more than 25% of an investment company’s total assets in one or more issuers conducting their principal activities in the same industry constitutes concentration. It is possible that interpretations of concentration could change in the future. The policy in number 7 above will be interpreted to refer to concentration as that term may be interpreted from time to time. The policy also will be interpreted to permit investment without limit in the following: securities of the U.S. government and its agencies or instrumentalities; securities of state, territory, possession or municipal governments (excluding private activity municipal debt securities whose principal and interest payments are derived principally from the assets and revenues of a non-governmental entity) and their authorities, agencies, instrumentalities or political subdivisions; and repurchase agreements collateralized by any such obligations. Accordingly, issuers of the foregoing

 

71

securities will not be considered to be members of any industry. Additionally, the Fund’s investments in Portfolio Funds are not deemed to be investments in an industry. The Fund typically has little or no current visibility into the portfolios of the Portfolio Funds. The Portfolio Funds generally are not subject to concentration limits and have wide investment discretion. The Portfolio Funds may choose to concentrate in any industry and subsequently change their concentration policies at any time. The Fund makes reasonable efforts to obtain information regarding the holdings of the Portfolio Funds and to the extent the Fund receives information regarding the current holdings of the Portfolio Funds it will consider such holdings in applying its concentration policy. The Fund, however, may be concentrated in the securities of an industry to the extent that the Portfolio Funds concentrate their investment in that industry and the Fund is unable to obtain that information. The Fund also does not consider investment in issuers domiciled in a single jurisdiction or country to constitute concentration in an industry. For purposes of this concentration policy, the Fund may classify and re-classify companies in a particular industry and define and re-define industries in any reasonable manner, consistent with guidance and interpretive positions issued by the SEC or its staff.

 

72

The Fund’s Board of Trustees (the “Board” or “Trustees”) has overall responsibility for monitoring and overseeing the investment program of the Fund and its management and operations. The Board will monitor and oversee the business affairs of the Fund. The Board exercises the same powers, authority and responsibilities on behalf of the Fund as are customarily exercised by the directors of an investment company registered under the Investment Company Act organized as a corporation and has complete and exclusive authority to oversee and establish policies regarding the management, conduct and operation of the Fund’s business. The Trustees who are not “interested persons” within the meaning of the Investment Company Act (the “Independent Trustees”) have retained independent legal counsel to assist them in connection with their duties.

Certain biographical and other information relating to Trustees of the Fund is set out below, including their ages, their principal occupations for at least the last five years, the length of time served as a Trustee, the total number of portfolios overseen in the complex of funds advised by the Investment Manager and its affiliates (“AB Advised Funds”) and any public Director/Trusteeships.

Certain information concerning the Fund’s Trustees is set forth below.

 

 

73

 

74

 

 

 

 

75

 

 

 

 

76

The following tables set forth the dollar range of equity securities beneficially owned, if any, by a Trustee in the Fund and each fund in the AB Advised Funds complex that is overseen by the Trustee as of December 31, 2023.

 

 

The Fund does not pay any fees to, or reimburse expenses of, its Trustees who are considered “interested persons” of the Fund. The aggregate compensation paid to each of the Trustees for the fiscal year ended March 31, 2024, the aggregate compensation paid to each of the Trustees during calendar year 2023 by the AB Advised Funds, and the total number of registered investment companies (and separate investment portfolios within the companies) in the AB Advised Funds with respect to which each of the Trustees serves as a director, trustee or Advisory Board member are set forth below.

 

 

 

 

77

As of December 31, 2023, no Independent Trustee, nor any of their immediate family members, owned beneficially or of record any class of securities in the Investment Manager or the Distributor or a person (other than a registered investment company) directly or indirectly “controlling,” “controlled by,” or “under common control with” (within the meaning of the Investment Company Act) the Investment Manager or the Distributor.

As of July 1, 2024, the Trustees and officers of the Fund as a group owned less than 1% of the outstanding shares of the Fund.

The Board of Trustees’ primary role is oversight of the management of the Fund. As is the case with virtually all investment companies, the Fund’s service providers, primarily the Investment Manager and its affiliates, have responsibility for the Fund’s day-to-day management, which includes responsibility for risk management (including management of investment performance and investment risk, valuation risk, issuer and counterparty credit risk, compliance risk and operational risk). As part of its oversight, the Board of Trustees, acting at its scheduled meetings, or the Chair acting between Board of Trustees meetings, regularly interacts with and receives reports from senior personnel of the Fund and its Investment Manager.

. The Governance, Nominating and Compensation Committee (the “Governance Committee”), which is composed of Independent Trustees, reviews the experience, qualifications, attributes and skills of potential candidates for nomination or election by the Board, and conducts a similar review in connection with the proposed nomination of current Trustees for re-election by shareholders at an annual or special meeting of shareholders. In evaluating a candidate for nomination or election as a Trustee, the Governance Committee takes into account the contribution that the candidate would be expected to make to the diverse mix of experience, qualifications, attributes and skills that the Governance Committee believes contributes to good governance for the Fund. Additional information concerning the Governance Committee’s consideration of Trustees appears in the description of the Committee below.

The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allows the Board to operate effectively in governing the Fund and protecting the interests of stockholders. The Board believes that, based on each Trustee’s experience, qualifications, attributes or skills on an individual basis and in combination with those of the other Trustees, each Trustee is qualified to serve as such.

In determining whether a particular Trustee was qualified to serve as a Trustee, the Board considered a variety of criteria, none of which, in isolation, was controlling. In addition, the Board has taken into account the actual or anticipated (in the case of new Trustees) service and commitment of each Trustee during his or her tenure (including the Trustee’s commitment and participation in Board and committee meetings, as well as his or her current and prior leadership of standing committees) in concluding that each should serve as a Trustee. Additional information about the specific experience, skills, attributes and qualifications of each Trustee, which in each case led to the Board’s conclusion that each Trustee should serve as a Trustee of the Fund, is provided in the table above and in the next paragraph.

Among other attributes and qualifications common to all Trustees are their ability to review critically, evaluate, question and discuss information provided to them (including information requested by the Trustees), to interact effectively with the Investment Manager, other service providers, counsel and the Fund’s independent registered public accounting firm, and to exercise effective business judgment in the performance of their duties as Trustees. While the Board does not have a formal, written diversity policy, the Board believes that an effective board consists of a diverse group of individuals who bring together a variety of complementary skills and perspectives. In addition to his or her service as a Trustee of the Fund and certain other funds advised by the

 

78

Investment Manager: Mr. Gerken has investment management experience as a portfolio manager and executive officer, and experience as a board member; Mr. Holland has business experience as a senior executive of a financial services firm, including experience in provision of custody and other services to investment funds globally, and experience as a board member; Mr. Kristol has a public and economic policy background and experience as a board member of various organizations; Ms. Perry has business and financial experience as a senior executive of various financial services firms focusing on fixed-income research and capital markets and experience as a board member of various organizations; and Mr. Peterson has business and finance experience as an executive officer of public companies and experience as a board member of various organizations.

Additional information about the specific experience, skills, attributes and qualifications of each Trustee-Elect, which in each case led to the Board’s conclusion that each Trustee-Elect should serve as a Trustee of the Fund, effective January 1, 2025, is provided in the table in Appendix C and in this paragraph. Mr. Bermudez has extensive experience in the financial services industry, including risk management, from his service in various senior executive positions, including as Chief Risk Officer, of a large global financial services company, as a director and Audit Chair of a Federal Reserve Bank and a director of a large public company, and as Chairman or director or trustee of numerous non-profit organizations; Mr. Chaloff has business, finance and investment management experience as Head of Investment & Wealth Strategies of Bernstein Private Wealth Management of the Investment Manager, and he has served as President and Chief Executive Officer of the Fund as of April 2023; Ms. Loeb has extensive experience in the financial services industry and in business more generally, including as a former executive and partner of a large global financial services company and as Chief Executive Officer of a private e-commerce company, a director and audit committee member of a large publicly traded business development company and former director of a fund of hedge funds, and a director or trustee of numerous non-profit organizations including the United Nations Development Corporation and New York City Center and has served as Chair of the Governance and Nominating Committees of certain other AB Advised Funds since August 2023; Ms. McMullen has experience in talent management for a global technology consulting firm, serves on the advisory board of a privately held e-commerce company, has served as director of a variety of privately held firms and non-profit boards (including as director of one of the 10 largest healthcare systems in the U.S. and Chair of a top U.S. community hospital), has extensive asset management industry experience including as Director of Global Investment Research for a major fund company and President of Wealth Management for a regional bank and has served as Chair of the Audit Committees of certain other AB Advised Funds since February 2023; Mr. Moody, a certified public accountant, has extensive experience in the asset management industry as a senior executive of a large fund complex and as Vice Chairman and U.S. and Global Investment Management Practice Managing Partner for a major accounting firm, and served as a member of the Board of Governors of the Investment Company Institute, the leading association representing regulated funds, including mutual funds, exchange-traded funds and closed-end funds, from October 2019 through September 2023, and also the Governing Council of the Independent Directors Council, a group created by the Investment Company Institute that aims to advance the education, communication and policy positions of investment company independent directors, where he also served as the Chairman of the Governance Committee from October 2021 through September 2023, has served as a director or trustee since 2008 and served as Chairman of the Audit Committees of certain other AB Advised Funds from 2008 to February 2023, and has served as a Chairman of certain other AB Advised Funds and the Independent Directors Committees of certain other AB Advised Funds since 2023. In addition to her service as an Advisory Board member of certain other AB Advised Funds, Ms. Wrapp has extensive experience in the investment management industry, including formerly serving as Senior Vice President, Assistant Secretary, Counsel and Head of Mutual Fund & Retail Legal of the Investment Manager, and Assistant General Counsel and Assistant Secretary of ABI. She also served as Chief Legal Officer and Secretary of the AB Advised Funds and other registered investment companies advised by the Investment Manager and had extensive involvement in fund industry organizations including committees and working groups of the Investment Company Institute.

 

79

Employee; Length of Service; Title		Principal Occupation During the Past Five (5) Years
Vikas Kapoor; since 2017; Senior Vice President of the Investment Manager		Senior Vice President and Head of Hedge Fund Solutions of the Investment Manager, with which he has been associated beginning prior to 2019.
Brian Briskin; since June 2021; Senior Vice President of the Investment Manager		Senior Vice President and Director of Hedge Fund Research — Custom Alternative Solutions of the Investment Manager, with which he has been associated beginning prior to 2019. Previously, he was Vice President and Hedge Fund Research Analyst of Custom Alternative Solutions of the Investment Manager since prior to 2019 until June 2021.

Name of Portfolio Manager

Type of Accounts

Total # of Accounts Managed

Total Assets (000,000’s omitted)

# of Accounts Managed for which Advisory Fee is Based on Performance

Total Assets for which Advisory Fee is Based on Performance (000,000’s omitted)

Vikas Kapoor

Registered Investment Companies:

None

None

None

None

Other Pooled Investment Vehicles:

None

None

None

None

Other Accounts:

34

$

864

None

None

Brian Briskin

Registered Investment Companies:

2

$

170

None

None

Other Pooled Investment Vehicles:

None

None

None

None

Other Accounts:

None

None

None

None

Portfolio Manager		Dollar Range of Equity Securities of the Fund
Vikas Kapoor			$100,001 — $500,000
Brian Briskin			$100,001 — $500,000

Similarly Managed Accounts and Benchmark		1 Year				3 Year				5 Year				Since Inception†
Similarly Managed Accounts			4.93	%			2.24	%			4.13	%			4.14	%
MSCI World Index			25.11	%			8.60	%			12.07	%			10.29	%
Bloomberg US Aggregate Bond Index			1.70	%			-2.46	%			0.36	%			1.91	%
HFRI Fund of Funds Composite Index			9.68	%			2.88	%			5.00	%			3.52	%

		Annual				MSCI World Index				Bloomberg US Aggregate Bond Index				HFRI Fund of Funds Composite Index
2024**			2.15	%			8.88	%			(0.78	)%			4.17	%
2023			3.68	%			23.79	%			5.53	%			6.07	%
2022			(0.46	)%			(18.14	)%			(13.01	)%			(5.31	)%
2021			3.27	%			21.82	%			(1.54	)%			6.17	%
2020			8.75	%			15.90	%			7.51	%			10.88	%
2019			7.38	%			27.67	%			8.72	%			8.72	%
2018			(4.50	)%			(8.71	)%			0.01	%			(4.02	)%
2017			7.91	%			22.40	%			3.54	%			7.77	%
2016			0.75	%			7.51	%			2.65	%			0.51	%
2015			(3.43	)%			(0.87	)%			0.55	%			(0.27	)%
2014			3.14	%			4.94	%			5.97	%			3.37	%

*

The performance of the Similarly Managed Accounts includes the Fund’s performance for the period from October 1, 2012 (commencement of Fund operations) through March 31, 2024. The Fund’s average annual total return for the one-year, three-year, five-year and since inception periods ended June 30, 2024 was 4.92%, 1.78%, 4.05% and 3.59% respectively.

**	For the period January 1, 2024 to March 31, 2024 (not annualized).

1.	open-end mutual funds are valued at the closing NAV per share and exchanged-traded funds and closed-end funds are valued at the closing market price per share;

2.

a security listed on a national or foreign exchange (other than securities listed on the Nasdaq Stock Exchange (“NASDAQ”)) is valued at the last sale price reflected on the consolidated tape at the close of the exchange. If there has been no sale on the relevant business day, the security is valued at the last traded price from the previous day. On the following day, the security is valued in good faith at fair value by the Valuation Designee;

3.	a security traded on NASDAQ is valued at the NASDAQ Official Closing Price;

4.	a security traded on more than one exchange is valued in accordance with paragraphs (2) and (3) above by reference to the principal exchange (as determined by the Valuation Designee) on which the security is traded;

5.

a listed or over the counter (“OTC”) put or call option is valued at the level midway between the current bid and asked prices (for options or futures contracts, see paragraph (6)). If neither a current bid nor a current ask price is available, the Valuation Designee will have discretion to determine the best valuation ( e.g. , last trade price);

6.	an open futures contract and any option thereon is valued at the closing settlement price or, in the absence of such a price, the most recent quoted bid price. If there are no quotations available for the relevant business day, the security is valued at the last available closing settlement price;

7.	a right is valued at the last traded price provided by approved pricing services;

8.	a warrant is valued at the last traded price provided by approved pricing services. If the last traded price is not available, the bid price will be used. Once a warrant passes maturity, it may be valued at zero;

9.

U.S. Government securities and any other debt instrument having 60 days or less remaining until maturity generally are valued at market by an independent pricing service, if a market price is available. If a market price is not available, the securities are valued at amortized cost. This methodology pertains to short-term securities that have an original maturity of 60 days or less, as well as short-term securities that had an original term to maturity that exceeded 60 days. In instances in which amortized cost is utilized, the Valuation Designee must reasonably conclude that the utilization of amortized cost is approximately the same as the fair value of the security. The factors the Valuation Designee will consider include, but are not limited to, an impairment of the creditworthiness of the issuer or material changes in interest rates. The Valuation Designee is responsible for monitoring any instances when a market price is not applied to a short-term security;

10.

unless paragraph 9 above applies, a fixed-income instrument is typically valued on the basis of bid prices provided by an approved pricing service when the Valuation Designee reasonably believes that such prices reflect the fair value of the instrument. The market convention may be to use the mid-price between bid and offer in certain markets, and fixed-income instruments may be valued on the basis of the mid-prices when such prices reflect the convention of the particular markets. If the Valuation Designee determines that an appropriate pricing vendor does not exist for a fixed-income instrument, the Valuation Designee may use broker quotations consistent with the manner in which the instruments are quoted and traded, or another valuation methodology deemed reasonable by the Valuation Designee;

11.

a mortgage-backed or asset-backed security is valued on the basis of bid prices obtained from pricing services or bid prices obtained from multiple major broker-dealers in the security when the Valuation Designee believes that these prices reflect the market value of the security. In cases in which broker-dealer quotes are obtained, the Valuation Designee has procedures for using changes in market yields or spreads to adjust, on a daily basis, a recently obtained quoted bid price on a security. The second highest price will be utilized whenever two or more quoted bid prices are obtained;

12.	bank loans are valued on the basis of bid prices provided by a pricing service;

13.

bridge loans are valued at par, unless it is determined by the Valuation Designee that any particular bridge loan should be valued at something other than par. This may occur from a significant change in the high- yield market and/or a significant change in the state of any particular issuer or issuers or bridge loans;

14.	residential and commercial mortgage loan pools are fair market priced by a pricing service;

15.	forward and spot currency pricing is provided by pricing services;

16.	a swap is valued by the Valuation Designee utilizing various external sources to obtain inputs for variables in pricing models; and

17.	interest rate caps and floors are valued at the latest present value of the terms of the agreement, which is provided by a pricing service.