Form POS AMI Destiny Alternative Fund

As filed with the Securities and Exchange Commission on November 6, 2025

1940 Act File No. 811-23814

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

FORM N-2

DESTINY ALTERNATIVE FUND (TEI) LLC
(Exact Name of Registrant as Specified in Charter)

c/o UMB Fund Services, Inc.
235 West Galena Street
Milwaukee, WI 53212
(Address of Principal Executive Offices)

414-299-2270
(Registrant’s Telephone Number)

Ann Maurer
235 West Galena Street
Milwaukee, WI 53212
(Name and Address of Agent for Service)

Copy to:
Joshua B. Deringer, Esq.
Faegre Drinker Biddle & Reath LLP
One Logan Square, Ste. 2000
Philadelphia, PA 19103-6996
215-988-2700

Check each box that appropriately characterizes the Registrant:

Supplement dated November 6, 2025

to the Confidential Private Placement Memorandum

dated November 3, 2023

Destiny Alternative Fund (TEI) LLC

NOTICE OF REORGANIZATION OF MASTER FUND, LIQUIDATION OF FUND

The board of managers (the “Board”) of Destiny Alternative Fund (TEI) LLC (the “Fund”) has, upon careful consideration, approved a proposal to liquidate the Fund pursuant to the terms of a plan of liquidation (the “Plan of Liquidation”).

The Fund invests all or substantially all of its assets in Destiny Alternative Fund Limited (the “Offshore Fund”), a Cayman Islands exempted company with the same investment objective as the Fund. The Offshore Fund, in turn, invests all or substantially all of its assets in Destiny Alternative Fund LLC (the “Master Fund”), a Delaware limited liability company registered under the Investment Company Act of 1940, as amended (the “1940 Act”) as a closed-end management investment company. The board of directors of the Offshore Fund has, upon careful consideration, approved a proposal to distribute all of the Offshore Fund’s assets to the Fund and to dissolve the Offshore Fund effective January 1, 2026.

In addition, the board of managers (the “Master Fund Board”) of the Master Fund has approved the reorganization of the Master Fund with and into a new closed-end management investment company registered under the 1940 Act as a closed-end management investment company, Destiny Alternative Fund (the “Acquiring Fund”), effective on or about January 1, 2026 (the “Reorganization”).

Following the dissolution of the Offshore Fund and the Reorganization of the Master Fund, the Fund will terminate pursuant to the Plan of Liquidation.

It is expected that in advance of the dissolution of the Offshore Fund and the liquidation of the Fund, First Trust Capital Management L.P. (the “Investment Adviser”), will recommend to the Board, subject to the Board’s discretion, that the Fund offer to repurchase units from investors in an amount up to 5% of the Fund’s net asset value. If you redeem your interests in the Fund before December 31, 2025, the liquidation will not impact you.

If you take no action, you will become a shareholder of the Acquiring Fund at the close of business on or about January 1, 2026. You will receive shares of the Acquiring Fund with a value equal to the value of your units in the Fund as of the Closing Date.

The Fund and the Acquiring Fund have the same Investment Adviser and the same investment objective, strategies, and policies. The same individuals compose the Board and the board of trustees of the Acquiring Fund. The anticipated benefits of the Reorganization include a larger, potentially more efficient portfolio. In approving the Reorganization, the Master Fund Board considered the terms and conditions of the Reorganization and determined that the Reorganization is in the best interests of the Master Fund and that investors will not be diluted as a result of the Reorganization. The Board also considered the costs of the Reorganization, which the Board believes are outweighed by the benefits of the Reorganization.

The Reorganization, together with the Acquiring Fund’s election to be an association taxable as a corporation, will be structured as a tax-free transfer within the meaning of Section 351(a) of the United States Internal Revenue Code of 1986, as amended (the “Code”), and a tax-free distribution of shares of the Acquiring Fund in exchange for units of the Master Fund pursuant to Section 731(a) of the Code, with the Acquiring Fund as the surviving company of the transaction. Provided that the Acquiring Fund does not hold residual interests in real estate mortgage investment conduits, which it does not plan to do, income you receive from the Acquiring Fund will not be unrelated business taxable income, except to the extent of your acquisition indebtedness in connection with your units of the Master Fund.

Confidential Private Placement Memorandum

DESTINY ALTERNATIVE FUND (TEI) LLC

LIMITED LIABILITY COMPANY UNITS

Destiny Alternative Fund (TEI) LLC (the “Fund”) is a Delaware limited liability company registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”), as a non-diversified, closed-end management investment company. The Fund is designed for investment primarily by U.S. tax-exempt and tax-deferred investors. The Fund’s investment objective is to seek long-term capital appreciation. The Fund seeks to achieve its objective by investing all or substantially all of its assets in the Destiny Alternative Fund Limited (the “Offshore Fund”), a Cayman Islands exempted company with the same investment objective as the Fund. The Offshore Fund, in turn, invests all or substantially all of its assets in Destiny Alternative Fund LLC (the “Master Fund”), a Delaware limited liability company registered under the Investment Company Act as a non-diversified, closed-end management investment company. The Master Fund and the Offshore Fund have the same investment objective as the Fund. The Offshore Fund serves solely as an intermediate entity through which the Fund invests in the Master Fund. The Offshore Fund makes no independent investment decisions and has no investment or other discretion over the Fund’s investable assets. The Master Fund is a “fund of funds” that intends to invest primarily in hedge funds, private equity funds, growth equity funds and venture capital funds. The Master Fund may also invest to a lesser extent in credit funds, real estate funds, co-investment vehicles, managed accounts, open-end and closed-end registered investment companies (including exchange-traded funds) and other types of investment vehicles (together with hedge funds, private equity funds, growth equity funds and venture capital funds, the “Underlying Funds”). The Underlying Funds employ a broad range of investment strategies and invest or trade in a wide range of securities. The Master Fund, and the Underlying Funds in which it invests, may invest directly in U.S. and foreign securities, including emerging markets. The Master Fund and Fund cannot guarantee that their investment objectives will be achieved or that the Master Fund’s strategy of investing in Underlying Funds will be successful. Investing in the Fund involves a high degree of risk, including the possible loss of the principal amount invested. The Master Fund and Fund are not intended as a complete investment program for investors. See “PRINCIPAL RISK FACTORS” beginning on page 20.

This confidential private placement memorandum (the “Memorandum”) applies to the offering of units of limited liability company interests (“Units” or “Interests”) in the Fund on a private placement basis to investors who satisfy the eligibility requirements for investment in the Fund. Units will generally be offered at the net asset value per Unit as of the first business day of each calendar quarter or at such other times and/or more or less frequently as may be determined by the Fund’s Board of Managers (the “Board”), in each case subject to any applicable fees, as described herein. No person who is admitted as a member of the Fund (a “Member”) will have the right to require the Fund to redeem its Units. This Memorandum is not an offer to sell Units and is not soliciting an offer to buy Units in any state or jurisdiction where such offer or sale is not permitted. Investments in the Fund may be made only by “Eligible Investors” as defined herein. See “INVESTOR QUALIFICATIONS.”

If you purchase Units of the Fund, you will become bound by the terms and conditions of the Limited Liability Company Agreement of the Fund (the “LLC Agreement”). A copy of the LLC Agreement is attached as Appendix A to this Memorandum.

Units are speculative and illiquid securities involving substantial risk of loss. Units are not listed on any securities exchange and it is not anticipated that a secondary market for Units will develop. Units are subject to substantial restrictions on transferability and resale and may not be transferred or resold except as permitted under the LLC Agreement. Although the Fund may offer to repurchase Units from time to time, Units will not be redeemable at a Member’s option nor will they be exchangeable for units or shares of any other fund. As a result, an investor may not be able to sell or otherwise liquidate his or her Units. Units are appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment and for whom an investment in the Fund does not constitute a complete investment program.

This Memorandum concisely provides information that you should know about the Fund before investing. You are advised to read this Memorandum carefully and to retain it for future reference. Additional information about the Fund, including the Fund’s statement of additional information (the “SAI”), dated November 6, 2025, has been filed with the SEC. You can request a copy of the SAI and annual and semi-annual reports of the Fund without charge by writing to the Fund, c/o UMB Fund Services, Inc., 235 West Galena Street, Milwaukee, WI 53212, by calling the Fund toll-free at (877) 779-1999. The SAI is incorporated by reference into this Memorandum in its entirety. You may also obtain copies of the SAI, and the annual and semi-annual reports of the Fund, as well as other information about the Fund on the SEC’s website at https://www.sec.gov. You may also email requests for these documents to [email protected]. The address of the SEC’s internet site is provided solely for the information of prospective investors and is not intended to be an active link.Neither the SEC nor any state securities commission has determined whether this Memorandum is truthful or complete, nor have they made, nor will they make, any determination as to whether anyone should buy these securities. Any representation to the contrary is a criminal offense.

The Fund’s Units have not been and will not be registered with the SEC under the Securities Act of 1933, as amended (the “1933 Act”), and are being offered and sold solely in private placement transactions in reliance on an exemption from registration under Section 4(a)(2) of the 1933 Act and Rule 506 of Regulation D promulgated thereunder.

You should not construe the contents of this Memorandum and SAI as legal, tax or financial advice. You should consult with your own professional advisors as to legal, tax, financial, or other matters relevant to the suitability of an investment in the Fund.

You should rely only on the information contained in this Memorandum and the SAI. The Fund has not authorized anyone to provide you with different information. You should not assume that the information provided by this Memorandum is accurate as of any date other than the date shown below.

This Memorandum is intended solely for the use of the person to whom it has been delivered for the purpose of evaluating a possible investment by the recipient in the Units of the Fund described herein, and is not to be reproduced or distributed to any other persons (other than professional advisors of the prospective investor receiving this document).

The Fund’s Units do not represent a deposit or an obligation of, and are not guaranteed or endorsed by, any bank or other insured depository institution, and are not federally insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency.

The date of this Memorandum is November 6, 2025

TABLE OF CONTENTS

You should rely only on the information contained in this Memorandum. The Fund has not authorized anyone to provide you with different information. The Fund is not making an offer of securities in any state where the offer is not permitted. You should not assume that the information provided by this Memorandum is accurate as of any date other than the date on the front of this Memorandum.

FUND SUMMARY

This is only a summary and does not contain all of the information that investors should consider before investing in the Fund. Investors should review the more detailed information appearing elsewhere in this Memorandum, the SAI, and the Limited Liability Company Agreement attached hereto as Exhibit A (the “LLC Agreement”) and especially the information set forth under the heading “Principal Risk Factors.”

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USE OF LEVERAGE

The Master Fund may invest in private Underlying Funds that employ certain Underlying Managers (many of which trade on margin and do not generally need additional capital from the Master Fund in order to increase the level of the positions they acquire for it) to trade notional equity in excess of the equity actually available in their accounts. In addition to the use of leverage by the Underlying Managers in their respective trading strategies, the Investment Adviser may leverage the Master Fund’s allocations to the Underlying Managers through (i) borrowings, (ii) swap agreements, options or other derivative instruments, or (iii) a combination of these methods. The financing entity or counterparty on any swap, option or other derivative instrument may be any entity or institution which the Investment Adviser determines to be creditworthy.

Thus, the Master Fund, through its leveraged investments in the Underlying Funds and through each Underlying Manager’s use of leverage in its trading strategies, uses leverage with respect to the Units. As a result of that leverage, a relatively small movement in the spread relationship between the securities and commodities interests the Master Fund indirectly owns and those which it has indirectly sold short may result in substantial losses.

Except as described below, the Fund and the Master Fund do not generally intend to borrow money for investment purposes. The Master Fund may borrow money when deemed appropriate by the Investment Adviser, including, without limitation, to make investments, facilitate reallocation of assets among the Underlying Funds and meet repurchase requests which might otherwise result in the liquidation of investments, possibly at an inopportune time or on unfavorable terms. Borrowing may also be used by the Fund for other operating purposes, such as to pay miscellaneous expenses as they arise. See “CREDIT FACILITY.”

Under the Investment Company Act, the Master Fund is not permitted to incur indebtedness unless immediately after doing so the Master Fund has an asset coverage of at least 300% of the aggregate outstanding principal balance of indebtedness (i.e., such indebtedness may not exceed 33-1/3% of the value of the Master Fund’s assets including the amount borrowed). Additionally, under the Investment Company Act, the Fund may not declare any dividend or other distribution upon any class of its Units, or repurchase any such Units, unless the aggregate indebtedness of the Master Fund has, at the time of the declaration of any such dividend or distribution or at the time of any such repurchase, asset coverage of at least 300% after deducting the amount of such dividend, distribution, or repurchase price, as the case may be. These limits may not apply to the private Underlying Funds and, therefore, the Master Fund’s portfolio may be exposed to the risk of highly leveraged investment programs of certain private Underlying Funds.

The Master Fund may enter into derivatives or other transactions that may provide leverage (other than through borrowings). On October 28, 2020, the SEC adopted Rule 18f-4 under the Investment Company Act relating to a registered investment company’s use of derivatives and related instruments. Rule 18f-4 prescribes specific value-at-risk leverage limits for certain derivatives users and requires certain derivatives users to adopt and implement a derivatives risk management program (including the appointment of a derivatives risk manager and the implementation of certain testing requirements), and prescribes reporting requirements in respect of derivatives. Subject to certain conditions, if a fund qualifies as a “limited derivatives user,” as defined in Rule 18f-4, it is not subject to the full requirements of Rule 18f-4. In connection with the adoption of Rule 18f-4, the SEC rescinded certain of its prior guidance regarding asset segregation and coverage requirements in respect of derivatives transactions and related instruments. With respect to reverse repurchase agreements or other similar financing transactions in particular, Rule 18f-4 permits a fund to enter into such transactions if the fund either (i) complies with the asset coverage requirements of Section 18 of the Investment Company Act, and combines the aggregate amount of indebtedness associated with all tender option bonds or similar financing with the aggregate amount of any other senior securities representing indebtedness when calculating the relevant asset coverage ratio, or (ii) treats all tender option bonds or similar financing transactions as derivatives transactions for all purposes under Rule 18f-4. The Master Fund and Fund have adopted procedures for investing in derivatives and other transactions in compliance with Rule 18f-4. Each of the Fund and Master Fund intend to continue to be a limited derivatives user under Rule 18f-4 of the Investment Company Act. As a limited derivatives user, the Master Fund’s derivatives exposure, excluding certain currency and interest rate hedging transactions, may not exceed 10% of its net assets. This restriction is not fundamental and may be changed by the Master Fund without a Member vote. Rule 18f-4 under the Investment Company Act may require the Master Fund to observe more stringent asset coverage and related requirements than were previously imposed by the Investment Company Act, which could adversely affect the value or performance of the Master Fund and Fund. Limits or restrictions applicable to the counterparties or issuers, as applicable, with which the Master Fund may engage in derivative transactions could also limit or prevent the Master Fund from using certain instruments.

The Boards of Managers

The Board has overall responsibility for the management and supervision of the business operations of the Fund on behalf of the Members. The Master Fund Board, which currently has the same composition as the Board, has overall responsibility for the management and supervision of the business operations of the Master Fund on behalf of the Master Fund’s members. The Fund is the sole shareholder of the Offshore Fund. The board of directors of the Offshore Fund will delegate the day to day management, as well as general oversight responsibilities of the Offshore Fund, to the Board of Managers of the Fund. Therefore, the Board effectively will make all decisions on behalf of the Offshore Fund. A majority of the Board is and will be persons who are not “interested persons,” as defined in Section 2(a)(19) of the Investment Company Act (the “Independent Managers”). To the extent permitted by the Investment Company Act and other applicable law, the Board may delegate any of its rights, powers and authority to, among others, the officers of the applicable fund any committee of such board, service providers or, in the case of the Master Fund, the Investment Adviser. See “BOARDS OF MANAGERS AND OFFICERS” in the Fund’s SAI for the identities of the Managers and executive officers of the Fund and the Master Fund, brief biographical information regarding each of them, and other information regarding the election and membership of the Board and Master Fund Board.

The Investment Adviser

First Trust Capital Management L.P. serves as the investment adviser of the Master Fund and is responsible for determining and implementing the Master Fund’s overall investment strategy and for the day-to-day management of the Master Fund’s portfolio, managing the Master Fund’s business affairs and providing certain clerical, bookkeeping and other administrative services. The Investment Adviser is a Delaware limited partnership and a registered investment adviser controlled by First Trust Capital Solutions L.P. First Trust Capital Solutions LP is a Delaware limited partnership owned by First Trust Capital Partners, LLC and by VFT Holdings LP and its affiliates.. The Investment Adviser is an investment adviser registered with the SEC under the Investment Advisers Act of 1940, as amended. As of August 31, 2025, the Investment Adviser had assets under management of approximately $10.4 billion.

The Investment Adviser and its affiliates may serve as investment managers to other funds that have investment programs which are similar to the investment program of the Fund and the Master Fund, and the Investment Adviser or one of their affiliates may in the future serve as the investment manager or otherwise manage or direct the investment activities of other registered and/or private investment companies with investment programs similar to the investment program of the Fund and the Master Fund. See “CONFLICTS OF INTEREST.”

The Fund and the Master Fund intend to rely on the no-action relief provided by the Commodity Futures Trading Commission (“CFTC”). Pursuant to the relief, the Investment Adviser is not required to register as a commodity pool operator with respect to the Fund and the Master Fund, or rely on an exemption from registration, until the later of June 30, 2013 or six months from the date that revised guidance is issued on the application of the calculation of the de minimis thresholds to fund-of-funds operators. As of the date of this Memorandum, the CFTC has not yet proposed any guidance regarding the application of the de minimis thresholds to fund-of-funds operators. If the Fund and the Master Fund and the Investment Adviser with respect to the Fund become subject to CFTC regulation, the Fund may incur additional compliance, operational and other expenses.

Portfolio Managers

The personnel of the Investment Adviser who currently have primary responsibility for management of the Master Fund (the “Portfolio Managers”) are as follows:

MICHAEL PECK, CFA^® — Portfolio Manager

Mr. Peck, CFA, joined the Investment Adviser and its affiliated companies in February 2012 and is currently Chief Executive Officer and Co-Chief Investment Officer of FTCM and President and Co-Chief Investment Officer of Vivaldi Capital Management LP. Prior to thereto, Mr. Peck was a Portfolio Manager at Coe Capital, LLC, a Chicago-based registered investment adviser, from March 2010 to December 2011. From June 2007 through March 2009, Mr. Peck was a consultant at various real estate and investment companies. From 2006 to 2008, Mr. Peck was a Senior Financial Analyst/Risk Manager at The Bond Companies. Mr. Peck graduated from Lehigh University with a Bachelor of Science in Accounting. Mr. Peck also holds a Master of Arts in Finance and a Master in Business Administration (Real Estate Analysis and Financial Analysis) from DePaul University and is a Chartered Financial Analyst (“CFA”).

BRIAN MURPHY — Portfolio Manager

Mr. Murphy joined the Investment Adviser in March 2014 as a Senior Research Analyst. He currently serves as Co-Chief Investment Officer of FTCM and a portfolio manager to the Fund. Mr. Murphy was previously a Director at Voyager Management, LLC (“Voyager Management”), a fund of hedge fund firm, from 2010 to 2014. Prior to Voyager Management, from 2009 to 2010, Mr. Murphy was Derivatives Product Specialist at Analytic Investors, specializing in quantitative derivative hedge fund strategies. Mr. Murphy was also an Analyst at Iron Partners, LLC, a fund of hedge fund firm, from 2007 to 2009, where he was primarily responsible for covering hedged equity, equity trading, derivative and structured product services. Mr. Murphy graduated from Miami University with a Bachelor of Science in Finance.

ROBERT O’HARA, CFA^® — Portfolio Manager

Mr. O’Hara, CFA, joined the Investment Adviser in January 2022 and currently serves as Principal, Portfolio Manager at the Investment Adviser, where he is responsible for overseeing the alternative credit investment program. Prior thereto, Mr. O’Hara was an Investment Analyst and Trader at LBMC Investment Advisors, a registered investment adviser, from December 2018 to December 2021. Mr. O’Hara graduated from Pennsylvania State University with a Bachelor of Science in Finance. Mr. O’Hara also holds an Undergraduate Certificate of Real Estate Analysis and Development from Pennsylvania State University and is a Chartered Financial Analyst (“CFA”).

The Investment Management Agreement

The Investment Management Agreement (the “Investment Management Agreement”) between the Investment Adviser and the Master Fund became effective as of July 1, 2022 and will continue in effect for an initial two-year term. Thereafter, the Investment Management Agreement will continue in effect from year to year provided such continuance is specifically approved at least annually by (i) the vote of a majority of the outstanding voting securities of the Master Fund, or a majority of the Board, and (ii) the vote of a majority of the Independent Managers of the Master Fund, cast in person at a meeting called for the purpose of voting on such approval. See “VOTING.” The Investment Management Agreement will terminate automatically if assigned (as defined in the Investment Company Act) and is terminable at any time without penalty upon sixty (60) days’ written notice to the Fund by either the Board, or the Investment Adviser or by vote of a majority of the outstanding voting securities (as defined in the Investment Company Act) of the Fund. A discussion regarding the basis for the Board’s approval of the Investment Management Agreement is available in the Fund’s and Master Fund’s semi-annual report to its Members for the period ended September 30, 2024.

The Investment Management Agreement provides that, in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations to the Master Fund, the Investment Adviser and any partner, director, officer or employee of the Investment Adviser, or any of its affiliates, executors, heirs, assigns, successors or other legal representatives, will not be liable to the Master Fund for any error of judgment, for any mistake of law or for any act or omission by the person in connection with the performance of services to the Master Fund. The Investment Management Agreement also provides for indemnification, to the fullest extent permitted by law, by the Master Fund, of the Investment Adviser or any partner, director, officer or employee of the Investment Adviser, and any of its affiliates, executors, heirs, assigns, successors or other legal representatives, against any liability or expense to which the person may be liable that arises in connection with the performance of services to the Master Fund, so long as the liability or expense is not incurred by reason of the person’s willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations to the Master Fund.

Investment Management Fee

Through its investment in the Master Fund via the Offshore Fund, the Fund bears a proportionate share of the investment management fee (the “Investment Management Fee”) paid by the Master Fund to the Investment Adviser in consideration of the advisory and other services provided by the Investment Adviser to the Master Fund. Pursuant to the Investment Management Agreement, the Master Fund pays the Investment Adviser an Investment Management Fee on an annualized basis, payable quarterly in arrears on the 60^th business day of the succeeding quarter, based upon the Master Fund’s net assets as of the last business day of each calendar quarter, subject to certain adjustments.

The Master Fund pays the Investment Adviser as described below:

The Investment Management Fee will be paid to the Investment Adviser before giving effect to any repurchase of Units in the Master Fund effective as of that date and will decrease the net profits or increase the net losses of the Master Fund that are credited to its Members. NAV means the total value of all assets of the Master Fund, less an amount equal to all accrued debts, liabilities and obligations of the Master Fund; provided that for purposes of determining the Investment Management Fee payable to the Investment Adviser for any quarter, NAV will be calculated prior to any reduction for any fees and expenses of the Master Fund for that quarter, including, without limitation, the Investment Management Fee payable to the Investment Adviser for that quarter.

FINANCIAL INTERMEDIARIES

The Fund’s Units are offered for sale at NAV. The Fund also may enter into agreements with Recipients for the sale and servicing of the Fund’s Units. The Fund intends to offer to sell its Units on a continuous basis Units of the Fund will not be listed on any national securities exchange and the Fund will not act as a market maker in Fund Units.

The Fund is relying on an exemptive order from the SEC, and has adopted a Shareholder Service Plan with respect to its Units in compliance with Rule 12b-1 under the Investment Company Act. The Shareholder Service Plan will allow the Fund to pay servicing fees for the sale and servicing of its Units. Under the Service Agreement, the Fund will be permitted to pay a Servicing Fee up to 0.25% on an annualized basis of the net assets to the Fund’s Recipients.

All or a portion of such Servicing Fee may be used to compensate financial industry professionals for providing ongoing member services. Such activities may include electronic processing of client orders, electronic fund transfers between clients and the Fund, account reconciliations with the Fund’s Transfer Agent, facilitation of electronic delivery to clients of Fund documentation, monitoring client accounts for back-up withholding and any other special tax reporting obligations, maintenance of books and records with respect to the foregoing, and such other information and ongoing liaison services as the Fund or the Investment Adviser may reasonably request.

The Fund may authorize one or more financial intermediaries and their authorized agents that have made arrangements with the Fund (collectively, “Financial Intermediaries”) to receive on its behalf purchase orders and repurchase requests. Such Financial Intermediaries are authorized to designate other intermediaries or designees to receive purchase orders and repurchase requests on the Fund’s behalf. The Fund will be deemed to have received a purchase order or repurchase request when a Financial Intermediary or, if applicable, a Financial Intermediary’s designee, receives the order or repurchase request. Orders will be priced at the next computed per-class NAV per Unit after they are received by a Financial Intermediary or the Financial Intermediary’s authorized designee.

Investors may be charged a fee if they effect transactions through a Financial Intermediary or authorized designee. Investors who purchase Units through Financial Intermediaries will be subject to the procedures of those intermediaries through which they purchase Units, which may include charges, investment minimums, cutoff times and other restrictions in addition to, or different from, those listed herein. Information concerning any charges or services will be provided to customers by the Financial Intermediary through which they purchase Units. Investors purchasing Units of the Fund through Financial Intermediaries should acquaint themselves with their Financial Intermediary’s procedures and should read this Memorandum in conjunction with any materials and information provided by their Financial Intermediary. The Financial Intermediary, and not its customers, will be the shareholder of record, although customers may have the right to vote Units depending upon their arrangement with the Financial Intermediary.

The Investment Adviser and/or its affiliates may make payments to selected affiliated or unaffiliated third parties (including the parties that have entered into selling agreements with the Fund) from time to time in connection with the servicing of Members and/or the Fund. These payments will be made out of the Investment Adviser’s and/or its affiliates’ own assets, as applicable, and will not represent an additional charge to the Fund. The amount of the foregoing payments may be significant in amount and the prospect of receiving any such payments may provide such third parties or their employees with an incentive to favor sales of Units of the Fund over other investment options. Contact your financial intermediary for details about revenue sharing payments it receives or may receive.

ADMINISTRATION

Each of the Fund and the Master Fund has retained the Administrator, UMB Fund Services, Inc., whose principal business address is 235 West Galena Street, Milwaukee, WI 53212, to provide administrative services, and to assist with operational needs. The Administrator provides such services to the Fund pursuant to an administration agreement between the Fund, the Master Fund, and the Administrator (the “Administration Agreement”). The Administrator is responsible directly or through its agents for, among other things, providing the following services to the Fund and the Master Fund, as applicable; (1) maintaining a list of Members and generally performing all actions related to the issuance and repurchase of Units of the Fund, if any, including delivery of trade confirmations and capital statements; (2) providing certain administrative, clerical and bookkeeping services; (3) providing transfer agency services, services related to the payment of distributions, and accounting services; (4) computing the NAV of the Fund and the Master Fund in accordance with U.S. generally accepted accounting principles (“GAAP”) and procedures defined in consultation with the Investment Adviser; (5) overseeing the preparation of semi-annual and annual financial statements of the Fund in accordance with GAAP, quarterly reports of the operations of the Fund and information required for tax returns; (6) supervising regulatory compliance matters and preparing certain regulatory filings; and (7) performing additional services, as agreed upon, in connection with the administration of the Fund. The Administrator may from time to time delegate its responsibilities under the Administration Agreement to one or more parties selected by the Administrator, including its affiliates or affiliates of the Investment Adviser.

The Fund pays the Administrator an annual fee calculated as a percentage of the Master Fund’s net assets and decreasing as assets reach certain levels. In addition, the Fund pays the Administrator its pro-rata share, based on combined assets under management, of an annual relationship-level base fee paid by all registered investment companies advised by the Investment Adviser and serviced by the Administrator (together with the asset-based fee, the “Administration Fee”). This fee structure generally covers fund administration, fund accounting, tax regulation and compliance, transfer agent and record keeping, and custody administration services provided by the Administrator or its affiliates. The Administration Fee is paid to the Administrator out of the assets of the Fund and Master Fund, as applicable, and therefore decreases the net profits or increases the net losses of the Fund and Master Fund. The Fund and Master Fund, as applicable, also reimburse the Administrator for certain out-of-pocket expenses. The Administration Fee and the other terms of the Administration Agreement may change from time to time as may be agreed to by the Fund, Master Fund and the Administrator.

The Administration Agreement provides that, in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations to the Fund, the Master Fund, the Administrator and any partner, director, officer or employee of the Administrator, or any of their affiliates, executors, heirs, assigns, successors or other legal representatives, will not be liable to the Fund and Master Fund for any error of judgment, for any mistake of law or for any act or omission by the person in connection with the performance of administration services for the Fund and the Master Fund. The Administration Agreement also provides for indemnification, to the fullest extent permitted by law, by the Fund or the Administrator, or any partner, director, officer or employee of the Administrator, and any of their affiliates, executors, heirs, assigns, successors or other legal representatives, against any liability or expense to which the person may be liable that arises in connection with the performance of services to the Fund, so long as the liability or expense is not incurred by reason of the person’s willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations to the Fund and the Master Fund.

CUSTODIAN

UMB Bank, n.a. (the “Custodian”), an affiliate of the Administrator, serves as the primary custodian of the assets of the Fund and the Master Fund, and may maintain custody of such assets with U.S. and non-U.S. subcustodians (which may be banks and trust companies), securities depositories and clearing agencies in accordance with the requirements of Section 17(f) of the Investment Company Act and the rules thereunder. Assets of the Fund and the Master Fund are not held by the Investment Adviser or commingled with the assets of other accounts other than to the extent that securities are held in the name of the Custodian or U.S. or non-U.S. subcustodians in a securities depository, clearing agency or omnibus customer account of such custodian. The Custodian’s principal business address is 1010 Grand Blvd., Kansas City, MO 64106.

FUND AND MASTER FUND EXPENSES

Each of the Fund, the Offshore Fund and the Master Fund will pay all of its expenses, or reimburse the Investment Adviser or its affiliates to the extent they have previously paid such expenses on behalf of the Fund, the Offshore Fund or the Master Fund. The expenses of the Fund (whether borne directly, or indirectly through, and in proportion to, the Fund’s interest in the Master Fund (through its investment in the Offshore Fund)) include, but are not limited to, any fees and expenses in connection with the offering and issuance of Units and Master Fund Interests; all fees and expenses reasonably incurred in connection with the operation of the Fund and the Master Fund such as direct and indirect expenses related to the assessment of prospective investments (whether or not such investments are consummated), investment structuring, corporate actions, travel associated with due diligence and monitoring activities and enforcing the Fund’s and the Master Fund’s rights in respect of the Master Fund Investments; quotation or valuation expenses; the Investment Management Fee, the Servicing Fee and the Administration Fee; brokerage commissions; interest and fees on any borrowings by the Fund and Master Fund; professional fees (including, without limitation, expenses of consultants, experts and specialists); research expenses; fees and expenses of outside tax or legal counsel (including fees and expenses associated with the review of documentation for prospective investments by the Master Fund), including foreign counsel; accounting, auditing and tax preparation expenses; fees and expenses in connection with repurchase offers and any repurchases or redemptions of Units and Master Fund Interests; taxes and governmental fees (including tax preparation fees); fees and expenses of any custodian, subcustodian, transfer agent, and registrar, and any other agent of the Fund and the Master Fund; all costs and charges for equipment or services used in communicating information regarding the Fund’s or the Master Fund’s transactions with any custodian or other agent engaged by the Fund or the Master Fund, as applicable; bank service fees; costs and expenses relating to any amendment of the LLC Agreement, the Master Fund LLC Agreement or other organizational documents of the Fund or the Master Fund; expenses of preparing, amending, printing, and distributing Memorandums, SAIs, and any other sales material (and any supplements or amendments thereto), reports, notices, websites, other communications to Members or the Master Fund’s members, and proxy materials; expenses of preparing, printing, and filing reports and other documents with government agencies; expenses of Members’ or Master Fund members’ meetings, including the solicitation of proxies in connection therewith; expenses of corporate data processing and related services; member recordkeeping and account services, fees, and disbursements; expenses relating to investor and public relations; fees and expenses of the members of the Board and Master Fund Board who are not employees of the Investment Adviser or its affiliates; insurance premiums; Extraordinary Expenses (as defined below); and all costs and expenses incurred as a result of dissolution, winding-up and termination of the Fund or the Master Fund. The Fund or the Master Fund may need to sell portfolio securities to pay fees and expenses, which could cause the Fund to realize taxable gains.

“Extraordinary Expenses” means all expenses incurred by the Fund, the Offshore Fund or Master Fund, as applicable, outside of the ordinary course of its business, including, without limitation, costs incurred in connection with any claim, litigation, arbitration, mediation, government investigation or dispute and the amount of any judgment or settlement paid in connection therewith, or the enforcement of the rights against any person or entity; costs and expenses for indemnification or contribution payable to any person or entity (including, without limitation, pursuant to the indemnification obligations described under “SUMMARY OF THE LLC AGREEMENT — LIMITATION OF LIABILITY; INDEMNIFICATION”); expenses of a reorganization, restructuring or merger, as applicable; expenses of holding, or soliciting proxies for, a meeting of members (except to the extent relating to items customarily addressed at an annual meeting of a registered closed-end management investment company); and the expenses of engaging a new administrator, custodian, transfer agent or escrow agent.

The Investment Adviser will bear all of its own routine overhead expenses, including rent, utilities, salaries, office equipment and communications expenses. In addition, the Investment Adviser is responsible for the payment of the compensation and expenses of those members of the Master Fund Board and officers of the Master Fund affiliated with the Investment Adviser, and making available, without expense to the Master Fund, the services of such individuals, subject to their individual consent to serve and to any limitations imposed by law.

The Fund’s expenses incurred and to be incurred in connection with the initial offering of Units will be amortized by the Fund over the 12-month period beginning on the Initial Closing Date. The Fund will also bear directly certain ongoing offering costs associated with any periodic offers of Units, and indirectly certain ongoing offering costs associated with any periodic offers of Master Fund Units, which will be expensed as they are incurred. Organizational expenses will be paid out of Fund assets which will be expensed as they are incurred. Offering costs cannot be deducted by the Fund, the Master Fund or the Members.

The Investment Adviser has entered into an expense limitation and reimbursement agreement (the “Expense Limitation and Reimbursement Agreement”) with the Fund, whereby the Investment Adviser has agreed to waive fees that it would otherwise have been paid, and/or to assume expenses of the Fund (including the Fund’s pro rata share of the Master Fund’s investment management fee and other fees and expenses) (a “Waiver”), in the amount necessary to ensure that Total Annual Expenses of the Fund (including the Fund’s pro rata share of the Master Fund’s Total Annual Expenses, but excluding any taxes, leverage interest, brokerage commissions, dividend and interest expenses on short sales, acquired fund fees and expenses (as determined in accordance with SEC Form N-2), expenses incurred in connection with any merger or reorganization, and extraordinary expenses, such as litigation expenses) do not exceed 2.50% of the average daily net assets of the Fund on an annualized basis (the “Expense Limit”). The current term of the Expense Limitation and Reimbursement Agreement continues until July 1, 2026. Thereafter, the Expense Limitation and Reimbursement Agreement will automatically renew for consecutive one-year terms unless terminated by the Fund or the Investment Adviser upon 30 days’ advanced written notice. Because taxes, leverage interest, brokerage commissions, dividend and interest expenses on short sales, acquired fund fees and expenses, expenses incurred in connection with any merger or reorganization, and extraordinary expenses are excluded from the Expense Limit, Total Annual Expenses (after fee waivers and expense reimbursements) are expected to exceed 2.50%.For a period not to exceed three years from the date on which a Waiver is made, the Investment Adviser may recoup amounts waived or assumed, provided it is able to effect such recoupment without causing the Fund’s expense ratio (after recoupment) to exceed the lesser of (i) the Expense Limit in effect at the time of the waiver and (ii) the Expense Limit in effect at the time of the recoupment. The Fund’s and the Master Fund’s fees and expenses will decrease the net profits or increase the net losses of the Fund that are credited to or debited against each Member’s capital account.

For the year ended March 31, 2025, the Investment Adviser waived $47,266. For a period not to exceed three years from the date on which a Waiver is made, the Investment Adviser may recoup amounts waived or assumed, provided it is able to effect such recoupment without causing the Fund’s expense ratio (after recoupment) to exceed the lesser of (i) the Expense Limit in effect at the time of the waiver and (ii) the Expense Limit in effect at the time of the recoupment. As of March 31, 2025, the amount of these potentially recoverable expenses was $254,008. The Investment Adviser may recapture all or a portion of this amount no later than March 31st of the years stated below:

CONFLICTS OF INTEREST

The Fund may be subject to a number of actual and potential conflicts of interest.

The Investment Adviser and its affiliates engage in financial advisory activities that are independent from, and may from time to time conflict with, those of the Fund and the Master Fund. In the future, there might arise instances where the interests of such affiliates conflict with the interests of the Fund and the Master Fund. The Investment Adviser and its affiliates may provide services to, invest in, advise, sponsor and/or act as Investment Adviser to investment vehicles and other persons or entities (including prospective investors in the Fund) which may have structures, investment objectives and/or policies that are similar to (or different than) those of the Fund and the Master Fund; which may compete with the Fund and the Master Fund for investment opportunities; and which may, subject to applicable law, co-invest with the Fund and the Master Fund in certain transactions. In addition, the Investment Adviser and its affiliates and respective clients may themselves invest in securities that would be appropriate for the Fund and the Master Fund. By acquiring Units, each Member will be deemed to have acknowledged the existence of any such actual and potential conflicts of interest.

The Investment Adviser and Master Fund have been granted an order of exemptive relief from the SEC that permits the Master Fund to participate in certain negotiated investments alongside other funds managed by the Investment Adviser or certain of its affiliates outside the parameters of Section 17 of the Investment Company Act, subject to certain conditions including (i) that a majority of the Board members who have no financial interest in the co-investment transaction and a majority of the Board members who are not “interested persons,” as defined in the Investment Company Act, approve the 17(d) investment, and (ii) that the price, terms and conditions of the 17(d) investment will be identical for each fund participating pursuant to the exemptive relief. The Master Fund will not engage in 17(d) investments alongside affiliates unless such investments are permitted under the Order granting such exemptive relief or unless such investments are not prohibited by Section 17(d) of the Investment Company Act or interpretations of Section 17(d) as expressed in SEC no-action letters or other available guidance. The Master Fund could be limited in its ability to invest in certain investments in which the Investment Adviser or any of its affiliates are investing or are invested. Furthermore, the Master Fund’s participation in co-investment transactions in reliance on the Order may give rise to actual or perceived conflicts of interest among the Master Fund and the other participating accounts. For example, certain 17(d) investment transactions may be more or less advantageous to the Master Fund relative to one or more other participating accounts. In addition, the Investment Adviser may be incentivized to pursue a 17(d) investment transaction for the Master Fund for reputational or other reasons that are not directly advantageous to the Master Fund.

Although the Investment Adviser and its affiliates will seek to allocate investment opportunities among the Fund and the Master Fund and their other clients in a fair and reasonable manner, there can be no assurance that an investment opportunity which comes to the attention of the Investment Adviser or its affiliates will be appropriate for the Fund and the Master Fund or will be referred to the Fund and the Master Fund. The Investment Adviser and its affiliates are not obligated to refer any investment opportunity to the Fund and the Master Fund.

The directors, partners, trustees, managers, members, officers and employees of the Investment Adviser and its affiliates may buy and sell securities or other investments for their own accounts (including through funds managed by the Investment Adviser or its affiliates). As a result of differing trading and investment strategies or constraints, investments may be made by directors, partners, trustees, managers, members, officers and employees that are the same, different from or made at different times than investments made for the Fund. To reduce the possibility that the Fund will be materially adversely affected by the personal trading described above, the Fund, Master Fund, and Investment Adviser have adopted codes of ethics (collectively, the “Codes of Ethics”) in compliance with Section 17(j) of the Investment Company Act that restricts securities trading in the personal accounts of investment professionals and others who normally come into possession of information regarding the portfolio transactions of the Fund. The Codes of Ethics are available on the EDGAR Database on the SEC’s website at https://www.sec.gov, and copies may be obtained, after paying a duplicating fee, by email at [email protected].

Expenses incurred with respect to the Master Fund Investments are generally allocated among the Master Fund and the Investment Adviser’s and its affiliates’ other clients participating in such investments. With respect to each Master Fund Investment in which any co-investor of the Investment Adviser or its affiliates co-invests with one or more funds (including the Master Fund) or separate accounts managed by the Investment Adviser or its affiliates, investment expenses or indemnification obligations related to such investments are generally borne by such funds (including the Master Fund) or separate accounts and such co-investor(s) in proportion to the capital committed by each to such investment.

Broken deal expenses are generally allocated entirely to funds (including the Master Fund) or separate accounts discretionarily managed by the Investment Adviser or its affiliates that would be allocated the relevant potential, but ultimately unconsummated, investment and not to any co-investor of the Investment Adviser or its affiliates allocated to such proposed investment. Discretionarily managed funds (including the Master Fund) or separate accounts managed by the Investment Adviser or its affiliates typically have priority allocation rights to investments whilst co-investors (including the Master Fund) have no such rights but typically participate to enable a transaction considered beneficial for the discretionarily managed funds (including the Master Fund) or separate accounts managed by the Investment Adviser or its affiliates participating therein as such funds’ and separate accounts’ collective appetite alone is typically insufficient to consummate such transactions. Accordingly, amongst such discretionarily managed funds (including the Master Fund) or separate accounts managed by the Investment Adviser or its affiliates, each shall bear the entire amount of broken deal expenses incurred, in proportion to the capital they would have committed to the contemplated unconsummated investment, save for certain initial stage broken deal expenses which may be allocated to funds (including the Master Fund) and separate accounts managed by the Investment Adviser or its affiliates (and not to co-investors of the Investment Adviser and its affiliates) based on such funds’ and accounts’ investment objectives rather than a planned allocation to an investment.

Potential Conflicts of Interest Risk

The Investment Adviser and the portfolio managers of the Fund have interests which may conflict with the interests of the Fund. In particular, the Investment Adviser manages and/or advises other investment funds or accounts with the same or similar investment objectives and strategies as the Fund. As a result, the Investment Adviser and the Fund’s portfolio managers may devote unequal time and attention to the management of the Fund and those other funds and accounts, and may not be able to formulate as complete a strategy or identify equally attractive investment opportunities as might be the case if they were to devote substantially more attention to the management of the Fund. The Investment Adviser and the Fund’s portfolio managers may identify a limited investment opportunity that may be suitable for multiple funds and accounts, and the opportunity may be allocated among these several funds and accounts, which may limit the Fund’s ability to take full advantage of the investment opportunity. Additionally, transaction orders may be aggregated for multiple accounts for purpose of execution, which may cause the price or brokerage costs to be less favorable to the Fund than if similar transactions were not being executed concurrently for other accounts. Furthermore, it is theoretically possible that a portfolio manager could use the information obtained from managing a fund or account to the advantage of other funds or accounts under management, and also theoretically possible that actions could be taken (or not taken) to the detriment of the Fund. At times, a portfolio manager may determine that an investment opportunity may be appropriate for only some of the funds and accounts for which he or she exercises investment responsibility, or may decide that certain of the funds and accounts should take differing positions with respect to a particular security. In these cases, the portfolio manager may place separate transactions for one or more funds or accounts which may affect the market price of the security or the execution of the transaction, or both, to the detriment or benefit of one or more other funds and accounts. For example, a portfolio manager may determine that it would be in the interest of another account to sell a security that the Fund holds, potentially resulting in a decrease in the market value of the security held by the Fund.

Conflicts potentially limiting the Fund’s investment opportunities may also arise when the Fund and other clients of the Investment Adviser invest in, or even conduct research relating to, different parts of an issuer’s capital structure, such as when the Fund owns senior debt obligations of an issuer and other clients own junior tranches of the same issuer. In such circumstances, decisions over whether to trigger an event of default, over the terms of any workout, or how to exit an investment may result in conflicts of interest. In order to minimize such conflicts, a portfolio manager may avoid certain investment opportunities that would potentially give rise to conflicts with other clients of the Investment Adviser or result in the Investment Adviser receiving material, non-public information, or the Investment Adviser may enact internal procedures designed to minimize such conflicts, which could have the effect of limiting the Fund’s investment opportunities. Additionally, if the Investment Adviser acquires material non-public confidential information in connection with its business activities for other clients, a portfolio manager or other investment personnel may be restricted from purchasing securities or selling certain securities for the Fund or other clients.

The portfolio managers also may engage in cross trades between funds and accounts, may select brokers or dealers to execute securities transactions based in part on brokerage and research services provided to the Investment Adviser or which may not benefit all funds and accounts equally and may receive different amounts of financial or other benefits for managing different funds and accounts. The Investment Adviser and their affiliates may provide more services to some types of funds and accounts than others.

The Fund and Investment Adviser have adopted policies and procedures that address the foregoing potential conflicts of interest, including policies and procedures to address the allocation of investment opportunities, execution of portfolio transactions, personal trading by employees and other potential conflicts of interest that are designed to ensure that all accounts of the Investment Adviser are treated equitably. There is no guarantee that the policies and procedures adopted by the Investment Adviser and the Fund will be able to identify or mitigate the conflicts of interest that arise between the Fund and any other investment funds or accounts that the Investment Adviser may manage or advise from time to time. For further information on potential conflicts of interest, see “Investment Management and Other Services — Conflicts of Interest” in the SAI.

TENDER OFFERS/OFFERS TO REPURCHASE

No Member will have the right to require the Fund to redeem its Units. In addition, no public market exists for the Units and the Fund does not expect any trading market to develop for the Units. As a result, if investors decide to invest in the Fund, they will have very limited opportunity to sell their Units, as described below.

The Fund may from time to time offer to repurchase Units from investors in accordance with written tenders by investors at those times, in those amounts, and on such terms and conditions as the Board may determine in its sole discretion. However, because all or substantially all of the Fund’s assets will be invested in the Master Fund (through its investment in the Offshore Fund), the Fund will generally find it necessary to liquidate a portion of its Master Fund Interest (via the Offshore Fund) in order to satisfy repurchase requests. Because Master Fund Interests may not be transferred, the Fund may withdraw a portion of its Master Fund Interest only pursuant to repurchase offers by the Master Fund. Therefore, the Fund does not expect to conduct a repurchase offer for Units unless the Master Fund contemporaneously conducts a repurchase offer for Master Fund Interests.

It is expected that, under normal market circumstances, the Investment Adviser generally will recommend to the Board, subject to the Board’s discretion, that any such tender offer of the Master Fund would be for an amount that is not more than 5% of the Master Fund’s NAV. To preserve the partnership tax treatment for the Master Fund, any such redemption program may be subject to significant restrictions and delays, including the restriction that no more than the Units representing 10% of the total interests in Master Fund capital or profits may be redeemed in any one taxable year. If a tender offer is oversubscribed by Members, the Master Fund will repurchase only a pro rata portion of the Units tendered by each Member, in which case tendering Members will not have all of their tendered Units repurchased by the Master Fund, or the Master Fund may take any other action permitted by the tender offer rules under the Securities Exchange Act of 1934 (the “Exchange Act”) and described in the written tender offer notice to Members.

Each tender offer will be made and Members will be notified in accordance with the requirements of the Exchange Act and the Investment Company Act, either by publication or mailing or both. The tender offer documents will contain information prescribed by such laws and the rules and regulations promulgated thereunder. Members tendering Units for repurchase will be asked to give written notice of their intent to do so by the date specified in the notice describing the terms of the applicable repurchase offer.

In determining whether the Master Fund should offer to repurchase Units therein from its Members pursuant to written requests, the Master Fund Board will consider the recommendation of the Investment Adviser. The Master Fund Board or the Board also may consider the following factors, among others, in determining whether to repurchase Master Fund Interests or Units and the amount of Master Fund Interests or Units therein to be repurchased:

The Investment Adviser currently expects that it will generally recommend to the Board that the Master Fund offer to repurchase Units from Members biannually (but not more than four times a year) with tender offer Valuation Dates occurring on the last business day of June and December; however, there can be no assurance that any such tender offers will be conducted on a biannual basis or at all. The Board may elect not to conduct a tender offer, notwithstanding the recommendation of the Investment Adviser. The decision to offer to repurchase Units is in the complete and absolute discretion of the Board. It is also anticipated that the Fund will generally conduct repurchase offers contemporaneously with repurchase offers conducted by the Master Fund. The Fund and the Master Fund are not required to conduct tender offers.

In certain circumstances, the Board may require a Member to tender its Units.

A 2.00% early repurchase fee will be charged by the Fund with respect to any repurchase of a Member’s Units at any time prior to the day immediately preceding the one-year anniversary of the Member’s purchase of the Units. Units tendered for repurchase will be treated as having been repurchased on a “first in — first out” basis. An early repurchase fee payable by a Member may be waived by the Fund in circumstances where the Board determines that doing so is in the best interests of the Fund and in a manner as will not discriminate unfairly against any Member.

Other than the Early Repurchase Fee, the Fund does not presently intend to impose any charges on the repurchase of Units. However, the Fund is permitted to allocate Members, whose Units are repurchased, costs and charges imposed by Underlying Funds, or otherwise incurred in connection with Master Fund Investments, if the Investment Adviser determines to liquidate such interests as a result of repurchase tenders by Members and such charges are imposed on the Fund. In the event that any such charges are allocated to the Fund, and subject to applicable law, the Fund may allocate such charges pro rata to all tendering Members. Additionally, as described above, the Board may offer to repurchase at a discount to NAV under certain circumstances.

A Member who tenders for repurchase only a portion of its Units in the Fund will be required to maintain a minimum account balance of $100,000. Subject to certain requirements under the Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder, the Fund reserves the right to reduce the amount to be repurchased from a Member so that the required account balance is maintained. Such minimum capital account balance requirement may also be waived by the Board in its sole discretion, subject to applicable federal securities laws.

Members whose written tenders of Units are accepted by the Fund will be subject to the risk of fluctuations in the NAV of Units until the Valuation Date. In addition, payment for repurchased Units may require the Fund to liquidate portfolio holdings earlier than the Investment Adviser would otherwise have caused these holdings to be liquidated, potentially resulting in losses, and may increase the Fund’s investment- related expenses as a result of higher portfolio turnover rates.

TENDER/REPURCHASE PROCEDURES

The following is a summary of the procedures expected to be employed by the Fund in connection with the repurchase of Units. The Master Fund is expected to employ substantially similar procedures in connection with the repurchase of Master Fund Interests.

Due to liquidity restraints associated with the Fund’s investments in Underlying Funds, it is presently expected that, under the procedures applicable to the repurchase of Units, Units will be valued as of the applicable Valuation Date. The Fund will generally pay the value of the Units repurchased (or as discussed below, 95% of such value) no later than the 65th day after the deadline for Member to tender Units for repurchase as set forth in the applicable repurchase offer. This amount will be subject to adjustment after completion of the annual audit of the Fund’s financial statements for the fiscal year in which the repurchase is effective. Units may be repurchased prior to Underlying Fund audits. To mitigate any effects of this, the Member will receive an initial cash payment equal to 95% of the estimated, unaudited value of the Units (after adjusting for early repurchase fees), determined as of the Valuation Date, no later than the 65th day after the deadline for Members to tender Units for repurchase as set forth in the applicable repurchase offer. The remaining 5% of the of the estimated unaudited net assets value of such Member’s Units being repurchased, subject to audit adjustment, will be determined and paid within two business days after completion of the Fund’s annual audit.

Under these procedures, Members will have to decide whether to tender their Units for repurchase without the benefit of having current information regarding the value of the Units as of the Valuation Date. The Member may inquire of the Fund, at the telephone number indicated within this Memorandum, as to the value of the Units last determined. In addition, there will be a substantial period of time between the date as of which the Members must tender the Units and the date they can expect to receive payment for their Units from the Fund. Payments for repurchased Units may be delayed under circumstances where the Fund has determined to redeem its interest in Underlying Funds to make such payments but has experienced delays in receiving payments from the Underlying Funds.

Repurchase of Units by the Fund are subject to certain regulatory requirements imposed by SEC rules. Notwithstanding the foregoing, the Board may determine to postpone payment of the repurchase price or suspend repurchases during any period at any time.

In accordance with the terms and conditions of the LLC Agreement, the Fund may cause a mandatory repurchase or redemption of all or some of the Units of a Member, or any person acquiring Units from or through a Member, in the event that the Board determines or has reason to believe, in its sole discretion, that: (i) its Units have been transferred to, or has vested in, any person, by operation of law in connection with the death, divorce, bankruptcy, insolvency, or adjudicated incompetence of a Member; (ii) ownership of the Units by such Member or other person will cause the Fund or the Master Fund to be in violation of, or subject the Fund, the Master Fund or the Investment Adviser to additional registration or regulation under the securities, commodities, or other laws of the United States or any other jurisdiction; (iii) continued ownership of the Units by such Members may be harmful or injurious to the business or reputation of the Fund or the Investment Adviser, or may subject the Fund, the Offshore Fund, the Master Fund or any Members or members of the Master Fund to an undue risk of adverse tax or other fiscal consequences; (iv) any representation or warranty made by a Member in connection with the acquisition of Units was not true when made or has ceased to be true, or the Member has breached any covenant made by it in connection with the acquisition of Units; or (v) it would be in the best interests of the Fund for the Fund to cause a mandatory redemption of such Units in circumstances where the Board determines that doing so is in the best interests of the Fund in a manner as will not discriminate unfairly against any Member.

TRANSFERS OF UNITS

There is no public market for the Units and none is expected to develop. The Fund does not list its Units on a stock exchange or similar market. Units are transferable only in limited circumstances as described below, and liquidity for investments in Units may be provided only through periodic tender offers by the Fund. If a Member attempts to transfer Units 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 Units and should be viewed as a long-term investment.

No person shall become a substituted Member of the Fund without the consent of the Fund, which consent may be withheld in its sole discretion. Units held by Members may be transferred only: (i) by operation of law in connection with the death, bankruptcy, insolvency, adjudicated incompetence, or dissolution of the Member; or (ii) under other limited circumstances, with the consent of the Board (which may be withheld in its sole and absolute discretion and is expected to be granted, if at all, only under extenuating circumstances).

Unless counsel to the Fund confirms that the transfer will not cause the Fund to be treated as a “publicly traded partnership” taxable as a corporation, the Board generally will not consider consenting to a transfer of Units unless the transfer is: (i) one in which the tax basis of the Units in the hands of the transferee is determined, in whole or in part, by reference to its tax basis in the hands of the transferring Member (e.g., certain transfers to affiliates, gifts and contributions to family entities); (ii) to members of the transferring Member’s immediate family (siblings, spouse, parents, or children); or (iii) a distribution from a qualified retirement plan or an individual retirement account.

Notice to the Fund of any proposed transfer must include evidence satisfactory to the Board that the proposed transferee, at the time of transfer, meets any requirements imposed by the Fund with respect to investor eligibility and suitability, including the requirement that any investor be an Eligible Investor. See “INVESTOR QUALIFICATIONS.” Notice of a proposed transfer of a Unit must also be accompanied by a properly completed investor application in respect of the proposed transferee. In connection with any request to transfer Units, the Fund may require the Member requesting the transfer to obtain, at the Member’s expense, an opinion of counsel selected by the Fund as to such matters as the Fund may reasonably request. The Board generally will not consent to a transfer of Units by a Member (i) unless such transfer is to a single transferee, or (ii) if, after the transfer of the Units, the balance of the account of each of the transferee and transferor is less than $50,000. Each transferring Member and transferee may be charged reasonable expenses, including, but not limited to, attorneys’ and accountants’ fees, incurred by the Fund in connection with the transfer. The Board reserves the right to revise the transfer restrictions on Units at any time.

Any transferee acquiring Units by operation of law in connection with the death, divorce, bankruptcy, insolvency, or adjudicated incompetence of a Member, will be entitled to the distributions allocable to the Units so acquired, to transfer the Units in accordance with the terms of the LLC Agreement and to tender the Units for repurchase by the Fund, but will not be entitled to the other rights of a Member unless and until the transferee becomes a substituted Member as specified in the LLC Agreement. If a Member transfers Units with the approval of the Board, the Fund shall as promptly as practicable take all necessary actions so that each transferee or successor to whom the Units are transferred is admitted to the Fund as a Member.

By subscribing for Units, each Member agrees to indemnify and hold harmless the Fund, the Board, the Investment Adviser, the Offshore Fund, the Master Fund, and each other Member, and any affiliate of the foregoing against all losses, claims, damages, liabilities, costs, and expenses (including legal or other expenses incurred in investigating or defending against any losses, claims, damages, liabilities, costs, and expenses or any judgments, fines, and amounts paid in settlement), joint or several, to which such persons may become subject by reason of or arising from any transfer made by that Member in violation of the LLC Agreement or policies adopted by the Board or any misrepresentation made by that Member in connection with any such transfer.

ANTI-MONEY LAUNDERING

If the Fund, the Investment Adviser or any governmental agency believes that the Fund has sold Units to, or is otherwise holding assets of, any person or entity that is acting, directly or indirectly, in violation of U.S., international or other anti-money laundering laws, rules, regulations, treaties or other restrictions, or on behalf of any suspected terrorist or terrorist organization, suspected drug trafficker, or senior foreign political figure(s) suspected of engaging in corruption, the Fund, the Investment Adviser or such governmental agency may freeze the assets of such person or entity invested in the Fund or suspend the repurchase of Units. The Fund may also be required to, or deem it necessary or advisable to, remit or transfer those assets to a governmental agency, in some cases without prior notice to the investor.

CREDIT FACILITY

The Master Fund may enter into one or more credit agreements or other similar agreements negotiated on market terms (each, a “Borrowing Transaction”) with one or more banks or other financial institutions (each, a “Financial Institution”) as chosen by the Investment Adviser and approved by the Board. The Master Fund may borrow under a credit facility for a number of reasons, including without limitation, to pay fees and expenses, to make annual income distributions and to satisfy certain repurchase offers in a timely manner to ensure liquidity for the investors. To facilitate such Borrowing Transactions, the Master Fund may pledge its assets to the Financial Institution.

The Fund and the Master Fund comply with Section 8 and Section 18 of the Investment Company Act, governing investment policies and capital structure and leverage.

CALCULATION OF NET ASSET VALUE

GENERAL

The Administrator calculates each of the Fund’s, the Offshore Fund’s and the Master Fund’s NAV as of the close of business on the last day of each quarter and at such other times as the Board may determine, including in connection with repurchases of Units, in accordance with the procedures described below or as may be determined from time to time in accordance with policies established by the Board.

Because the Fund invests all or substantially all of its assets in the Master Fund (through the Offshore Fund), the value of the assets of the Fund will depend on the value of its pro rata interest in the Master Fund. The Board and the Master Fund Board have approved valuation procedures for the Fund and the Master Fund, which are in substance identical (the “Valuation Procedures”).

For purposes of calculating NAV, portfolio securities and other assets for which market quotations are readily available are valued at market value. A market quotation is readily available only when that quotation is a quoted price (unadjusted) in active markets for identical investments that the Master Fund can access at the measurement date, provided that a quotation will not be readily available if it is not reliable.

Investments for which market quotations are not readily available are valued at fair value as determined in good faith pursuant to Rule 2a-5 under the Investment Company Act. As a general principle, the fair value of a security or other asset is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Pursuant to Rule 2a-5, the Board and Master Fund Board have designated the Investment Adviser as the valuation designee (“Valuation Designee”) for the Fund and Master Fund to perform in good faith the fair value determination relating to all Fund and Master Fund investments, under the Board’s and Master Fund Board’s oversight. The Investment Adviser carries out its designated responsibilities as Valuation Designee through its Valuation Committee. The fair values of one or more assets may not be the prices at which those assets are ultimately sold and the differences may be significant.

The Valuation Designee may value Master Fund portfolio securities for which market quotations are not readily available and other Master Fund assets utilizing inputs from pricing services, quotation reporting systems, valuation agents and other third-party sources.

The Master Fund values its investments in private Underlying Funds (generally private funds that are excluded from the definition of “investment company” pursuant to Sections 3(c)(1) or 3(c)(7) of the Investment Company Act). In accordance with the Valuation Procedures, fair value as of each quarter-end or other applicable accounting periods, as applicable, ordinarily will be the value determined as of such date by each private Underlying Fund in accordance with the private Underlying Fund’s valuation policies and reported at the time of the Master Fund’s valuation. As a general matter, the fair value of the Master Fund’s interest in a private Underlying Fund will represent the amount that the Master Fund could reasonably expect to receive from the private Underlying Fund if the Master Fund’s interest was redeemed at the time of valuation, based on information reasonably available at the time the valuation is made and that the Valuation Designee believes to be reliable. The Valuation Designee will determine the fair value of such private Underlying Fund based on the most recent final or estimated value reported by the private Underlying Fund, as well as any other relevant information available at the time the Valuation Designee values the portfolio. Using the nomenclature of the hedge fund industry, any values reported as “estimated” or “final” values are expected to reasonably reflect market values of securities when available or fair value as of the Master Fund’s valuation date. A substantial amount of time may elapse between the occurrence of an event necessitating the pricing of the Master Fund assets and the receipt of valuation information from the Underlying Manager of a private Underlying Fund.

The Valuation Designee will consider whether it is appropriate, in light of all relevant circumstances, to value such interests at the NAV as reported by the Underlying Manager at the time of valuation, or whether to adjust such value to reflect a premium or discount to NAV. In accordance with U.S. generally accepted accounting principles and industry practice, the Master Fund may not always apply a discount in cases where there is no contemporaneous redemption activity in a particular Underlying Fund. In other cases, as when an Underlying Fund imposes extraordinary restrictions on redemptions, when other extraordinary circumstances exist, or when there have been no recent transactions in Underlying Fund interests, the Master Fund may determine that it is appropriate to apply a discount to the NAV of the Underlying Fund. Any such decision will be made in good faith by the Valuation Designee under oversight by the Master Fund Board.

Where deemed appropriate by the Valuation Designee and consistent with the Investment Company Act, investments in Underlying Funds may be valued at cost. Cost will be used only when cost is determined to best approximate the fair value of the particular security under consideration.

To the extent the Fund or the Master Fund invests in securities or other instruments that are not investments in Underlying Funds, the Fund or the Master Fund, as applicable, will generally value such assets as described below. Securities traded (1) on one or more of the U.S. national securities exchanges or the OTC Bulletin Board will be valued at their last sales price, and (2) on NASDAQ will be valued at the NASDAQ Official Closing Price (“NOCP”), at the close of trading on the exchanges or markets where such securities are traded for the business day as of which such value is being determined. Securities traded on NASDAQ for which the NOCP is not available will be valued at the mean between the closing bid and ask prices in this market. Securities traded on a foreign securities exchange generally will be valued at their closing prices on the exchange where such securities are primarily traded and translated into U.S. dollars at the current exchange rate. Except as specified above, the value of a security, derivative, or synthetic security that is not actively traded on an exchange shall be determined by an unaffiliated pricing service that may use actual trade data or procedures using market indices, matrices, yield curves, specific trading characteristics of certain groups of securities, pricing models, or combinations of these. If the Valuation Designee believes that the value received from the pricing service does not reflect fair value, then the Valuation Designee will fair value the security using another methodology.

Debt securities generally will be valued by the Valuation Designee using a third-party pricing system, agent, or dealer selected by the Valuation Designee, which may include the use of valuations furnished by a pricing service that employs a matrix to determine valuations for normal institutional size trading units. Debt securities with remaining maturities of 60 days or less, absent unusual circumstances, will be valued at amortized cost, so long as such valuations are determined by the Valuation Designee to represent fair value.

Assets and liabilities initially expressed in foreign currencies will be converted into U.S. dollars using foreign exchange rates provided by a pricing service. Trading in foreign securities generally is completed, and the values of such securities are determined, prior to the close of securities markets in the United States. Foreign exchange rates are also determined prior to such close. On occasion, the values of securities and exchange rates may be affected by events occurring between the time as of which determination of such values or exchange rates are made and the time as of which the NAV of the Fund or the Master Fund is determined. When such events materially affect the values of securities held by the Fund or the Master Fund or its liabilities, such securities and liabilities will be valued at fair value as determined in good faith by the Valuation Designee.

The Master Fund will generally value shares of ETFs at the last sale price on the exchange on which the ETF is principally traded. The Master Fund will generally value shares of open-end investment companies and closed-end investment companies that do not trade on one or more of the U.S. national securities exchanges at their respective NAVs.

Investors should be aware that situations involving uncertainties as to the value of portfolio positions could have an adverse effect on the Fund’s and Master Fund’s net assets if the judgments of the Valuation Designee (in reliance on the Underlying Funds and/or their administrators) regarding appropriate valuations should prove incorrect.

SUSPENSION OF CALCULATION OF NET ASSET VALUE

As noted above, the Administrator calculates the NAV of the Fund and the Master Fund as of the close of business on the last day of each quarter. However, there may be circumstances where it may not be practicable to determine an NAV, such as during any period when the principal stock exchanges for securities in which Underlying Funds have invested their assets are closed other than for weekends and customary holidays (or when trading on such exchanges is restricted or suspended). In such circumstances, the Board (after consultation with the Investment Adviser) may suspend the calculation of NAV. The Fund will not accept subscriptions for Units if the calculation of NAV is suspended, and the suspension may require the termination of a pending repurchase offer by the Fund (or the postponement of the Valuation Date for a repurchase offer). Notwithstanding a suspension of the calculation of NAV, the Fund and Master Fund will be required to determine the value of its assets and report NAV in its semi-annual and annual reports to Members, and in its reports on Form N-PORT filed with the SEC after the end of the first and third quarters of the Fund’s and the Master Fund’s fiscal year. The Administrator will resume calculation of the Fund’s NAV after the Board (in consultation with the Investment Adviser) determines that conditions no longer require suspension of the calculation of NAV.

DIVIDEND REINVESTMENT PLAN

The Master Fund has a dividend reinvestment plan (the “DRIP”). Unless a Member elects to receive cash by contacting the Fund’s Administrator, UMB Fund Services, Inc. at (877) 779-1999 or 235 West Galena Street, Milwaukee, WI 53212, all dividends and/or capital gains distributions declared on Units will be automatically reinvested in full and fractional Units at the Master Fund’s then current NAV. Members who elect not to participate in the DRIP will receive all dividends and capital gains distributions in cash paid by check mailed directly to the shareholder of record (or, if the Units are held in street or other nominee name, then to such nominee) by the Administrator as dividend disbursing agent. Participation in the DRIP is completely voluntary and may be terminated or resumed at any time without penalty by notice if received and processed by the Administrator prior to the dividend record date; otherwise, such termination or resumption will be effective with respect to any subsequently declared dividend or other distribution. Such notice will be effective with respect to a particular dividend or other distribution (together, a “Dividend”). Some brokers or dealers may automatically elect to receive cash on behalf of Members who hold their Units in the broker or dealer’s name and may re-invest that cash in additional Units. Reinvested Dividends will increase the Fund’s assets on which the Investment Management Fee is payable to the Investment Adviser.

Whenever the Fund declares a dividend and/or capital gain payable in cash, non-participants in the DRIP will receive cash and participants in the DRIP will receive the equivalent in Units. The Units will be acquired by the Administrator for the DRIP participants’ accounts through receipt of additional unissued but authorized Units from the Master Fund.

The Administrator maintains all Members’ accounts in the DRIP and furnishes written confirmation of all transactions in the accounts, including information needed by Members for tax records. Units in the account of each DRIP participant will be held by the Administrator on behalf of the DRIP participant, and each Member proxy will include those Units purchased or received pursuant to the DRIP. The Administrator will forward all proxy solicitation materials to participants and vote proxies for Units held under the DRIP in accordance with the instructions of the participants.

Beneficial owners of Units who hold their Units in the name of a broker or dealer should contact the broker or nominee to determine whether and how they may participate in, or opt out of, the DRIP. In the case of Members such as banks, brokers or dealers that hold Units for others who are the beneficial owners, the Administrator will administer the DRIP on the basis of the number of Units certified from time to time by the record shareholder’s name and held for the account of beneficial owners who participate in the DRIP.

There will be no brokerage charges with respect to Units issued directly by the Master Fund. The automatic reinvestment of dividends and/or capital gains in Units under the DRIP will not relieve participants of any federal, state or local income tax that may be payable (or required to be withheld) on such dividends and/or capital gains, even though such participants have not received any cash with which to pay the resulting tax.

The Master Fund reserves the right to amend or terminate the DRIP. There is no direct service charge to participants with regard to purchases in the DRIP; however, the Fund reserves the right to amend the DRIP to include a service charge payable by the participants.