1173394--3/31/2008--GOLDMAN_SACHS_HEDGE_FUND_PARTNERS

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{investment, property, distribution}

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{loan, real, estate}

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{stock, price, share}

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{tax, income, asset}

{regulation, change, law}

{debt, indebtedness, cash}

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There Can Be No Assurance that the Managing Member s Decisions Regarding Allocations will be Successful; Inaccurate Information Provided by the Advisors May Have a Material Adverse Effect on Implementing the Company s Investment Objective Non-Diversified Status; the Managing Member may Allocate to One or More Advisors a Relatively Large Percentage of an Investment Fund s Assets Dependence on the Managing Member and the Advisors; the Managing Member Generally Has Limited Access to Information on or Control over Advisors Portfolios and Members Assume the Risk that Advisors May Knowingly Misrepresent Information Which Could Have a Material Negative Impact on the Company The Company Does Not Currently Intend to Participate in New Issues Which May Limit Potential Gains Risks Related to the Company s Regulatory Environment Limited Regulatory Oversight; Members not Afforded Protection of Investment Company Act Legal, Tax and Regulatory Risks; Disclosure of Information Regarding Members Risks Related to the Units, Liquidity of Units and the Offering of the Units Units Will Not be Listed and Will Not be Marketable The Company has Limited Liquidity and Limited Rights for Redemption Redemptions of Units are Subject to a Substantial Waiting Period and Potentially Outdated Information Substantial Redemptions Could Have a Material Adverse Effect on the Company Certain Classes of Units May Have No Lock-Up Period Redemption May be in Cash or In-Kind Under the Sole Discretion of the Managing Member; Members May Bear Risks Related to In-Kind Securities and Pay Fees in Disposing of In-Kind Securities Special Considerations Applicable to the Continuous Offering of Units; After the Initial Offering of Units Subsequent Purchasers of Units May Suffer Losses Because of Previously Established Open Positions Investing Prior to receipt of Subscription Monies and Prior to the Effective Date of Subscriptions Special Risks of the Company s Structure Risks Related to the Company s Structure The Investment Funds and the Advisors Investments May not be Diversified and There can be no Assurance that the Company s Allocation Methodologies will Achieve the Company s Allocation Goals The Company s Financial Statements are, and in the Future Will Ultimately be, Based on Estimates of Valuations Provided by Third Party Advisors Which May not be Accurate or May Need to be Adjusted in the Future The Other Business Activities and Relationships of Goldman Sachs and the Company s Advisors May Create Conflicts of Interest Affiliates of Goldman Sachs and Members of the Company May Market and Trade Derivatives Linked to the Performance of the Company, Which May Adversely Affect the NAV of the Company Special Risks of the Fund of Funds Structure Members of the Company are Subject to Multiple Levels of Fees and Expenses Because of the Company s Structure, and the Fee Structure of the Company May Create Incentives for Advisors to Make Risky Investments The Company Could Indirectly Incur Duplicative Transaction Costs Without Accomplishing a Net Investment Result Compensation Arrangements With the Managing Member and the Advisors of the Investment Funds May Create Incentives for the Managing Member, the Investment Funds or the Advisors to Make Riskier Investments or to Inflate Returns Transactions Between and Among Funds May Be Undervalued and Negatively Affect the Company s Performance Risks Associated with the Company Investing in Other Entities Past Performance of Affiliated Funds and Advisors are not Necessarily Indicative of the Results that the Company and Any Investment Fund May Achieve or of Future Results A Member s Investment in the Company will be Affected by the Investment Policies and Decisions of Advisors Which are Outside the Company s Control Limitations on Ability to Invest in Advisors May Result in Assets Not Being Used to Pursue Investment Objectives Valuation of the Investment Funds Investments Will be Based Upon Valuations Provided by the Advisors Which are Generally not Audited; Uncertainties in Valuations Could Have a Material Adverse Effect on the Company s Net Assets Investment Fund Allocations to Advisor Funds are Difficult to Monitor and Control Trading in Investments May be Illiquid Which May Cause Substantial Losses and May Negatively Impact the Ability to Make Distributions to a Withdrawing or Redeeming Member Advisor Redemption Holdbacks and Other Advisor Fund Liquidity Restrictions May Adversely Affect Remaining Members Managed Account Allocations Expose the Investment Funds to Liability Exceeding Allocations An Investment Fund May Not be Able to Vote or May Limit its Voting Abilities Lack of Operating History of Certain Advisors; Past Performance of Advisors is not Indicative of Future Results Advisors Invest Independently and May Hold Economically Offsetting Positions Advisors May Have Limited Capacity to Manage Additional Investment Fund Investments, Which Could Cause Dilution or Concentration of the Company s Investments or Negatively Affect Allocation of Investments Advisor Funds Securities are Generally Illiquid Which May Increase Costs and Limit Redemptions Frequent Trading and Turnover Typically Result in High Transaction Costs and the Investment Funds Have No Control Over This Turnover Indemnification of Advisors May Create Costs for the Company and the Investment Funds Allocation of the Company s Assets May Not Protect the Company from Exposure to Economic Downturns in Any Investment Fund or Investment Sector Risks Related to Investment and Trading An Investment in the Company Involves a High Degree of Risk That the Entire Amount Invested May be Lost; Investment Results May Vary Substantially over Time The Advisors May be Unable to or May Choose not to Seek to Achieve their Investment Goals; Advisors May Not be Able to Locate Suitable Investment Opportunities The Use of Leverage May Substantially Increase the Adverse Impact to Which the Investment Funds Investment Portfolios May be Subject Convergence Risk May Result in Significant Losses of the Investment Funds and the Company Possible Effects of Speculative Position Limits Could Adversely Affect the Operations and Profitability of the Investment Funds and the Company Short Selling Creates the Risk of Significant Losses The Ability of an Investment Fund to Hedge Successfully will Depend on the Particular Advisor s Ability to Predict Pertinent Market Movements Which Cannot be Assured Forward Contracts May Entail Significant Risks and Uncertainties Which Could Result in Substantial Losses to the Investment Funds and the Company Swap Agreements May Increase or Decrease the Overall Volatility of an Investment Fund s Portfolio The Prices of an Investment Fund s Investments Can be Highly Volatile and Influenced by External Factors Outside the Control of Such Investment Fund Failure of the Investment Funds Counterparties, Brokers, and Exchanges Exposes Investment Funds to Credit Risks in Various Forms Risks Related to International Investments Trading on Non-U.S. Exchanges May Involve Higher Risk of Financial Irregularities and/or Lack of Appropriate Risk Monitoring and Controls Non-U.S. Investments Involve Special Risks not Usually Associated with Investments in U.S. Securities Investment in Emerging Markets Involves Significant Risks, including Inflation and Currency Devaluations Foreign Currency Transactions and Exchange Rate Risk Create Additional Risks for Advisors Investing in Certain Financial Instruments Non-U.S. Futures Transactions Afford Less Protection as Rules of a Non-U.S. Exchange May Not be Enforced by a U.S. Regulator Risks Related to Securities and Other Instruments Investing in Derivative Instruments Involves Risk of Loss to the Advisors That Could Materially Adversely Affect the Value of the Company s Net Assets Equity Securities and Equity-Related Instruments May be Subject to Various Types of Risk, Including Market Risk, Liquidity Risk, Counterparty Credit Risk, Legal Risk and Operations Risk Fixed Income Securities are Subject to Credit Risk and Price Volatility High Yield Debt Investments are Subject to Significant Risks of Default, Illiquidity and Volatility Other Debt Instruments; CBOs and CLOs Structured Securities May Present a Greater Degree of Market Risk and May be More Volatile, Less Liquid and More Difficult to Price Accurately Than Less Complex Securities Call Options Involve Significant Risks for Buyers and Sellers Put Options Involve Significant Risks for Buyers and Sellers Reverse Repurchase Agreements May Increase the Volatility of an Investment Fund s and the Company s Investment Portfolio There are Significant Risks Associated with When-Issued and Forward Commitment Securities Derivatives with Respect to High Yield and Other Indebtedness Expose Advisors to Counterparty and Issuer Risk The Company May be Prevented From Achieving its Objective During any Period in Which Assets are not Substantially Invested in Accordance with Principal Investment Strategies Restricted and Illiquid Investments May Prevent Prompt Liquidation of Unfavorable Positions Resulting in Substantial Loss Risks Related to Issuers of Securities The Issuers of Securities Acquired by Advisors will Sometimes Face a High Degree of Business and Financial Risk Expected Transactions May not Take Place or may Result in Substantial Losses Investments in Small Capitalization Companies are Speculative and May be Difficult to Value Investments in Issuers of Indebtedness May be Adversely Affected in the Event of an Issuer s Insolvency Purchases of Securities and Other Obligations of Financially Distressed Companies Create an Enhanced Risk of Substantial Loss or Loss of Entire Investment Investments in Certain Multi-Advisor Structures Additional Investment Risks of Certain Advisor Funds

Full 10-K form ▸

1173394--3/31/2008--GOLDMAN_SACHS_HEDGE_FUND_PARTNERS_LLC