As filed with the Securities and Exchange Commission on
November 23, 2009
Registration
No. 333-162132
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Amendment No. 2
to
Form S-1
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF
1933
Quadriga Superfund,
L.P.
(Exact name of registrant as
specified in its charter)
|
|
|
Delaware
(State of
Organization)
|
|
6221
(Primary Standard
Industrial
Classification Code Number)
|
98-0375395
(I.R.S. Employer
Identification Number)
|
|
|
|
|
|
Superfund Office Building
PO Box 1479
Grand Anse
St. Georges, Grenada
West Indies
(473) 439-2418
(Address, including zip
code, and telephone number,
including area code, of registrants principal executive
offices)
|
|
Roman Gregorig
Superfund Office Building
PO Box 1479
Grand Anse
St. Georges, Grenada
West Indies
(473) 439-2418
(Name, address, including
zip code, and telephone number,
including area code, of agent for service)
|
Copy to:
James B. Biery
Sidley Austin LLP
One South Dearborn
Street
Chicago, Illinois
60603
(312) 853-4167
Approximate date of commencement of proposed sale to the
public: As soon as practicable after the
effective date of this Registration Statement.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933 (the
Securities Act) check the following
box. þ
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same
offering. o
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering. o
If this Form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering. o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in Rule
12b-2 of the Exchange Act. (Check one):
|
|
|
|
|
|
|
Large accelerated filer
|
|
o
|
|
Accelerated filer
|
|
o
|
Non-accelerated filer
|
|
o (Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
|
þ
|
CALCULATION
OF REGISTRATION FEE
|
|
|
|
|
|
|
|
|
|
Proposed Maximum
|
|
|
Amount of Additional
|
Title of Each Class of
|
|
|
Aggregate Offering
|
|
|
Registration
|
Securities being Registered
|
|
|
Price
|
|
|
Fee(1)*
|
Series A Units
|
|
|
$220,000,000
|
|
|
$0
|
Series B Units
|
|
|
$320,000,000
|
|
|
$0
|
|
|
|
|
|
|
|
|
|
(1) |
Pursuant to Rule 457(o).
|
|
|
* |
As of the date hereof, Registrant registers pursuant to this
Registration Statement on Form S-1 (Registration
No. 333-162132) $220,000,000 of Series A Units and
$320,000,000 of Series B Units. Registrant paid $55.80 in
registration fees to the Securities and Exchange Commission in
connection with the registration of $1,000,000 of Series A
Units and $8,609.94 in registration fees to the Securities and
Exchange Commission in connection with the registration of
$154,300,000 of Series B Units upon the initial filing of
this Registration Statement on Form S-1 on
September 25, 2009. Upon the filing of this Amendment
No. 1 to the Registration Statement on Form S-1 on
October 29, 2009, Registrant carried forward and
registered, pursuant to Rule 415(a)(6), $219,000,000 of
registered but unsold Series A Units and $165,700,000 of
registered but unsold Series B Units from Registrants
previous Registration Statement on Form S-1 (Registration
No. 333-136804) for which Registrant has paid $23,433.00
and $17,729.90 in registration fees to the Securities and
Exchange Commission, respectively.
|
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission
acting pursuant to said Section 8(a), may determine.
PROSPECTUS AND DISCLOSURE DOCUMENT
QUADRIGA SUPERFUND, L.P.
$220,000,000 SERIES A
$320,000,000 SERIES B
UNITS OF LIMITED PARTNERSHIP INTEREST
The
Offering
Quadriga Superfund, L.P. a Delaware limited partnership (the
Fund), is offering two separate series of limited
partnership units (Units), designated Series A
and Series B (the Series), in an aggregate
offering amount of up to $540,000,000 for both Series A and
Series B together. The two Series are traded and managed
the same way except for the degree of leverage. The assets of
each Series are segregated from the other Series and each Series
is offered separately.
Superfund USA, Inc. and additional selling agents, which serve
as underwriters, are offering the Series Units on the last
day of each month at a price of month-end net asset value per
Unit. As of October 31, 2009, the net asset value of a
Series A Unit was $1,312.64 and the net asset value of a
Series B Unit was $1,388.19. No up-front underwriting
discount or commissions apply. The selling agents will use their
best efforts to sell the Units offered. The offering will be
conducted on a continuous basis until all Units have been sold.
This offering is scheduled to terminate on
November [ ], 2012, provided, however, that it
may terminate earlier if all of the Units registered pursuant to
the registration statement of which this Prospectus is part have
been sold and it may be extended for up to six months beyond
November [ ], 2012 pursuant to the rules of the
Securities Act of 1933. Subscription proceeds are held in escrow
at HSBC Bank USA until released to the Series. There is no
minimum number of Units that must be sold for Units to be issued
at the end of each month. Regardless of the net asset value at
which Units are issued, the initial aggregate net asset value of
an investors Units will equal the dollar amount of the
investors subscription, and no up-front underwriting
discount or commission will be taken, although, as described
herein, certain Units will pay an installment selling commission
of up to 10% of the gross offering proceeds of the Units in
monthly installments of 1/12 of 4.0% of the month-end net asset
value of such Units.
The
Risks
These are speculative securities. BEFORE YOU DECIDE WHETHER TO
INVEST, READ THIS ENTIRE PROSPECTUS CAREFULLY AND CONSIDER
THE RISKS YOU FACE ON PAGE 9.
|
|
|
|
|
The Fund is speculative and highly leveraged. The Series will
acquire positions with face amounts substantially greater than
their total equity. Leverage magnifies the impact of both gains
and losses.
|
|
|
|
Performance can be volatile and the net asset value per Unit may
fluctuate significantly in a single month.
|
|
|
|
You could lose all or substantially all of your investment in
each Series.
|
|
|
|
Superfund Capital Management, Inc. has total trading authority
over each Series. The use of a single advisor could mean lack of
diversification and, consequently, higher risk.
|
|
|
|
There is no secondary market for the Units, and none is expected
to develop. While the Units have redemption rights, there are
restrictions. For example, redemptions can occur only at the end
of a month. See Distributions and Redemptions.
|
|
|
|
Transfers of interest in the Units are subject to limitations,
such as 30 days advance written notice of any intent
to transfer. Also, Superfund Capital Management, Inc. may deny a
request to transfer if it determines that the transfer may
result in adverse legal or tax consequences for a Series. See
Quadriga Superfund, L.P. Fourth Amended and Restated
Limited Partnership Agreement.
|
|
|
|
Substantial expenses must be offset by trading profits and
interest income for each Series to be profitable.
|
|
|
|
No U.S. regulatory authority or exchange has the power to
compel the enforcement of the rules of a foreign board of trade
or any applicable foreign laws.
|
To invest, you will be required to represent and warrant,
among other things, that you have received a copy of this
Prospectus and that you satisfy the minimum net worth and income
requirements for residents of your state to invest in a Series.
You are encouraged to discuss your investment decision with your
individual financial, tax and legal advisors.
These securities have not been approved or disapproved by the
Securities and Exchange Commission or any state securities
commission nor has the Securities and Exchange Commission or any
state securities commission passed upon the accuracy or adequacy
of this prospectus. Any representation to the contrary is a
criminal offense.
This prospectus is in two parts: a disclosure document and a
statement of additional information. These parts are bound
together, and both contain important information.
THE COMMODITY FUTURES TRADING COMMISSION HAS NOT PASSED UPON
THE MERITS OF PARTICIPATING IN THIS POOL NOR HAS THE COMMISSION
PASSED ON THE ADEQUACY OR ACCURACY OF THIS DISCLOSURE
DOCUMENT.
SUPERFUND CAPITAL MANAGEMENT, INC.
General Partner
Prospectus dated
[ ],
2009
COMMODITY
FUTURES TRADING COMMISSION
RISK DISCLOSURE STATEMENT
YOU SHOULD CAREFULLY CONSIDER WHETHER YOUR FINANCIAL CONDITION
PERMITS YOU TO PARTICIPATE IN A COMMODITY POOL. IN SO DOING, YOU
SHOULD BE AWARE THAT FUTURES AND OPTIONS TRADING CAN QUICKLY
LEAD TO LARGE LOSSES AS WELL AS GAINS. SUCH TRADING LOSSES CAN
SHARPLY REDUCE THE NET ASSET VALUE OF THE POOL AND CONSEQUENTLY
THE VALUE OF YOUR INTEREST IN THE POOL. IN ADDITION,
RESTRICTIONS ON REDEMPTIONS MAY AFFECT YOUR ABILITY TO WITHDRAW
YOUR PARTICIPATION IN THE POOL.
FURTHER, COMMODITY POOLS MAY BE SUBJECT TO SUBSTANTIAL CHARGES
FOR MANAGEMENT, AND ADVISORY AND BROKERAGE FEES. IT MAY BE
NECESSARY FOR THOSE POOLS THAT ARE SUBJECT TO THESE CHARGES TO
MAKE SUBSTANTIAL TRADING PROFITS TO AVOID DEPLETION OR
EXHAUSTION OF THEIR ASSETS. THIS DISCLOSURE DOCUMENT CONTAINS A
COMPLETE DESCRIPTION OF EACH EXPENSE TO BE CHARGED THIS POOL AT
PAGES 3 THROUGH 6 AND 33 THROUGH 37 AND A STATEMENT OF THE
PERCENTAGE RETURN NECESSARY TO BREAK EVEN, THAT IS, TO RECOVER
THE AMOUNT OF YOUR INITIAL INVESTMENT, AT PAGES 5 AND 6.
THIS BRIEF STATEMENT CANNOT DISCLOSE ALL THE RISKS AND OTHER
FACTORS NECESSARY TO EVALUATE YOUR PARTICIPATION IN THIS
COMMODITY POOL. THEREFORE, BEFORE YOU DECIDE TO PARTICIPATE IN
THIS COMMODITY POOL, YOU SHOULD CAREFULLY STUDY THIS DISCLOSURE
DOCUMENT, INCLUDING A DESCRIPTION OF THE PRINCIPAL RISK FACTORS
OF THIS INVESTMENT, BEGINNING AT PAGE 9.
YOU SHOULD ALSO BE AWARE THAT THIS COMMODITY POOL MAY TRADE
FOREIGN FUTURES OR OPTIONS CONTRACTS. TRANSACTIONS ON MARKETS
LOCATED OUTSIDE THE UNITED STATES, INCLUDING MARKETS FORMALLY
LINKED TO A UNITED STATES MARKET, MAY BE SUBJECT TO REGULATIONS
WHICH OFFER DIFFERENT OR DIMINISHED PROTECTION TO THE POOL AND
ITS PARTICIPANTS. FURTHER, UNITED STATES REGULATORY AUTHORITIES
MAY BE UNABLE TO COMPEL THE ENFORCEMENT OF THE RULES OF
REGULATORY AUTHORITIES OR MARKETS IN
NON-UNITED
STATES JURISDICTIONS WHERE TRANSACTIONS FOR THE POOL MAY BE
EFFECTED.
THIS PROSPECTUS DOES NOT INCLUDE ALL OF THE INFORMATION OR
EXHIBITS IN EACH SERIES REGISTRATION STATEMENT. YOU CAN
READ AND COPY THE ENTIRE REGISTRATION STATEMENT AT THE PUBLIC
REFERENCE FACILITIES MAINTAINED BY THE SECURITIES AND EXCHANGE
COMMISSION (SEC) IN WASHINGTON, D.C. EACH
SERIES FILES QUARTERLY AND ANNUAL REPORTS WITH THE SEC. YOU CAN
READ AND COPY THESE REPORTS AT THE SEC PUBLIC REFERENCE FACILITY
AT 100 F STREET, N.E., WASHINGTON, D.C. 20549. PLEASE CALL
THE SEC AT
1-800-SEC-0300
FOR FURTHER INFORMATION. EACH SERIES FILINGS WILL BE
POSTED AT THE SEC WEBSITE AT HTTP://WWW.SEC.GOV.
SUPERFUND
CAPITAL MANAGEMENT, INC.
General Partner
SUPERFUND OFFICE BUILDING
PO BOX 1479
GRAND ANSE
ST. GEORGES, GRENADA
WEST INDIES
(473) 439-2418
ii
TABLE OF
CONTENTS
|
|
|
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
2
|
|
|
|
|
2
|
|
|
|
|
2
|
|
|
|
|
3
|
|
|
|
|
3
|
|
|
|
|
3
|
|
|
|
|
3
|
|
|
|
|
4
|
|
|
|
|
5
|
|
|
|
|
6
|
|
|
|
|
7
|
|
|
|
|
7
|
|
|
|
|
8
|
|
|
|
|
9
|
|
|
|
|
9
|
|
|
|
|
9
|
|
|
|
|
9
|
|
|
|
|
9
|
|
|
|
|
9
|
|
|
|
|
9
|
|
|
|
|
10
|
|
|
|
|
10
|
|
|
|
|
10
|
|
|
|
|
10
|
|
|
|
|
11
|
|
|
|
|
11
|
|
|
|
|
11
|
|
|
|
|
11
|
|
|
|
|
11
|
|
|
|
|
11
|
|
|
|
|
11
|
|
|
|
|
11
|
|
|
|
|
12
|
|
|
|
|
12
|
|
|
|
|
12
|
|
|
|
|
12
|
|
|
|
|
12
|
|
|
|
|
12
|
|
iii
|
|
|
|
|
|
|
|
13
|
|
|
|
|
13
|
|
|
|
|
13
|
|
|
|
|
13
|
|
|
|
|
13
|
|
|
|
|
14
|
|
|
|
|
14
|
|
|
|
|
14
|
|
|
|
|
14
|
|
|
|
|
14
|
|
|
|
|
15
|
|
|
|
|
15
|
|
|
|
|
16
|
|
|
|
|
16
|
|
|
|
|
18
|
|
|
|
|
20
|
|
|
|
|
20
|
|
|
|
|
20
|
|
|
|
|
20
|
|
|
|
|
20
|
|
|
|
|
30
|
|
|
|
|
30
|
|
|
|
|
30
|
|
|
|
|
30
|
|
|
|
|
30
|
|
|
|
|
31
|
|
|
|
|
31
|
|
|
|
|
32
|
|
|
|
|
32
|
|
|
|
|
32
|
|
|
|
|
32
|
|
|
|
|
33
|
|
|
|
|
33
|
|
|
|
|
35
|
|
|
|
|
35
|
|
|
|
|
35
|
|
|
|
|
36
|
|
|
|
|
36
|
|
|
|
|
36
|
|
|
|
|
36
|
|
|
|
|
37
|
|
|
|
|
37
|
|
|
|
|
37
|
|
|
|
|
37
|
|
|
|
|
38
|
|
iv
|
|
|
|
|
|
|
|
38
|
|
|
|
|
39
|
|
|
|
|
39
|
|
|
|
|
39
|
|
|
|
|
40
|
|
|
|
|
41
|
|
|
|
|
41
|
|
|
|
|
41
|
|
|
|
|
41
|
|
|
|
|
41
|
|
|
|
|
42
|
|
|
|
|
42
|
|
|
|
|
42
|
|
|
|
|
42
|
|
|
|
|
42
|
|
|
|
|
43
|
|
|
|
|
43
|
|
|
|
|
43
|
|
|
|
|
43
|
|
|
|
|
43
|
|
|
|
|
43
|
|
|
|
|
44
|
|
|
|
|
44
|
|
|
|
|
44
|
|
|
|
|
44
|
|
|
|
|
44
|
|
|
|
|
45
|
|
|
|
|
45
|
|
|
|
|
45
|
|
|
|
|
45
|
|
|
|
|
46
|
|
|
|
|
46
|
|
|
|
|
46
|
|
|
|
|
46
|
|
|
|
|
46
|
|
|
|
|
47
|
|
|
|
|
48
|
|
|
|
|
48
|
|
|
|
|
48
|
|
|
|
|
49
|
|
|
|
|
49
|
|
|
|
|
49
|
|
|
|
|
50
|
|
|
|
|
51
|
|
|
|
|
51
|
|
v
|
|
|
|
|
|
|
|
51
|
|
|
|
|
52
|
|
|
|
|
|
|
|
|
|
110
|
|
|
|
|
112
|
|
|
|
|
121
|
|
|
|
|
121
|
|
|
|
|
123
|
|
|
|
|
123
|
|
|
|
|
124
|
|
|
EXHIBITS
|
|
|
|
|
|
EXHIBIT A: Quadriga Superfund, L.P. Form of Fourth Amended and
Restated Limited
Partnership Agreement
|
|
|
A-1
|
|
EXHIBIT B: Quadriga Superfund, L.P. Request for Redemption
|
|
|
B-1
|
|
EXHIBIT C: Quadriga Superfund, L.P. Subscription Representations
|
|
|
C-1
|
|
EXHIBIT D: Quadriga Superfund, L.P. Subscription Agreement
|
|
|
D-1
|
|
EXHIBIT E: Quadriga Superfund, L.P. Request for Transfer Form
|
|
|
E-1
|
|
EXHIBIT F: Quadriga Superfund, L.P. Subscription Agreement for
an Additional Investment
|
|
|
F-1
|
|
EXHIBIT G: Quadriga Superfund, L.P. Series Exchange Subscription
Agreement
|
|
|
G-1
|
|
EX-23.01 |
EX-23.02 |
An electronic version of this Prospectus is available on a
dedicated web site (http://www.superfund.net) being maintained
by Superfund USA, Inc.
vi
SUMMARY
General
Quadriga Superfund, L.P. (the Fund) is offering two
separate series of limited partnership units
(Units): Quadriga Superfund, L.P. Series A and
Quadriga Superfund, L.P. Series B (each, a
Series). Each Series trades speculatively in the
U.S. and international futures and cash foreign currency
markets. Specifically, each Series trades in a portfolio of more
than 120 futures and cash foreign currency markets using
fully automated, proprietary, computerized trading systems. The
Superfund trading systems are licensed to Superfund Capital
Management, Inc., the Funds general partner and a Grenada
corporation (Superfund Capital Management) on a
non-exclusive basis. These systems automatically initiate buy
and sell trading signals and monitor relevant technical
indicators on over 120 markets traded in the United States,
Canada, Europe and Asia. Each Series strategy is based on
the implementation of a four-point philosophy consisting of
(i) market diversification, (ii) technical analysis,
(iii) trend-following, and (iv) money management.
Superfund Capital Management may also formulate new approaches
to carry out the overall investment objective of each Series.
Superfund Capital Management reserves the right to trade other
pools and/or funds.
The leverage and trading methodology employed with respect to
Series A is the same as that for
Superfund Q-AG,
a private non-U.S. fund managed by Superfund Trading Management,
Inc., an affiliate of Superfund Capital Management. The leverage
and trading methodology employed with respect to Series B
is the same as that for Superfund GCT, a private non-U.S. fund
managed by Superfund Fund Management Inc., an affiliate of
Superfund Capital Management. Series B is leveraged
approximately 1.5 times Series A. Performance
information for each Series is shown beginning on page 18
and for these private,
non-U.S.
funds beginning on page 117 of the Prospectus.
Each Series trades in more than 120 futures and forward markets
globally, including both commodity and financial futures. The
primary sectors that each Series may trade are: currencies,
interest rates, bonds, stock indices, metals, energy, grains and
agricultural markets. Each Series will emphasize instruments
with low correlation to each other and high liquidity for order
execution. Notwithstanding each Series philosophy of
diversification among markets traded, a majority of each
Series market exposure may be concentrated in only one or
two market sectors from time to time.
The proprietary software technology embodied in Superfunds
trading systems examines a broad array of investments around the
world to identify possible opportunities that fit within a
narrow selection criteria. This methodology primarily uses
trend-following technical trading strategies. The duration of
these trends vary from days to months. The technology is
designed to isolate market patterns that offer high reward to
risk potential based on historical data. Once potential trades
are identified, the systems apply additional filters with
respect to trend and volatility analysis. Finally, prior to
generating definite buy or sell signals, the systems take into
consideration macro variables such as overall risk capital and
portfolio volatility. All transactions are then executed using a
fully automated computerized system.
The following summary provides a review in outline form of
certain important aspects of an investment in each Series.
|
|
|
How
to Subscribe for Units
|
|
|
|
|
|
Investors must submit subscriptions at least five business days
prior to the applicable month-end closing date. Approved
subscriptions will be accepted once payments are received and
cleared at the applicable month-end net asset value for the
respective Series. Pursuant to an addendum to the Subscription
Agreement, investors may subscribe for Units and receive them,
and pay for them in equal installments, over a period of time to
achieve an average price for the Units acquired; provided,
however, that no Units will be issued until such Units have been
fully paid for by the investor.
|
|
|
|
|
|
Each Series will accept subscriptions throughout the continuing
offering period, which can be terminated by Superfund Capital
Management at any time. The offering is scheduled to terminate
on November [ ], 2012, provided, however, that
it may terminate earlier if all of the Units registered pursuant
to the registration statement of which this Prospectus is part
have been sold and it may be extended for up to six months
beyond November [ ], 2012 pursuant to the rules
of the Securities Act of 1933. Additional registration
statements may also be filed in the future offering additional
Units for sale to the public.
|
|
|
|
|
|
The selling agents serve as underwriters and will use their best
efforts to sell the Units offered, without any firm underwriting
commitment. Superfund Capital Management is also offering Units,
through Superfund
|
1
|
|
|
|
|
USA, Inc. (Superfund USA), which also serves as an
underwriter, to potential investors by distributing this
Prospectus and making it available on a dedicated internet
website (http://www.superfund.net). Superfund Capital Management
intends to engage in marketing efforts through media including
but not limited to third party websites, newspapers, magazines,
other periodicals, television, radio, seminars, conferences,
workshops, and sporting and charity events. Investors are
required to make representations and warranties regarding their
suitability to purchase the Units in the Subscription Agreement.
Read the Subscription Agreement as well as this Prospectus
carefully before you decide whether to invest.
|
Minimum
Investment in Each Series
The minimum initial investment is $5,000 per Series.
Persons that become limited partners by holding Units in a
particular Series may make additional investments in that same
Series of at least $1,000.
|
|
|
Is
Quadriga Superfund, L.P. a Suitable Investment for
You?
|
The primary objective of the Units is to achieve substantial
capital appreciation over time. An investment in the Units may
fit within your portfolio allocation strategy if you are
interested in the Units potential to produce returns that
are generally unrelated to traditional securities investments.
An investment in each Series is speculative and involves a high
degree of risk. Each Series is not a complete investment
program. Superfund Capital Management offers each Series as a
diversification opportunity for an investors entire
investment portfolio, and therefore an investment in each Series
should only be a limited portion of the investors
portfolio. You must, at a minimum, have:
(1) a net worth of at least $250,000, exclusive of home,
furnishings and automobiles; or
(2) a net worth, similarly calculated, of at least $70,000
and an annual gross income of at least $70,000.
A number of jurisdictions in which the Units are offered impose
higher minimum suitability standards on prospective investors.
See Exhibit C to this Prospectus. These suitability standards
are, in each case, regulatory minimums only, and merely because
you meet such standards does not mean that an investment in the
Units is suitable for you. YOU MAY NOT INVEST MORE THAN 10% OF
YOUR NET WORTH, EXCLUSIVE OF HOME, FURNISHINGS AND AUTOMOBILES,
IN THE FUND.
Risk
Factors You Should Consider Before Investing in Either
Series
|
|
|
|
|
Each Series is a highly volatile and speculative investment.
There can be no assurance that each Series will achieve its
objectives or avoid substantial losses. You must be prepared to
lose all or substantially all of your investment.
|
|
|
|
For every gain made in a futures, forward or swap transaction,
the opposing side of that transaction will have an equal and
offsetting loss. Each Series has from time to time in the past
experienced drawdowns. Investments managed by Superfund Capital
Management, including the Series, will likely experience
drawdowns in the future.
|
|
|
|
Each Series trades in futures and forward contracts. Therefore,
each Series is a party to financial instruments with elements of
off-balance sheet market risk, including market volatility and
possible illiquidity. There is also a credit risk that a
counterparty will not be able to meet its obligations to each
Series.
|
|
|
|
There is no secondary market for Units of each Series and it is
not anticipated that any such market will develop.
|
|
|
|
Each Series is subject to numerous conflicts of interest
including the following:
|
(1) Superfund Capital Management is both the general
partner and trading advisor of each Series and its fees and
services have not been negotiated at arms length.
Superfund Capital Management has a disincentive to replace
itself as trading advisor, even if doing so may be in the best
interests of each Series;
(2) Superfund Capital Management, each Series
clearing brokers and their respective principals and affiliates,
may trade in the futures and forward markets for their own
accounts and may take positions opposite or ahead of those taken
for each Series; and
(3) Superfund Capital Managements principals are not
obligated to devote any minimum amount of time to the Fund.
2
|
|
|
|
|
Owners of Units (Limited Partners) take no part in
the management of each Series, and the past performance of
Superfund Capital Management or each Series is not necessarily
indicative of future results of a Series.
|
|
|
|
Superfund Capital Management will be paid a monthly management
fee of
1/12
of 1.85% of the monthly net asset value (1.85% annually) for
each Series, regardless of profitability. Superfund Capital
Management will also be paid monthly performance fees equal to
25% of aggregate cumulative net appreciation of each Series
above its previous highest value, excluding interest income, in
net asset value, if any.
|
|
|
|
Each Series is a single-advisor fund which may be inherently
more volatile than multi-advisor managed futures products.
|
|
|
|
Although each Series is liquid compared to other
alternative investments such as real estate or
venture capital, liquidity is restricted, as the Units may only
be redeemed on a monthly basis, upon five business days
written notice. You may transfer or assign your Units after
30 days advance notice, and only with the consent of
Superfund Capital Management which may not be given if such
transfer may result in adverse legal or tax consequences for a
Series.
|
|
|
|
Even though Superfund Capital Management does not presently
intend to make distributions from either Series, you will be
liable for taxes on your share of trading profits and other
income of the Series in which you invest.
|
|
|
|
Each Series must experience certain levels of trading profits in
order for you to break even on your investment. Based on an
initial investment of $5,000 (and assuming no changes in net
asset value and interest income of 0.15%), the break even points
for each Series are as follows: Series A 8.85%; Series A
not subject to selling commissions 4.85%; Series B
9.85%; Series B not subject to selling commissions 5.85%.
A more detailed break even analysis begins at page 5.
|
Investment
Factors You Should Consider Before Investing in Either
Series
|
|
|
|
|
Each Series is a leveraged investment fund managed by an
experienced, professional trading advisor and it trades in a
wide range of futures and forward markets.
|
|
|
|
Superfund Capital Management utilizes proprietary, systematic
trading systems for each Series.
|
|
|
|
Each Series has the potential to help diversify traditional
securities portfolios. A diverse portfolio consisting of assets
that perform in an unrelated manner, or non-correlated assets,
may increase overall return and/or reduce the volatility (a
primary measure of risk) of a portfolio. However,
non-correlation will not provide any diversification advantages
unless the non-correlated assets are outperforming other
portfolio assets, and there is no guarantee that either Series
will outperform other sectors of an investors portfolio or
not produce losses. Each Series profitability also depends
on the success of Superfund Capital Managements trading
techniques. If a Series is unprofitable, then the Series will
not increase the return on an investors portfolio or
achieve its diversification objectives.
|
|
|
|
Investors in each Series get the advantage of limited liability
in highly leveraged trading.
|
Superfund
Capital Management
Superfund Capital Management, the general partner and trading
advisor for each Series, is responsible for the administration
and trading of each Series. Affiliates of Superfund Capital
Management manage various offshore investment funds with
strategies substantially similar to that of each Series.
Charges
to Each Series
Each Series charges are substantial and must be offset by
trading gains and interest income in order to avoid depletion of
each Series assets.
Superfund
Capital Management
|
|
|
|
|
1.85% annual management fee
(1/12
of 1.85% payable monthly) for each Series.
|
|
|
|
25% of new appreciation in each Series net assets computed
on a monthly basis and excluding interest income and as adjusted
for subscriptions and redemptions.
|
3
|
|
|
|
|
Up to 1% of net assets in each Series per year (up to
1/12
of 1% payable monthly) for ongoing offering expenses (including
the costs of updating this Prospectus and registering additional
Units for sale to the public), such as legal, auditing,
administration, printing and postage costs, not to exceed the
amount of actual expenses incurred. Ongoing offering expenses
will not exceed 0.3542% of the gross offering proceeds of the
Units. Superfund Capital Management will assume liability for
ongoing offering expenses in excess of 1% of average month-end
net assets per year of each Series.
|
|
|
|
Up to 0.15% of net assets in each Series per year
(1/12
of 0.15% payable monthly) for operating expenses such as legal,
auditing, administration, printing and postage, not to exceed
the amount of actual expense incurred.
|
Selling
Agents and Others
|
|
|
|
|
An annual selling commission will be paid to Superfund USA, an
affiliate of Superfund Capital Management. The Units pay a
commission of 4% of the month-end net asset value per Unit
(1/12
of 4% per month) in the initial year after purchase. The Units
pay additional selling commissions of 4% per annum of the
month-end net asset value per Unit thereafter. Each Series and
Superfund USA may retain additional selling agents to assist
with the placement of the Units. Superfund USA will pay all or a
portion of the selling commission described above which it
receives in respect of the Units sold by the additional selling
agents to the additional selling agents effecting the sales. If
the selling commission paid in the initial year after purchase
is less than 4% of proceeds due to a decrease in the net asset
value per Unit, the maximum additional selling commissions paid
will exceed 6% of the proceeds. If the selling commission paid
in the initial year after purchase is more than 4% of the
proceeds due to an increase in the net asset value per Unit, the
maximum additional selling commissions paid will be less than 6%
of the proceeds. In either case, the maximum cumulative selling
commission per Unit sold pursuant to this Prospectus is 10% of
the gross offering proceeds price for such Unit (which is equal
to $54,000,000 out of the $540,000,000 in Units offered pursuant
to this Prospectus).
|
|
|
|
If you participate in a registered investment advisers
asset-based fee or fixed fee advisory program and your
investment adviser recommends a portfolio allocation to the Fund
or if the Units are purchased by commodity pools operated by
commodity pool operators registered as such with the National
Futures Association (NFA), your Units purchased
through Superfund USA will not be subject to the selling
commissions described above.
|
|
|
|
$25.00 per round-turn transaction plus applicable NFA and
exchange fees for brokerage commissions, where brokerage
commissions are charged in U.S. dollars, a portion of which
will be paid to the clearing brokers for execution and clearing
costs and the balance of which will be paid to Superfund Asset
Management, Inc. (Superfund Asset Management) which
serves as introducing broker for each Series and is an affiliate
of Superfund Capital Management. Brokerage commissions for
certain foreign futures contracts to be traded by the Fund are
charged in currencies other than the U.S. dollar.
Commission rates for brokerage commissions charged in foreign
currencies will be reset on the first day of each calendar month
to the foreign currency equivalent of $25.00 based on the then
current U.S. dollar exchange rate for the applicable
foreign currencies. Daily fluctuations in foreign currency
exchange rates will, however, cause the actual commissions
charged to the Fund for certain foreign futures contracts to be
more or less than $25.00.
|
|
|
|
Bid-ask spreads for off-exchange contracts. Currency
dealers trade with a spread between the price at which they are
prepared to buy or sell a particular currency. These
bid-ask spreads are not a quantifiable expense of
the Series but do represent a profit margin to the dealer for
making the market in the currency. Superfund Capital Management
cannot quantify the amount of dealer profit that is embedded in
a price quoted by a dealer but does believe that the Fund will
effect currency transactions at prevailing market prices. Dealer
profit from the Series currency trading may, over time, be
substantial.
|
|
|
|
There are no penalties or charges applied upon the redemption of
Units.
|
4
Breakeven
Analysis
The following tables show the fees and expenses that an investor
would incur on an initial investment of $5,000 in each Series
and the amount that such investment must earn to break even
after one year.
Series
A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollar Return
|
|
|
|
Percentage Return
|
|
|
Required ($5,000
|
|
|
|
Required Initial
|
|
|
Initial Investment)
|
|
|
|
Twelve Months
|
|
|
Initial Twelve Months
|
|
Routine Expenses
|
|
of Investment
|
|
|
of Investment
|
|
|
Management Fees
|
|
|
1.85
|
%
|
|
$
|
92.50
|
|
General Partner Performance Fees(1)
|
|
|
0.00
|
%
|
|
$
|
0.00
|
|
Selling Commissions(2)
|
|
|
4.00
|
%
|
|
$
|
200.00
|
|
Ongoing Offering Expenses(3)
|
|
|
1.00
|
%
|
|
$
|
50.00
|
|
Operating Expenses(3)
|
|
|
0.15
|
%
|
|
$
|
7.50
|
|
Brokerage Fees(4)
|
|
|
2.00
|
%
|
|
$
|
100.00
|
|
Less Interest Income(5)
|
|
|
0.15
|
%
|
|
$
|
7.50
|
|
TWELVE-MONTH BREAKEVEN
|
|
|
8.85
|
%
|
|
$
|
442.50
|
|
Series A
for Investors Not Subject to Selling Commissions(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollar Return
|
|
|
|
|
|
|
Required ($5,000
|
|
|
|
Percentage Return
|
|
|
Initial Investment)
|
|
|
|
Required Initial
|
|
|
Initial Twelve
|
|
|
|
Twelve Months
|
|
|
Months
|
|
Routine Expenses
|
|
of Investment
|
|
|
of Investment
|
|
|
Management Fees
|
|
|
1.85
|
%
|
|
$
|
92.50
|
|
General Partner Performance Fees(1)
|
|
|
0.00
|
%
|
|
$
|
0.00
|
|
Selling Commissions(2)
|
|
|
0.00
|
%
|
|
$
|
0.00
|
|
Ongoing Offering Expenses(3)
|
|
|
1.00
|
%
|
|
$
|
50.00
|
|
Operating Expenses(3)
|
|
|
0.15
|
%
|
|
$
|
7.50
|
|
Brokerage Fees(4)
|
|
|
2.00
|
%
|
|
$
|
100.00
|
|
Less Interest Income(5)
|
|
|
0.15
|
%
|
|
$
|
7.50
|
|
TWELVE-MONTH BREAKEVEN
|
|
|
4.85
|
%
|
|
$
|
242.50
|
|
Series
B
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollar Return
|
|
|
|
|
|
|
Required ($5,000
|
|
|
|
Percentage Return
|
|
|
Initial Investment)
|
|
|
|
Required Initial
|
|
|
Initial Twelve
|
|
|
|
Twelve Months
|
|
|
Months
|
|
Routine Expenses
|
|
of Investment
|
|
|
of Investment
|
|
|
Management Fees
|
|
|
1.85
|
%
|
|
$
|
92.50
|
|
General Partner Performance Fees(1)
|
|
|
0.00
|
%
|
|
$
|
0.00
|
|
Selling Commissions(2)
|
|
|
4.00
|
%
|
|
$
|
200.00
|
|
Ongoing Offering Expenses(3)
|
|
|
1.00
|
%
|
|
$
|
50.00
|
|
Operating Expenses(3)
|
|
|
0.15
|
%
|
|
$
|
7.50
|
|
Brokerage Fees(4)
|
|
|
3.00
|
%
|
|
$
|
150.00
|
|
Less Interest Income(5)
|
|
|
0.15
|
%
|
|
$
|
7.50
|
|
TWELVE-MONTH BREAKEVEN
|
|
|
9.85
|
%
|
|
$
|
492.50
|
|
5
Series B
for Investors Not Subject to Selling Commissions(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollar Return
|
|
|
|
|
Required ($5,000
|
|
|
Percentage Return
|
|
Initial Investment)
|
|
|
Required Initial
|
|
Initial Twelve
|
|
|
Twelve Months
|
|
Months
|
Routine Expenses
|
|
of Investment
|
|
of Investment
|
|
Management Fees
|
|
|
1.85
|
%
|
|
$
|
92.50
|
|
General Partner Performance Fees(1)
|
|
|
0.00
|
%
|
|
$
|
0.00
|
|
Selling Commissions(2)
|
|
|
0.00
|
%
|
|
$
|
0.00
|
|
Ongoing Offering Expenses(3)
|
|
|
1.00
|
%
|
|
$
|
50.00
|
|
Operating Expenses(3)
|
|
|
0.15
|
%
|
|
$
|
7.50
|
|
Brokerage Fees(4)
|
|
|
3.00
|
%
|
|
$
|
150.00
|
|
Less Interest Income(5)
|
|
|
0.15
|
%
|
|
$
|
7.50
|
|
TWELVE-MONTH BREAKEVEN
|
|
|
5.85
|
%
|
|
$
|
292.50
|
|
|
|
|
(1) |
|
No performance fees will be charged until breakeven costs are
met. However, because Superfund Capital Managements
performance fee is payable monthly, it is possible for Superfund
Capital Management to earn a performance fee during a break-even
or losing year if, after payment of a performance fee, a Series
incurs losses resulting in a break-even or losing year. It is
impossible to predict what performance fee, if any, could be
paid during a break-even or losing year, thus none is shown. |
|
(2) |
|
The maximum cumulative selling commission per Unit sold pursuant
to this Prospectus is 10% of the gross offering proceeds for
such Unit. |
|
(3) |
|
Not to exceed the amount of actual expenses incurred. |
|
(4) |
|
Assumes 800 round-turn transactions for Series A and 1,200
round-turn transactions for Series B per million dollars per
year at a rate of $25 per transaction.* The preceding
assumptions are based on the average number of round-turn
transactions per million dollars per year over the last three
years traded on behalf of the Series. The Partnership Agreement
provides that brokerage commission costs borne by the Fund shall
not exceed 5% (Series A) and 7% (Series B) annually of
average annual net assets of the Series. |
|
(5) |
|
Estimated. Interest income includes the assumed interest rate
and reflects current cash market information, expressed as an
annualized rate and rounded to the nearest half percentage point. |
|
|
|
The twelve-month break-even points shown are dependent on
interest income of 0.15% per annum. If interest income earned is
less, the Series will have to earn trading profits greater than
the amounts shown to cover their costs. Actual interest to be
earned by the Fund will be at the prevailing rates for the
period being measured which may be less than or greater than
0.15% over any twelve month period. |
|
(6) |
|
Certain Units are not subject to selling commissions:
(i) Units purchased through Superfund USA by investors that
participate in a registered investment advisers
asset-based fee or fixed fee advisory program; (ii) Units
purchased through Superfund USA by investors who are commodity
pools operated by commodity pool operators registered as such
with the NFA; and (iii) Units for which the investor has
paid the maximum cumulative selling commissions of 10% of the
original purchase price. |
|
|
|
|
*
|
In no instance will the total of all fees computed on a net
asset basis exceed 20% per annum for either Series A or
Series B.
|
Distributions
and Redemptions
Each Series is intended to be a medium- to long-term, i.e., 3-
to 5-year,
investment. Units are transferable, but no market exists for
their sale and none is expected to develop. Monthly redemptions
are permitted upon five business days written notice to
Superfund Capital Management; provided, however, that the
payment of redemption proceeds may be delayed in special
circumstances, including, but not limited to, inability to
liquidate dealers positions as of a redemption date or
default or delay in payments due to each Series from clearing
brokers, banks, or other persons or entities. If the net asset
value per Unit within a Series as of the end of any business day
declines by 50% or more from either the prior year-end or the
prior month-end Unit value of such Series, Superfund Capital
Management will suspend trading activities, notify all Limited
Partners within such Series of the relevant
6
facts within seven business days and declare a special
redemption period. As of November 17, 2009, the net asset
value per Series A Unit had declined by approximately
24.42% and per Series B Unit had declined by approximately
37.14% from the 2008 year-end Series A and Series B
Unit values. Superfund Capital Management may deny a request to
transfer if it determines that the transfer may result in
adverse legal or tax consequences for either Series but not a
redemption request submitted in good form and in a timely
manner. Superfund Capital Management does not intend to make any
distributions from either Series. Upon written request, an
investment in either Series may be exchanged for an investment
in the other Series by a simultaneous redemption and
subscription at the then applicable respective net asset values
of each Series.
Federal
Income Tax Aspects
Each Series will be classified as a partnership for federal
income tax purposes. As such, you will be taxed each year on the
income attributable to the Series in which you invest whether or
not you redeem Units or receive distributions from the Series.
To the extent the Fund invests in futures and other commodity
contracts, gain or loss on such investments will, depending on
the contracts traded, consist of a mixture of: 1) ordinary
income or loss;
and/or
2) capital gain or loss. Forty percent (40%) of trading
profits, if any, on U.S. exchange-traded futures contracts
and certain foreign currency forward contracts are taxed as
short-term capital gains at ordinary income rates and the
remaining sixty percent (60%) is taxed as long-term capital
gains at a lower maximum rate for
non-corporate
investors. Trading gains or losses from other contracts will be
primarily short-term capital gains or losses, and interest
income is taxed at ordinary income rates.
Capital losses on the Units may be deducted against capital
gains but may only be deducted by
non-corporate
investors against ordinary income to the extent of $3,000 per
year. Therefore, you could pay tax on a Series interest
income even though your overall investment in the Fund has been
unprofitable.
Reports
Within 30 calendar days after the end of each month, Superfund
Capital Management will distribute to investors a monthly report
of the Fund. Superfund Capital Management will also distribute
an annual report of the Fund within 90 calendar days after the
end of the Funds fiscal year and will provide investors
with federal income tax information for the Fund before April 15
of each year.
Commodity Futures Trading Commission (CFTC) rules
require that this Prospectus be accompanied by summary financial
information, which may be a recent monthly report of the Fund,
current within 60 calendar days.
7
Organizational
Chart
The organizational chart below illustrates the relationships
among the various service providers of this offering. Superfund
Capital Management is both the general partner and trading
advisor for each Series. The selling agents (other than
Superfund USA) and clearing brokers are not affiliated with
Superfund Capital Management or each Series.
|
|
|
(1) |
|
Superfund Capital Management will maintain an investment in each
Series of at least 1% of the net asset value of each such Series. |
Descriptions of the dealings between Superfund Capital
Management and its affiliates and the Fund are set forth below
under Conflicts of Interest and Charges to
Each Series.
8
THE RISKS
YOU FACE
Market
Risks
Possible
Total Loss of an Investment in each Series
Futures and forward contracts have a high degree of price
variability and are subject to occasional rapid and substantial
changes. Consequently, you could lose all or substantially all
of your investment in each Series.
Each
Series Will Be Highly Leveraged
Because the amount of margin funds necessary to be deposited
with a clearing broker in order to enter into a futures or
forward contract position is typically about 2% to 10% of the
total value of the contract, each Series will be able to hold
positions with face values equal to several times each
Series net assets. The ratio of margin to equity for
Series A is approximately 20% and approximately 30% for
Series B, but each Series can range from 10% to 50% due to
factors such as market volatility and changes in margin
requirements. As a result of this leveraging, even a small
movement in the price of a contract can cause major losses.
Superfund Capital Management will monitor the leverage of each
Series regularly but is not limited by the amount of leverage it
may employ, except that Series A will be leveraged less
than Series B.
The
Performance of the Fund Is Expected To Be Volatile;
Volatile Performances Can Result in Sudden Large
Losses.
Superfund Capital Management expects the performance of each
Series to be volatile. Futures and forward contract prices have
a high degree of variability and are subject to occasional rapid
and substantial changes, and the value of the Units may suffer
substantial loss from time to time. The net asset value per Unit
may change substantially between the date on which you subscribe
for Units and the date on which your Units are issued or the
date on which you request a redemption and the month-end
redemption date. Since its inception in October 2002 through
October 2009, monthly returns have ranged from up 19.45% to down
20.12% for Series A Units and from up 27.33% to down 29.11%
for Series B Units.
Various factors may influence the price movements of commodity
interests, such as: changing supply and demand relationships;
weather; agricultural, trade, fiscal, monetary and exchange
control programs and policies of governments; United States and
foreign political and economic events and policies; changes in
national and international interest rates and rates of
inflation; currency devaluations and revaluations; and emotions
of the marketplace. None of these factors can be controlled by
Superfund Capital Management and no assurance can be given that
Superfund Capital Managements advice will result in
profitable trades for a participating customer or that a
customer will not incur substantial losses.
Illiquidity
of Your Investment
There is no secondary market for the Units. While the Units have
redemption rights, there are restrictions. For example,
redemptions can occur only at the end of a month. If a large
number of redemption requests were to be received at one time,
each Series might have to liquidate positions to satisfy the
requests. Such a forced liquidation could adversely affect each
Series and consequently your investment. Transfers of the Units
are subject to limitations, such as 30 days advance
written notice of any intent to transfer. Also, Superfund
Capital Management may deny a request to transfer if it
determines that the transfer may result in adverse legal or tax
consequences for each Series. Because Units cannot be readily
liquidated, it will not be possible for you to limit losses or
realize accrued profits, if any, except at a month-end in
accordance with the Funds redemption provisions. See
Quadriga Superfund, L.P. Fourth Amended and Restated
Limited Partnership Agreement Dispositions.
Market
Illiquidity
In illiquid markets, the Fund could be unable to close out
positions to limit losses or to take positions in order to
follow trends. There are too many different factors that can
contribute to market illiquidity to predict when or where
illiquid markets may occur.
9
Unexpected market illiquidity has caused major losses for some
traders in recent years in such market sectors as emerging
market currencies. There can be no assurance that the same will
not happen in the markets traded by the Fund. In addition, the
large size of the positions the Fund may take increases the risk
of illiquidity by both making its positions more difficult to
liquidate and increasing the losses incurred while trying to do
so.
United States commodity exchanges impose limits on the amount
the price of some, but not all, futures contracts may change on
a single day. Once a futures contract has reached its daily
limit, it may be impossible for the Fund to liquidate a position
in that contract, if the market has moved adversely to the Fund,
until the limit is either raised by the exchange or the contract
begins to trade away from the limit price.
The
Fund Will Trade Extensively in Foreign Markets Which May
Not Be Subject to the Same Level of Regulatory Oversight as
Trading in Domestic Markets
A substantial portion of the Funds trades take place on
markets or exchanges outside the United States. The risk of loss
in trading foreign futures contracts and foreign options can be
substantial.
Non-U.S. markets
may not be subject to the same degree of regulation as their
U.S. counterparts. None of the CFTC, NFA or any domestic
exchange regulates activities of any foreign boards of trade or
has the power to compel enforcement of the rules of a foreign
board of trade or any applicable foreign laws. In addition, some
foreign exchanges are principals markets
in which performance is the responsibility only of the
individual exchange member counterparty, not of the exchange or
a clearing facility. In such cases, the Fund will be subject to
the risk that the member with whom the Fund has traded is unable
or unwilling to perform its obligations under the transaction.
Trading on foreign exchanges also presents the risk of loss due
to the possible imposition of exchange controls (making it
difficult or impossible for the Fund to repatriate some or all
of the Series assets held by foreign counterparties),
government expropriation of assets, taxation, government
intervention in markets, limited rights in the event of
bankruptcy of a foreign counterparty or exchange and variances
in foreign exchange rates between the time a position is entered
and the time it is exited.
Forward
Transactions are Not Regulated and are Subject to Credit
Risk
Each Series trades forward contracts in foreign currencies.
Forward contracts are typically traded through a dealer market
which is dominated by major money center banks and is not
regulated by the CFTC. Thus, you do not receive the protection
of CFTC regulation or the statutory scheme of the Commodity
Exchange Act in connection with this trading activity by each
Series. Also, each Series faces the risk of non-performance by
the counterparties to the forward contracts and such
non-performance may cause some or all of your gain to be
unrealized.
Non-Correlated,
Not Negatively Correlated, Performance Objective
Historically, managed futures have been generally non-correlated
to the performance of other asset classes such as stocks and
bonds. Non-correlation means that there is no statistically
valid relationship between the past performance of futures and
forward contracts on the one hand and stocks or bonds on the
other hand. Non-correlation should not be confused with negative
correlation, where the performance of two asset classes would be
exactly opposite. Because of this non-correlation, each Series
cannot be expected to be automatically profitable during
unfavorable periods for the stock market, or vice versa. The
futures, forward and swap markets are fundamentally different
from the securities markets in that for every gain made in a
futures, forward or swap transaction, the opposing side of that
transaction will have an equal and off-setting loss. If a Series
does not perform in a manner non-correlated with the general
financial markets or does not perform successfully, you will
obtain no diversification benefits by investing in the Units of
such Series and such Series may have no gains to offset your
losses from other investments.
Foreign
Currency Trading
Cash foreign currency markets are substantially unregulated and
price movements in such markets are caused by many unpredictable
factors including general economic and financial conditions,
governmental policies, national and international political and
economic events, and changes in interest rates. Such factors
combined with the lack of regulation could expose each Series to
significant losses which they might otherwise have avoided.
10
Positions in cash foreign currencies can be established using
less margin than is typical for futures contracts. Thus, a small
movement in the price of the underlying currency can result in a
substantial price movement relative to the margin deposit. In
addition, cash foreign currencies are traded through a dealer
market and not on an exchange. This presents the risks of both
counterparty creditworthiness and possible default or bankruptcy
by the counterparty.
Trading
Risks
Superfund
Capital Management Analyzes Only Technical Market Data, Not Any
Economic Factors External to Market Prices
The trading systems used by Superfund Capital Management for
each Series are technical, trend-following methods involving
instruments that are not historically correlated with each
other. The profitability of trading under these systems depends
on, among other things, the occurrence of significant price
trends which are sustained movements, up or down, in futures and
forward prices. Such trends may not develop; there have been
periods in the past without price trends in certain markets. The
likelihood of the Units being profitable could be materially
diminished during periods when events external to the markets
themselves have an important impact on prices. During such
periods, Superfund Capital Managements historic price
analysis could establish positions on the wrong side of the
price movements caused by such events.
Speculative
Position Limits May Alter Trading Decisions for Each
Series
The CFTC has established limits on the maximum net long or net
short positions which any person may hold or control in certain
futures contracts. Exchanges also have established such limits.
All accounts controlled by Superfund Capital Management,
including the account of each Series, are combined for
speculative position limit purposes. If positions in those
accounts were to approach the level of the particular
speculative position limit, such limits could cause a
modification of Superfund Capital Managements trading
decisions for each Series or force liquidation of certain
futures positions.
Increase
in Assets Under Management May Affect Trading
Decisions
The more assets Superfund Capital Management manages, the more
difficult it may be for Superfund Capital Management to trade
profitably because of the difficulty of trading larger positions
without adversely affecting prices and performance. Accordingly,
such increases in equity under management may require Superfund
Capital Management to modify its trading decisions for each
Series which could have a detrimental effect on your investment.
Each
Series Trading is Not Transparent
Superfund Capital Management makes each Series trading
decisions. While Superfund Capital Management receives daily
trade confirmations from the clearing brokers, only a
Series net trading results are reported to Limited
Partners and only on a monthly basis. Accordingly, an investment
in each Series does not offer Limited Partners the same
transparency, i.e., an ability to review all investment
positions daily, that a personal trading account offers.
Tax
Risks
Investors
are Taxed Based on Their Share of Profits in Each
Series
Investors are taxed each year on their share of each
Series profits, if any, irrespective of whether they
redeem any Units or receive any cash distributions from each
Series. All performance information included in this Prospectus
is presented on a pre-tax basis; investors who experience such
performance may have to redeem Units or pay the related taxes
from other sources.
Tax
Could Be Due From Investors on Their Share of Each Series
Ordinary Income Despite Overall Losses
Investors may be required to pay tax on their allocable share of
each Series ordinary income, which in the case of each
Series is each Series interest income and gain on some
foreign futures contracts, even though each Series incurs
overall losses. Capital losses can be used only to offset
capital gains and $3,000 of ordinary income each year for non-
11
corporate investors. Consequently, if a non-corporate investor
were allocated $5,000 of ordinary income and $10,000 of capital
losses, the investor would owe tax on $2,000 of ordinary income
even though the investor would have a $5,000 loss for the year.
The $7,000 capital loss carry forward could be used in
subsequent years to offset capital gain and ordinary income, but
subject to the same annual limitation on its deductibility
against ordinary income.
Deductibility
of Management and Performance Fees
Although each Series treats the management fees and performance
fees paid and other expenses of such Series as ordinary and
necessary business expenses, upon audit each Series may be
required to treat such fees as investment advisory
fees if each Series trading activities were
determined to not constitute a trade or business for tax
purposes. If the expenses were determined to be investment
advisory fees, a Limited Partners tax liability would
likely increase. In addition, upon audit, a portion of the
management and performance fees might be treated as a
non-deductible syndication cost or might be treated as a
reduction in each Series capital gain or as an increase in
each Series capital loss. If the management and
performance fees were so treated, a Limited Partners tax
liability would likely increase.
Other
Risks
Fees
and Commissions are Charged Regardless of Profitability and are
Subject to Change
Each Series is subject to substantial charges payable
irrespective of profitability in addition to performance fees
which are payable based on each Series profitability.
Included in these charges are management, Ongoing offering, and
brokerage fees and operating expenses. On each Series
forward and swap trading, bid-ask spreads are
incorporated into the pricing of each Series forward and
swap contracts by the counterparties in addition to the
brokerage fees paid by each Series. It is not possible to
quantify the bid-ask spreads paid by each Series
because each Series cannot determine the profit its counterparty
is making on its forward and swap transactions. Such spreads can
at times represent significant profits to the counterparty.
Failure
of Brokerage Firms; Disciplinary History of Clearing
Brokers
The Commodity Exchange Act requires a clearing broker to
segregate all funds received from customers from such
brokers proprietary assets. If any of the clearing brokers
fails to do so, the assets of each Series might not be fully
protected in the event of the bankruptcy of the clearing broker.
Furthermore, in the event of a clearing brokers
bankruptcy, each Series could be limited to recovering only a
pro rata share, which may be zero, of all available funds
segregated on behalf of any such clearing brokers combined
customer accounts, even though certain property specifically
traceable to each Series (for example, Treasury Bills deposited
by each Series with the clearing broker as margin) was held by
the clearing broker. The clearing brokers have been the subject
of certain regulatory and private causes of action in the past
and may be again in the future. Such actions could affect the
ability of a clearing firm to conduct its business. See
The Clearing Brokers. Furthermore, dealers in
forward and swap contracts are not regulated by the Commodity
Exchange Act and are not obligated to segregate customer assets.
As a result, you do not have such basic protections in forward
and swap contracts.
Investors
Must Not Rely on Past Performance of the Series or Superfund
Capital Management in Deciding Whether to Buy
Units
The future performance of each Series is not predictable, and no
assurance can be given that each Series will perform
successfully in the future. Past performance of a trading
program is not necessarily indicative of future results.
Conflicts
of Interest
The Fund is subject to numerous actual and potential conflicts
of interest, including: (1) Superfund Capital Management
will not select any other trading advisor for the Fund even if
doing so would be beneficial to the Fund; (2) the
affiliation between Superfund Capital Management and Superfund
Asset Management creates an incentive for Superfund Capital
Management to trade more frequently than it otherwise might
absent the affiliation; (3) the proprietary trading of
Superfund Capital Management or its principals or of the
Funds clearing brokers and their
12
affiliates and personnel may increase competition for positions
sought to be entered by the Fund making it more difficult for
the Fund to enter positions at favorable prices; and
(4) the compensation that the selling agents, including
Superfund USA, receive gives them an incentive to promote the
sale of Units as well as to discourage redemptions. See
Conflicts of Interest.
Because Superfund Capital Management has not established any
formal procedures for resolving conflicts of interest and
because there is no independent control over how conflicts of
interest are resolved, you will be dependent on the good faith
of the parties with conflicts to resolve the conflicts
equitably. Superfund Capital Management cannot assure that
conflicts of interest will not result in losses for the Fund.
Lack
of Independent Experts Representing Investors
Superfund Capital Management has consulted with counsel,
accountants and other experts regarding the formation and
operation of each Series. No counsel has been appointed to
represent the Limited Partners in connection with the offering
of the Units. Accordingly, each prospective investor should
consult his own legal, tax and financial advisers regarding the
desirability of an investment in each Series.
Reliance
on Superfund Capital Management
Each Series is structured as a single-advisor managed futures
fund. Many managed futures funds are structured as multi-advisor
funds to attempt to control risk and reduce volatility through
combining advisors whose historical performance records have
exhibited a significant degree of non-correlation with each
other. As a single-advisor managed futures fund, the Series may
have greater volatility and a higher risk of loss than
investment vehicles employing multiple advisors, but may also
have increased performance volatility and a higher risk of loss.
Superfund Capital Management may retain additional trading
advisors on behalf of each Series in the future.
The incapacity of one or more of Superfund Capital
Managements principals could have a material and adverse
effect on its ability to discharge its obligations under the
Quadriga Superfund, L.P. Fourth Amended and Restated Limited
Partnership Agreement (the Partnership Agreement).
Additionally, Superfund Capital Management may withdraw as
general partner with respect to a Series, or the Fund as a
whole, upon 120 days notice, which would cause such
Series, or the Fund, to terminate unless a substitute general
partner was obtained. Neither Superfund Capital Management nor
its principals are under any obligation to devote a minimum
amount of time to the operation of the Fund.
Possibility
of Termination of Each Series Before Expiration of its Stated
Term
As general partner, Superfund Capital Management may withdraw
from each Series upon 120 days notice, which would
cause each Series to terminate unless a substitute general
partner was obtained. Other events, such as a long-term
substantial loss suffered by each Series, could also cause each
Series to terminate before the expiration of its stated term.
This could cause you to liquidate your investments and upset the
overall maturity and timing of your investment portfolio. If the
registrations with the CFTC or memberships in the NFA of
Superfund Capital Management or the clearing brokers were
revoked or suspended, such entity would no longer be able to
provide services to each Series.
Each
Series is Not a Regulated Investment Company
Although Superfund Capital Management is subject to regulation
by the CFTC, each Series is not an investment company subject to
the Investment Company Act of 1940. Accordingly, you do not have
the protections afforded by that statute which, for example,
require investment companies to have a majority of disinterested
directors and regulate the relationship between the adviser and
the investment company.
A
Bankruptcy Court Could Find the Assets of One Series to be
Available to Offset the Liabilities of the Other
Series
The Fund is organized as a series limited partnership pursuant
to
Section 17-218
(Section 17-218) of the Delaware Revised
Uniform Limited Partnership Act (the Act), with
separate series of limited partnership interests and assets.
Section 17-218
provides that, if certain conditions (as set forth in
Section 17-218)
are met, the debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to a
particular series
13
shall be enforceable only against the assets of such series and
not against the assets of the limited partnership generally or
any other series. Accordingly, the assets of one Series of the
Fund include only those funds and other assets that are paid to,
held by or distributed to the Fund on account of and for the
benefit of that Series, including, without limitation, funds
delivered to the Fund for the purchase of Units in that Series.
However, the limitations on inter-series liability provided by
Section 17-218
have never been tested in court. Thus there is a risk that a
court, and in particular, a Bankruptcy Court, could determine
that the assets of one Series should be applied to meet the
liabilities of the other Series or the liabilities of the Fund
generally where the assets of such other Series or of the Fund
generally are insufficient to meet its liabilities.
Proposed
Regulatory Change is Impossible to Predict
The futures markets are subject to comprehensive statutes,
regulations and margin requirements. In addition, the CFTC and
the exchanges are authorized to take extraordinary actions in
the event of a market emergency, including, for example, the
retroactive implementation of speculative position limits or
higher margin requirements, the establishment of daily price
limits and the suspension of trading. The regulation of futures
and forward transactions in the United States is a rapidly
changing area of law and is subject to modification by
government and judicial action. In addition, various national
governments have expressed concern regarding the disruptive
effects of speculative trading in the currency markets and the
need to regulate the derivatives markets in general.
The effect of any future regulatory change on each Series is
impossible to predict, but could be substantial and adverse.
Forwards,
Swaps, Hybrids and Other Derivatives are Not Subject to CFTC
Regulation
Each Series may trade foreign exchange contracts in the
interbank market. In addition to swaps, each Series may also
trade hybrid instruments and other off-exchange contracts. Swap
agreements involve trading income streams such as fixed rate for
floating rate interest. Hybrids are instruments which combine
features of a security with those of a futures contract. There
is no exchange or clearinghouse for these contracts, they are
not regulated by the CFTC, and traders must rely on the
creditworthiness of the counterparty to fulfill the obligations
of the transaction. Each Series will not receive the protections
which are provided by the CFTCs regulatory scheme for
these transactions.
Options
on Futures are Speculative and Highly Leveraged
In the future, options on futures contracts may be used by each
Series to generate premium income or capital gains. Futures
options involve risks similar to futures in that options are
speculative and highly leveraged. The buyer of an option risks
losing the entire purchase price (the premium) of the option.
The writer (seller) of an option risks losing the
difference between the premium received for the option and the
price of the commodity or futures contract underlying the option
which the writer must purchase or deliver upon exercise of the
option (which losses can be unlimited). Specific market
movements of the commodities or futures contracts underlying an
option cannot accurately be predicted.
Money
Committed to Margin
Each Series may commit up to 50% of its assets as margin for
positions held by the clearing brokers. Because such commitment
typically represents only a small percentage of the total value
of such positions, adverse price movements can cause losses in
excess of such commitment and potentially in excess of the total
assets of a Series.
A
Computer Systems Failure Could Result in Losses or Delays
in Reporting
Superfund Capital Managements strategies are dependent to
a significant degree on the proper functioning of its internal
computer systems. Accordingly, systems failures, whether due to
third-party failures upon which such systems are dependent or
the failure of Superfund Capital Managements hardware or
software, could disrupt trading or make trading impossible until
such failure is remedied. Such failures may result from events
including acts of God and domestic or international
terrorism. Any such failure, and consequential inability to
trade (even for a short time), could, in certain market
conditions, cause the Fund to experience significant trading
losses or to miss opportunities for profitable trading. Lastly,
any such failures could cause a temporary delay in reports to
investors.
14
SUPERFUND
CAPITAL MANAGEMENT
Description
Superfund Capital Management is the general partner and
commodity trading advisor of each Series. It is a Grenada
corporation with offices located at Superfund Office Building,
P.O. Box 1479, Grand Anse, St. Georges, Grenada
West Indies, and its telephone number is (473) 439-2418.
The firms books and records are maintained at this
location and are available there for inspection. Its sole
business is the trading and management of discretionary futures
accounts, including commodity pools. It has been registered with
the CFTC as a commodity pool operator since May 9, 2001 and
has been a member of the NFA in that capacity since
January 7, 2003. As of October 31, 2009, Superfund
Capital Management and its affiliates had approximately
$1.00 billion in assets under management in the futures and
forward markets. Christian Baha owns 100% of Superfund Capital
Management and Superfund Investment Advisory, Inc. and 50% or
more of two of their affiliates, Superfund Fund Management, Inc.
and Superfund Trading Management, Inc.
The principals of Superfund Capital Management are Nigel James,
Roman Gregorig and Christian Baha. As discussed below,
Mr. James and Mr. Gregorig are responsible for the
firms trading decisions through the implementation of
proprietary, computerized trading systems. The principals of
Superfund Capital Management have not purchased and do not
intend to purchase Units. Superfund Capital Management has
agreed that its capital account as general partner of each
Series at all times will equal at least 1% of the net aggregate
capital contributions of all Limited Partners in each such
Series. There have never been any material administrative, civil
or criminal proceedings brought against Superfund Capital
Management or its principals, whether pending, on appeal or
concluded. The firm maintains any required past performance
information for itself and its trading principals at the address
shown above in this section.
Nigel James, age 29, was appointed as President of
Superfund Capital Management on July 13, 2006 and was
registered as a principal and associated person with Superfund
Capital Management on November 28, 2006, and May 23,
2007, respectively. Mr. James has been an employee of
various members of the Superfund group of affiliated companies
since July 2003 when he became a software developer for
Superfund Trading Management, Inc., an affiliate of Superfund
Capital Management that acts as a commodity trading advisor to
non-U.S. funds.
In May 2005, he was promoted to the role of Intellectual
Technology Project Manager for Superfund Trading Management,
Inc. Mr. James graduated from the University of the West
Indies in Barbados with a Bachelors Degree in Computer
Science and Management in May 2003 and began his employment in
July 2003. Mr. James is a citizen of Grenada.
Roman Gregorig, age 46, is Vice President and
Principal Financial Officer of Superfund Capital Management.
Mr. Gregorig has been a Director of Superfund Capital
Management as well as its Audit Committee Financial Expert and
Principal Accounting Officer since March 3, 2006 and was
registered as principal of Superfund Capital Management on
June 26, 2007. Mr. Gregorig became a licensed tax
advisor in July 1993 and subsequently worked as a partner at
Treufinanz Wirtschaftstreuhand GmbH, an Austrian accounting
firm, until November 2000. In December 2000, Mr. Gregorig
became licensed to perform auditing services by the Austrian
Chamber of Conventional Trustees. Also in December 2000, he
founded Gregorig Consulting GmbH, specializing in providing
accounting and tax consulting services to companies in the
financial sector, which he sold in April 2005. Mr. Gregorig
spent May 2005 preparing for his transition to the
Superfund group of affiliated entities. Since June 2005,
Mr. Gregorig has served in various oversight positions for
multiple member companies of the Superfund group of affiliated
companies. Mr. Gregorig graduated from the Academy of
Commerce in Vienna, Austria, in March 1986. Mr. Gregorig is
a citizen of Austria.
Christian Baha, age 41, is Superfund Capital
Managements founder and sole owner. By December 1991,
Mr. Baha began working independently to develop software
for the technical analysis of financial data in Austria. In
January 1995, Mr. Baha founded the first members of the
Superfund group of affiliated companies specializing in managed
futures funds and began to develop a worldwide distribution
network. With profit sharing rights certificates, Mr. Baha
launched an alternative investment vehicle for private
investors. Launched on March 8, 1996, this product is
called the Superfund
Unternehmens-Beteiligungs-Aktiengesellschaft (Superfund Q-AG),
and was formerly known as Quadriga Beteiligungs &
Vermögens AG (Quadriga AG). In March 2003, a new generation
15
of managed futures funds was internationally launched under the
brand name Superfund and previously existing
products have since been re-branded under this name.
Simultaneously with the development of the Quadriga/Superfund
group of affiliated companies, Mr. Baha founded the
software company TeleTrader AG, which has been listed on the
Vienna Stock Exchange since March 2001. He was registered as a
principal of Superfund USA, a registered broker-dealer and a
CFTC registered commodity pool operator on August 13, 2009.
He is also an associated person and principal of Superfund Asset
Management, Inc., a CFTC registered introducing broker,
positions which he has held since July 23, 1999 and
June 24, 1997, respectively. He became registered as a
principal of Superfund Capital Management on May 9, 2001
and was registered as an associated person of Superfund Capital
Management from May 9, 2001, until February 17, 2009.
He is a graduate of the police academy in Vienna, Austria and
studied at the Business University of Vienna, Austria.
Mr. Baha is a citizen of Austria.
The
Trading Advisor
Pursuant to the Partnership Agreement, Superfund Capital
Management has the sole authority and responsibility for
managing the Fund and for directing the investment and
reinvestment of each Series assets. Although Superfund
Capital Management will initially serve as the sole trading
advisor of each Series, it may, in the future, retain other
trading advisors to manage a portion of the assets of each
Series. Limited Partners will receive prior notice, in the
monthly report from each Series or otherwise, in the event that
additional trading advisors are to be retained on behalf of each
Series.
Trading
Strategy
Superfund Capital Management makes each Series trading
decisions using proprietary, fully-automated computerized
trading systems, which trade in more than 120 futures and
foreign currency forward markets, which automatically generate
buy and sell signals, and constantly monitor relevant technical
indicators on the traded futures markets in the U.S., Canada,
Europe and Asia and on the off-exchange foreign currency
markets. By using fully-automated trading systems, human
emotions are removed from the capital management process.
Superfund Capital Management and its affiliates trade in more
than 120 futures and forward markets globally, although not
in all markets at all times, including both commodity and
financial futures and foreign currencies. The primary sectors
that each Series may trade are: currencies, interest rates,
bonds, stock indices, metals, energy, grains and agriculture
markets. Superfunds proprietary trading systems emphasize
instruments with low correlation to each other and high
liquidity for order execution.
Superfund Capital Managements strategy is based on the
implementation of a four-point philosophy consisting of
(i) market diversification, (ii) technical analysis,
(iii) trend-following, and (iv) money management. The
Superfund trading systems scan more than 120 different futures
markets worldwide on a daily basis and make the following
decisions: whether to establish new positions (long or short),
whether to adjust or place stop orders, whether to make a change
in position size based on volatility or change in correlation
between markets, and whether to exit open positions. The
decision to establish new positions is based on a proprietary
algorithm that seeks to identify market trends at an early stage
of formation. These trends can last from days to months. Trend
identification is done by analyzing technical indicators and
parameters such as moving averages, Bollinger Bands, which are
technical channel indicators calculated as multiples of the
standard deviation above and below a moving average and other
technical indicators. Once potential trades are identified, the
systems apply additional filters at the trade level with respect
to trend and volatility analysis and, before generating definite
buy or sell signals, taking into consideration macro variables
such as overall risk capital available for trading and portfolio
volatility.
With respect to money management, before entering new positions
the Superfund trading systems define the maximum open risk per
position based on market correlation and market volatility. This
money management filter is applied after positions have been
established on a daily basis per market and adjusts existing
stop order levels or reduces position size if proprietary
pre-defined risk measures are met or exceeded due to market
volatility or changes in market correlation. Finally, positions
are exited either by being stopped out or adjusted as a result
of the
16
changes in volatility or market correlation. Once finally
determined, trade instructions are transmitted to Superfund
Asset Management, which serves as the Funds introducing
broker, for execution through the Funds executing and
clearing brokers.
The trading method, systems, and money management techniques
employed by Superfund Capital Management are proprietary and
confidential. The foregoing description is general and is not
intended to be complete. There can be no assurance that
Superfund Capital Managements trading systems will
successfully identify trends that the Fund can capitalize on or
produce results similar to those produced in the past for other
funds managed by Superfund Capital Management or its affiliates.
17
PAST
PERFORMANCE OF QUADRIGA SUPERFUND, L.P.
Set forth below and on the following page are the performance
records of the Fund for the period January 2004 through
October 2009. PAST PERFORMANCE IS NOT NECESSARILY
INDICATIVE OF FUTURE RESULTS.
|
|
|
Name of Pool
|
|
Quadriga Superfund, L.P. Series A
|
Type of Pool
|
|
Single Advisor/Publicly Offered/No Principal Protection
|
General Partner
|
|
Superfund Capital Management
|
Inception of Trading
|
|
November 2002
|
Aggregate Subscriptions as of October 31, 2009
|
|
$114.27 million
|
Net Asset Value as of October 31, 2009
|
|
$31.89 million
|
Worst Monthly % Drawdown (April 2004)
|
|
(14.20%)
|
Worst Peak-to-Valley % Drawdown (June 2008 to
October 2009)
|
|
(32.55%)
|
HISTORICAL
PERFORMANCE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
Jan
|
|
|
2.46
|
%
|
|
Jan
|
|
|
(9.87
|
%)
|
|
Jan
|
|
|
6.87
|
%
|
|
Jan
|
|
|
(3.09
|
%)
|
|
Jan
|
|
|
(2.73%
|
)
|
|
Jan
|
|
|
0.35%
|
|
Feb
|
|
|
12.65
|
%
|
|
Feb
|
|
|
1.78
|
%
|
|
Feb.
|
|
|
(3.66
|
%)
|
|
Feb
|
|
|
(7.54
|
%)
|
|
Feb
|
|
|
17.93%
|
|
|
Feb
|
|
|
0.04%
|
|
Mar
|
|
|
(2.10
|
%)
|
|
Mar
|
|
|
6.15
|
%
|
|
Mar
|
|
|
4.48
|
%
|
|
Mar
|
|
|
(8.73
|
%)
|
|
Mar
|
|
|
2.29%
|
|
|
Mar
|
|
|
(2.33%
|
)
|
Apr
|
|
|
(14.20
|
%)
|
|
Apr
|
|
|
(12.22
|
%)
|
|
Apr
|
|
|
5.79
|
%
|
|
Apr
|
|
|
7.99
|
%
|
|
Apr
|
|
|
(1.57%
|
)
|
|
Apr
|
|
|
(6.92%
|
)
|
May
|
|
|
7.21
|
%
|
|
May
|
|
|
0.30
|
%
|
|
May
|
|
|
(7.57
|
%)
|
|
May
|
|
|
2.39
|
%
|
|
May
|
|
|
5.21%
|
|
|
May
|
|
|
(12.03%
|
)
|
Jun
|
|
|
(11.62
|
%)
|
|
Jun
|
|
|
2.44
|
%
|
|
Jun
|
|
|
(0.33
|
%)
|
|
Jun
|
|
|
6.84
|
%
|
|
Jun
|
|
|
7.73%
|
|
|
Jun
|
|
|
(2.39%
|
)
|
Jul
|
|
|
(0.16
|
%)
|
|
Jul
|
|
|
(2.85
|
%)
|
|
Jul
|
|
|
(10.35
|
%)
|
|
Jul
|
|
|
(6.78
|
%)
|
|
Jul
|
|
|
(9.65%
|
)
|
|
Jul
|
|
|
(7.86%
|
)
|
Aug
|
|
|
(6.84
|
%)
|
|
Aug
|
|
|
5.69
|
%
|
|
Aug
|
|
|
0.38
|
%
|
|
Aug
|
|
|
(3.27
|
%)
|
|
Aug
|
|
|
(4.64%
|
)
|
|
Aug
|
|
|
3.52%
|
|
Sep
|
|
|
10.44
|
%
|
|
Sep
|
|
|
0.51
|
%
|
|
Sep
|
|
|
3.20
|
%
|
|
Sep
|
|
|
5.57
|
%
|
|
Sep
|
|
|
(0.07%
|
)
|
|
Sep
|
|
|
2.81%
|
|
Oct
|
|
|
4.88
|
%
|
|
Oct.
|
|
|
(7.93
|
%)
|
|
Oct
|
|
|
5.53
|
%
|
|
Oct
|
|
|
9.92
|
%
|
|
Oct
|
|
|
12.19%
|
|
|
Oct.
|
|
|
(11.60%
|
)
|
Nov
|
|
|
12.30
|
%
|
|
Nov
|
|
|
8.81
|
%
|
|
Nov
|
|
|
(1.28
|
%)
|
|
Nov
|
|
|
(4.69
|
%)
|
|
Nov
|
|
|
1.47%
|
|
|
|
|
|
|
|
Dec
|
|
|
0.19
|
%
|
|
Dec
|
|
|
(0.28
|
%)
|
|
Dec
|
|
|
11.36
|
%
|
|
Dec
|
|
|
2.82
|
%
|
|
Dec
|
|
|
1.32%
|
|
|
|
|
|
|
|
Annual
|
|
|
11.35
|
%
|
|
Annual
|
|
|
(9.43
|
%)
|
|
Annual
|
|
|
12.94
|
%
|
|
Annual
|
|
|
(0.92
|
%)
|
|
Annual
|
|
|
30.00%
|
|
|
Annual
|
|
|
(32.07%
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10 mos.
|
)
|
Aggregate
Subscriptions
Total gross capital subscriptions made to a pool or account from
inception through the date indicated.
Drawdown
Losses experienced by a pool or account over a specified period.
Worst
Peak-to-Valley % Drawdown
Greatest cumulative percentage decline in month-end net asset
value due to losses sustained by a pool or account during any
period in which the initial month-end net asset value is not
equaled or exceeded by a subsequent month-end net asset value.
Net Asset
Value
Net Asset Value of each Series is that Series assets less
liabilities determined in accordance with accounting principles
generally accepted in the United States.
PAST PERFORMANCE IS NOT
NECESSARILY INDICATIVE OF FUTURE RESULTS.
18
|
|
|
Name of Pool
|
|
Quadriga Superfund, L.P. Series B
|
Type of Pool
|
|
Single Advisor/Publicly Offered/No Principal Protection
|
General Partner
|
|
Superfund Capital Management
|
Inception of Trading
|
|
November 2002
|
Aggregate Subscriptions as of October 31, 2009
|
|
$138.14 million
|
Net Asset Value as of October 31, 2009
|
|
$49.55 million
|
Worst Monthly % Drawdown (April 2004)
|
|
(19.60%)
|
Worst Peak-to-Valley % Drawdown (February 2009 to
October 2009)
|
|
(47.52%)
|
HISTORICAL
PERFORMANCE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2004
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
Jan
|
|
|
3.49
|
%
|
|
Jan
|
|
|
(14.74
|
%)
|
|
Jan
|
|
|
9.72
|
%
|
|
Jan
|
|
|
(4.60
|
%)
|
|
Jan
|
|
|
(3.61%
|
)
|
|
Jan
|
|
|
1.01%
|
|
Feb
|
|
|
18.63
|
%
|
|
Feb
|
|
|
3.94
|
%
|
|
Feb
|
|
|
(4.95
|
%)
|
|
Feb
|
|
|
(10.67
|
%)
|
|
Feb
|
|
|
24.60%
|
|
|
Feb
|
|
|
0.68%
|
|
Mar
|
|
|
(2.59
|
%)
|
|
Mar
|
|
|
8.49
|
%
|
|
Mar
|
|
|
6.32
|
%
|
|
Mar
|
|
|
(12.65
|
%)
|
|
Mar
|
|
|
1.95%
|
|
|
Mar
|
|
|
(4.49%
|
)
|
Apr
|
|
|
(19.60
|
%)
|
|
Apr
|
|
|
(16.86
|
%)
|
|
Apr
|
|
|
8.31
|
%
|
|
Apr
|
|
|
11.38
|
%
|
|
Apr
|
|
|
(1.20%
|
)
|
|
Apr
|
|
|
(10.83%
|
)
|
May
|
|
|
9.11
|
%
|
|
May
|
|
|
0.48
|
%
|
|
May
|
|
|
(10.37
|
%)
|
|
May
|
|
|
3.41
|
%
|
|
May
|
|
|
7.33%
|
|
|
May
|
|
|
(19.31%
|
)
|
Jun
|
|
|
(15.07
|
%)
|
|
Jun
|
|
|
3.56
|
%
|
|
Jun
|
|
|
0.29
|
%
|
|
Jun
|
|
|
9.77
|
%
|
|
Jun
|
|
|
12.54%
|
|
|
Jun
|
|
|
(3.52%
|
)
|
Jul
|
|
|
(0.09
|
%)
|
|
Jul
|
|
|
(3.68
|
%)
|
|
Jul
|
|
|
(14.11
|
%)
|
|
Jul
|
|
|
(10.11
|
%)
|
|
Jul
|
|
|
(15.00%
|
)
|
|
Jul
|
|
|
(12.24%
|
)
|
Aug
|
|
|
(9.29
|
%)
|
|
Aug
|
|
|
8.02
|
%
|
|
Aug
|
|
|
0.55
|
%
|
|
Aug
|
|
|
(4.66
|
%)
|
|
Aug
|
|
|
(7.28%
|
)
|
|
Aug
|
|
|
5.62%
|
|
Sep
|
|
|
14.75
|
%
|
|
Sep
|
|
|
1.06
|
%
|
|
Sep
|
|
|
4.45
|
%
|
|
Sep
|
|
|
8.26
|
%
|
|
Sep
|
|
|
0.46%
|
|
|
Sep
|
|
|
4.58%
|
|
Oct
|
|
|
7.01
|
%
|
|
Oct
|
|
|
(10.77
|
%)
|
|
Oct
|
|
|
7.74
|
%
|
|
Oct
|
|
|
14.57
|
%
|
|
Oct
|
|
|
20.14%
|
|
|
Oct
|
|
|
(18.34%
|
)
|
Nov
|
|
|
17.33
|
%
|
|
Nov
|
|
|
12.93
|
%
|
|
Nov
|
|
|
(1.73
|
%)
|
|
Nov
|
|
|
(6.79
|
%)
|
|
Nov
|
|
|
2.78%
|
|
|
|
|
|
|
|
Dec
|
|
|
0.41
|
%
|
|
Dec.
|
|
|
(0.22
|
%)
|
|
Dec
|
|
|
16.14
|
%
|
|
Dec
|
|
|
4.44
|
%
|
|
Dec
|
|
|
2.60%
|
|
|
|
|
|
|
|
Annual
|
|
|
16.82
|
%
|
|
Annual
|
|
|
(12.06
|
%)
|
|
Annual
|
|
|
19.74
|
%
|
|
Annual
|
|
|
(2.60
|
%)
|
|
Annual
|
|
|
46.56%
|
|
|
Annual
|
|
|
(46.63%
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10 mos.
|
)
|
Aggregate
Subscriptions
Total gross capital subscriptions made to a pool or account from
inception through the date indicated.
Drawdown
Losses experienced by a pool or account over a specified period.
Worst
Peak-to-Valley % Drawdown
Greatest cumulative percentage decline in month-end net asset
value due to losses sustained by a pool or account during any
period in which the initial month-end net asset value is not
equaled or exceeded by a subsequent month-end net asset value.
Net Asset
Value
Net Asset Value of each Series is that Series assets less
liabilities determined in accordance with accounting principles
generally accepted in the United States.
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE
RESULTS.
19
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Introduction
The Fund commenced the offering of its Units on October 22,
2002. The initial offering terminated on October 31, 2002
and the Fund commenced operations on November 5, 2002. The
continuing offering period commenced at the termination of the
initial offering period and is ongoing. From inception through
the period ended October 31, 2009, subscriptions totaling
$252,404,121 have been accepted and redemptions over the same
period totaled $170,663,483
Liquidity
Most United States commodity exchanges limit fluctuations in
futures contracts prices during a single day by regulations
referred to as daily price fluctuation limits or
daily limits. During a single trading day, no trades
may be executed at prices beyond the daily limit. This may
affect the Funds ability to initiate new positions or
close existing ones or may prevent it from having orders
executed. Futures prices have occasionally moved the daily limit
for several consecutive days with little or no trading. Similar
occurrences could prevent the Fund from promptly liquidating
unfavorable positions and subject the Fund to substantial
losses, which could exceed the margin initially committed to
such trades. In addition, even if futures prices have not moved
the daily limit, the Fund may not be able to execute futures
trades at favorable prices if little trading in such contracts
is taking place.
Trading in forward contracts introduces a possible further
impact on liquidity. Because such contracts are executed
off exchange between private parties, the time
required to offset or unwind these positions may be
greater than that for regulated instruments. This potential
delay could be exacerbated to the extent a counterparty is not a
United States person.
Other than these limitations on liquidity, which are inherent in
the Funds futures trading operations, the Funds
assets are expected to be highly liquid.
Capital
Resources
The Fund will raise additional capital only through the sale of
Units offered pursuant to the continuing offering and does not
intend to raise any capital through borrowings. Due to the
nature of the Funds business, it will make no capital
expenditures and will have no capital assets which are not
operating capital or assets.
Results
of Operations
2009
(9 months)
Series A
Net results for the nine months ended September 30, 2009,
were a loss of 23.15% in net asset value compared to
December 31, 2008. In this period, Series A
experienced a net decrease in net assets from operations of
$9,230,230. This loss consisted of interest income of $31,849,
trading losses of $7,010,556, and total expenses of $2,251,523.
Expenses included $482,997 in management fees, $261,079 in
ongoing offering expenses, $39,162 in operating expenses,
$1,044,317 in selling commissions, $410,850 in brokerage
commissions, and $13,118 in other expenses. At
September 30, 2009, and December 31, 2008, the net
asset value per Unit of Series A was $1,484.92 and
$1,932.30, respectively.
Series B
Net results for the nine months ended September 30, 2009,
were a loss of 34.64% in net asset value compared to
December 31, 2008. In this period, Series B
experienced a net decrease in net assets from operations of
$26,253,501. This decrease consisted of interest income of
$59,119, trading losses of $21,651,988, and total expenses of
$4,660,632. Expenses included $844,238 in management fees,
$456,345 in ongoing offering expenses, $68,452 in operating
expenses, $1,825,381 in selling commissions, $1,145,959 in
brokerage commissions, and $19,024 in other expenses. At
September 30, 2009, and December 31, 2008, the net
asset value per Unit of Series B was $1,699.95 and
$2,600.96, respectively.
20
Fund
results for
3rd
Quarter 2009:
In September, world bond markets finished on the upside after
better than expected economic data was discounted as several
global central banks weighed the withdrawal of economic stimulus
packages. These conditions led the Funds long positions in
the bond sector to an overall gain. Global short-term interest
rate futures continued their strong upward trend as inflation
fears weakened and sustainability of the economic recovery came
into question. Three month eurodollar futures extended their
upside move after the Federal Open Market Committee kept rates
at record lows in an effort to combat a
26-year high
in unemployment. The Funds long positions produced gains
in the interest rates sector. The U.S. dollar established
new lows for the year in September, falling 2.0% as investors
around the world aggressively borrowed the low yielding currency
to finance purchases of assets in countries offering higher
yields. Emerging South American currencies continued to shine
due to their relatively high yields. The Colombian peso and
Brazilian real finished 6.8% and 6.0% higher, respectively,
against the U.S. dollar. The Funds short positions in
the U.S. dollar led to gains in the currencies sector.
November crude oil contracts finished near unchanged as existing
homes sales and consumer confidence came in well below
expectations. Crude inventories continued to expand as demand
remained weak. The Funds short energy positions produced
losses on the month. December gold futures finished 5.9% higher,
closing above the significant $1,000 mark. December silver
futures also attracted investment demand, finishing 11.6% higher
on the month. The Funds long metals positions produced an
overall gain.
In August, world bond markets moved steadily higher as
perceptions surrounding economic data shifted.
U.S. Treasury bonds attracted steady buying in the latter
half of the month as retail sales missed forecasts and producer
prices fell more than expected. These developments led the
Funds long positions in the interest rate sector to an
overall gain. The U.S. dollar remained near its lows for
the year as risk appetite remained elevated, while the British
pound and Canadian dollar finished down 2.5% and 1.1%,
respectively, against the U.S. dollar. The Funds
short positions in U.S. dollar led to an overall gain.
Crude oil finished down 1.7%, while natural gas lost 23.3%. The
Funds short positions in the energy sector lead to an
overall gain. October gold continued to trade sideways between
$900-$1,000, while London copper, nickel and lead finished
12.6%, 6.7% and 12.2% higher, respectively. The Funds
short positions in the metals sector led to an overall loss. Hog
futures continued their steady drive lower, finishing down
10.5%. Sugar and coffee finished 30.1% and 7.6% higher,
respectively. The Funds mix of long and short positions in
the agriculture sector resulted in an overall gain.
In July, global stock markets continued to advance as many
markets rose to new multi-month highs. Chinas Shenzen 300
finished 15.0% higher, while Germanys DAX, Londons
FTSE and Frances CAC40 established new highs, rising
between 8.0% and 11.0%. Short positions in the stock indices
sector produced relatively large losses for the month. The
Canadian dollar surged, finishing 7.0% higher against the
U.S. dollar, and the Norwegian krona, Brazilian real and
Australian dollar finished 5%, 4.4% and 3.6% higher,
respectively, against the U.S. dollar. These conditions led
the Funds long positions in the U.S. dollar to an
overall loss. Gold gained slightly in July as investors
continued to search for conviction on short-term price action.
U.S. dollar weakness combined with an inflationary Producer
Price Index report caused December gold futures to experience a
2.8% gain. Industrial metals continued to trend higher with
London copper leading the way, finishing 15.2% higher. The
Funds short positions in metals led to an overall loss.
For the third quarter of 2009, the most profitable market sector
for the Fund on an overall basis was the interest rates sector,
while the greatest losses resulted from the Funds
positions in the stock indices sector.
Fund
results for
2nd
Quarter 2009:
In June, U.S. stock indices finished near unchanged, while
most Asian stock indices finished higher; Hong Kongs
Chinese Enterprise Index rose 6.1%. The Funds short
positions in the stock indices sector experienced a loss. World
bond markets reversed early month lows by month end, finishing
higher as improving bond yields and a stagnating equity rally
attracted buyers. The Funds long positions in the bonds
sector led to a gain. U.S. and European short-term interest
rate futures finished slightly higher in June, recovering from a
substantial early month selloff. The Funds long positions
during the earlier part of the month resulted in losses. The
Australian dollar finished the month 1.2% higher, while the
British pound finished 2.0% higher. The Funds long
positions in the U.S. dollar led to a loss. December wheat
contracts plunged, losing 17.5% as the global recession
continued to destroy demand. The Funds short positions in
the grains sector produced gains. London copper added 3.7%,
while lead also rose 8.9% as Chinese auto sales soared. London
nickel finished up 10% as Chinese imports for the first
21
4 months of 2009 exceeded 2008 levels by 16%. The
Funds short positions in the metals sector resulted in
losses. U.S. August crude oil futures added 4.1% despite
rising inventories as Chinese buying supported values. The
Funds short positions in the energy sector produced
losses. Other market sectors, relative to the sectors mentioned
above, did not reveal significant trends and did not have a
substantial influence on this months overall negative
performance.
In May, world bond markets traded dramatically lower as
burgeoning budget deficits led to heavy bond issuance,
foreshadowing long-term inflation.
U.S. 30-year
bond futures, German Bund futures, and Japanese
10-year bond
futures traded to their lowest levels since November 2008. The
Funds long positions in the bonds sector resulted in
losses. Emerging market strength contributed to a steep selloff
in U.S. treasuries, resulting in a 6.2% loss for the
U.S. dollar index. The Brazilian real and the Australian
dollar were up 10% and 13.2%, respectively, against the
U.S. dollar. The Funds long positions in the
U.S. dollar produced losses. Despite crude demand falling
more than 7.5% from last year, inventories declined, leading to
a 24.8% gain for July crude futures. The Funds short
positions in this sector incurred relatively large losses. Other
market sectors did not reveal significant trends and did not
have a significant influence on this months overall
negative performance.
In April, the S&P 500 Index rose 9.4% led by bank stocks as
(i) FAS 157-4
provided guidance for determining the fair value of assets and
liabilities, including guidance on identifying circumstances
that indicate an observed transaction used to determine fair
value is not orderly and, therefore, is not indicative of fair
value and (ii) strong earnings from favorable spreads
created by cheap central bank liquidity supported values. The
Funds short stock indices positions led to a relatively
large loss. World bond markets tracked steadily lower in April
as money flowed out of low yielding treasuries and into
equities. The Funds long positions in the bonds sector
produced an overall loss. The U.S. dollar index finished
down 1.2% while the euro moved sideways as capital moved out of
the U.S. and European Union amid unattractive treasury
yields. The Hungarian forint, Polish zloty and Czech koruna
gained 6.0%, 4.6% and 2.1%, respectively against the
U.S. dollar, while the Australian dollar, Canadian dollar
and Brazilian real finished up 5.0%, 5.5% and 5.7%, respectively
against the U.S. dollar. The Funds long positions in
the U.S. dollar lead to an overall loss for the currency
sector. Positive economic signals from the G20 meeting and the
resulting rise in world equity markets were offset by rising
inventories as global energy demand continued to contract. June
natural gas prices continued lower, posting a 13.8% loss as
storage increased to nearly 34% greater than a year ago and 23%
greater than the five-year moving average. The Funds short
positions in the energy sector produced a relatively large gain.
Other market sectors did not reveal significant trends and did
not have a substantial influence on Aprils overall
negative performance.
For the second quarter of 2009, the most profitable market
sector for the Fund on an overall basis was the grains sector,
while the greatest losses resulted from the Funds
positions in the energy sector.
Fund
results for
1st
Quarter 2009:
In March, global stock indices finished the month with
significant gains. On the basis of strong economic indicators,
U.S. indices experienced gains of 7% to 10%, while
Koreas Kospi and the China-based H-Shares experienced
gains of 14.2% and 13.7%, respectively. The Funds short
stock indices positions resulted in losses for the month. Global
short-term interest rate futures trended higher during March as
the continuous actions of world central banks attempting to
combat the recession and reverse deflation provided steady
support. The Funds long interest rates positions produced
gains. The Australian dollar gained 8.2% against the
U.S. dollar, while the Brazilian real and New Zealand
dollar gained 2.6% and 11.7%, respectively, based on strong
relative economic performance bolstered by commodity market
strength. The euro added 4.6% against the U.S. dollar and
6% against the Japanese yen, while the Norwegian krone rose 4.4%
against the U.S. dollar. A relatively large loss resulted
from the Funds short positions in these foreign currency
markets. In March, Australian wheat production estimates grew by
1.4 million tons, while global
2008-09
total wheat production was projected to be a record
684.4 million tons. May corn moved 12.7% higher as rising
crude oil and fertilizer prices resulted in the United States
Department of Agriculture (USDA) shifting production
from corn to soybeans. The Funds short positions in grain
lead to a loss in the sector. May crude oil futures added to
Februarys late month rebound, rising 6.1%, supported by
solid U.S. housing and durable goods orders and a weaker
U.S. dollar. A surprisingly dramatic recovery in Chinese
demand also provided underlying support. The Funds short
energy sector positions resulted in losses for the month. Gold
ETF holdings posted yet another record high, supporting the
market at levels well above $900 per ounce as investors
continued to seek protection from currency debasing moves by
central bankers. In London, base metals,
22
led by copper and zinc, up 19.7% and 21.4%, respectively, moved
sharply higher amid widespread evidence that China is moving to
counteract damage to its export-led economic growth by
stockpiling industrial metals to use for vast infrastructure
projects. These developments produced losses for the Funds
short positions in the metals sector.
In February, equities continued their collapse as dark economic
clouds hung over global markets. In Asia, major indices lost
between 3% and 9%. The Nikkei Index fell nearly 4.7% amid a
startling 84% drop in January machine orders (year over year).
The Funds short positions in stock indices produced gains
on the month. Front month U.S. 30 year bond futures
finished slightly lower as the unexpected inflation readings and
massive debt supply offset the short term inflation outlook.
European bonds returned to recent highs as reports showed
economic contraction of 1.5% in the 4th quarter, the most
in 13 years. Japanese bonds also returned to recent highs
as gross domestic product (GDP) shrank at a 12.7%
annualized rate in the fourth quarter. The Funds long
positions in the bonds sector produced gains for the month. May
soybean futures showed strength early in the month on concern
that dry conditions in Argentina would result in significant
production losses. Nonetheless, soybeans finished over 10.7%
lower as the combination of timely rains and persistent
U.S. dollar strength weighed on values. May corn futures
finished 8% lower despite the dry weather in Argentina leading
the USDA to lower world production estimates by 4.6 million
tons. The Funds short positions in the grains sector
resulted in gains for the month. U.S. crude inventories
rose to 351.3 million barrels versus 299.8 million
barrels in February 2009 despite several rounds of OPEC
production cuts. Despite the negative news, April crude managed
a late rally of over 20% to finish with a loss of 3.3% on the
back of a bullish gasoline inventory report. April gasoline
futures rallied over 20% from its lows to finish 1.3% higher as
capacity utilization in the refining sector shrank to 81.4%.
April natural gas finished 6.2% lower as supplies stood more
than 12% above the five-year average. The Funds short
positions in the energy sector resulted in overall gains for the
month.
In January, negative news sent equities lower around the world.
Asian indices finished lower as the Nikkei declined 10% due to
distressed vehicle sales and industrial production, while Hong
Kongs Hang Seng index fell 8.2% on poor export data. In
Europe, falling industrial production and bank sector trouble
pressured markets, leading to a 10.2% decline for Germanys
DAX. The Funds short positions in the stock indices sector
produced gains for the month. World bond markets gave back most
of Decembers gains as stimulus and bailout package
announcements by world governments made bond investors nervous.
In Europe, producer prices fell the most in 27 years and
consumer inflation reached the lowest in more than 2 years.
This data propelled front-month Bund futures to a record high by
mid-month, however the market finished near unchanged as the
European Central Bank rejected talk of easing to a 0% target
rate. The Funds long positions in the bonds sector
resulted in losses for the month. Crude oil settled near its
December low of around $40 per barrel as the market shrugged off
a litany of bullish factors, choosing instead to focus on
deteriorating demand, growing inventories, and the strong U.S
dollar. March natural gas futures continued trending lower,
falling 21.8% as inventories remained plentiful despite below
average temperatures throughout the U.S. The Funds
short positions in the energy sector produced overall gains for
the month.
For the first quarter of 2009, the most profitable market sector
was interest rates, while the largest losses resulted from
positions in the currency sector.
2008
Series A
Net results for the year ended December 31, 2008 were a
gain of 30.00% in net asset value compared to the preceding
year. In this period, Series A experienced a net increase
in net assets from operations of $13,083,514. This net increase
consisted of interest income of $917,244, trading gains of
$17,665,180, and total expenses of $5,498,910. Expenses included
$813,892 in management fees, $439,942 in ongoing offering
expenses, $65,991 in operating expenses, $1,759,767 in selling
commissions, $1,786,681 in incentive fees, $615,631 in brokerage
commissions, and $17,006 in other expenses. At December 31,
2008, and December 31, 2007, the net asset value per Unit
of Series A was $1,932.30 and $1,486.44, respectively.
Series B
Net results for the year ended December 31, 2008 were a
gain of 46.56% in net asset value compared to the preceding
year. In this period, Series B experienced a net gain in
net assets from operations of $17,346,271. This net increase
consisted of interest income of $792,092, trading gains of
$24,927,058, and total expenses of $8,372,879.
23
Expenses included $936,891 in management fees, $506,427 in
ongoing offering expenses, $75,964 in operating expenses,
$2,025,709 in selling commissions, $3,831,165 in incentive fees,
$971,657 in brokerage commissions, and $25,066 in other
expenses. At December 31, 2008, and December 31, 2007,
the net asset value per Unit of Series B was $2,600.96 and
$1,774.69, respectively.
Fund
results for
4th
Quarter 2008:
In December, the world bond market rally continued as
U.S. 30-year
bond futures and the German Bund traded to record highs.
U.S. bonds finished the year exceptionally strong as
unemployment reached 6.7%, the highest rate since 1993. European
bond futures climbed to record highs as euro zone GDP dropped to
0.6%
(year-on-year).
Japanese
10-year bond
futures finished the year higher as the Tankan Survey showed
business sentiment at a
10-year low,
forcing the Bank of Japan to lower interest rates to 0.1% as yen
appreciation decimated exports. The Funds long bond
positions produced gains in December. World energy markets
endured extreme volatility in 2008. After crude oil futures
peaked in July with an
intra-day
high of $147.27 per barrel, energy markets moved sharply lower
for the balance of the year as the credit crisis and high prices
quashed demand and sent the world into recession. Crude oil
finished down 54.2% on the year as growing inventories and
wholesale commodity deleveraging sent buyers to the exits.
Heating oil, gasoline, and natural gas followed a similar path.
Heating oil peaked with a gain of over 57%, only to finish down
46.3%. Gasoline and natural gas futures also finished the year
with losses of 59.5% and 25%, respectively. Short positions in
the energy sector produced gains in December.
In November, the credit crunch continued to stifle the world
banking system and choke off corporate funding, leading to
additional layoffs. In Asia, the Taiwan Index lost nearly 9.5%
as exports and industrial production collapsed. Australias
SPI Index fell 7.5% as commodity prices remained depressed.
Germanys DAX led European equities lower, declining 7.8%,
as GDP and industrial production sank. The Funds short
positions in stock indices futures produced gains. World bond
markets rose sharply as fears of a protracted global economic
recession led to a parallel concern that deflation was
establishing itself. The rally continued as U.S. retail
sales sustained the largest drop since records began in 1992,
declining 2.8%. Front month
U.S. 30-year
bond futures responded by trading to near a 10 year high as
the CPI decreased the greatest amount on record, conveying a
steep drop off in inflation. European bonds continued their
upward trend with December bond futures reaching a 33 month
high. The Funds long bond positions resulted in
significant gains. Global short-term interest rate futures
continued their strong upward trend in November as the economic
crisis intensified. Three month Eurodollar futures rallied to
over 4-year
highs after Treasury Secretary Paulson announced the
U.S. would abandon buying soured assets from banks in favor
of easing consumer credit. In Europe, three month Euribor
futures continued higher as the European Community Bank cut
rates by 50 basis points, while stating the possibility of
further rate reductions in the near future. Front month three
month Euroswiss futures traded to over
3-year highs
as the Swiss National Bank stunned the market with a
100 basis points rate cut, their third cut in 6 weeks.
The Funds long currency positions produced gains in
November.
In October, global equity markets crashed as panic spread amid
the realization that the credit crisis would continue to
constrain economic growth for the foreseeable future. Equity
markets around the world fell between 20% and 35% as volatility
surged to all-time highs. Central banks in Asia, Europe, South
America, and the United States responded with interest rate
cuts and massive liquidity injections. The Funds short
positions in stock indices futures resulted in relatively large
gains. Global short term interest rate futures experienced a
momentous rally in October as recession fears deepened and short
term interbank financing froze. The U.S. Federal Reserve
cut rates 100 basis points during the month. Central banks
throughout Europe and Asia followed suit with aggressive cuts of
their own. Front month Euribor and Sterling futures traded to
22 month and 3 year highs, respectively. By month end,
the aggressive efforts of central bankers appeared to pay off as
LIBOR-OIS narrowed 15 consecutive days to finish at
242 basis points over. The Funds long interest rate
positions produced gains. Currencies plummeted worldwide in
October amid fears of a global depression. The attractiveness of
the U.S. dollar as a safe haven during periods of
uncertainty helped push the U.S. dollar index to a
2 year high, rising 8.7%. The British pound fell to a
6 year low of below $1.53 when the United Kingdoms
gross domestic product dropped 0.5% in the 3rd quarter, the
first contraction since 1992. Australian and Canadian dollar
futures plummeted, declining 15.5% and 11.6%, respectively,
along with the Brazil real, which declined 13.3%, as commodity
driven economies were expected to suffer from declining demand.
The Fund gained from its long positions in the U.S. dollar.
24
For the fourth quarter of 2008, the most profitable market group
overall was the stock indices sector, while the greatest losses
were attributable to positions in the grains sector.
Fund
results for
3rd
Quarter 2008:
In September, worldwide stock indices finished the month with
significant losses. Major European indices finished 6-19% lower,
while the Dow Jones and Nasdaq finished 6.3% and 15.6% lower,
respectively. The Funds short positions in stock indices
produced gains for the month. Energy markets continued to drop
from record highs three months prior, finishing the month with
steep losses. Despite a short lived rally, crude oil prices
finished 13.2% lower on the month, while natural gas and
gasoline futures lost 11% and 12.6%, respectively. The
Funds long energy positions resulted in losses for the
month.
In August, U.S. dollar index futures surged 5.5% as the
EUR/USD declined 8.5%. Recessionary fears in the United Kingdom
led to the GBP/USDs largest decline in two years, while
the Australian dollar declined 8.4%. The Funds short
positions in the U.S. dollar resulted in a relatively large
loss for the month. U.S. dollar gains combined with
contracting global demand and record OPEC production contributed
to a 7.1% decline in crude oil. Natural gas also declined,
finishing 13.8% lower. The Funds long positions in the
energy sector resulted in losses for the month. Gold dropped to
its lowest levels since December, finishing the month 9.4%
lower. Silver and platinum also experienced declines, falling
23.7% and 14.8%, respectively. Nickel had a surprise gain of
10.2% as key producers announced plans to cut output. The
Funds long positions in the metals sector resulted in a
relatively large loss. World bond markets traded higher as
global economic growth concerns widened.
U.S. 30-year
bond futures traded to a four month high, while European bond
futures rallied as euro zone annual inflation eased to 3.8% and
German GDP contracted by 0.8%. The Funds long positions in
the bonds sector resulted in an overall gain.
In July, write-offs continued to plague financials as equities
endured heavy selling. The U.S. government responded by
enacting emergency measures to stabilize the financial system.
In the United Kingdom, the FTSE Index finished with a 4.5% loss.
The Funds short position in stock indices resulted in an
overall gain. Agricultural futures gave back nearly all of
Junes gains as soybean futures fell 10.8%, corn plummeted
19.7%, and wheat futures fell 8.2% on the month. The Funds
long positions in the agricultural market resulted in a
substantial loss. Energy prices fell sharply in July due to a
reduction in geopolitical hostilities and further evidence of
overall reductions in global demand. Both crude oil and gas
futures experienced greater than 10% declines. Natural gas
plummeted over 30% due to inventory gains. The Funds long
positions in the energy sector resulted in significant losses.
Gold ultimately finished 1.5% lower after an initial rally in
the first half of July. Platinum also fell over 15%, a result of
significant declines in U.S. auto sales. The Funds
long positions in the metals sector produced an overall loss.
For the third quarter of 2008, the most profitable market group
overall was stock indices while the largest losses resulted from
positions in the energy sector.
Fund
results for
2nd
Quarter 2008:
In June, equity markets declined around the globe due to slowing
growth and rising unemployment and commodity prices. Short
positions in equity markets produced significant gains. Severe
flooding in the U.S. caused significant delays in the grain
planting process, sending prices soaring. Long positions in the
agricultural sector resulted in an overall gain. World energy
markets remained elevated as geopolitical concerns kept oil
supply uncertainty high. Crude oil finished with a 9.8% gain.
Long positions in the energy sector resulted in overall gains.
Other market sectors, relative to the sectors mentioned above,
did not reveal significant trends and did not have any major
influence on Junes positive performance.
In May, some foreign currencies approached all time highs. Long
positions in foreign currencies resulted in an overall gain for
this sector. World energy markets continued their historic
advances in May as crude oil finished 12.9% higher. Heating oil,
gasoline, and natural gas all rose sharply as declining margins
continued to result in insufficient distillate fuel production.
Long positions in this sector resulted in a substantial gain.
Other market sectors, relative to the sectors mentioned above,
did not reveal significant trends and did not have any major
influence on Mays overall positive performance.
In April, world bond markets moved lower as growing inflation
readings added to late Marchs weakness. U.S. bonds
rallied early in the month before values moved lower as consumer
prices rose due to higher fuel and food costs. Long positions in
this market sector resulted in a loss. World energy markets
traded higher in April as oil
25
futures moved 12.3%, reaching all time highs. The ongoing
weakness of the U.S. dollar provided early support, while
strong demand from developing nations, bullish domestic
inventory reports, and continued geopolitical concerns provided
support throughout the month. Long positions led to an overall
gain in the energy sector. Other market sectors, relative to the
bond and energy sector, did not reveal significant trends and
did not have a major influence on Aprils slightly negative
performance.
For the second quarter of 2008, the most profitable market
sector for the Fund on an overall basis was the energy sector,
while the greatest losses resulted from the Funds
positions in the bonds sector.
Fund
results for
1st
Quarter 2008:
In March, long positions in world bond markets resulted in a
gain. Long positions in the currencies markets resulted in a
relatively large gain. The U.S. dollars historic
decline accelerated against most world currencies in March. Long
positions in the currencies markets resulted in a relatively
large gain. Long positions in the agricultural markets led to an
overall loss for the agricultural sector. Crude oil rose to
record highs with long positions producing gains in the energy
sector. Although gold touched record highs well above $1000 per
ounce, the precious metals markets reversed. Long positions in
the metals sector resulted in a relatively large loss. Other
market sectors, relative to the sectors mentioned above, did not
reveal significant trends and did not have a significant
influence on Marchs overall positive performance.
In February, wheat and corn futures posted record highs, with
soybeans futures also surging. Long positions in this sector
produced considerable gains. Crude oil futures moved to record
highs over $100 in February, extending a long-standing bull run.
A relatively large gain resulted from energy sector long
positions. Gold and platinum futures rose to record highs in
February and silver reached a
28-year high
resulting in significant gains from long positions in the metals
sector. A mix of long and short positions produced overall gains
in agricultural markets. Other market sectors did not reveal
significant trends and did not have a major influence on
Februarys positive overall performance.
Crude oil futures opened January near all-time highs, but the
market moved lower as the month progressed. Long positions in
the energy markets resulted in relatively large losses for the
sector. Gold and platinum futures traded at all-time highs,
silver traded at its highest level since January 1981, and
copper rose, resulting in gains in the metal sector. Other
market sectors, relative to the energies and metals, did not
reveal significant trends and did not have a major influence on
Januarys overall negative performance.
2007
Series A
Net results for the year ended December 31, 2007 were a
loss of 0.92% in net asset value per Unit compared to the
preceding year. In 2007, Series A experienced a net
decrease in net assets from operations of $1,287,807. This net
decrease in net assets consisted of interest income of
$2,882,259, a net realized and unrealized gain of $1,544,192
from trading operations, and expenses of $5,714,258. Expenses
included $1,165,114 in management fees, $395,190 in ongoing
offering expenses, $94,469 in operating expenses, $2,519,166 in
selling commissions, $1,535,369 in brokerage commissions, and
$4,950 in other expenses. At December 31, 2007 and
December 31, 2006, the net asset value per Unit of
Series A was $1,486.44 and $1,500.20, respectively.
Series B
Net results for the year ended December 31, 2007 were a
loss of 2.60% in net asset value per Unit compared to the
preceding year. In 2007, Series B experienced a net
decrease in net assets from operations of $1,559,643. This net
decrease in net assets consisted of interest income of
$1,299,435, a net realized and unrealized gain of $102,974 from
trading operations, and expenses of $2,962,052. Expenses
included $535,198 in management fees, $182,051 in ongoing
offering expenses, $43,394 in operating expenses, $1,157,184 in
selling commissions, $1,042,451 in brokerage commissions, and
$1,774 in other expenses. At December 31, 2007 and
December 31, 2006, the net asset value per Unit of
Series B was $1,774.69 and $1,821.99, respectively.
Fund
results for
4th
Quarter 2007:
U.S. stocks finished December near unchanged, completing a
volatile trading year as strong earnings and employment were
offset by subprime fears, housing market weakness, and higher
energy costs. Major European
26
indices finished lower in December as consumer prices jumped
3.1%, limiting expectations for future rate cuts. Spains
IBEX fell 4.5% in December amid declining merger prospects,
while South Africas All Shares fell 4.2% as mining
equities corrected. The Funds long positions produced
overall losses in the stock indices sector. Wheat finished the
month near unchanged after moving to record highs above $10 at
mid month as food inflation surged amid poor crop prospects in
Argentina and severe Chinese restrictions on corn, wheat, and
soybean exports. Soybeans gained 11% in December, approaching
all time highs near $13. Beans found support on declining
planted acreage due to historic rallies in corn and wheat, solid
bio fuel demand, the weak U.S. dollar, and the year-end
South American weather premium. Long positions resulted in
gains in this sector. Crude oil futures continued their historic
run-up,
adding 8.2% on the month to finish with a 57.2% gain for the
year. The market found persistent underlying support from the
ongoing war in Iraq, the Iranian nuclear standoff, instability
in Nigeria, and a very strong demand component. News that Iran
may have abandoned its nuclear weapons program did little to
avert the advance. Heating oil added 4.8% in December to finish
63.3% higher on the year, while gasoline posted a 9.8% monthly
gain and 55.2% annual gain. Natural gas continued to lag the
complex, finishing down 2.9% for the month and up 19.3% on the
year. Long positions outpaced short positions, producing overall
gains in the energy sector. Gold futures added 7% in December to
finish the year 31.1% higher as inflation fears mounted.
Projections for declining economic growth amid weak
U.S. home sales and deteriorating consumer confidence
limited the Federal Reserves options in the fight against
inflation, thereby supporting gold investment as the
U.S. dollar fell. Silver moved 6.9% higher to finish the
year with a 15.8% gain while Platinum advanced 5.3% to finish
the year up more than 33%. Long positions in the metals sector
resulted in gains for the month. Other market sectors did not
reveal significant trends and did not have a major influence on
this months positive performance.
Evidence of a slowing global economy led stocks lower in
November, reversing the uptrend from the early fall season. Long
positions in the stock indices sector produced relatively large
losses during November. The U.S. dollar continued to trend
lower in November as the euro rose to new all time highs just
below the $1.50 level. The U.S. dollar gained ground
against Latin American currencies as prospects for weakness in
the U.S. economy raised worries of softening export demand
in the region. The Brazilian real lost 3.6% as the government
bought U.S. dollars in an attempt to limit the strength of
their currency amid a sharp decline in the countrys trade
surplus. The Chilean peso, Colombian peso and the Mexican peso
lost 2.5%, 3.5%, and 2.4%, respectively. In Asia, the Australian
dollar lost 5.6% as metal prices declined, while the Korean won
fell 2.2% amid fears of declining exports. Long currency
positions in the emerging markets and the Australian dollar
resulted in losses in this sector. Crude oil and heating oil
futures finished slightly lower in volatile action following
moves to all time highs earlier in the month. Rallies were paced
by ongoing weakness in the U.S. dollar and overall fears
that oil production may soon peak. Meanwhile, crude and heating
oil stocks continued to tighten ahead of prime northern
hemisphere heating season even as OPEC continued to increase
output. Intra-month declines resulted from Iraqi pledges to
increase pressure on Kurdish rebels, rising OPEC exports, and
fears of a global economic slowdown. Natural gas continued to
trend lower, finishing with losses of 15.6%. The Funds
short positions overcame losses from long positions, resulting
in an overall gain in the energy sector. Other market sectors
did not reveal significant trends and did not have a major
influence on the Funds overall negative performance for
the month.
World bond markets remained volatile in October, finishing with
notable gains as rising economic uncertainty overcame positive
early month data. The Funds short positions in this sector
collectively produced losses. The U.S. dollar continued its
strong downward trend in October. Worldwide commodity prices
continued to derive support from the U.S. dollars
weakness, thereby driving strong economic results and higher
yields in commodity dependant economies. The Funds short
positions in the U.S. dollar resulted in relatively large
gains. Crude oil futures moved sharply higher throughout October
as the market continued an advance that began in January.
Extreme U.S. dollar weakness, tight crude oil supplies
heading into the winter heating season, an increase in refinery
utilization, and the overall resilience of the world economy
also supported values. Unleaded gas (+10.3%) and heating oil
(+9.0%) followed crude oil higher while natural gas finished
only 3.2% higher as mild weather contributed to solid
inventories. Gains from the Funds long positions
overwhelmed losses from short positions, resulting in an overall
gain in the energy sector. Precious metals posted impressive
gains, led by gold, which rallied 5% to
27-year
highs near the $800 level. Gold found persistent support from
weakness in the U.S. dollar, which moved to new record lows
against the euro as investors sought portfolio diversity. Silver
advanced 2.9% to its highest level since April in sympathy.
Platinum reached a new record high driven by supply shortages
stemming from South African mine closures. These events led the
Funds long metal positions to an overall gain. Other
market
27
sectors did not reveal significant trends and did not have a
major influence on Octobers overall positive performance.
For the fourth quarter of 2007, the most profitable market group
overall was the metals sector, while the greatest losses were
attributable to positions in the stock indices sector.
Fund
results for
3rd
Quarter 2007:
Worldwide stock indices finished the month of September with
solid gains, with Hong Kongs Hang Seng advancing 13.5% and
the Dow Jones, Nasdaq, and S&P 500 finishing with gains of
3.8%, 4.5%, and 3.3%, respectively. The Funds long
positions in this sector produced gains for the month. The
Funds short U.S. dollar positions experienced
relatively large gains as the U.S. dollar moved sharply
lower against all major currencies in September. The Funds
long positions in agricultural markets produced gains as corn,
soybean and wheat futures rallied. In September the energy
markets, including crude oil, heating oil and gasoline, rallied
resulting in a loss for the Funds short positions in these
markets. Gold reestablished its long-term upward trend in
September, rallying 9.9% to the $750 level resulting in gains
for the Funds long positions in the metals sector.
In August, world equity markets finished mixed to lower,
resulting in a loss for the Funds long positions in this
market sector. The Funds short positions in the interest
rate sector also incurred losses in August. As the
U.S. dollar moved sharply higher during the first half of
August, the euro and British pound finished nominally lower and
the Australian dollar and New Zealand dollar lost 3.9% and 7.9%
respectively, a mixture of long and short positions in
currencies led to an overall loss. In August, gold, silver,
Comex Copper, zinc and nickel lost 4.1%, 12%, 6.5%, 11.9% and
5.5%, respectively. The Funds long positions in the metals
sector resulted in a loss.
In July, a relatively large loss was incurred from the
Funds long positions in world equity markets as global
equities rallied in early July before selling off late in the
month. World bond markets moved significantly higher in July as
ongoing fallout from U.S. housing market weakness spurred a
global flight to safety. The Fund experienced losses from its
short positions in this sector. Despite healthy economic reports
early in the month, short term rates moved higher on concerns
that tightening credit would limit mergers and acquisition flow,
lower fixed income revenue at banks, slow overall expansion, and
thus limit corporate profits throughout the economy. Relatively
large losses were sustained from the Funds short positions
in this market sector. Crude oil and natural gas futures
continued to diverge in July, extending a phenomenon that dates
back to February. Natural gas continued to trend lower, while
gasoline futures fell. Gains resulted from the Funds short
positions in this sector. Precious metals finished July slightly
higher with gold limited to a small gain on the month. The
Funds combination of long and short positions in the
metals sector produced an overall loss.
For the third quarter of 2007, the most profitable market group
overall was currencies while the largest losses resulted from
positions in interest rates.
Fund
results for
2nd
Quarter 2007:
In June, many Asian equity markets surged to new highs, while
Japanese stocks finished modestly higher. Stocks in Europe
finished mixed to lower as concerns over rising interest rates
and currencies limited investor demand for equities. Long
positions led to a relatively large loss in stock indices. World
bond markets moved sharply lower in early month action as
sentiment rose that central banks would continue to be
aggressive in fighting inflation. A relatively large gain
resulted from short positions in this sector. Three month
Eurodollar futures continued their downward trend in early June
as strong economic data pushed rates to their lowest level in
nearly a year. Indices sold off as investors moved to treasuries
in a flight to quality. In England, three month Sterling futures
continued moving lower as falling unemployment and strong
consumer confidence continued to spur economic growth. This led
the Funds short positions in this sector to an overall
gain. The New Zealand dollar moved to 22 year highs and the
Australian dollar rose to 18 year highs. The Yen continued
to decline against the euro and U.S. dollar. A mixture of
long positions in New Zealand dollar and Australian dollar and
short positions in markets such as the Yen resulted in a gain in
this market sector. Energy markets were mixed in June as crude
oil futures finished 8.3% higher at just over $70 per barrel,
while natural gas futures finished sharply lower. Short
positions, mainly from natural gas, resulted in an overall gain
for this sector. Gold futures moved 2.3% lower in June while
silver futures declined 8.3%. Declining prices led long
positions to a loss for this sector. Other market sectors,
relative to the sectors mentioned above, did not reveal
significant trends and did not have any major influence on
Junes positive performance.
28
Global equities continued their advance in May with solid gains
across all regions. Relatively large gains resulted from long
positions in stock indices. World bond markets moved lower again
in May as strong economic data foreshadowed the need for more
interest rate hikes. Short positions resulted in a gain for this
market sector. Short term interest rate futures continued to
trend lower in May on the strength of world economic data.
Relatively large gains resulted from short positions in this
market sector. Precious metals finished lower in May as world
equity markets continued to attract investment dollars away from
gold and silver. This led our long positions to an overall loss
for this sector. London coffee futures rose to their highest
level of the year and New York coffee bounced off early month
lows in a counter trend reaction to post a gain. Meanwhile,
London sugar gained on signs that exports from Brazil may
decline. Short positions resulted in a loss for this market
sector. Other market sectors, relative to the sectors mentioned
above, did not reveal significant trends and did not have any
major influence on this Mays overall positive performance.
World stock indices rallied steadily throughout April as the
global equities uptrend reasserted itself. Long positions in
this market sector produced gains for the Fund. The
U.S. dollar sustained heavy losses against most currencies
in April as prospects for interest rate hikes throughout the
world increased relative to U.S. monetary policy.
Relatively large gains resulted from positions in this market
sector. Other market sectors, relative to the currency sector,
did not reveal significant trends and did not have a major
influence on this months overall positive performance.
For the second quarter of 2007, the most profitable market
sector for the Fund on an overall basis was the currencies
sector, while the greatest losses resulted from the Funds
positions in the metals sector.
Fund
results for
1st
Quarter 2007:
In March, the Funds long positions in the euro, New
Zealand dollar and Brazilian real experienced major gains which
exceeded the losses from short positions in other currency
markets, resulting in an overall gain. Corn futures closed 14%
lower in March as the high prices of the last six months appear
to have offered sufficient incentive for increased plantings.
Soybeans finished 3.3% lower in sympathy with these losses in
the corn market. Wheat futures continued to trend lower,
finishing with a 10.2% loss on timely spring rains in the
plains. The Fund experienced losses from its long positions in
this sector. Worldwide energy markets continued to trend higher
in March, extending the rally that began in January. Short
positions in this market sector resulted in a relatively large
loss. Other market sectors, relative to the sectors mentioned
above, did not reveal significant trends and did not have any
major influence on this Marchs overall negative
performance.
In February, world stock market indices trended downward,
triggered by a large correction in Chinese stocks and weakness
in the U.S. sub-prime mortgage market. Long positions in
this market sector resulted in a loss. At the end of February,
bond futures markets rallied significantly, reaching two month
highs in a flight to quality as global equity markets endured a
substantial sell off. Short positions resulted in a loss for
this sector. Euribor futures, Eurodollar futures and Sterling
futures each rallied in February, resulting in a relatively
large loss in this market sectors short positions. Energy
markets moved higher in February amid ongoing geopolitical
developments in the Middle East, cold temperatures, and refinery
disruptions in the U.S. Short positions resulted in a loss
for this sector. Precious and base metals trended upward in
February resulting in gains for the Funds long positions
in this market sector. Other market sectors, relative to the
sectors mentioned above, did not reveal significant trends and
did not have any major influence on Februarys negative
performance.
World stock indices moved steadily higher in January on the
strength of various economic indicators, resulting in gains for
the Funds long positions in this market sector. In
January, American and European bond futures trended lower for
the second consecutive month as employment and inflation figures
pointed toward ongoing central bank vigilance. The Funds
short positions in this sector produced positive results. Three
month Eurodollar futures and three month Euribor futures
continued their downward trends, resulting in a relatively large
gain from short positions in this sector. World energy markets
continued to trend lower early in January, but this trend
reversed dramatically as natural gas finished sharply higher
(+15.9%), crude oil rallied from a 17% deficit to finish 6.9%
lower, and heating oil rallied to finish unchanged after trading
over 12% lower early in the month. Short positions resulted in
relatively large losses for this market sector and contributed
significantly to the Funds overall loss for January. Other
market sectors, relative to the sectors mentioned above, did not
reveal significant trends and did not have a major influence on
this Januarys overall negative performance.
29
For the first quarter of 2007, the most profitable market sector
for the Fund on an overall basis was agriculture, while the
highest losses resulted from the Funds positions in
currencies.
Off-Balance
Sheet Risk
The term off-balance sheet risk refers to an
unrecorded potential liability that, even though it does not
appear on the balance sheet, may result in a future obligation
or loss. The Fund trades in futures and forward contracts and is
therefore a party to financial instruments with elements of
off-balance sheet market and credit risk. In entering into these
contracts, there exists a market risk that such contracts may be
significantly influenced by conditions, such as interest rate
volatility, resulting in such contracts being less valuable. If
the markets should move against all of the futures interests
positions of the Fund at the same time, and if Superfund Capital
Management was unable to offset such positions, the Fund could
experience substantial losses. Superfund Capital Management
attempts to minimize market risk through real-time monitoring of
open positions, diversification of the portfolio and maintenance
of a
margin-to-equity
ratio in all but extreme instances not greater than 50%.
In addition to market risk, in entering into futures and forward
contracts there is a credit risk that a counterparty will not be
able to meet its obligations to the Fund. The counterparty for
futures contracts traded in the United States and on most
foreign exchanges is the clearinghouse associated with such
exchange. In general, clearinghouses are backed by the corporate
members of the clearinghouse who are required to share any
financial burden resulting from the non-performance by one of
their members and, as such, should significantly reduce this
credit risk. In cases where the clearinghouse is not backed by
the clearing members, like some foreign exchanges, it is
normally backed by a consortium of banks or other financial
institutions.
Off-Balance
Sheet Arrangements
The Fund does not engage in off-balance sheet arrangements.
Contractual
Obligations
The Fund does not enter into contractual obligations or
commercial commitments to make future payments of a type that
would be typical for an operating company. The Funds sole
business is trading futures, currency, forward and certain swap
contracts, both long (contracts to buy) and short (contacts to
sell). All such contracts are settled by offset, not delivery.
Substantially all such contracts are for settlement within four
months of the trade date and substantially all such contracts
are held by the Fund for less than four months before being
offset or rolled over into new contracts with similar
maturities. The Financial Statements of Series A and
Series B each present a Condensed Schedule of Investments
setting forth net unrealized appreciation (depreciation) of such
Series open futures and other contracts at
September 30, 2009 and December 31, 2008.
Critical
Accounting Policies Valuation of the Funds
Positions
Superfund Capital Management believes that the accounting
policies that will be most critical to the Funds financial
condition and results of operations relate to the valuation of
the Funds positions. The Fund uses the amortized cost
method for valuing U.S. Treasury Bills, accordingly, the
cost of securities plus accreted discount, or minus amortized
premium, approximates fair value. The majority of the
Funds positions will be exchange-traded futures contracts,
which will be valued daily at settlement prices published by the
exchanges. Any spot and forward foreign currency or swap
contracts held by the Fund will also be valued at published
daily settlement prices or at dealers quotes. Thus,
Superfund Capital Management expects that under normal
circumstances substantially all of the Funds assets will
be valued on a daily basis using objective measures.
Recently
Issued Accounting Pronouncements
ASC 105.10.05
In June 2009, the Financial Accounting Standards Board
(FASB) issued FASB Accounting Standards Codification
(ASC) 105.10.05, Generally Accepted Accounting
Principles (ASC 105.10.05).
ASC 105.10.05 establishes the FASB ASC as the single source
of authoritative generally accepted accounting principles
(GAAP). Pursuant to the provisions of
ASC 105.10.05, the Fund has updated references to GAAP in
its financial statements issued subsequent to September 15,
2009. The adoption of ASC 105.10.05 did not have any impact
on the Funds results of operations, financial condition or
cash flows.
30
ASC 810
In June 2009, FASB issued ASC 810, Consolidation
(ASC 810). ASC 810 changes how a company
determines when an entity that is insufficiently capitalized or
is not controlled through voting rights should be consolidated.
The determination of whether a company is required to
consolidate an entity is based on an entitys purpose and
design and a companys ability to direct the activities of
the entity that most significantly impact the entitys
economic performance. ASC 810 is effective for annual
reporting periods ending after November 15, 2009. Superfund
Capital Management is currently evaluating the impact of
ASC 810 on the Funds financial statements.
CONFLICTS
OF INTEREST
Superfund Capital Management has not established any formal
procedures to resolve the conflicts of interest described below.
You should be aware that no such procedures have been
established, and that, consequently, you will be dependent on
the good faith of the respective parties subject to such
conflicts to resolve such conflicts equitably. Although
Superfund Capital Management will attempt to resolve conflicts
in good faith, there can be no assurance that these conflicts
will not, in fact, result in losses for the Fund.
Superfund
Capital Management
Conflicts exist between Superfund Capital Managements
interests in and its responsibilities to each Series. The
conflicts are inherent in Superfund Capital Management acting as
general partner and as trading advisor to each Series. These
conflicts and the potential detriments to the Limited Partners
are described below. Superfund Capital Managements
selection of itself as trading advisor was not objective,
because it is also the general partner of the Fund and the
general partner associated with each Series and it will not
replace itself as the trading advisor even if doing so would be
beneficial to the Fund. The advisory relationship between each
Series and Superfund Capital Management, including the fee
arrangement, was not negotiated at arms length. Investors
should note, however, that Superfund Capital Management believes
that the fee arrangements are fair and competitive with
compensation arrangements in pools involving independent general
partners and advisors. Superfund Capital Management will review
its compensation terms annually to determine whether such terms
continue to be competitive with other pools for similar services
and will lower such fees if it concludes, in good faith, that
its fees are no longer competitive.
Superfund Capital Managements principals do not devote
their time exclusively to each Series. Superfund Capital
Management (or its principals or affiliates) may or do currently
act as general partner to other commodity pools and trading
advisor to other accounts which may compete with each Series for
Superfund Capital Managements services. Thus, Superfund
Capital Management (or its principals or affiliates) could have
a conflict between its responsibilities to each Series and to
those other pools and accounts. Superfund Capital Management
believes that it has sufficient resources to discharge its
responsibilities in this regard in a fair manner. Superfund
Capital Management (or its principals or affiliates) may receive
higher advisory fees from some of those other accounts than it
receives from each Series. Superfund Capital Management and its
affiliates, however, trade all accounts in a substantially
similar manner, given the differences in size and timing of the
capital additions and withdrawals.
In addition, Superfund Capital Management may find that futures
positions established for the benefit of each Series, when
aggregated with positions in other accounts of Superfund Capital
Management (or its principals or affiliates) approach the
speculative position limits in a particular commodity. Superfund
Capital Management may decide to address this situation either
by liquidating each Series positions in that futures
contract and reapportioning the portfolio in other contracts or
by trading contracts in other markets which do not have
restrictive limits. Any principal of Superfund Capital
Management may trade futures and related contracts for its own
account. Trading records for any proprietary trading are not
available for review by clients or investors. Employees of
Superfund Capital Management are prohibited from trading futures
and related contracts for their own accounts.
A conflict of interest exists if proprietary trades are executed
and cleared at more favorable rates than trades cleared on
behalf of each Series. A potential conflict also may occur when
Superfund Capital Management or its principals trade their
proprietary accounts more aggressively, or take positions in
proprietary accounts which are opposite, or ahead of, the
positions taken by each Series.
31
|
|
|
Superfund
Asset Management
|
Superfund Asset Management, an affiliate of Superfund Capital
Management, serves as an introducing broker for the Fund and, as
such, receives a portion of the round turn futures trading
commissions paid by each Series. The affiliation between
Superfund Asset Management and Superfund Capital Management
gives rise to a conflict of interest in that Superfund Capital
Management may have an incentive to trade more frequently than
it otherwise might absent the affiliation in order to generate
commission income for its affiliate, and the round turn
brokerage commission paid by each Series to Superfund Asset
Management was not negotiated at arms length. For purposes
of evaluating this conflict of interest, Limited Partners may
assume that Superfund Asset Management may receive up to the
full amount of the round turn futures trading commissions paid
by each Series. Nevertheless, Superfund Capital Management does
not intend to initiate trades for the Series other than the
trades indicated by Superfunds systematic,
non-discretionary automated trading system and in accordance
with its money management filters defining the maximum open risk
per position taken. If the Superfund trading systems are
proposed to be changed in a manner that Superfund Capital
Management reasonably believes will cause the average annual
trading volume to materially exceed 1,300 (Series A) and 1,850
(Series B) round-turn trades per year per million dollars in
such Series, Superfund Capital Management will give the Limited
Partners not less than 15 business days notice prior to
implementing any such change and will not implement such change
until after a month-end has passed since giving such notice.
Since Superfund Capital Management is responsible for selecting
brokers for each Series, Superfund Capital Management is
unlikely to select a different introducing broker, or dismiss
Superfund Asset Management, even if doing so is in the best
interests of the Series.
The
Clearing Brokers
The clearing brokers, currently ADM Investor Services, Inc.
(ADMIS), Barclays Capital Inc. (BCI),
and Rosenthal Collins Group, L.L.C. (RCG) and the
affiliates and personnel of such entities, may trade futures and
forward contracts for their own accounts. This trading could
give rise to conflicts of interest with each Series. The
clearing brokers also may serve as brokers for other commodity
pools, which could give rise to conflicts of interest between
their responsibility to each Series and to those pools and
clients. Any clearing broker that is also a selling agent of
each Series could give rise to conflicts of interest because its
compensation in each role is based on the net asset value of
Units outstanding. Further, in making recommendations to redeem
or purchase additional Units, employees of the clearing brokers
may have a conflict of interest between acting in the best
interest of their clients and assuring continued compensation to
their employer.
The
Selling Agents
The selling agents, including Superfund USA, an affiliate of
Superfund Capital Management, receive substantial selling
commissions on the sale of Units. Consequently the selling
agents have a conflict of interest in advising their clients
whether to invest in the Units. The selling agents receive
initial selling commissions and ongoing selling commissions
based on Units sold by them pursuant to this Prospectus equal
to, in the aggregate, up to 10% of the gross offering proceeds
for each Unit (which is equal to $54,000,000 out of the
$540,000,000 in Units registered in this offering).
Consequently, until this maximum cumulative selling commission
limit is reached, the selling agents have a disincentive to
advise clients to redeem their Units even if doing so is in such
clients best interests.
Fiduciary
Duty and Remedies
Subject to the provisions of the Partnership Agreement, a
prospective investor should be aware that Superfund Capital
Management, as general partner of a Series, has a responsibility
to Limited Partners of that Series to exercise good faith and
fairness in all dealings affecting such Series. The Partnership
Agreement provisions limiting this responsibility are summarized
below under Indemnification and Standard of
Liability. The fiduciary responsibility of a general
partner to the Limited Partners is a developing and changing
area of the law and Limited Partners who have questions
concerning the duties of Superfund Capital Management as general
partner should consult with their counsel. In the event that a
Limited Partner of a Series believes that Superfund Capital
Management has violated its fiduciary duty to the Limited
Partners of such Series, he may seek legal relief individually
or on behalf of such Series under applicable laws, including
under the Act and under commodities laws, to recover damages
from or require an accounting by Superfund Capital Management.
The Partnership Agreement
32
is governed by Delaware law and any breach of Superfund Capital
Managements fiduciary duty under the Partnership Agreement
will generally be governed by Delaware law.
The Partnership Agreement does not limit Superfund Capital
Managements fiduciary obligations under Delaware or common
law; however, Superfund Capital Management may assert as a
defense to claims of breach of fiduciary duty that the conflicts
of interest and fees payable to Superfund Capital Management
have been disclosed in this Prospectus. Limited Partners may
also have the right, subject to applicable procedural and
jurisdictional requirements, to bring class actions in federal
court to enforce their rights under the federal securities laws
and the rules and regulations promulgated thereunder by the SEC.
Limited Partners who have suffered losses in connection with the
purchase or sale of the Units may be able to recover such losses
from Superfund Capital Management where the losses result from a
violation by Superfund Capital Management of the federal
securities laws. State securities laws may also provide certain
remedies to Limited Partners. Limited Partners should be aware
that performance by Superfund Capital Management of its
fiduciary duty to each Series is measured by the terms of the
Partnership Agreement as well as applicable law. Limited
Partners are afforded certain rights to institute reparations
proceedings under the Commodity Exchange Act for violations of
the Commodity Exchange Act or of any rule, regulation or order
of the CFTC by Superfund Capital Management.
Indemnification
and Standard of Liability
Superfund Capital Management and its controlling persons may not
be liable to each Series or any Limited Partner for errors in
judgment or other acts or omissions not amounting to misconduct
or negligence, as a consequence of the indemnification and
exculpatory provisions described in the following paragraph.
Purchasers of Units may have more limited rights of action than
they would absent such provisions.
The Partnership Agreement provides that Superfund Capital
Management and its controlling persons shall not have any
liability to each Series or to any Limited Partner for any loss
suffered by such Series which arises out of any action or
inaction if Superfund Capital Management, in good faith,
determined that such course of conduct was in the best interests
of such Series and such course of conduct did not constitute
negligence or misconduct of Superfund Capital Management. Each
Series has agreed to indemnify Superfund Capital Management and
its controlling persons against claims, losses or liabilities
based on their conduct relating to such Series, provided that
the conduct resulting in the claims, losses or liabilities for
which indemnity is sought did not constitute negligence or
misconduct or breach of any fiduciary obligation to such Series
and was done in good faith and in a manner which Superfund
Capital Management, in good faith, determined to be in the best
interests of such Series. Controlling persons of Superfund
Capital Management are entitled to indemnity only for losses
resulting from claims against such controlling persons due
solely to their relationship with Superfund Capital Management
or for losses incurred in performing the duties of Superfund
Capital Management. See Section 17 of the Partnership
Agreement, included as Exhibit A to this Prospectus. Each
Series will not indemnify Superfund Capital Management or its
controlling persons for any liability arising from securities
law violations in connection with the offering of the Units of
such Series unless Superfund Capital Management or its
controlling persons prevails on the merits or obtains a court
approved settlement (in accordance with Section 17 of the
Partnership Agreement). The position of the SEC is that any such
indemnification is contrary to the federal securities laws and
therefore unenforceable.
CHARGES
TO EACH SERIES
The following list of fees and expenses includes all
compensation, fees, profits and other benefits (including
reimbursement of
out-of-pocket
expenses) which Superfund Capital Management, the selling
agents, the clearing brokers and the affiliates of those parties
may earn or receive in connection with the offering and
operation of each Series. Prospective investors should refer to
the Breakeven Analysis for each Series starting on page 5
for an estimate of the break-even amount that is required for an
investor to recoup such fees and expenses, or break
even in the first year of trading.
Charges
to be Paid by Each Series
|
|
|
|
|
Recipient
|
|
Nature of Payment
|
|
Amount of Payment
|
|
Superfund Capital Management
|
|
Management Fee
|
|
1/12
of 1.85% of month-end net asset value (a 1.85% annual rate).
|
33
|
|
|
|
|
Recipient
|
|
Nature of Payment
|
|
Amount of Payment
|
|
Superfund Capital Management
|
|
Performance Fee
|
|
25% of new appreciation (described below), if any, excluding
interest income, on a monthly basis.
|
|
|
|
|
|
Superfund Asset Management and clearing and executing futures
brokers
|
|
Round-Turn Commodity Brokerage
|
|
$25 per round-turn futures transaction where commissions and
margin are denominated in U.S. dollars. Approximately $25 per
round-turn futures transactions for certain non-U.S. futures
contracts, as described below.
|
|
|
|
|
|
Superfund USA and additional selling agents
|
|
Selling Compensation
|
|
1/12
of 4% of month-end net asset value (a 4% annual rate) of the
Series A and Series B Units; provided, however, that the maximum
selling compensation paid shall not exceed 10% of the aggregate
gross offering proceeds of all Units sold pursuant to this
offering, as described below. Superfund USA, Inc. may pay all or
a portion of the sales compensation it receives to additional
selling agents assisting with the placement of the Units.
|
|
|
|
|
|
Superfund Capital Management and others
|
|
Operating and Ongoing Offering Expenses
|
|
Expenses, such as legal, auditing, accounting, escrow, printing,
mailing and filing costs, including fees and expenses of PNC or
other administrator providing administration services to the
Fund. Ongoing offering expenses will not exceed 0.3542% of the
gross offering proceeds of the Units. Operating expenses are
charged at a fixed rate of
1/12
of 0.15% of month-end net assets (0.15% annually). Each
Series liability for these expenses, considered together,
shall not exceed 1.15% of the average month-end net assets each
year of such Series.
|
34
Management
Fee
Each Series will pay Superfund Capital Management a monthly
management fee equal to one-twelfth of 1.85% (1.85% annually) of
the month-end net asset value of such Series. This fee will be
paid to Superfund Capital Management for providing ongoing
advisory services and is payable regardless of whether or not
the Series are profitable.
Performance
Fee
Each Series will pay Superfund Capital Management a monthly
performance fee equal to 25% of the new appreciation (if any) in
the net asset value of each Series. New appreciation
means the total increase in net asset value of a Series from the
end of the last period for which a performance fee was earned by
Superfund Capital Management, after adjusting for subscriptions
and redemptions, excluding interest income. New appreciation is
not reduced by extraordinary expenses, if any, or by the
performance fee itself. That is, Superfund Capital Management
does not have to earn back the performance fee previously paid
in order to generate new appreciation. If a performance fee
payment is made by a Series, and that Series thereafter incurs
net trading losses, Superfund Capital Management will retain the
amount previously paid. Thus, Superfund Capital Management may
be paid a performance fee during a year in which a Series
incurred net losses. Trading losses will be carried forward and
no further performance fees may be paid until the prior trading
losses have been recovered; however, redemption of Units will
result in a proportional decrease in any such trading loss
carryforward.
For example, assume a Series paid a performance fee at the end
of the first month of 2009 and assume that such Series
recognized trading profits (net of all brokerage fees,
management fees, and operating and offering expenses but
excluding interest income) of $200,000 during the second month
of 2009. The new appreciation for the month would be $200,000
and Superfund Capital Managements performance fee would be
$50,000 (0.25 × $200,000). Alternatively, assume that such
Series paid a performance fee at the end of the eleventh month
of 2008 but did not pay a performance fee at the end of the
twelfth month of 2008 because it had trading losses of $100,000.
If such Series recognized trading profits of $200,000 at the end
of the first month of 2009, the new appreciation (before
interest earned) for the month would be $100,000
($200,000 $100,000 loss carry forward) and Superfund
Capital Managements performance fee would be $25,000 (0.25
× $100,000). Please note that this simplified example
assumes that no Limited Partners of such Series have added or
redeemed Units within such Series during this sample time frame.
Such capital changes require that the calculation be determined
on a per Unit per Series basis. If the net asset
value per Unit within a Series at the time when a particular
investor acquires Units is lower than the net asset value per
Unit within a Series as of the end of the most recent prior
calendar month for which a performance fee was payable (due to
losses incurred between such month-end and the subscription
date), such Units might experience a substantial increase in
value after the subscription date yet pay no performance fee as
of the next calendar month-end because such Series as a whole
has not experienced new appreciation. If a performance fee
accrual is in effect at the time when particular Units are
purchased (due to gains achieved prior to the applicable
subscription day), the net asset value per Unit reflects such
accrual. In the event the net asset value of a Series declines
after the subscription date, the incentive fee accrual is
reversed and such reversal is credited to all Units
within such Series equally, including the Units which were
purchased at a net asset value per Unit which fully reflected
such accrual.
Ongoing
Offering Expenses
Each Series will pay a monthly fee up to one twelfth of 1% (1%
annually) of the month-end net asset value of that Series for
ongoing offering expenses incurred in connection with the
offering of the Units, not to exceed the actual amount of such
expenses. The ongoing offering costs which the Series will incur
are legal costs associated with updating this Prospectus, escrow
fees, Blue Sky filing fees and printing and postage costs
associated with producing and mailing copies of the Prospectus.
The ongoing offering costs will not exceed 0.3542% of the gross
offering proceeds of the Units. When added to sales commissions
discussed herein, the organization and offering
expenses of the Fund, as defined by FINRA Rule 2310,
will not exceed 10.3542% of the gross offering proceeds of the
Units.
35
Operating
Expenses
Each Series bears its operating expenses at a fixed rate of
1/12
of 0.15% of month-end net assets (0.15% annually), not to exceed
the amount of actual expense incurred. The Funds operating
costs include certain legal, auditing, accounting,
administration and printing and postage costs relating to the
day-to-day operations of the Fund, and are distinct from the
Funds ongoing offering costs described above. Indirect
operating expenses in connection with the administration of the
Fund, such as salaries, rent, travel and overhead of Superfund
Capital Management are borne by Superfund Capital Management,
not the Fund or either Series.
Round-Turn
Brokerage Commissions
Each Series will be charged brokerage fees of $25.00 per round
turn futures transaction plus applicable NFA and exchange fees
where brokerage commissions are charged in U.S. dollars.
Brokerage commissions for certain foreign futures contracts to
be traded by the Fund are charged in currencies other than the
U.S. dollar. Commission rates for brokerage commissions
charged in foreign currencies will be reset on the first
business day of each calendar month to the foreign currency
equivalent of $25.00 based on the then current U.S. dollar
exchange rate for the applicable foreign currencies. Daily
fluctuations in foreign currency exchange rates will, however,
cause the actual commissions charged to the Fund for certain
foreign futures contracts to be more or less than $25.00 per
round-turn. A portion of the Funds brokerage fees will be
paid to the clearing brokers for execution and clearing costs
and the balance will be paid to Superfund Asset Management,
which serves as introducing broker for each Series. Assuming 800
round turn transactions per year per million dollars in
Series A, and 1,200 round-turn transactions per year per
million dollars in Series B, brokerage commissions are
estimated at 2.00% (Series A) and 3.00%
(Series B) annually of average annual net assets. The
preceding assumptions are based on the average number of
round-turn transactions per million dollars per year over the
last three years traded on behalf of the Series. The Partnership
Agreement provides that brokerage commission costs to be borne
by the Fund shall not exceed 5% (Series A) and 7%
(Series B) annually of the average annual net assets of the
Series.
Bid-Ask
Spreads
Currency dealers trade with a spread between the price at which
they are prepared to buy or sell a particular currency. These
bid-ask spreads are not a quantifiable expense of
the Series but do represent a profit margin to the dealer for
making a market in the currency. Superfund Capital Management
cannot quantify the amount of dealer profit that is embedded in
a price quoted by a dealer but does believe that the Fund will
effect currency transactions at prevailing market prices. Dealer
profit from the Series currency trading may, over time, be
substantial.
Sales
Compensation
Each Series will pay Superfund USA a selling commission of up
to 10% of the gross offering proceeds of the Units by paying 4%
of the average month-end net asset value of each outstanding
Unit in monthly installments of
1/12
of 4% of the month-end net asset value of such Units. Thus,
Units are charged a commission of 4% of the average month-end
net asset value per Unit in the initial year after purchase.
Units are charged additional selling commissions of 4% per annum
of the average month-end net asset value per Unit thereafter;
provided, however, that the maximum cumulative selling
commission per Unit is limited to 10% of the gross offering
proceeds for such Unit (maximum of $54,000,000 in respect of the
$540,000,000 in Units registered in this offering). Superfund
USA may retain additional selling agents to assist with the
placement of the Units and will pay all or a portion of the
annual selling commission it receives in respect of the Units
sold by the additional selling agents to the additional selling
agents effecting the sales.
Units held by the following types of investors are not subject
to selling commissions: (i) investors participating in
selling agent asset-based or fixed-fee investment programs or a
registered investment advisers asset-based fee or fixed
fee advisory program through which an investment adviser
recommends a portfolio allocation to the Fund and for which
Superfund USA serves as selling agent, (ii) investors who
are commodity pools operated by commodity pool operators
registered as such with the NFA for which Superfund USA serves
as selling agent, and (iii) investors who have paid the
maximum selling commission on their Units.
36
If a Limited Partners Units are not subject to the selling
commissions described above, as of the end of each month, the
Limited Partners Units will be charged, as a Fund
bookkeeping entry only, the same
1/12
of the 4% annual selling commission as other investors. However,
the amount of that charge will not be taken from the Fund or
paid to any person and, as of the beginning of the next month,
that charge will be reversed and the Fund will issue that
Limited Partner additional Units, calculated to three decimal
places, at the then current Unit net asset value. Accordingly,
the net asset value of that Limited Partners investment in
the Fund will reflect the inapplicability of the annual selling
commission to the Limited Partners Units and a somewhat
higher performance fee, if applicable, as a result of the
Limited Partners Units not paying the annual selling
commission. The Fund will use this bookkeeping procedure and the
issuance of additional Units to maintain a uniform net asset
value across all Units.
USE OF
PROCEEDS
The entire offering proceeds received from subscription for each
Series will be credited to such Series bank and brokerage
accounts for the purpose of engaging in trading activities and
as reserves for that trading. Continuing fees and expenses such
as operating and management will also be paid from funds in
these accounts. Each Series meets its margin requirements by
depositing U.S. government securities and cash, which is
held in interest bearing accounts, with the clearing brokers. In
this way, substantially all (i.e., 95% or more) of each
Series assets, whether used as margin for trading purposes
or as reserves for such trading, can be invested in
U.S. government securities or interest bearing accounts.
Investors should note that maintenance of each Series
assets in U.S. government securities and banks does not
reduce the risk of loss from trading futures and forward
contracts. Each Series receives all interest earned on its
assets. Up to 50% of each Series assets will be committed
as margin for futures contracts and held by the clearing broker,
although the amount committed may vary significantly. Such
assets are maintained in segregated accounts with the clearing
broker pursuant to the Commodity Exchange Act and regulations
thereunder. The remaining Series assets will normally be
invested in U.S. Treasury Bills. Each Series assets
are not and will not be, directly or indirectly, commingled with
the property of any other Series, or any other person by
Superfund Capital Management nor invested with or loaned to
Superfund Capital Management or any affiliated entities.
THE
CLEARING BROKERS; ADMINISTRATION
ADM
Investor Services, Inc.
ADMIS is a registered futures commission merchant and is a
member of the NFA. Its main office is located at
141 W. Jackson Blvd., Suite 1600A, Chicago, IL
60604. In the normal course of its business, ADMIS is involved
in various legal actions incidental to its commodities business.
None of these actions are expected either individually or in
aggregate to have a material adverse impact on ADMIS.
Neither ADMIS nor any of its principals have been the subject of
any material administrative, civil or criminal actions within
the past five years, except the CFTC Order entered on
March 26, 2009. In this order, the CFTC finds that during
2002 to 2004, ADMIS lacked adequate procedures concerning post
execution allocation of bunched orders and that it allowed an
account manager to carry out post-execution allocations from one
or more days after the day the trades were executed and that it
failed to maintain certain records to identify orders subject to
post execution allocation. The order imposes a remedial sanction
of $200,000 and requires ADMIS to implement enhanced procedures
for post execution allocation of trades.
Barclays
Capital Inc.
BCI is a registered securities broker-dealer and futures
commission merchant. BCI is involved in a number of judicial and
arbitration matters arising in connection with the conduct of
its business, including some proceedings relating to the
collapse of Enron. BCIs management believes, based on
currently available information, that the results of such
proceedings will not have a significant adverse effect on
BCIs financial condition. There have been no other
administrative civil or criminal actions, whether pending or
concluded, against BCI within the last 5 years that would
be considered to be material as defined in regulations under the
Commodity Exchange Act.
37
RCG, a successor entity to firms dating back to 1923, is an
Illinois limited liability company with its principal offices at
216 West Jackson Boulevard, Chicago, Illinois 60606. It is
a registered futures commission merchant and a member of the
NFA. As is the case with similar securities futures and
derivatives organizations, RCG, a futures brokerage firm having
a number of branch offices, introducing brokers and customers,
and its principals, are from time to time engaged in various
lawsuits and administrative proceedings with customers and
regulatory authorities incidental to conducting business as a
securities, futures and derivatives organization. Some matters
are settled, a material number are resolved in favor of RCG and
some customer complaints are resolved in favor of customers and
regulatory authorities. In the opinion of management of RCG, the
amounts in controversy relative to the capital of RCG have not
been material. Moreover, as a matter of policy, RCG vigorously
defends all proceedings against it and its principals, and in
proceedings currently pending, RCG believes it has meritorious
defenses.
In August 2005, RCG, without admitting or denying any of the
allegations or findings, settled a matter with the Chicago
Mercantile Exchange (the Exchange) in which the
Exchange found that RCG violated Exchange Rule 958 (a major
offense) by not adequately supervising a branch manager, which
allowed the branch manager to accumulate positions in excess of
speculative position limits. The Exchange also found that RCG
violated Exchange Rule 536 (a minor offense) when
RCGs employees at the branch office under the same branch
manager entered orders without readily identifying the specific
accounts, that RCGs floor personnel accepted such orders,
and RCGs office personnel accepted account information
after the order was placed. RCG settled the matter by paying the
Exchange a penalty of $175,000, terminating the specific branch
manager in question (RCG also closed the branch office), and
engaging an independent auditor to review RCGs order
handling procedures (the results of which were provided to the
Exchange).
On August 26, 2008, without admitting or denying the
findings, RCG settled a CFTC administrative action alleging that
it failed to diligently supervise certain of its New York City
branch office employees in the handling of certain payments to
third parties from a customers account, made or delivered
at the customers direction but against company policy. In
connection with the settlement, RCG paid a civil monetary
penalty of $310,000 and agreed to augment its supervision of its
own policy and procedures for reviewing and approving
disbursements to third parties from customer accounts.
RCG, its principals and its predecessor companies have not been
parties to any criminal action during the past ten years or at
any other time. Moreover, there have been no administrative or
civil actions, which management of RCG considers material, taken
or concluded against any principal of RCG or RCG or its
predecessors within the ten years preceding the date of this
Prospectus, and there are none pending or on appeal.
Superfund Capital Management is not obligated to continue to use
the clearing brokers identified above and may select others or
additional dealers and counterparties in the future, provided
Superfund Capital Management believes that their service and
pricing are competitive.
No broker may pay directly or indirectly, rebates or give-ups to
any trading advisor or manager or to Superfund Capital
Management or any of their respective affiliates in respect of
sales of Units; and such prohibitions may not be circumvented by
any reciprocal business arrangements.
The
Administrator
PNC Global Investment Servicing Inc., a Massachusetts
corporation (PNC or the Administrator)
is currently the Funds administrator. Pursuant to an
Administration, Accounting, and Investor Services Agreement
entered into between the Fund and PNC (the Accounting
Agreement), PNC will be responsible for, among other
things: (i) journalizing investment, capital and income and
expense activities; (ii) recording futures trading activity
by receiving a data file from each of the Series clearing
brokers; (iii) calculating the monthly fees and performance
fees, as applicable, payable to Superfund Capital Management
with respect to each Series; (iv) computing the net asset
value and net asset value per Unit of each Series; and
(v) performing all other accounting, administration, and
investor services necessary in connection with each Series.
38
The Accounting Agreement provides that PNC shall not be liable
to a Series for any acts or omissions in connection with the
services rendered to such Series under such agreement in the
absence of gross negligence, intentional acts or willful
misconduct. In addition, the Fund has agreed to indemnify PNC
from any and all expenses, costs, damages or causes of action,
including but not limited to, reasonable attorneys fees,
incurred by PNC in connection with the Accounting Agreement and
not resulting from the unauthorized acts of PNC, its employees
or agents, the negligence or willful misconduct of PNC in the
performance of such obligations and duties or by reason of its
breach of the Accounting Agreement. The Accounting Agreement may
be terminated by either of the parties upon not less than
60 days written notice.
PNC is a member of The PNC Financial Services Group. Its main
office address is 301 Bellevue Parkway, Wilmington,
Delaware 19809.
DISTRIBUTIONS
AND REDEMPTIONS
Distributions
Each Series is not required to make any distributions to Limited
Partners. While each Series has the authority to make such
distributions, Superfund Capital Management does not intend to
cause either Series to do so in the foreseeable future.
Superfund Capital Management believes that distributions of Fund
assets are not necessary since Limited Partners may redeem any
or all of their Units at the then current net asset value per
Unit on a periodic basis. The amount and timing of future
distributions is uncertain. Because of the potential volatility
of the futures and forward contract markets, especially in the
short-term, each Series is recommended for those seeking a
medium- to long-term investment (i.e., three to five years). If
each Series realizes profits for any fiscal year, such profits
will constitute taxable income to the Limited Partners of such
Series in accordance with their respective investments in such
Series whether or not cash or other property has been
distributed to Limited Partners. Any distributions, if made by a
Series, may be inadequate to cover such taxes payable by the
Limited Partners of such Series.
Redemptions
A Limited Partner of a Series may request any or all of his
investment in such Series be redeemed by such Series at the net
asset value per Unit within such Series as of the end of the
month, subject to a minimum redemption of $1,000 and subject
further to such Limited Partner having an investment in such
Series, after giving effect to the requested redemption, at
least equal to the minimum initial investment amount of $5,000.
Limited Partners must transmit a written request of such
redemption to Superfund Capital Management not less than
five business days prior to the end of the month (or such
shorter period as permitted by Superfund Capital Management) as
of which redemption is to be effective. The request for
redemption must specify the dollar amount for which redemption
is sought. If the net asset value per Unit within a Series as of
the end of any business day declines by 50% or more from either
the prior year-end or the prior month-end Unit value of such
Series, Superfund Capital Management will suspend trading
activities, notify all Limited Partners within such Series of
the relevant facts within seven business days and declare a
special redemption period. As of November 17, 2009, the net
asset value per Series A Unit had declined by approximately
24.42% and per Series B Unit had declined by approximately
37.14% from the 2008 year-end Series A and Series B
Unit values. Redemptions will generally be paid within
20 days after the date of redemption. However, in special
circumstances, including, but not limited to, inability to
liquidate dealers positions as of a redemption date or
default or delay in payments due to each Series from clearing
brokers, banks or other persons or entities, each Series may in
turn delay payment to persons requesting redemption of the
proportionate part of the net assets of each Series represented
by the sums that are the subject of such default or delay. No
such delays have been imposed to date by any pool sponsored by
Superfund Capital Management. The federal income tax aspects of
redemptions are described under Federal Income Tax
Aspects.
39
A Limited Partner may exchange his or her investment in one
Series for an investment in the other Series by simultaneously
redeeming his or her Units in one Series and subscribing for new
Units in the other Series at the then current net asset values
of each Series.
Net Asset
Value
The net asset value of a Unit within a Series as of any date is
(i) the sum of all cash, plus U.S. Treasury Bills
valued at cost plus accrued interest, and other securities of
such Series valued at market, plus the market value of all open
futures, forward and option positions maintained by such Series,
less all liabilities of each Series and accrued performance fees
payable by such Series, determined in accordance with the
principles specified in the Partnership Agreement, divided by
(ii) the number of Units of such Series outstanding as of
the date of determination. Where no principle is specified in
the Partnership Agreement, the net asset value of a Series is
calculated in accordance with accounting principles generally
accepted in the United States of America under the accrual basis
of accounting.
40
QUADRIGA
SUPERFUND, L.P. FOURTH AMENDED AND RESTATED LIMITED
PARTNERSHIP AGREEMENT
The following is a summary of the Partnership Agreement, a form
of which is attached as Exhibit A and incorporated by
reference.
Organization
and Limited Liabilities
The Fund is organized under the Act. The Partnership Agreement
provides that the Fund shall be organized as separate Series.
Under the Partnership Agreement, Superfund Capital Management
has created Series A and Series B. Superfund Capital
Management may create other Series under the Partnership
Agreement as provided therein. In general, the liability of a
Limited Partner within a Series under the Act is limited to the
amount of his capital contribution to such Series and his share
of any undistributed profits of such Series. (However, Limited
Partners could be required, as a matter of bankruptcy law, to
return to each Series estate any distribution which they
received at a time when such Series was in fact insolvent or in
violation of the Partnership Agreement.) The assets and estate
of one Series are not liable for the liabilities of another
Series.
Management
of Fund Affairs
The Partnership Agreement effectively gives Superfund Capital
Management, as general partner, full control over the management
and operations of each Series and the Partnership Agreement
gives no management role to the Limited Partners. To facilitate
matters for Superfund Capital Management, the Limited Partners
must execute the attached Subscription Agreement
(Exhibit D).
Registered Agents Legal Services, LLC will accept service of
legal process on each Series in the State of Delaware. Only
Superfund Capital Management has signed the Registration
Statement of which this Prospectus is a part, and only the
assets of each Series are subject to issuer liability under the
federal securities laws for the information contained in this
Prospectus and under federal and state laws with respect to the
issuance and sale of the Units. Under the Partnership Agreement,
the power and authority to manage, operate and control all
aspects of the business of each Series are vested in Superfund
Capital Management. In addition, Superfund Capital Management
has been designated as the tax matters partner of
each Series and of the Fund for purposes of the Internal Revenue
Code of 1986, as amended (the Code).
The Limited Partners have no voice in the operations of each
Series, other than certain limited voting rights as set forth in
the Partnership Agreement. In the course of its management,
Superfund Capital Management may, in its sole and absolute
discretion, appoint an affiliate or affiliates of Superfund
Capital Management as additional general partners (except where
Superfund Capital Management has been notified by the Limited
Partners that it is to be replaced as the general partner) and
retain such persons, including affiliates of Superfund Capital
Management, as it deems necessary for the efficient operation of
each Series.
Sharing
of Profits and Losses
Each Limited Partner within a Series has a capital account.
Initially, the Limited Partners balance equals the amount
paid for the Units in such Series. The Limited Partners
balance is then proportionally adjusted monthly to reflect any
additions or withdrawals by each Limited Partner and his portion
of such Series gains or losses for the month as reflected
by changes in the net asset value for such Series.
Federal
Tax Allocations
At year-end,
each Series will determine the total taxable income or loss for
the year. Subject to the special allocation of net capital gain
or loss to redeeming Limited Partners, the taxable gain or loss
is allocated to each Limited Partner within a Series in
proportion to his capital account therein and each Limited
Partner is responsible for his share of taxable income of such
Series. See Section 8 of the Partnership Agreement, and
Federal Income Tax Aspects. For net capital gain and
loss, the gains and losses are first allocated to each Limited
Partner who redeemed Units during the year. The remaining net
capital gain or loss is then allocated among all Limited
Partners whose capital accounts are in excess of their
Units allocation accounts. Finally, any excess net capital
gain or loss is
41
allocated to each Limited Partner in proportion to his capital
account. Each Limited Partners tax basis in his Units is
increased by the taxable income allocated to him and reduced by
any distributions received and losses allocated to him. Upon
each Series liquidation, each Limited Partner within such
Series will receive his proportionate share of the assets of
such Series.
Dispositions
A Limited Partner may transfer or assign his Units in a Series
upon 30 days prior written notice to Superfund
Capital Management and subject to approval by Superfund Capital
Management of the assignee. Superfund Capital Management will
provide consent when it is satisfied that the transfer complies
with applicable laws, and further would not result in the
termination of such Series for federal income tax purposes. An
assignee not admitted to a Series as a Limited Partner will have
only limited rights to share the profits and capital of such
Series and a limited redemption right. Assignees receive
carry-over tax basis accounts and capital accounts
from their assignors, irrespective of the amount paid for the
assigned Units.
Dissolution
and Termination of Each Series
Each Series will be terminated and dissolved upon the happening
of the earlier of: 1) the expiration of each Series
stated term on December 31, 2050; 2) Limited Partners
owning more than 50% of the outstanding Units of such Series
vote to dissolve such Series; 3) Superfund Capital
Management withdraws as general partner and no new general
partner is appointed; 4) a decline in the aggregate net
assets of such Series to less than $500,000; 5) the
continued existence of such Series becomes unlawful; or
6) such Series is dissolved by operation of law.
Amendments
and Meetings
The Partnership Agreement may be amended with the approval of
more than 50% of the Units then owned by Limited Partners of
each Series. Superfund Capital Management may make minor changes
to the Partnership Agreement without the approval of the Limited
Partners. These minor changes can be for clarifications of
inaccuracies or ambiguities, modifications in response to
changes in tax code or regulations or any other changes the
managing owner deems advisable so long as they do not change the
basic investment policy or structure of each Series. Limited
Partners owning at least 10% of the outstanding Units of a
Series can call a meeting of such Series. At that meeting, the
Limited Partners, provided that Limited Partners owning a
majority of the outstanding Units of such Series concur, can
vote to: 1) amend the Partnership Agreement with respect to
such Series without the consent of Superfund Capital Management;
2) dissolve such Series; 3) terminate contracts with
Superfund Capital Management; 4) remove and replace
Superfund Capital Management as general partner; and
5) approve the sale of the Funds assets.
Indemnification
Each Series agrees to indemnify Superfund Capital Management, as
general partner, for actions taken on behalf of such Series,
provided that Superfund Capital Managements conduct was in
the best interests of such Series and the conduct was not the
result of negligence or misconduct. Indemnification by each
Series for alleged violation of securities laws is only
available if the following conditions are satisfied: 1) a
successful adjudication on the merits of each count alleged has
been obtained; or 2) such claims have been dismissed with
prejudice on the merits by a court of competent jurisdiction; or
3) a court of competent jurisdiction approves a settlement
of the claims and finds indemnification of the settlement and
related costs should be made; and 4) in the case of 3), the
court has been advised of the position of the SEC and certain
states in which the Units were offered and sold as to
indemnification for the violations.
Reports
to Limited Partners
The Limited Partners in a Series shall have access to and the
right to copy such Series books and records. A Limited
Partner may obtain a list of all Limited Partners within such
Series together with the number of Units owned by each Limited
Partner within such Series, provided such request is not for
commercial purposes unrelated to such Limited Partners
interest as a beneficial owner of such Series. Superfund Capital
Management will provide various
42
reports and statements to the Limited Partners within a Series
including: 1) monthly, Superfund Capital Management will
provide an unaudited income statement of the prior months
Series activities; 2) annually, Superfund Capital
Management will provide audited financial statements of such
Series accompanied by a fiscal year-end summary of the monthly
reports described above; and 3) annually, Superfund Capital
Management will provide tax information necessary for the
preparation of the Limited Partners annual federal income
tax returns.
FEDERAL
INCOME TAX ASPECTS
The following constitutes the opinion of Sidley Austin LLP and
summarizes the material federal income tax consequences to
individual investors in each Series. The following is based upon
interpretations of existing laws in effect on the date of this
Prospectus, and no assurance can be given that courts or fiscal
authorities responsible for the administration of such laws will
agree with the interpretations or that changes in such laws will
not occur.
Each
Series Partnership Tax Status
Superfund Capital Management has not elected, and does not
intend to elect, to classify the Fund or either Series as an
association taxable as a corporation. Based on the foregoing, in
the opinion of Sidley Austin LLP, each Series will be classified
as a partnership for federal income tax purposes. Superfund
Capital Management has provided Sidley Austin LLP a list of
contracts that it intends to trade on behalf of each Series. On
the basis thereof, in the opinion of Sidley Austin LLP, neither
Series will be treated as a publicly traded partnership taxable
as a corporation.
Taxation
of Limited Partners on Profits and Losses of Each
Series
Each Limited Partner must pay tax on his share of the annual
income and gains of each Series in which such Limited Partner
invests, if any, even if such Series does not make any cash
distributions. Each Series generally allocates its gains and
losses equally to each Unit in such Series. However, a Limited
Partner who redeems any Units in a Series will be allocated his
share of such Series gains and losses in order that the
amount of cash the Limited Partner receives for a redeemed Unit
equals the Limited Partners adjusted tax basis in the
redeemed Unit less any offering or syndication expenses
allocated to such Units. A Limited Partners adjusted tax
basis in a redeemed Unit equals the amount originally paid for
the Unit, increased by income or gains allocated to the Unit and
decreased (but not below zero) by distributions, deductions or
losses allocated to the Unit.
Deduction
of Series Losses by Limited Partners
A Limited Partner may deduct Series losses only to the extent of
his tax basis in his Units in such Series. Generally, a Limited
Partners tax basis in a Unit of a Series is the amount
paid for the Unit reduced (but not below zero) by his share of
any Series distributions, losses and expenses and increased by
his share of Series income and gains. However, a Limited Partner
subject to at-risk limitations (generally,
non-corporate taxpayers and closely-held corporations) can only
deduct losses to the extent he is at-risk. The
at-risk amount is similar to tax basis, except that
it does not include any amount borrowed on a non-recourse basis
or from someone with an interest in a Series.
Passive-Activity
Loss Rules and Their Effect on the Treatment of Income
and Loss
The trading activities of each Series are not a passive
activity. Accordingly, a Limited Partner can deduct Series
losses from taxable income. However, a Limited Partner cannot
offset losses from passive activities against Series
gains.
Cash
Distributions and Unit Redemptions
Cash received from a Series by a Limited Partner as a
distribution with respect to his Units in such Series or in
redemption of less than all of his Units in such Series
generally is not reportable as taxable income by a partner,
except as described below. Rather, such distribution reduces
(but not below zero) the total tax basis of the remaining Units
in such Series held by the Limited Partner after the redemption.
Any cash distribution by a Series in excess of a Limited
Partners adjusted tax basis for his Units in such Series
is taxable to him as gain from the sale or exchange of such
Units. Because a Limited Partners tax basis in his Units
in a Series is not increased on account of his
43
distributive share of such Series income until the end of
such Series taxable year, distributions during the taxable
year could result in taxable gain to a Limited Partner even
though no gain would result if the same distributions were made
at the end of the taxable year. Furthermore, the share of a
Series income allocable to a Limited Partner at the end of
the Series taxable year would also be includable in the
Limited Partners taxable income and would increase his tax
basis in his remaining Units in such Series as of the end of
such taxable year.
Redemption for cash of all Units in a Series held by a Limited
Partner will result in the recognition of gain or loss for
federal income tax purposes. Such gain or loss will be equal to
the difference, if any, between the amount of the cash
distribution and the Limited Partners adjusted tax basis
for such Units. A Limited Partners adjusted tax basis for
his Units in a Series includes for this purpose his distributive
share of such Series income or loss for the year of such
redemption.
Potential
Series-Level Consequences of Redemptions and Transfers of
Units
If a Limited Partner receives a distribution of property in
liquidation of his Units in a Series that would, if the Series
had a Code Section 754 election in effect, require the
Series to make a downward adjustment of more than $250,000 to
the basis of its remaining assets, then even if the Series does
not have a Code Section 754 election in effect, the Series
will be required to make a downward adjustment to the basis of
its remaining assets.
In addition, if immediately after the transfer of a Unit in a
Series, the Series adjusted basis in its property exceeds
the fair market value by more than $250,000 of such property,
the Series generally will be required to adjust the basis of its
property with respect to the transferee Limited Partner.
Gain or
Loss on Section 1256 Contracts and Non-Section 1256
Contracts
Section 1256 Contracts are futures and most options traded
on U.S. exchanges and certain foreign currency contracts.
For tax purposes, Section 1256 Contracts that remain open
at year-end are treated as if the position were closed at
year-end. The gain or loss on Section 1256 Contracts is
characterized as 60% long-term capital gain or loss and
40% short-term capital gain or loss regardless of how long
the position was open. Non-Section 1256 Contracts include,
among other things, certain foreign currency transactions such
as transactions when the amount paid or received is in a foreign
currency. Gain and loss from these Non-Section 1256
Contracts is generally short-term capital gain or loss or
ordinary income or loss.
Tax on
Capital Gains and Losses
Long-term capital gains net gain on capital assets
held more than one year and 60% of the gain on Section 1256
Contracts are taxed at a maximum rate of 15%.
Short-term capital gains net gain on capital assets
held not more than one year and 40% of the gain on
Section 1256 Contracts are subject to tax at
the same rates as ordinary income, with a maximum current tax
rate of 35% for individuals. Individual taxpayers can deduct
capital losses only to the extent of their capital gains plus
$3,000 per year. Accordingly, a Series could suffer
significant losses and a Limited Partner could still be required
to pay taxes on his share of such Series interest income.
An individual taxpayer can carry back net capital losses on
Section 1256 Contracts three years to offset earlier gains
on Section 1256 Contracts. To the extent the taxpayer
cannot offset past Section 1256 Contract gains, he can
carry forward such losses indefinitely as losses on
Section 1256 Contracts.
Interest
Income
Interest received by a Series is taxed as ordinary income. Net
capital losses can offset ordinary income only to the extent of
$3,000 per year. See Tax on Capital Gains
and Losses.
Limited
Deduction for Certain Expenses
Superfund Capital Management does not consider the management
fees and the performance fees, as well as other ordinary
expenses of each Series, to be investment advisory expenses or
other expenses of producing income. Accordingly, Superfund
Capital Management treats these expenses as ordinary business
deductions not subject to the material deductibility limitations
which apply to investment advisory expenses. The IRS could
contend
44
otherwise and to the extent the IRS recharacterizes these
expenses, a Limited Partner would have the amount of the
ordinary expenses allocated to him reduced accordingly.
Syndication
Fees
Neither each Series nor any Limited Partner is entitled to any
deduction for syndication expenses, if any, in the year they
reduce net asset value, nor can these expenses be amortized by
each Series or any Limited Partner even though the payment of
such expenses reduces net asset value.
Investment
Interest Deductibility Limitations
Individual taxpayers can deduct investment
interest interest on indebtedness allocable to
property held for investment only to the extent that
it does not exceed net investment income. Net investment income
does not include adjusted net capital gain taxed at the lower
rate.
Unrelated
Business Taxable Income
Tax-exempt Limited Partners will not be required to pay tax on
their share of income or gains of a Series, provided that such
Limited Partners do not purchase Units with borrowed funds and
that Superfund Capital Management does not utilize leverage.
Taxation
of Foreign Limited Partners
A Limited Partner who is a non-resident alien individual,
foreign corporation, foreign partnership, foreign trust or
foreign estate (a Foreign Limited Partner) generally
is not subject to taxation by the United States on capital gains
from commodity or derivatives trading, provided that such
Foreign Limited Partner (in the case of an individual) does not
spend more than 182 days in the United States during his or
her taxable year, and provided further, that such Foreign
Limited Partner is not engaged in a trade or business within the
United States during a taxable year to which income, gain, or
loss is treated as effectively connected. An
investment in a Series should not, by itself, cause a Foreign
Limited Partner to be engaged in a trade or business within the
United States for the foregoing purposes, assuming that the
trading activities of each Series will be conducted as described
in this Prospectus. Pursuant to a safe harbor in the
Code and proposed Treasury regulations, an investment fund whose
U.S. business activities consist solely of trading commodities
and derivatives for its own account should not be treated as
engaged in a trade or business within the United States provided
that such investment fund is not a dealer in commodities or
derivatives and that the commodities traded are of a kind
customarily dealt in on an organized commodity exchange.
Superfund Capital Management has advised Sidley Austin LLP of
the contracts that each Series will trade. Based on a review of
such contracts as of the date of this Prospectus, Superfund
Capital Management has been advised by its counsel, Sidley
Austin LLP, that such contracts should satisfy the safe harbor.
If the contracts traded by a Series in the future were not
covered by the safe harbor, there is a risk that such Series
would be treated as engaged in a trade or business within the
United States. In the event that a Series were found to be
engaged in a United States trade or business, a Foreign Limited
Partner would be required to file a United States federal income
tax return for such year and pay tax at full United States
rates. In the case of a Foreign Limited Partner which is a
foreign corporation, an additional 30% branch
profits tax might be imposed. Furthermore, in such event
such Series would be required to withhold taxes from the income
or gain allocable to such a Foreign Limited Partner under
Section 1446 of the Code.
A Foreign Limited Partner is not subject to United States tax on
certain interest income, including income attributable to
(i) original issue discount on Treasury bills having a
maturity of 183 days or less or (ii) commercial bank
deposits, provided, in either case, that such Foreign Limited
Partner is not engaged in a trade or business within the United
States during a taxable year. Additionally, a Foreign Limited
Partner not engaged in a trade or business within the United
States is not subject to United States tax on interest income
(other than certain
so-called
contingent interest) attributable to obligations
issued after July 18, 1984 that are in registered form if
the Foreign Limited Partner provides the Series in which such
Limited Partner invests with the appropriate
Form W-8.
45
IRS
Audits of the Fund and its Limited Partners
The IRS audits partnership-related items at the entity level
rather than at the partner level. Superfund Capital Management
acts as tax matters partner for each Series, and has
the authority to determine each Series responses to an
audit. If an audit results in an adjustment, all Limited
Partners may be required to pay additional taxes, interest and
penalties.
State and
Other Taxes
In addition to the federal income tax consequences described
above, each Series and the Limited Partners may be subject to
various state and other taxes. PROSPECTIVE INVESTORS ARE URGED
TO CONSULT THEIR TAX ADVISERS BEFORE DECIDING WHETHER TO INVEST.
INVESTMENTS
BY EMPLOYEE BENEFIT PLANS
General
This section sets forth certain consequences under the Employee
Retirement Income Security Act of 1974, as amended
(ERISA), and the Code, which a fiduciary of an
employee benefit plan as defined in, and subject to
the fiduciary responsibility provisions of, ERISA or of a
plan as defined in and subject to Section 4975
of the Code who has investment discretion should consider before
deciding to invest the plans assets in the Fund (such
employee benefit plans and plans being
referred to herein as Plans, and such fiduciaries
with investment discretion being referred to herein as
Plan Fiduciaries). The following summary is not
intended to be complete, but only to address certain questions
under ERISA and the Code which are likely to be raised by the
Plan Fiduciarys own counsel.
In general, the terms employee benefit plan as
defined in ERISA and plan as defined in
Section 4975 of the Code together refer to any plan or
account of various types which provides retirement benefits or
welfare benefits to an individual or to an employers
employees and their beneficiaries. Such plans and accounts
include, but are not limited to, corporate pension and
profit-sharing plans, simplified employee pension
plans, Keogh plans for self-employed individuals
(including partners), individual retirement accounts described
in Section 408 of the Code and medical benefit plans.
Each Plan Fiduciary must give appropriate consideration to the
facts and circumstances that are relevant to an investment in
the Fund, including the role that an investment in the Fund
plays in the Plans overall investment portfolio. Each Plan
Fiduciary, before deciding to invest in the Fund, must be
satisfied that the investment in the Fund is a prudent
investment for the Plan, that the investments of the Plan,
including the investment in the Fund, are diversified so as to
minimize the risk of large losses and that an investment in the
Fund complies with the terms of the Plan and related trust.
EACH PLAN FIDUCIARY CONSIDERING ACQUIRING UNITS MUST CONSULT ITS
OWN LEGAL AND TAX ADVISERS BEFORE DOING SO.
Plan
Assets
ERISA and a regulation issued thereunder (the ERISA
Regulation) contain rules for determining when an
investment by a Plan in an equity interest of an entity will
result in the underlying assets of the entity being assets of
the Plan for purposes of ERISA and Section 4975 of the Code
(i.e., plan assets). Those rules provide in
pertinent part that assets of an entity will not be plan assets
of a Plan which purchases an equity interest in the entity if
the equity interest purchased is a publicly-offered
security (the Publicly-Offered Security
Exception). If the underlying assets of an entity are
considered to be assets of any Plan for purposes of ERISA or
Section 4975 of the Code, the operations of such entity
would be subject to and, in some cases, limited by, the
provisions of ERISA and Section 4975 of the Code. The
Publicly-Offered Security Exception applies if the equity
interest acquired by Plans is a security that is:
1) freely transferable (as described below);
2) part of a class of securities that is widely
held (meaning that the class of securities is owned by 100
or more investors independent of the issuer and of each other);
and 3) either (a) part of a class of securities
registered under Section 12(b) or 12(g) of the Securities
Exchange Act of 1934, or (b) sold to the Plan as part of a
public offering pursuant to an effective registration statement
under the Securities Act and the class of which such security is
a part is registered under the Securities Exchange Act of 1934
within 120 days (or such later time as
46
may be allowed by the SEC) after the end of the fiscal year of
the issuer in which the offering of such security occurred. The
ERISA Regulation states that the determination of whether a
security is freely transferable is to be made based
on all relevant facts and circumstances. The ERISA Regulation
specifies that, in the case of a security that is part of an
offering in which the minimum investment is $10,000 or less, the
following requirements, alone or in combination, ordinarily will
not affect a finding that the security is freely transferable:
(i) a requirement that no transfer or assignment of the
security or rights in respect thereof be made that would violate
any federal or state law; (ii) a requirement that no
transfer or assignment be made without advance written notice
given to the entity that issued the security; and
(iii) any restriction on substitution of an assignee
as a limited partner of a partnership, including a general
partner consent requirement, provided that the economic benefit
of ownership of the assignor may be transferred or assigned
without regard to such restriction or consent (other than
compliance with any of the foregoing restrictions).
Superfund Capital Management believes that the Publicly-Offered
Security Exception applies to the Fund for the following
reasons. First, the Units are part of a class of securities
registered under Section 12(g) of the Securities Exchange
Act of 1934. Second, the Units are held by 100 or more investors
that Superfund Capital Management believes are independent of
the Fund and of each other. Lastly, Superfund Capital Management
believes that the Units should be considered to be freely
transferable because the minimum investment for investors
is $5,000 and Limited Partners may transfer their Units by
giving notice to Superfund Capital Management, provided that the
transfer would not violate applicable federal or state
securities laws. In addition, if Superfund Capital Management
does not consent to substitution of an assignee as a limited
partner, the economic benefits of ownership can be transferred
by the assignor without regard to such consent. Therefore,
Superfund Capital Management believes that it is reasonable to
take the position that the Units are freely transferable within
the meaning of the ERISA Regulation. Accordingly, Superfund
Capital Management believes that the underlying assets of the
Fund should not be considered to constitute assets of any Plan
which purchases Units. This position has not been confirmed by,
and is not binding on, the Department of Labor, which issued the
ERISA Regulation and which has authority to issue opinion and
information letters thereunder. Therefore, the Plan Fiduciary
and each other potential investor should consult with his or her
attorney on this matter.
Ineligible
Purchasers
In general, Units may not be purchased with the assets of a Plan
if Superfund Capital Management, HSBC Bank USA (the
Escrow Agent), ADMIS, BCI, RCG, the Administrator,
Superfund Asset Management, Superfund USA, any other selling
agent, any of their respective affiliates or any of their
respective employees either: 1) has investment discretion
with respect to the investment of such plan assets; 2) has
authority or responsibility to give or regularly gives
investment advice with respect to such plan assets, for a fee,
and pursuant to an agreement or understanding that such advice
will serve as a primary basis for investment decisions with
respect to such plan assets and that such advice will be based
on the particular investment needs of the Plan; or 3) is an
employer maintaining or contributing to such Plan. A party that
is described in clause 1) or 2) of the preceding
sentence is a fiduciary under ERISA and the Code with respect to
the Plan, and any such purchase might result in a
prohibited transaction under ERISA and the Code.
Except as otherwise set forth, the foregoing statements
regarding the consequences under ERISA and the Code of an
investment in the Fund are based on the provisions of the Code
and ERISA as currently in effect, and the existing
administrative and judicial interpretations thereunder. No
assurance can be given that administrative, judicial, or
legislative changes will not occur that may make the foregoing
statements incorrect or incomplete.
ACCEPTANCE OF SUBSCRIPTIONS ON BEHALF OF PLANS IS IN NO RESPECT
A REPRESENTATION BY SUPERFUND CAPITAL MANAGEMENT OR ANY OTHER
PARTY RELATED TO THE FUND THAT THIS INVESTMENT MEETS THE
RELEVANT LEGAL REQUIREMENTS WITH RESPECT TO INVESTMENTS BY ANY
PARTICULAR PLAN OR THAT THIS INVESTMENT IS APPROPRIATE FOR ANY
PARTICULAR PLAN. THE PERSON WITH INVESTMENT DISCRETION SHOULD
CONSULT WITH HIS OR HER ATTORNEY AND FINANCIAL ADVISORS AS TO
THE PROPRIETY OF AN INVESTMENT IN EACH SERIES IN LIGHT OF THE
CIRCUMSTANCES OF THE PARTICULAR PLAN.
47
PLAN OF
DISTRIBUTION
Subscription
Procedure
Each Series will offer the Units to the public during the
continuing offering at the net asset value per Unit as of each
month-end closing date on which subscriptions are accepted,
subject to calculation of such month-end net asset value by the
Administrator. Investors must submit subscriptions at least five
(5) business days prior to the applicable month-end closing
date and they will be accepted once payments are received and
cleared. Investors may rescind their subscription agreement
within five (5) business days of receipt of the Prospectus.
Superfund Capital Management may suspend, limit or terminate the
continuing offering period at any time. The Units are offered on
a best efforts basis without any firm underwriting
commitment through selling agents which are registered
broker-dealers and members of FINRA and which serve as
underwriters. Superfund Capital Management is also offering
Units, through Superfund USA, which also serves as an
underwriter, to potential investors by distributing this
Prospectus and making it available on a special internet website
(http://www.superfund.net).
Superfund Capital Management intends to engage in marketing
efforts through media including but not limited to third party
websites, newspapers, magazines, other periodicals, television,
radio, seminars, conferences, workshops, and sporting and
charity events. Units are offered until such time as Superfund
Capital Management terminates the continuing offering.
Subscriptions received during the continuing offering period can
be accepted on a monthly basis. Subscribers whose subscriptions
are canceled or rejected will be notified of when their
subscriptions will be returned, which shall be promptly after
rejection. Subscribers whose subscriptions are accepted will be
issued fractional Units, calculated to three decimal places.
Each Series escrow account is maintained at the Escrow
Agent, 452 Fifth Avenue, New York, New York
10018. All subscription funds are required to be promptly
transmitted to the Escrow Agent. Subscriptions must be accepted
or rejected by Superfund Capital Management within five business
days of receipt, and the settlement date for the deposit of
subscription funds in escrow must be within five business days
of acceptance. No fees or costs will be assessed on any
subscription while held in escrow, irrespective of whether the
subscription is accepted or subscription funds returned.
Subscriptions from customers of any of the selling agents may
also be made by authorizing such selling agent to debit the
Limited Partners customer securities account at the
selling agent. Promptly after debiting the customers
securities account, the selling agent shall send payment to the
Escrow Agent as described above, in the amount of the
subscription so debited. Subscribers must purchase Units for
investment purposes only and not with a view toward resale. An
investor who meets the suitability standards given below must
complete, execute and deliver to the relevant selling agent a
copy of the Subscription Agreement attached as Exhibit D. A
Limited Partner can pay either by a check made payable to
Quadriga Superfund, L.P. Series (A or B, as
applicable), Escrow Account or by authorizing his selling
agent to debit his customer securities account. Superfund
Capital Management will then accept or reject the subscription
within five business days of receipt of the subscription. All
subscriptions are irrevocable once subscription payments are
deposited in escrow. Pursuant to an addendum to the Subscription
Agreement, investors may subscribe for Units and receive them,
and pay for them in equal installments, over a period of time to
achieve an average price for the Units acquired; provided,
however, that no Units will be issued until such Units have been
fully paid for by the investor.
Superfund Capital Management and each person selling Units on
behalf of the Fund may not complete a sale of the Units to
prospective investors until at least five (5) business days
after the date the prospective investor receives a final
prospectus. This document is the final prospectus of the Fund.
Representations
and Warranties of Investors in the Subscription
Agreement
Investors are required to make representations and warranties in
the Subscription Agreement. Each Series primary intention
in requiring the investors to make representations and
warranties is to ensure that only persons for whom an investment
is suitable invest in each Series. Each Series is most likely to
assert representations and warranties if it has reason to
believe that the related investor may not be qualified to invest
or remain invested in each Series. The representations and
warranties made by investors in the Subscription Agreement may
be summarized as relating to: 1) eligibility of investors
to invest in each Series, including legal age, net worth and
annual income; 2) representative capacity of investors;
3) information provided by investors; 4) information
received by investors; and 5) investments made on behalf of
employee benefit plans. See the Subscription Agreement attached
as Exhibit D for further detail.
48
Minimum
Investment
The minimum investment is $5,000 in one Series. Limited Partners
in one Series may increase their investment in that same Series
with an additional investment of $1,000 or more. Prospective
investors must be aware that the price per Unit of a Unit in a
Series during the continuing offering period will vary depending
upon the month-end net asset value per Unit of such Series.
Under the federal securities laws and those of certain states,
investors may be subject to special minimum purchase and/or
investor suitability requirements.
Investor
Suitability
There can be no assurance that each Series will achieve its
objectives or avoid substantial losses. An investment in each
Series is suitable only for a limited segment of the risk
portion of an investors portfolio and no one should invest
more in each Series than he can afford to lose. Superfund
Capital Management and each person selling Units on behalf of
the Fund will make every reasonable effort to determine the
suitability of prospective investors through information
received on the Subscription Agreement. At an absolute minimum,
investors must have (i) a net worth of at least $250,000
(exclusive of home, furnishings and automobiles) or (ii) an
annual gross income of at least $70,000 and a net worth (as
calculated above) of at least $70,000. No one may invest more
than 10% of his net worth (as calculated above) in the Fund.
THESE STANDARDS (AND THE ADDITIONAL STANDARDS APPLICABLE TO
RESIDENTS OF CERTAIN STATES AS SET FORTH UNDER EXHIBIT
C SUBSCRIPTION REQUIREMENTS HEREIN) ARE
REGULATORY MINIMUMS ONLY. QUALIFICATION UNDER SUCH STANDARDS
DOES NOT NECESSARILY IMPLY THAT AN INVESTMENT IN EACH SERIES IS
SUITABLE FOR A PARTICULAR INVESTOR. PROSPECTIVE LIMITED PARTNERS
SHOULD REVIEW EXHIBIT C AND CONSIDER THE HIGHLY SPECULATIVE
AND ILLIQUID NATURE OF AN INVESTMENT IN EACH SERIES AS WELL AS
THE HIGH RISK AND HIGHLY LEVERAGED NATURE OF THE FUTURES,
FORWARD AND RELATED MARKETS IN DETERMINING WHETHER AN INVESTMENT
IN EACH SERIES IS CONSISTENT WITH THEIR OVERALL PORTFOLIO
OBJECTIVES.
The
Selling Agents
The selling agents, the broker-dealers who offer the Units and
serve as underwriters, offer the Units on a best efforts basis
without any firm underwriting commitment. The selling agents,
including Superfund USA, which also serves as an underwriter, is
an affiliate of Superfund Capital Management, and certain
foreign dealers who may elect to participate in the offering,
are bound by their respective Selling Agreements with each
Series. Subject to the limitations herein, Superfund USA and any
additional selling agents will receive collectively an annual 4%
selling commission
(1/12
of 4% per month) of the month-end net asset value per Unit
with respect to any Units they sell. Superfund Capital
Management may also engage one or more registered broker-dealers
to solicit other broker-dealers to become selling agents and to
assist those selling agents with the offering and sale of Units,
that is, to act as wholesalers. As compensation for its
services, any such wholesaler will receive up to one-fourth of
the selling commission that would otherwise be paid to the
selling agents. Thus, the Units pay a commission of 4% of the
month-end net asset value per Unit in the initial year after
purchase. The Units pay additional selling commissions of
4% per annum of the month-end net asset value per Unit
thereafter. Any wholesaler would receive up to 1% of the
month-end net asset value per Unit
(1/12
of 1% per month) in the initial year after purchase, and
additional selling commissions of up to 1% per annum
(1/12
of 1% per month) of the month-end net asset value per Unit
thereafter (limited, when combined with payments in the first
year, to 2.5% of the proceeds of the sale of the Units). If the
selling commission paid (including payments to any wholesaler)
in the initial year after purchase is less than 4% of proceeds
due to a decrease in the net asset value per Unit, the maximum
additional selling commissions paid will exceed 6% of the
proceeds. If the selling commission paid (including payments to
any wholesaler) in the initial year after purchase is more than
4% of the proceeds due to an increase in the net asset value per
Unit, the maximum additional selling commissions paid will be
less than 6% of the proceeds. In either case, the maximum
cumulative sales commission per Unit is 10% of the gross
offering proceeds price of such Unit (which is equal to
$54,000,000 out of the $540,000,000 in Units registered in this
offering) and in no event will the maximum amount of
compensation to be paid to FINRA members in connection with this
offering exceed such amount. Other than as described above,
Superfund Capital Management will pay no person any commissions
or other fees in connection with the solicitation of purchases
for Units. In the Selling Agreement with each selling agent,
Superfund Capital Management has agreed to indemnify the
49
selling agents against certain liabilities that the selling
agents may incur in connection with the offering and sale of the
Units, including liabilities under the Securities Act. Units
will be sold on a continuing basis at the net asset value per
Unit as of the end of each month.
The selling agents will use their best efforts to sell the Units
offered but are not required to sell any particular number of
Units. The Units are also offered through Superfund USA to
potential investors on a special internet website
(http://www.superfund.net).
Other than as described above, no person will pay any
commissions or other compensation in connection with the
solicitation or purchase of Units.
Units acquired through Superfund USA in conjunction with a
registered investment advisers asset-based fee or fixed
fee advisory program where the investment adviser recommends a
portfolio allocation to the Fund, and Units acquired through
Superfund USA by commodity pools operated by commodity pool
operators registered as such with the NFA, will not be subject
to the selling commissions described above.
Selling
Agent Compensation Table
Units
Sold Without Wholesalers
|
|
|
|
|
Nature of Payment
|
|
Recipient
|
|
Amount of Payment
|
|
Selling Commissions
|
|
Superfund USA and
additional selling agents
|
|
Superfund USA shall receive from the Fund a selling commission
of up to 10% of the gross offering proceeds by receiving annual
selling commissions of 4% of the average month-end net asset
value of all Units sold by the selling agents, including
Superfund USA, subject to the limitations of FINRA
Rule 2310 pertaining to maximum allowable selling
commissions. Superfund USA will pay all or a portion of such
commissions to the additional selling agents with respect to the
Units they sell.
|
Units
Sold With Wholesalers
|
|
|
|
|
Nature of Payment
|
|
Recipient
|
|
Amount of Payment
|
|
Selling Commissions
|
|
Superfund USA and
additional selling agents
|
|
Superfund USA shall receive from the Fund a selling commission
of up to 7.5% of the gross offering proceeds by receiving annual
selling commissions of 3% of the average month-end net asset
value of all Units sold by the selling agents, including
Superfund USA, subject to the limitations of FINRA
Rule 2310 pertaining to maximum allowable selling
commissions. Superfund USA will pay all or a portion of such
commissions to the additional selling agents with respect to the
Units they sell.
|
Selling Commissions
|
|
Wholesalers
|
|
Wholesalers shall receive from the Fund a selling commission of
up to 2.5% of the gross offering proceeds by receiving annual
selling commissions of 1% of the average month-end net asset
value of all Units sold by the selling agents introduced by such
wholesalers, subject to the limitations of FINRA Rule 2310
pertaining to maximum allowable selling commissions.
|
Under no circumstances will the maximum aggregate compensation
paid to the selling agents, including Superfund USA, and
wholesalers exceed 10% of the gross offering proceeds of the
sale of the Units.
50
Reimbursement
of Bona Fide Due Diligence Expenses
Bona fide due diligence expenses that are presented in a
detailed and itemized invoice to Superfund Capital Management by
broker-dealers will be paid by Superfund Capital Management
without reimbursement by the Fund.
CERTAIN
LEGAL MATTERS
Sidley Austin LLP, Chicago, Illinois, served as legal counsel to
Superfund Capital Management in connection with the preparation
of this Prospectus. Sidley Austin LLP may continue to serve in
such capacity in the future, but has not assumed any obligation
to update this Prospectus. Sidley Austin LLP may advise
Superfund Capital Management in matters relating to the
operation of the Fund on an ongoing basis. Sidley Austin LLP
does not represent and has not represented the prospective
investors or the Fund in the course of the organization of the
Fund, the negotiation of its business terms, the offering of the
Units or in respect of its ongoing operations. Prospective
investors must recognize that, as they have had no
representation in the organization process, the terms of the
Fund relating to themselves and the Units have not been
negotiated at arms length.
Sidley Austin LLPs engagement by Superfund Capital
Management in respect of the Fund is limited to the specific
matters as to which it is consulted by Superfund Capital
Management and, therefore, there may exist facts or
circumstances which could have a bearing on the Funds (or
Superfund Capital Managements) financial condition or
operations with respect to which Sidley Austin LLP has not been
consulted and for which Sidley Austin LLP expressly disclaims
any responsibility. More specifically, Sidley Austin LLP does
not undertake to monitor the compliance of Superfund Capital
Management and its affiliates with the investment program,
valuation procedures and other guidelines set forth herein, nor
does it monitor compliance with applicable laws. In preparing
this Prospectus, Sidley Austin LLP relied upon information
furnished to it by the Fund
and/or
Superfund Capital Management, and did not investigate or verify
the accuracy and completeness of information set forth herein
concerning Superfund Capital Management, the Funds service
providers and their affiliates and personnel.
EXPERTS
The financial statements of Quadriga Superfund, L.P.
Series A and Series B as of December 31, 2008 and
2007 and for the years ended December 31, 2008, 2007, and
2006 and the Statement of Financial Condition of Superfund
Capital Management as of December 31, 2008 have been
included herein in reliance upon reports of Deloitte &
Touche LLP, independent registered public accounting firm,
appearing elsewhere herein, and upon the authority of said firm
as experts in accounting and auditing.
51
|
|
|
|
|
|
|
|
|
|
|
September 30, 2009
|
|
|
December 31, 2008
|
|
|
ASSETS
|
US Government securities, at fair value (amortized cost of
$14,216,725 and $31,494,929 as of September 30, 2009, and
December 31, 2008, respectively)
|
|
$
|
14,216,725
|
|
|
$
|
31,494,929
|
|
Due from brokers
|
|
|
18,687,495
|
|
|
|
4,049,967
|
|
Unrealized appreciation on open forward contracts
|
|
|
281,415
|
|
|
|
11,138
|
|
Futures contracts sold
|
|
|
|
|
|
|
109,330
|
|
Futures contracts purchased
|
|
|
2,380,210
|
|
|
|
735,529
|
|
Cash
|
|
|
355,534
|
|
|
|
810,576
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
35,921,379
|
|
|
|
37,211,469
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
Unrealized depreciation on open forward contracts
|
|
|
286,401
|
|
|
|
43,336
|
|
Futures contracts sold
|
|
|
6,196
|
|
|
|
|
|
Redemptions payable
|
|
|
289,382
|
|
|
|
1,714,573
|
|
Due to affiliate
|
|
|
|
|
|
|
300,000
|
|
Management fees payable
|
|
|
54,996
|
|
|
|
56,861
|
|
Fees payable
|
|
|
108,881
|
|
|
|
124,365
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
745,856
|
|
|
|
2,239,135
|
|
|
|
|
|
|
|
|
|
|
NET ASSETS
|
|
$
|
35,175,523
|
|
|
$
|
34,972,334
|
|
|
|
|
|
|
|
|
|
|
Number of Units
|
|
|
23,688.460
|
|
|
|
18,098.830
|
|
Net asset value per Unit
|
|
$
|
1,484.92
|
|
|
$
|
1,932.30
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
53
QUADRIGA
SUPERFUND, L.P. SERIES A
September 30,
2009
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
|
|
|
|
|
|
|
Face Value
|
|
|
Net Assets
|
|
|
Fair Value
|
|
|
Debt Securities United States, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
United States Treasury Bills due November 27, 2009
(amortized cost $14,216,725), securities are held in margin
accounts as collateral for open futures and forwards
|
|
$
|
14,220,000
|
|
|
|
40.4
|
%
|
|
$
|
14,216,725
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward contracts, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized appreciation on forward contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
0.8
|
|
|
|
281,415
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total unrealized appreciation on forward contracts
|
|
|
|
|
|
|
0.8
|
|
|
|
281,415
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized depreciation on forward contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
(0.8
|
)
|
|
|
(286,401
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total unrealized depreciation on forward contracts
|
|
|
|
|
|
|
(0.8
|
)
|
|
|
(286,401
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total forward contracts, at fair value
|
|
|
|
|
|
|
(0.0
|
)*
|
|
|
(4,986
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures contracts, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts Purchased
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
1.6
|
|
|
|
564,073
|
|
Financial
|
|
|
|
|
|
|
3.2
|
|
|
|
1,124,891
|
|
Food & Fiber
|
|
|
|
|
|
|
0.3
|
|
|
|
100,899
|
|
Indices
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
(12,473
|
)
|
Metals
|
|
|
|
|
|
|
1.7
|
|
|
|
602,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures contracts purchased
|
|
|
|
|
|
|
6.7
|
|
|
|
2,380,210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts Sold
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
0.4
|
|
|
|
147,537
|
|
Energy
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
(49,710
|
)
|
Food & Fiber
|
|
|
|
|
|
|
0.7
|
|
|
|
241,216
|
|
Indices
|
|
|
|
|
|
|
0.1
|
|
|
|
43,023
|
|
Livestock
|
|
|
|
|
|
|
0.2
|
|
|
|
55,210
|
|
Metals
|
|
|
|
|
|
|
(1.3
|
)
|
|
|
(443,472
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures contracts sold
|
|
|
|
|
|
|
(0.0
|
)*
|
|
|
(6,196
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures contracts, at fair value
|
|
|
|
|
|
|
6.7
|
%
|
|
$
|
2,374,014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures and forward contracts by country composition
|
|
|
|
|
|
|
|
|
|
|
|
|
European Monetary Union
|
|
|
|
|
|
|
1.4
|
%
|
|
$
|
510,728
|
|
Great Britain
|
|
|
|
|
|
|
1.2
|
|
|
|
443,010
|
|
Japan
|
|
|
|
|
|
|
2.6
|
|
|
|
901,870
|
|
United States
|
|
|
|
|
|
|
1.6
|
|
|
|
554,938
|
|
Other
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
(41,518
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures and forward contracts by country
|
|
|
|
|
|
|
6.7
|
%
|
|
$
|
2,369,028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
54
QUADRIGA
SUPERFUND, L.P. SERIES A
December 31,
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
|
|
|
|
|
|
|
Face Value
|
|
|
Net Assets
|
|
|
Fair Value
|
|
|
Debt Securities United States, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
United States Treasury Bills due February 26, 2009
(amortized cost $31,494,929), securities are held in margin
accounts as collateral for open futures and forwards
|
|
$
|
31,500,000
|
|
|
|
90.1
|
%
|
|
$
|
31,494,929
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward contracts, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized appreciation on forward contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
0.0
|
%
|
|
$
|
11,138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total unrealized appreciation on forward contracts
|
|
|
|
|
|
|
0.0
|
*
|
|
|
11,138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized depreciation on forward contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
(43,336
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total unrealized depreciation on forward contracts
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
(43,336
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total forward contracts, at fair value
|
|
|
|
|
|
|
(0.1
|
)%
|
|
$
|
(32,198
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts Purchased
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
0.3
|
%
|
|
$
|
101,136
|
|
Financial
|
|
|
|
|
|
|
1.5
|
|
|
|
508,908
|
|
Food & Fiber
|
|
|
|
|
|
|
0.1
|
|
|
|
33,914
|
|
Indices
|
|
|
|
|
|
|
0.0
|
*
|
|
|
22,836
|
|
Metals
|
|
|
|
|
|
|
0.2
|
|
|
|
68,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures contracts purchased
|
|
|
|
|
|
|
2.1
|
|
|
|
735,529
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts Sold
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
0.1
|
|
|
|
38,025
|
|
Energy
|
|
|
|
|
|
|
0.2
|
|
|
|
88,531
|
|
Financial
|
|
|
|
|
|
|
0.0
|
*
|
|
|
919
|
|
Food & Fiber
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
(40,878
|
)
|
Indices
|
|
|
|
|
|
|
(0.0
|
)*
|
|
|
(7,067
|
)
|
Livestock
|
|
|
|
|
|
|
0.1
|
|
|
|
23,400
|
|
Metals
|
|
|
|
|
|
|
0.0
|
*
|
|
|
6,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures contracts sold
|
|
|
|
|
|
|
0.3
|
|
|
|
109,330
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures contracts, at fair value
|
|
|
|
|
|
|
2.4
|
%
|
|
$
|
844,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures, swap and forward contracts by country composition
|
|
|
|
|
|
|
|
|
|
|
|
|
European Monetary Union
|
|
|
|
|
|
|
0.4
|
%
|
|
$
|
153,538
|
|
Great Britain
|
|
|
|
|
|
|
0.3
|
|
|
|
110,392
|
|
United States
|
|
|
|
|
|
|
1.1
|
|
|
|
369,143
|
|
Other
|
|
|
|
|
|
|
0.5
|
|
|
|
179,588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures and forward contracts by country
|
|
|
|
|
|
|
2.3
|
%
|
|
$
|
812,661
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
55
QUADRIGA
SUPERFUND, L.P. SERIES A
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
Investment income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
$
|
7,733
|
|
|
$
|
176,226
|
|
|
$
|
31,849
|
|
|
$
|
814,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income
|
|
|
7,733
|
|
|
|
176,226
|
|
|
|
31,849
|
|
|
|
814,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling commission
|
|
|
340,090
|
|
|
|
376,532
|
|
|
|
1,044,317
|
|
|
|
1,380,848
|
|
Management fee
|
|
|
157,292
|
|
|
|
174,146
|
|
|
|
482,997
|
|
|
|
638,642
|
|
Ongoing offering expenses
|
|
|
85,022
|
|
|
|
94,133
|
|
|
|
261,079
|
|
|
|
345,212
|
|
Operating expenses
|
|
|
12,754
|
|
|
|
14,120
|
|
|
|
39,162
|
|
|
|
51,782
|
|
Incentive fee
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,786,681
|
|
Brokerage commissions
|
|
|
175,399
|
|
|
|
133,131
|
|
|
|
410,850
|
|
|
|
579,785
|
|
Other
|
|
|
3,692
|
|
|
|
7,537
|
|
|
|
13,118
|
|
|
|
11,780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
774,249
|
|
|
|
799,599
|
|
|
|
2,251,523
|
|
|
|
4,794,730
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
|
(766,516
|
)
|
|
|
(623,373
|
)
|
|
|
(2,219,674
|
)
|
|
|
(3,980,180
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized and unrealized gain (loss) on investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gain (loss) on futures and forward contracts
|
|
|
(1,572,831
|
)
|
|
|
(2,946,421
|
)
|
|
|
(8,566,923
|
)
|
|
|
11,735,085
|
|
Net change in unrealized appreciation (depreciation) on futures
and forward contracts
|
|
|
1,748,399
|
|
|
|
(2,452,818
|
)
|
|
|
1,556,367
|
|
|
|
67,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on investments
|
|
|
175,568
|
|
|
|
(5,399,239
|
)
|
|
|
(7,010,556
|
)
|
|
|
11,802,554
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets from operations
|
|
$
|
(590,948
|
)
|
|
$
|
(6,022,612
|
)
|
|
$
|
(9,230,230
|
)
|
|
$
|
7,822,374
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets from operations per unit
(based upon weighted average number of units outstanding during
period)
|
|
$
|
(25.22
|
)
|
|
$
|
(271.05
|
)
|
|
$
|
(436.83
|
)
|
|
$
|
292.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets from operations per unit
(based upon change in net asset value per unit during period)
|
|
$
|
(29.47
|
)
|
|
$
|
(270.65
|
)
|
|
$
|
(447.38
|
)
|
|
$
|
188.86
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
56
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
Increase (Decrease) in net assets from operations
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
$
|
(2,219,674
|
)
|
|
$
|
(3,980,180
|
)
|
Net realized gain (loss) on futures and forward contracts
|
|
|
(8,566,923
|
)
|
|
|
11,735,085
|
|
Net change in unrealized appreciation on futures and forward
contracts
|
|
|
1,556,367
|
|
|
|
67,469
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets from operations
|
|
|
(9,230,230
|
)
|
|
|
7,822,374
|
|
|
|
|
|
|
|
|
|
|
Capital share transactions
|
|
|
|
|
|
|
|
|
Issuance of Units
|
|
|
20,138,149
|
|
|
|
4,768,309
|
|
Redemption of Units
|
|
|
(10,704,730
|
)
|
|
|
(36,477,314
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets from capital share
transactions
|
|
|
9,433,419
|
|
|
|
(31,709,005
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets
|
|
|
203,189
|
|
|
|
(23,886,631
|
)
|
Net assets, beginning of period
|
|
|
34,972,334
|
|
|
|
57,934,508
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period
|
|
$
|
35,175,523
|
|
|
$
|
34,047,877
|
|
|
|
|
|
|
|
|
|
|
Units, beginning of period
|
|
|
18,098.830
|
|
|
|
38,975.348
|
|
Issuance of Units
|
|
|
11,938.031
|
|
|
|
2,747.546
|
|
Redemption of Units
|
|
|
(6,348.401
|
)
|
|
|
(21,399.386
|
)
|
|
|
|
|
|
|
|
|
|
Units, end of period
|
|
|
23,688.460
|
|
|
|
20,323.508
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
57
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets from operations
|
|
$
|
(9,230,230
|
)
|
|
$
|
7,822,374
|
|
Adjustments to reconcile net increase (decrease) in net assets
from operations to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Gross purchases of U.S. government securities
|
|
|
(62,907,793
|
)
|
|
|
(120,334,035
|
)
|
Gross proceeds from sales of U.S. government securities
|
|
|
80,158,355
|
|
|
|
143,314,323
|
|
Amortization of discounts and premiums
|
|
|
27,642
|
|
|
|
725,369
|
|
Due from brokers
|
|
|
(14,637,528
|
)
|
|
|
2,091,441
|
|
Due to affiliate
|
|
|
(300,000
|
)
|
|
|
(133,276
|
)
|
Unrealized appreciation on open forward contracts
|
|
|
(270,277
|
)
|
|
|
(22,432
|
)
|
Futures contracts purchased
|
|
|
(1,644,681
|
)
|
|
|
672,467
|
|
Unrealized depreciation on open forward contracts
|
|
|
243,065
|
|
|
|
(655,851
|
)
|
Futures contracts sold
|
|
|
115,526
|
|
|
|
(61,653
|
)
|
Management fees payable
|
|
|
(1,865
|
)
|
|
|
(38,888
|
)
|
Fees payable
|
|
|
(15,484
|
)
|
|
|
(78,238
|
)
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
|
(8,463,270
|
)
|
|
|
33,301,601
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
Subscriptions, net of change in advance subscriptions
|
|
|
20,138,149
|
|
|
|
4,768,309
|
|
Redemptions, net of redemptions payable
|
|
|
(12,129,921
|
)
|
|
|
(37,678,144
|
)
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
8,008,228
|
|
|
|
(32,909,835
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
|
|
|
(455,042
|
)
|
|
|
391,766
|
|
Cash, beginning of period
|
|
|
810,576
|
|
|
|
114,554
|
|
|
|
|
|
|
|
|
|
|
Cash, end of period
|
|
$
|
355,534
|
|
|
$
|
506,320
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash financing activities
|
|
|
|
|
|
|
|
|
Redemptions payable
|
|
$
|
289,382
|
|
|
$
|
1,694,843
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
58
|
|
|
|
|
|
|
|
|
|
|
September 30, 2009
|
|
|
December 31, 2008
|
|
|
ASSETS
|
US Government securities, at fair value (amortized costs of
$23,329,592 and $54,825,911 as of September 30, 2009, and
December 31, 2008, respectively)
|
|
$
|
23,329,592
|
|
|
$
|
54,825,911
|
|
Due from brokers
|
|
|
30,074,902
|
|
|
|
5,961,708
|
|
Unrealized appreciation on open forward contracts
|
|
|
762,354
|
|
|
|
44,878
|
|
Futures contracts sold
|
|
|
|
|
|
|
407,977
|
|
Futures contracts purchased
|
|
|
6,014,780
|
|
|
|
1,978,090
|
|
Cash
|
|
|
1,270,008
|
|
|
|
668,701
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
61,451,636
|
|
|
|
63,887,265
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
Unrealized depreciation on open forward contracts
|
|
|
745,068
|
|
|
|
163,504
|
|
Futures contracts sold
|
|
|
150,942
|
|
|
|
|
|
Redemptions payable
|
|
|
807,363
|
|
|
|
2,767,509
|
|
Management fees payable
|
|
|
93,183
|
|
|
|
98,291
|
|
Fees payable
|
|
|
195,702
|
|
|
|
240,910
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
1,992,258
|
|
|
|
3,270,214
|
|
|
|
|
|
|
|
|
|
|
NET ASSETS
|
|
$
|
59,459,378
|
|
|
$
|
60,617,051
|
|
|
|
|
|
|
|
|
|
|
Number of Units
|
|
|
34,977.175
|
|
|
|
23,305.633
|
|
Net asset value per Unit
|
|
$
|
1,699.95
|
|
|
$
|
2,600.96
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
59
QUADRIGA
SUPERFUND, L.P. SERIES B
September 30,
2009 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
|
|
|
|
|
|
|
Face Value
|
|
|
Net Assets
|
|
|
Fair Value
|
|
|
Debt Securities United States, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
United States Treasury Bills due November 27, 2009
(amortized cost $23,329,592), securities are held in margin
accounts as collateral for open futures and forwards
|
|
$
|
23,335,000
|
|
|
|
39.2
|
%
|
|
$
|
23,329,592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward contracts, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized appreciation on forward contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
1.3
|
|
|
|
762,354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total unrealized appreciation on forward contracts
|
|
|
|
|
|
|
1.3
|
|
|
|
762,354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized depreciation on forward contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
(1.3
|
)
|
|
|
(745,068
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total unrealized depreciation on forward contracts
|
|
|
|
|
|
|
(1.3
|
)
|
|
|
(745,068
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total forward contracts, at fair value
|
|
|
|
|
|
|
0.0
|
*
|
|
|
17,286
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures contracts, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures contracts purchased
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
2.4
|
|
|
|
1,419,474
|
|
Financial
|
|
|
|
|
|
|
4.8
|
|
|
|
2,839,751
|
|
Food & Fiber
|
|
|
|
|
|
|
0.4
|
|
|
|
265,502
|
|
Indices
|
|
|
|
|
|
|
(0.0
|
)*
|
|
|
(23,962
|
)
|
Metals
|
|
|
|
|
|
|
2.5
|
|
|
|
1,514,015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures contracts purchased
|
|
|
|
|
|
|
10.1
|
|
|
|
6,014,780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures contracts sold
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
0.6
|
|
|
|
368,733
|
|
Energy
|
|
|
|
|
|
|
(0.3
|
)
|
|
|
(159,275
|
)
|
Food & Fiber
|
|
|
|
|
|
|
1.1
|
|
|
|
639,494
|
|
Indices
|
|
|
|
|
|
|
0.2
|
|
|
|
109,193
|
|
Livestock
|
|
|
|
|
|
|
0.2
|
|
|
|
139,470
|
|
Metals
|
|
|
|
|
|
|
(2.0
|
)
|
|
|
(1,248,557
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures contracts sold
|
|
|
|
|
|
|
(0.2
|
)
|
|
|
(150,942
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures contracts, at fair value
|
|
|
|
|
|
|
9.9
|
%
|
|
|
5,863,838
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures and forward contracts by country composition
|
|
|
|
|
|
|
|
|
|
|
|
|
European Monetary Community
|
|
|
|
|
|
|
2.1
|
%
|
|
$
|
1,285,247
|
|
Great Britain
|
|
|
|
|
|
|
1.9
|
|
|
|
1,131,411
|
|
Japan
|
|
|
|
|
|
|
3.9
|
|
|
|
2,307,253
|
|
United States
|
|
|
|
|
|
|
2.1
|
|
|
|
1,232,868
|
|
Other
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
(75,655
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures and forward contracts by country
|
|
|
|
|
|
|
9.9
|
%
|
|
$
|
5,881,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
60
QUADRIGA
SUPERFUND, L.P. SERIES B
December 31,
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
|
|
|
|
|
|
|
Face Value
|
|
|
Net Assets
|
|
|
Fair Value
|
|
|
Debt Securities United States, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
United States Treasury Bills due February 26, 2009
(amortized cost $54,825,911), securities are held in margin
accounts as collateral for open futures and forwards
|
|
$
|
54,835,000
|
|
|
|
90.4
|
%
|
|
$
|
54,825,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward contracts, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized appreciation on forward contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
0.1
|
%
|
|
$
|
44,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total unrealized appreciation on forward contracts
|
|
|
|
|
|
|
0.1
|
|
|
|
44,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized depreciation on forward contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
(0.3
|
)
|
|
|
(163,504
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total unrealized depreciation on forward contracts
|
|
|
|
|
|
|
(0.3
|
)
|
|
|
(163,504
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total forward contracts, at fair value
|
|
|
|
|
|
|
(0.2
|
)%
|
|
$
|
(118,626
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures contracts, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures contracts purchased
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
0.5
|
%
|
|
$
|
282,349
|
|
Financial
|
|
|
|
|
|
|
2.5
|
|
|
|
1,535,102
|
|
Food & Fiber
|
|
|
|
|
|
|
0.2
|
|
|
|
91,596
|
|
Indices
|
|
|
|
|
|
|
0.1
|
|
|
|
69,043
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures contracts purchased
|
|
|
|
|
|
|
3.3
|
|
|
|
1,978,090
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures contracts sold
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
0.2
|
|
|
|
101,335
|
|
Energy
|
|
|
|
|
|
|
0.5
|
|
|
|
319,932
|
|
Financial
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
(30,335
|
)
|
Livestock
|
|
|
|
|
|
|
0.1
|
|
|
|
64,110
|
|
Indices
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
(85,438
|
)
|
Food & Fiber
|
|
|
|
|
|
|
(0.2
|
)
|
|
|
(144,632
|
)
|
Metals
|
|
|
|
|
|
|
0.3
|
|
|
|
183,005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures contracts sold
|
|
|
|
|
|
|
0.7
|
|
|
|
407,977
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures contracts, at fair value
|
|
|
|
|
|
|
4.0
|
%
|
|
$
|
2,386,067
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures and forward contracts by country composition
|
|
|
|
|
|
|
|
|
|
|
|
|
European Monetary Union
|
|
|
|
|
|
|
0.7
|
%
|
|
$
|
425,341
|
|
Great Britain
|
|
|
|
|
|
|
0.5
|
|
|
|
291,376
|
|
United States
|
|
|
|
|
|
|
1.9
|
|
|
|
1,142,037
|
|
Other
|
|
|
|
|
|
|
0.7
|
|
|
|
408,687
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures and forward contracts by country
|
|
|
|
|
|
|
3.8
|
%
|
|
$
|
2,267,441
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
61
QUADRIGA
SUPERFUND, L.P. SERIES B
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
Investment income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
$
|
11,475
|
|
|
$
|
234,976
|
|
|
$
|
59,119
|
|
|
$
|
633,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income
|
|
|
11,475
|
|
|
|
234,976
|
|
|
|
59,119
|
|
|
|
633,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling commission
|
|
|
565,705
|
|
|
|
514,910
|
|
|
|
1,825,381
|
|
|
|
1,382,252
|
|
Management fee
|
|
|
261,638
|
|
|
|
238,146
|
|
|
|
844,238
|
|
|
|
639,292
|
|
Ongoing offering expenses
|
|
|
141,426
|
|
|
|
128,727
|
|
|
|
456,345
|
|
|
|
345,563
|
|
Operating expenses
|
|
|
21,214
|
|
|
|
19,309
|
|
|
|
68,452
|
|
|
|
51,834
|
|
Incentive fee
|
|
|
|
|
|
|
|
|
|
|
301,233
|
|
|
|
3,831,165
|
|
Brokerage commissions
|
|
|
460,024
|
|
|
|
294,619
|
|
|
|
1,145,959
|
|
|
|
874,431
|
|
Other
|
|
|
3,013
|
|
|
|
12,815
|
|
|
|
19,024
|
|
|
|
16,661
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
1,453,020
|
|
|
|
1,208,526
|
|
|
|
4,660,632
|
|
|
|
7,141,198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
|
(1,441,545
|
)
|
|
|
(973,550
|
)
|
|
|
(4,601,513
|
)
|
|
|
(6,508,010
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized and unrealized gain (loss) on investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gain (loss) on futures and forward contracts
|
|
|
(4,459,329
|
)
|
|
|
(6,774,348
|
)
|
|
|
(25,265,671
|
)
|
|
|
8,513,880
|
|
Net change in unrealized appreciation (depreciation) on futures
and forward contracts
|
|
|
4,264,688
|
|
|
|
(4,851,385
|
)
|
|
|
3,613,683
|
|
|
|
1,057,804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on investments
|
|
|
(194,641
|
)
|
|
|
(11,625,733
|
)
|
|
|
(21,651,988
|
)
|
|
|
9,571,684
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets from operations
|
|
$
|
(1,636,186
|
)
|
|
$
|
(12,599,283
|
)
|
|
$
|
(26,253,501
|
)
|
|
$
|
3,063,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets from operations per unit
(based upon weighted average number of units outstanding during
period)
|
|
$
|
(47.24
|
)
|
|
$
|
(511.52
|
)
|
|
$
|
(869.39
|
)
|
|
$
|
146.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets from operations per unit
(based upon change in net asset value per unit during period)
|
|
$
|
(53.76
|
)
|
|
$
|
(540.12
|
)
|
|
$
|
(901.01
|
)
|
|
$
|
278.51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
62
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
Increase (decrease) in net assets from operations
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
$
|
(4,601,513
|
)
|
|
$
|
(6,508,010
|
)t
|
Net realized gain (loss) on futures and forward contracts
|
|
|
(25,265,671
|
)
|
|
|
8,513,880
|
|
Net change in unrealized appreciation on futures and forward
contracts
|
|
|
3,613,683
|
|
|
|
1,057,804
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets from operations
|
|
|
(26,253,501
|
)
|
|
|
3,063,674
|
|
|
|
|
|
|
|
|
|
|
Capital share transactions
|
|
|
|
|
|
|
|
|
Issuance of Units
|
|
|
39,218,868
|
|
|
|
30,269,792
|
|
Redemption of Units
|
|
|
(14,123,040
|
)
|
|
|
(6,890,026
|
)
|
|
|
|
|
|
|
|
|
|
Net increase in net assets from capital share transactions
|
|
|
25,095,828
|
|
|
|
23,379,766
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets
|
|
|
(1,157,673
|
)
|
|
|
26,443,440
|
|
Net assets, beginning of period
|
|
|
60,617,051
|
|
|
|
25,855,147
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period
|
|
$
|
59,459,378
|
|
|
$
|
52,298,587
|
|
|
|
|
|
|
|
|
|
|
Units, beginning of period
|
|
|
23,305.633
|
|
|
|
14,568.812
|
|
Issuance of Units
|
|
|
18,082.552
|
|
|
|
14,166.071
|
|
Redemption of Units
|
|
|
(6,411.010
|
)
|
|
|
(3,263.085
|
)
|
|
|
|
|
|
|
|
|
|
Units, end of period
|
|
|
34,977.175
|
|
|
|
25,471.798
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
63
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets from operations
|
|
$
|
(26,253,501
|
)
|
|
$
|
3,063,674
|
|
Adjustments to reconcile net increase (decrease) in net assets
from operations to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Gross purchases of U.S. government securities
|
|
|
(108,196,503
|
)
|
|
|
(122,002,215
|
)
|
Gross sales of U.S. government securities
|
|
|
139,642,182
|
|
|
|
105,669,394
|
|
Amortization of discounts and premiums
|
|
|
50,640
|
|
|
|
520,274
|
|
Due from brokers
|
|
|
(24,113,194
|
)
|
|
|
(8,461,345
|
)
|
Due from affiliate
|
|
|
|
|
|
|
133,276
|
|
Unrealized appreciation on open forward contracts
|
|
|
(717,476
|
)
|
|
|
(459,962
|
)
|
Futures contracts purchased
|
|
|
(4,036,690
|
)
|
|
|
877,783
|
|
Unrealized depreciation on open forward contracts
|
|
|
581,564
|
|
|
|
43,220
|
|
Futures contracts sold
|
|
|
558,919
|
|
|
|
(1,518,845
|
)
|
Management fees payable
|
|
|
(5,108
|
)
|
|
|
39,315
|
|
Fees payable
|
|
|
(45,208
|
)
|
|
|
192,526
|
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
|
(22,534,375
|
)
|
|
|
(21,902,905
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
Subscriptions, net of change in advance subscriptions
|
|
|
39,218,868
|
|
|
|
30,269,792
|
|
Redemptions, net of redemptions payable
|
|
|
(16,083,186
|
)
|
|
|
(7,985,906
|
)
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities
|
|
|
23,135,682
|
|
|
|
22,283,886
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash
|
|
|
601,307
|
|
|
|
380,981
|
|
Cash, beginning of period
|
|
|
668,701
|
|
|
|
73,375
|
|
|
|
|
|
|
|
|
|
|
Cash, end of period
|
|
$
|
1,270,008
|
|
|
$
|
454,356
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of noncash financing activities:
|
|
|
|
|
|
|
|
|
Redemptions payable
|
|
$
|
807,363
|
|
|
$
|
996,594
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
64
QUADRIGA
SUPERFUND, L.P. SERIES A AND B
Organization
and Business
Quadriga Superfund, L.P., a Delaware Limited Partnership (the
Fund), commenced operations on November 5,
2002. The Fund was organized to trade speculatively in United
States and international commodity futures markets using a
strategy developed by Superfund Capital Management, Inc., the
general partner and trading manager of the Fund (Superfund
Capital Management). The Fund has issued two series of
units of limited partnership interest (Units),
Series A and Series B (each a Series).
Series A and Series B are traded and managed the same
way, with the exception of the degree of leverage.
The term of the Fund shall continue until December 31,
2050, unless terminated earlier by Superfund Capital Management
or by operation of the law or a decline in the aggregate net
assets of such series to less than $500,000.
|
|
2.
|
Basis of
presentation and significant accounting policies
|
Basis
of Presentation
The unaudited financial statements have been prepared in
accordance with the rules and regulations of the Securities and
Exchange Commission (SEC) and accounting principles
generally accepted in the United States of America with respect
to the
Form 10-Q
and reflect all adjustments which in the opinion of management
are normal and recurring, and which are necessary for a fair
statement of the results of interim periods presented. It is
suggested that these financial statements be read in conjunction
with the financial statements and the related notes included in
the Funds Annual Report on
Form 10-K
for the year ended December 31, 2008. Certain
reclassifications of the December 31, 2008, data pertaining
to the Statements of Assets and Liabilities have been made to
conform to the September 30, 2009, presentation.
Valuation
of Investments in Futures Contracts, Forward Contracts, and U.S.
Treasury Bills
All commodity interests (including derivative financial
instruments and derivative commodity instruments) are used for
trading purposes. The commodity interests are recorded on a
trade date basis and open contracts are recorded in the
statements of assets and liabilities at fair value based upon
market quotes on the last business day of the period.
Exchange-traded futures contracts are valued at settlement
prices published by the recognized exchange. Any spot and
forward foreign currency contracts held by the Fund will be
valued at published settlement prices or at dealers
quotes. The Fund uses the amortized cost method for valuing the
U.S. Treasury Bills due to the short term nature of such
investments; accordingly, the cost of securities plus accreted
discount, or minus amortized premium approximates fair value.
Translation
of Foreign Currency
Assets and liabilities denominated in foreign currencies are
translated into U.S. dollar amounts at the period end
exchange rates. Purchases and sales of investments and income
and expenses that are denominated in foreign currencies are
translated into U.S. dollar amounts on the transaction
date. Adjustments arising from foreign currency transactions are
reflected in the statements of operations.
The Fund does not isolate that portion of the results of
operations arising from the effect of changes in foreign
exchange rates on investments from fluctuations from changes in
market prices of investments held. Such fluctuations are
included in net gain (loss) on investments in the statements of
operations.
65
QUADRIGA
SUPERFUND, L.P. SERIES A AND B
NOTES TO
FINANCIAL STATEMENTS (Continued)
Investment
Transactions, Investment Income and Expenses
Investment transactions are accounted for on a trade-date basis.
Interest income and expenses are recognized on the accrual basis.
Income
Taxes
The Fund does not record a provision for U.S. income taxes
because the partners report their share of the Funds
income or loss on their returns. The financial statements
reflect the Funds transactions without adjustment, if any,
required for income tax purposes.
Superfund Capital Management has evaluated the application of
Accounting Standards Codification 740 (ASC 740) to
the Fund, and has determined whether or not there are uncertain
tax positions that require financial statement recognition.
Based on this evaluation, the Fund has determined no reserves
for uncertain tax position are required to be recorded as a
result of the application of ASC 740. The Fund is not aware of
any tax positions for which it is reasonably possible that the
total amounts of unrecognized tax benefits will change
materially in the next twelve months. As a result, no income tax
liability or expense has been recorded in the accompanying
financial statements. The 2006 through 2009 tax years generally
remain subject to examination by the U.S. federal and most
state tax authorities.
Use of
Estimates
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires Superfund Capital Management to make estimates
and assumptions that affect the assets, liabilities, income and
expenses, as well as the other disclosures in the financial
statements. Actual results could differ from those estimates.
Recently
Issued Accounting Pronouncements
ASC
105.10.05
In June 2009, the Financial Accounting Standards Board
(FASB) issued FASB Accounting Standards Codification
(ASC) 105.10.05, Generally Accepted Accounting
Principles (ASC 105.10.05). ASC 105.10.05
establishes the FASB ASC as the single source of authoritative
generally accepted accounting principles (GAAP).
Pursuant to the provisions of ASC 105.10.05, the Fund has
updated references to GAAP in its financial statements issued
subsequent to September 15, 2009. The adoption of ASC
105.10.05 did not have any impact on the Funds results of
operations, financial condition or cash flows.
ASC
810
In June 2009, FASB issued ASC 810, Consolidation
(ASC 810). ASC 810 changes how a company
determines when an entity that is insufficiently capitalized or
is not controlled through voting rights should be consolidated.
The determination of whether a company is required to
consolidate an entity is based on an entitys purpose and
design and a companys ability to direct the activities of
the entity that most significantly impact the entitys
economic performance. ASC 810 is effective for annual reporting
periods ending after November 15, 2009. Superfund Capital
Management is currently evaluating the impact of ASC 810 on the
Funds financial statements.
|
|
3.
|
Fair
Value Measurements
|
The Fund follows ASC 820, Fair Value Measurements. ASC
820 establishes a fair value hierarchy that prioritizes the
inputs to valuation techniques used to measure fair value. The
hierarchy gives the highest priority to unadjusted quoted prices
in active markets for identical assets or liabilities
(level 1 measurements) and the lowest
66
QUADRIGA
SUPERFUND, L.P. SERIES A AND B
NOTES TO
FINANCIAL STATEMENTS (Continued)
priority to unobservable inputs (level 3 measurements). The
three levels of the fair value hierarchy under ASC 820 are
described below:
|
|
|
|
Level 1
|
Unadjusted quoted prices in active markets that are accessible
at the measurement date for identical, unrestricted assets or
liabilities;
|
|
|
Level 2
|
Quoted prices in markets that are not considered to be active or
financial instruments for which all significant inputs are
observable, either directly or indirectly;
|
|
|
Level 3
|
Prices or valuations that require inputs that are both
significant to the fair value measurement and unobservable.
|
A financial instruments level within the fair value
hierarchy is based on the lowest level of any input that is
significant to the fair value measurement. In determining fair
value, the Fund separates its financial instruments into two
categories: U.S. government securities and derivative
contracts.
U.S. Government Securities. The
Funds only market exposure in instruments held other than
for trading is in its U.S. Treasury Bill portfolio. As the
Fund uses the amortized cost method for valuing its
U.S. Treasury Bill portfolio, which approximates fair
value, this portfolio is classified within level 2 of the
fair value hierarchy.
Derivative Contracts. Derivative contracts can
be exchange-traded or over-the-counter (OTC).
Exchange-traded derivatives typically fall within level 1
or level 2 of the fair value hierarchy depending on whether
they are deemed to be actively traded or not. The Fund has
exposure to exchange-traded derivative contracts through the
Funds trading of exchange-traded futures contracts. The
Funds exchange-traded futures contract positions are
valued daily at settlement prices published by the applicable
exchanges. In such cases, provided they are deemed to be
actively traded, exchange-traded derivatives are classified
within level 1 of the fair value hierarchy. Less actively
traded exchange-traded derivatives fall within level 2 of
the fair value hierarchy.
OTC derivatives are valued using market transactions and other
market evidence whenever possible, including market-based inputs
to models, model calibration to market-clearing transactions,
broker or dealer quotations, or alternative pricing sources with
reasonable levels of price transparency. Where models are used,
the selection of a particular model to value an OTC derivative
depends upon the contractual terms of, and specific risks
inherent in, the instrument as well as the availability of
pricing information in the market. For OTC derivatives that
trade in liquid markets, such as generic forwards and swaps,
model inputs can generally be verified and model selection does
not involve significant management judgment. The OTC derivatives
held by the Fund include forwards and swaps. Spot and forward
foreign currency contracts held by the Fund are valued at
published daily settlement prices or at dealers quotes.
The Funds forward and swap positions are typically
classified within level 2 of the fair value hierarchy. As
of and during the quarter ended September 30, 2009, the
Fund held no derivative contracts valued using level 3
inputs.
Certain OTC derivatives trade in less liquid markets with
limited pricing information, and the determination of fair value
for these derivatives is inherently more difficult. Such
instruments are classified within level 3 of the fair value
hierarchy. Where the Fund does not have corroborating market
evidence to support significant model inputs and cannot verify
the model to market transactions, transaction price is initially
used as the best estimate of fair value. Accordingly, when a
pricing model is used to value such an instrument, the model is
adjusted so that the model value at inception equals the
transaction price. The valuations of these less liquid OTC
derivatives are typically based on level 1
and/or
level 2 inputs that can be observed in the market, as well
as unobservable level 3 inputs. Subsequent to initial
recognition, the Fund updates the level 1 and level 2
inputs to reflect observable market changes, with resulting
gains and losses reflected within level 3. Level 3
inputs are only changed when corroborated by evidence such as
similar market transactions, third-party pricing services
and/or
broker or dealer quotations, or other empirical market data. In
circumstances where the Fund cannot verify the model value to
market transactions, it is possible that a different valuation
model could produce a materially different estimate of fair
value. The Fund
67
QUADRIGA
SUPERFUND, L.P. SERIES A AND B
NOTES TO
FINANCIAL STATEMENTS (Continued)
attempts to avoid holding less liquid OTC derivatives. However,
once held, the market for any particular derivative contract
could become less liquid during the holding period.
The following tables summarize the valuation of the Funds
assets and liabilities by the ASC 820 fair value hierarchy as of
December 31, 2008, and September 30, 2009:
Series A:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government securities
|
|
$
|
14,216,725
|
|
|
$
|
|
|
|
$
|
14,216,725
|
|
|
$
|
|
|
Unrealized appreciation on open forward contracts
|
|
|
281,415
|
|
|
|
|
|
|
|
281,415
|
|
|
|
|
|
Futures contracts purchased
|
|
|
2,380,210
|
|
|
|
2,380,210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets Measured at Fair Value
|
|
$
|
16,878,350
|
|
|
$
|
2,380,210
|
|
|
$
|
14,498,140
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized depreciation on open forward contracts
|
|
$
|
286,401
|
|
|
$
|
|
|
|
$
|
286,401
|
|
|
$
|
|
|
Futures contracts sold
|
|
|
6,196
|
|
|
|
6,196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities Measured at Fair Value
|
|
$
|
292,597
|
|
|
$
|
6,196
|
|
|
$
|
286,401
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series B:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government securities
|
|
$
|
23,329,592
|
|
|
$
|
|
|
|
$
|
23,329,592
|
|
|
$
|
|
|
Unrealized appreciation on open forward contracts
|
|
|
762,354
|
|
|
|
|
|
|
|
762,354
|
|
|
|
|
|
Futures contracts purchased
|
|
|
6,014,780
|
|
|
|
6,014,780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets Measured at Fair Value
|
|
$
|
30,106,726
|
|
|
$
|
6,014,780
|
|
|
$
|
24,091,946
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized depreciation on open forward contracts
|
|
$
|
745,068
|
|
|
$
|
|
|
|
$
|
745,068
|
|
|
$
|
|
|
Futures contracts sold
|
|
|
150,942
|
|
|
|
150,942
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities Measured at Fair Value
|
|
$
|
896,010
|
|
|
$
|
150,942
|
|
|
$
|
745,068
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
68
QUADRIGA
SUPERFUND, L.P. SERIES A AND B
NOTES TO
FINANCIAL STATEMENTS (Continued)
Series A:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government securities
|
|
$
|
31,494,929
|
|
|
$
|
|
|
|
$
|
31,494,929
|
|
|
$
|
|
|
Unrealized appreciation on open forward contracts
|
|
|
11,138
|
|
|
|
|
|
|
|
11,138
|
|
|
|
|
|
Futures contracts purchased
|
|
|
735,529
|
|
|
|
735,529
|
|
|
|
|
|
|
|
|
|
Futures contracts sold
|
|
|
109,330
|
|
|
|
109,330
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets Measured at Fair Value
|
|
$
|
32,350,926
|
|
|
$
|
844,859
|
|
|
$
|
31,506,067
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized depreciation on open forward contracts
|
|
$
|
43,336
|
|
|
$
|
|
|
|
$
|
43,336
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities Measured at Fair Value
|
|
$
|
43,336
|
|
|
$
|
|
|
|
$
|
43,336
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series B:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government securities
|
|
$
|
54,825,911
|
|
|
$
|
|
|
|
$
|
54,825,911
|
|
|
$
|
|
|
Unrealized appreciation on open forward contracts
|
|
|
44,878
|
|
|
|
|
|
|
|
44,878
|
|
|
|
|
|
Futures contracts purchased
|
|
|
1,978,090
|
|
|
|
1,978,090
|
|
|
|
|
|
|
|
|
|
Futures contracts sold
|
|
|
407,977
|
|
|
|
407,977
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets Measured at Fair Value
|
|
$
|
57,256,856
|
|
|
$
|
2,386,067
|
|
|
$
|
54,870,789
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized depreciation on open forward contracts
|
|
$
|
163,504
|
|
|
$
|
|
|
|
$
|
163,504
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities Measured at Fair Value
|
|
$
|
163,504
|
|
|
$
|
|
|
|
$
|
163,504
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.
|
Disclosure
of derivative instruments and hedging activities
|
The Fund follows ASC 815, Disclosures about Derivative
Instruments and Hedging Activities (ASC 815).
The provisions of ASC 815 are effective for fiscal years
beginning after November 15, 2008. ASC 815 is intended to
improve financial reporting for derivative instruments by
requiring enhanced disclosure that enables investors to
understand how and why an entity uses derivatives, how
derivatives are accounted for, and how derivative instruments
affect an entitys results of operations and financial
position.
Derivative instruments held by the Fund do not qualify as
derivative instruments held as hedging instruments, as defined
in ASC 815. Instead, the Fund includes derivative instruments in
its trading activity. Per the requirements of ASC 815, the Fund
discloses the gains and losses on its trading activities for
both derivative and nonderivative instruments in the Statement
of Operations for each Series.
69
QUADRIGA
SUPERFUND, L.P. SERIES A AND B
NOTES TO
FINANCIAL STATEMENTS (Continued)
The Fund engages in the speculative trading of forward contracts
in currency and futures contracts in a wide range of
commodities, including equity markets, interest rates, food and
fiber, energy, livestock and metals. ASC 815 requires
entities to recognize all derivatives instruments as either
assets or liabilities at fair value in the statement of
financial position. Investments in forward contracts and
commodity futures contracts are recorded in the Statements of
Assets and Liabilities as unrealized appreciation or
depreciation on open forward contracts and futures contracts
purchased and futures contracts sold. Since the
derivatives held or sold by the Fund are for speculative trading
purposes, the derivative instruments are not designated as
hedging instruments under the provisions of ASC 815.
Accordingly, all realized gains and losses, as well as any
change in net unrealized gains or losses on open positions from
the preceding period, are recognized as part of the Funds
trading profits and losses in the Statements of Operations.
Superfund Capital Management believes futures and forwards
trading activity expressed as a percentage of net assets is
indicative of trading activity. Information concerning the fair
value of the Funds derivatives held long or sold short,
including information related to the volume of the Funds
derivative activity, is as follows:
Series A:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2009
|
|
|
|
|
|
|
Long Positions Gross Unrealized
|
|
|
Short Position Gross Unrealized
|
|
|
|
|
|
|
|
|
|
% of
|
|
|
|
|
|
% of
|
|
|
|
|
|
% of
|
|
|
|
|
|
% of
|
|
|
Net Unrealized
|
|
|
|
|
|
|
Net
|
|
|
|
|
|
Net
|
|
|
|
|
|
Net
|
|
|
|
|
|
Net
|
|
|
Gain (Loss) on
|
|
|
|
Gains
|
|
|
Assets
|
|
|
Losses
|
|
|
Assets
|
|
|
Gains
|
|
|
Assets
|
|
|
Losses
|
|
|
Assets
|
|
|
Open Positions
|
|
|
Foreign Exchange
|
|
$
|
245,600
|
|
|
|
0.7
|
|
|
$
|
(9,324
|
)
|
|
|
(0.0
|
)*
|
|
$
|
35,815
|
|
|
|
0.1
|
|
|
$
|
(277,077
|
)
|
|
|
(0.8
|
)
|
|
$
|
(4,986
|
)
|
Currency
|
|
|
564,185
|
|
|
|
1.6
|
|
|
|
(112
|
)
|
|
|
(0.0
|
)*
|
|
|
158,588
|
|
|
|
0.5
|
|
|
|
(11,051
|
)
|
|
|
(0.0
|
)*
|
|
|
711,610
|
|
Financial
|
|
|
1,220,494
|
|
|
|
3.5
|
|
|
|
(95,603
|
)
|
|
|
(0.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,124,891
|
|
Food & Fiber
|
|
|
107,844
|
|
|
|
0.3
|
|
|
|
(6,945
|
)
|
|
|
(0.0
|
)*
|
|
|
276,827
|
|
|
|
0.8
|
|
|
|
(35,611
|
)
|
|
|
(0.1
|
)
|
|
|
342,115
|
|
Indices
|
|
|
19,620
|
|
|
|
0.1
|
|
|
|
(32,093
|
)
|
|
|
(0.1
|
)
|
|
|
54,183
|
|
|
|
0.2
|
|
|
|
(11,160
|
)
|
|
|
(0.0
|
)*
|
|
|
30,550
|
|
Metals
|
|
|
643,700
|
|
|
|
1.8
|
|
|
|
(40,880
|
)
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
|
|
|
(443,472
|
)
|
|
|
(1.3
|
)
|
|
|
159,348
|
|
Livestock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56,650
|
|
|
|
0.2
|
|
|
|
(1,440
|
)
|
|
|
(0.0
|
)*
|
|
|
55,210
|
|
Energy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
195,033
|
|
|
|
0.6
|
|
|
|
(244,743
|
)
|
|
|
(0.7
|
)
|
|
|
(49,710
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals
|
|
$
|
2,801,443
|
|
|
|
8.0
|
|
|
$
|
(184,957
|
)
|
|
|
(0.5
|
)
|
|
$
|
777,096
|
|
|
|
2.4
|
|
|
$
|
(1,024,554
|
)
|
|
|
(2.9
|
)
|
|
$
|
(2,369,028
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A
trading results by market sector
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended September 30, 2009
|
|
|
|
|
|
|
Change in Net
|
|
|
|
|
|
|
Net Realized
|
|
|
Unrealized
|
|
|
Net Trading
|
|
|
|
Gain (Losses)
|
|
|
Gains (Losses)
|
|
|
Gains (Losses)
|
|
|
Foreign Exchange
|
|
$
|
(403,423
|
)
|
|
$
|
76,366
|
|
|
$
|
(327,057
|
)
|
Currency
|
|
|
(761,894
|
)
|
|
|
733,762
|
|
|
|
(28,132
|
)
|
Financial
|
|
|
657,336
|
|
|
|
408,426
|
|
|
|
1,065,762
|
|
Food & Fiber
|
|
|
104,660
|
|
|
|
9,777
|
|
|
|
114,437
|
|
Indices
|
|
|
(1,176,553
|
)
|
|
|
247,613
|
|
|
|
(928,940
|
)
|
Metals
|
|
|
(800,340
|
)
|
|
|
643,882
|
|
|
|
(156,458
|
)
|
Livestock
|
|
|
205,680
|
|
|
|
(68,350
|
)
|
|
|
137,330
|
|
Energy
|
|
|
601,703
|
|
|
|
(303,077
|
)
|
|
|
298,626
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net trading gains (losses)
|
|
$
|
(1,572,831
|
)
|
|
$
|
1,748,399
|
|
|
$
|
175,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70
QUADRIGA
SUPERFUND, L.P. SERIES A AND B
NOTES TO
FINANCIAL STATEMENTS (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended September 30, 2009
|
|
|
|
|
|
|
Change in Net
|
|
|
|
|
|
|
Net Realized
|
|
|
Unrealized
|
|
|
Net Trading
|
|
|
|
Gain (Losses)
|
|
|
Gains (Losses)
|
|
|
Gains (Losses)
|
|
|
Foreign Exchange
|
|
$
|
(1,103,932
|
)
|
|
$
|
27,212
|
|
|
$
|
(1,076,720
|
)
|
Currency
|
|
|
(1,836,866
|
)
|
|
|
572,449
|
|
|
|
(1,264,417
|
)
|
Financial
|
|
|
(341,791
|
)
|
|
|
615,063
|
|
|
|
273,272
|
|
Food & Fiber
|
|
|
(578,613
|
)
|
|
|
349,080
|
|
|
|
(229,533
|
)
|
Indices
|
|
|
(1,781,985
|
)
|
|
|
14,781
|
|
|
|
(1,767,204
|
)
|
Metals
|
|
|
(1,320,104
|
)
|
|
|
84,213
|
|
|
|
(1,235,891
|
)
|
Livestock
|
|
|
185,040
|
|
|
|
31,810
|
|
|
|
216,850
|
|
Energy
|
|
|
(1,788,672
|
)
|
|
|
(138,241
|
)
|
|
|
(1,926,913
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net trading gains (losses)
|
|
$
|
(8,566,923
|
)
|
|
$
|
1,556,367
|
|
|
$
|
(7,010,556
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series B:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2009
|
|
|
|
|
|
|
Long Positions Gross Unrealized
|
|
|
Short Position Gross Unrealized
|
|
|
|
|
|
|
|
|
|
% of
|
|
|
|
|
|
% of
|
|
|
|
|
|
% of
|
|
|
|
|
|
% of
|
|
|
Net Unrealized
|
|
|
|
|
|
|
Net
|
|
|
|
|
|
Net
|
|
|
|
|
|
Net
|
|
|
|
|
|
Net
|
|
|
Gain (Loss) on
|
|
|
|
Gains
|
|
|
Assets
|
|
|
Losses
|
|
|
Assets
|
|
|
Gains
|
|
|
Assets
|
|
|
Losses
|
|
|
Assets
|
|
|
Open Positions
|
|
|
Foreign Exchange
|
|
$
|
667,147
|
|
|
|
1.1
|
|
|
$
|
(28,146
|
)
|
|
|
(0.0
|
)*
|
|
$
|
95,207
|
|
|
|
0.2
|
|
|
$
|
(716,922
|
)
|
|
|
(1.2
|
)
|
|
$
|
17,286
|
|
Currency
|
|
|
1,420,136
|
|
|
|
2.4
|
|
|
|
(662
|
)
|
|
|
(0.0
|
)*
|
|
|
397,463
|
|
|
|
0.7
|
|
|
|
(28,730
|
)
|
|
|
(0.0
|
)*
|
|
|
1,788,207
|
|
Financial
|
|
|
3,084,631
|
|
|
|
5.2
|
|
|
|
(244,880
|
)
|
|
|
(0.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,839,751
|
|
Food & Fiber
|
|
|
285,632
|
|
|
|
0.5
|
|
|
|
(20,130
|
)
|
|
|
(0.0
|
)*
|
|
|
728,163
|
|
|
|
1.2
|
|
|
|
(88,669
|
)
|
|
|
(0.1
|
)
|
|
|
904,996
|
|
Indices
|
|
|
55,046
|
|
|
|
0.1
|
|
|
|
(79,008
|
)
|
|
|
(0.1
|
)
|
|
|
141,669
|
|
|
|
0.2
|
|
|
|
(32,476
|
)
|
|
|
(0.1
|
)
|
|
|
85,231
|
|
Metals
|
|
|
1,619,070
|
|
|
|
2.7
|
|
|
|
(105,055
|
)
|
|
|
(0.2
|
)
|
|
|
|
|
|
|
|
|
|
|
(1,248,557
|
)
|
|
|
(2.1
|
)
|
|
|
265,458
|
|
Livestock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
141,120
|
|
|
|
0.2
|
|
|
|
(1,650
|
)
|
|
|
(0.0
|
)*
|
|
|
139,470
|
|
Energy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
528,568
|
|
|
|
0.9
|
|
|
|
(687,843
|
)
|
|
|
(1.2
|
)
|
|
|
(159,275
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals
|
|
$
|
7,131,662
|
|
|
|
12.0
|
|
|
$
|
(477,881
|
)
|
|
|
(0.7
|
)
|
|
$
|
2,032,190
|
|
|
|
3.4
|
|
|
$
|
(2,804,847
|
)
|
|
|
(4.7
|
)
|
|
$
|
5,881,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
71
QUADRIGA
SUPERFUND, L.P. SERIES A AND B
NOTES TO
FINANCIAL STATEMENTS (Continued)
Series B
trading results by market sector
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended September 30, 2009
|
|
|
|
|
|
|
Change in Net
|
|
|
|
|
|
|
Net Realized
|
|
|
Unrealized
|
|
|
Net Trading
|
|
|
|
Gain (Losses)
|
|
|
Gains (Losses)
|
|
|
Gains (Losses)
|
|
|
Foreign Exchange
|
|
$
|
(1,093,989
|
)
|
|
$
|
235,703
|
|
|
$
|
(858,286
|
)
|
Currency
|
|
|
(2,030,970
|
)
|
|
|
1,844,372
|
|
|
|
(186,598
|
)
|
Financial
|
|
|
1,713,401
|
|
|
|
946,775
|
|
|
|
2,660,176
|
|
Food & Fiber
|
|
|
272,848
|
|
|
|
26,738
|
|
|
|
299,586
|
|
Indices
|
|
|
(3,164,392
|
)
|
|
|
671,663
|
|
|
|
(2,492,729
|
)
|
Metals
|
|
|
(2,148,270
|
)
|
|
|
1,554,573
|
|
|
|
(593,697
|
)
|
Livestock
|
|
|
529,620
|
|
|
|
(183,800
|
)
|
|
|
345,820
|
|
Energy
|
|
|
1,462,423
|
|
|
|
(831,336
|
)
|
|
|
631,087
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net trading gains (losses)
|
|
$
|
(4,459,329
|
)
|
|
$
|
4,264,688
|
|
|
$
|
(194,641
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended September 30, 2009
|
|
|
|
|
|
|
Change in Net
|
|
|
|
|
|
|
Net Realized
|
|
|
Unrealized
|
|
|
Net Trading
|
|
|
|
Gain (Losses)
|
|
|
Gains (Losses)
|
|
|
Gains (Losses)
|
|
|
Foreign Exchange
|
|
$
|
(3,376,565
|
)
|
|
$
|
135,912
|
|
|
$
|
(3,240,653
|
)
|
Currency
|
|
|
(5,145,643
|
)
|
|
|
1,404,523
|
|
|
|
(3,741,120
|
)
|
Financial
|
|
|
(873,957
|
)
|
|
|
1,334,984
|
|
|
|
461,027
|
|
Food & Fiber
|
|
|
(1,850,629
|
)
|
|
|
958,032
|
|
|
|
(892,597
|
)
|
Indices
|
|
|
(5,281,516
|
)
|
|
|
101,626
|
|
|
|
(5,179,890
|
)
|
Metals
|
|
|
(3,973,282
|
)
|
|
|
82,453
|
|
|
|
(3,890,829
|
)
|
Livestock
|
|
|
500,040
|
|
|
|
75,360
|
|
|
|
575,400
|
|
Energy
|
|
|
(5,264,119
|
)
|
|
|
(479,207
|
)
|
|
|
(5,743,326
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net trading gains (losses)
|
|
$
|
(25,265,671
|
)
|
|
$
|
3,613,683
|
|
|
$
|
(21,651,988
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Due from brokers consists of proceeds from securities sold.
Amounts due from brokers may be restricted to the extent that
they serve as deposits for securities sold short. Amounts due to
brokers, if any, represent margin borrowings that are
collateralized by certain securities.
In the normal course of business, all of the Funds
marketable securities transactions, money balances and
marketable security positions are transacted with brokers. The
Fund is subject to credit risk to the extent any broker with
whom it conducts business is unable to fulfill contractual
obligations on its behalf. Superfund Capital Management monitors
the financial condition of such brokers and does not anticipate
any losses from these counterparties.
|
|
6.
|
Allocation
of net profits and losses
|
In accordance with the Funds Third Amended and Restated
Limited Partnership Agreement (the Limited Partnership
Agreement), net profits and losses of the Fund are
allocated to partners according to their respective interests in
the Fund as of the beginning of each month.
Advance subscriptions represent cash received prior to the
balance sheet date for subscriptions of the subsequent month and
do not participate in the earnings of the Fund until the
following month.
72
QUADRIGA
SUPERFUND, L.P. SERIES A AND B
NOTES TO
FINANCIAL STATEMENTS (Continued)
|
|
7.
|
Related
party transactions
|
Superfund Capital Management shall be paid a management fee
equal to one-twelfth of 1.85% of month end net assets (1.85% per
annum), ongoing offering expenses equal to one-twelfth of 1% of
month end net assets (1% per annum), not to exceed the amount of
actual expenses incurred, and monthly operating expenses equal
to one-twelfth of 0.15% of month end net assets (0.15% per
annum). In accordance with the Prospectus dated February 9,
2009, included within the Registration Statement on
Form S-1
(File
No. 333-136804
as subsequently supplemented), Superfund USA, Inc., an entity
related to Superfund Capital Management by common ownership,
shall be paid selling commissions equal to 4% of the month-end
net asset value per Unit (one-twelfth of 4% per month). However,
the maximum cumulative selling commission per Unit is limited to
10% of the initial public offering price of such Unit.
Superfund Capital Management will also be paid a monthly
performance fee equal to 25% of the new appreciation without
respect to interest income. Trading losses will be carried
forward and no further performance fee may be paid until the
prior losses have been recovered.
Financial highlights for the period January 1 through September
30 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
|
Series A
|
|
|
Series B
|
|
|
Series A
|
|
|
Series B
|
|
|
Total return before incentive fees*
|
|
|
(23.2
|
)%
|
|
|
(34.3
|
)%
|
|
|
18.2
|
%
|
|
|
25.3
|
%
|
Incentive fees*
|
|
|
0.0
|
%
|
|
|
0.03
|
%
|
|
|
5.5
|
%
|
|
|
9.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total return after incentive fees*
|
|
|
(23.2
|
)%
|
|
|
(34.6
|
)%
|
|
|
12.7
|
%
|
|
|
15.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to average partners capital**
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses before incentive fees
|
|
|
8.6
|
%
|
|
|
9.5
|
%
|
|
|
8.6
|
%
|
|
|
10.2
|
%
|
Incentive fees
|
|
|
0.0
|
%
|
|
|
0.7
|
%
|
|
|
3.8
|
%
|
|
|
8.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
8.6
|
%
|
|
|
10.2
|
%
|
|
|
12.4
|
%
|
|
|
19.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss before incentive fees
|
|
|
(8.5
|
)%
|
|
|
(9.4
|
)%
|
|
|
(6.3
|
)%
|
|
|
(8.2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value per unit, beginning of period
|
|
$
|
1,932.30
|
|
|
|
2,600.96
|
|
|
$
|
1,486.44
|
|
|
$
|
1,774.69
|
|
Net investment loss
|
|
|
(106.20
|
)
|
|
|
(154.92
|
)
|
|
|
(147.95
|
)
|
|
|
(309.47
|
)
|
Net gain (loss) on investments
|
|
|
(341.18
|
)
|
|
|
(746.09
|
)
|
|
|
336.81
|
|
|
|
587.98
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value per unit, end of period
|
|
$
|
1,484.92
|
|
|
$
|
1,699.95
|
|
|
$
|
1,675.30
|
|
|
$
|
2,053.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Not annualized |
|
** |
|
Annualized, except for incentive fees |
73
QUADRIGA
SUPERFUND, L.P. SERIES A AND B
NOTES TO
FINANCIAL STATEMENTS (Continued)
Financial highlights for the period July 1 through September 30
are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
|
Series A
|
|
|
Series B
|
|
|
Series A
|
|
|
Series B
|
|
|
Total return before incentive fees*
|
|
|
(1.9
|
)%
|
|
|
(3.1
|
)%
|
|
|
(13.9
|
)%
|
|
|
(20.8
|
)%
|
Incentive fees*
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total return after incentive fees*
|
|
|
(1.9
|
)%
|
|
|
(3.1
|
)%
|
|
|
(13.9
|
)%
|
|
|
(20.8
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to average partners capital**
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses before incentive fees
|
|
|
9.1
|
%
|
|
|
10.2
|
%
|
|
|
8.2
|
%
|
|
|
9.1
|
%
|
Incentive fees
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
9.1
|
%
|
|
|
10.2
|
%
|
|
|
8.2
|
%
|
|
|
9.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss before incentive fees
|
|
|
(9.0
|
)%
|
|
|
(10.2
|
)%
|
|
|
(6.4
|
)%
|
|
|
(7.3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value per unit, beginning of period
|
|
$
|
1,514.39
|
|
|
$
|
1,753.71
|
|
|
$
|
1,945.95
|
|
|
$
|
2,593.32
|
|
Net investment loss
|
|
|
(33.14
|
)
|
|
|
(42.38
|
)
|
|
|
(28.05
|
)
|
|
|
(39.52
|
)
|
Net loss on investments
|
|
|
3.67
|
|
|
|
(11.38
|
)
|
|
|
(242.60
|
)
|
|
|
(500.60
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value per unit, end of period
|
|
$
|
1,484.92
|
|
|
$
|
1,699.95
|
|
|
$
|
1,675.30
|
|
|
$
|
2,053.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Not annualized |
|
** |
|
Annualized, except for incentive fees |
Financial highlights are calculated for each series taken as a
whole. An individual partners return, per unit data, and
ratios may vary based on the timing of capital transactions.
|
|
9.
|
Financial
instrument risk
|
In the normal course of its business, the Fund is party to
financial instruments with off-balance sheet risk, including
derivative financial instruments and derivative commodity
instruments. The term off balance sheet risk refers
to an unrecorded potential liability that, even though it does
not appear on the balance sheet, may result in a future
obligation or loss. These financial instruments may include
forwards, futures and options, whose values are based upon an
underlying asset, index, or reference rate, and generally
represent future commitments to exchange currencies or cash
flows, to purchase or sell other financial instruments at
specific terms at specific future dates, or, in the case of
derivative commodity instruments, to have a reasonable
possibility to be settled in cash, through physical delivery or
with another financial instrument. These instruments may be
traded on an exchange or OTC. Exchange-traded instruments are
standardized and include futures and certain option contracts.
OTC contracts are negotiated between contracting parties and
include forwards and certain options. Each of these instruments
is subject to various risks similar to those related to the
underlying financial instruments including market and credit
risk. In general, the risks associated with OTC contracts are
greater than those associated with exchange-traded instruments
because of the greater risk of default by the counterparty to an
OTC contract.
For Series A, gross unrealized gains and losses related to
exchange traded futures were $3,297,124 and ($923,110),
respectively, and gross unrealized gains and losses related to
non-exchange traded forwards were $281,415 and ($286,401),
respectively, at September 30, 2009.
For Series B, gross unrealized gains and losses related to
exchange traded futures were $8,401,498 and ($2,537,660),
respectively, and gross unrealized gains and losses related to
non-exchange traded forwards were $762,354 and ($745,068),
respectively, at September 30, 2009.
74
QUADRIGA
SUPERFUND, L.P. SERIES A AND B
NOTES TO
FINANCIAL STATEMENTS (Continued)
Market risk is the potential for changes in the value of the
financial instruments traded by the Fund due to market changes,
including interest and foreign exchange rate movements and
fluctuations in commodity or security prices. In entering into
these contracts, there exists a market risk that such contracts
may be significantly influenced by conditions, such as interest
rate volatility, resulting in such contracts being less
valuable. If the markets should move against all of the futures
interest positions at the same time, and Superfund Capital
Management was unable to offset such positions, the Fund could
experience substantial losses.
Credit risk is the possibility that a loss may occur due to the
failure of a counterparty to perform according to the terms of a
contract. Credit risk with respect to exchange-traded
instruments is reduced to the extent that an exchange or
clearing organization acts as a counterparty to the
transactions. The Funds risk of loss in the event of
counterparty default is typically limited to the amounts
recognized in the statements of assets and liabilities and not
represented by the contract or notional amounts of the
instruments. As the Funds assets are held in segregated
accounts with futures commission merchants, the Fund has credit
risk and concentration risk. The Funds futures commission
merchants are currently ADM Investor Services, Inc., Barclays
Capital Inc., Newedge Alternative Strategies, Inc., and
Rosenthal Collins Group LLC.
Superfund Capital Management monitors and controls the
Funds risk exposure on a daily basis through financial,
credit and risk management monitoring systems, and accordingly
believes that it has effective procedures for evaluating and
limiting the credit and market risks to which the Fund is
subject. These monitoring systems allow Superfund Capital
Management to statistically analyze actual trading results with
risk adjusted performance indicators and correlation statistics.
In addition, on-line monitoring systems provide account analysis
of futures and forward positions by sector, margin requirements,
gain and loss transactions, and collateral positions.
The majority of these futures and forwards mature within one
year of September 30, 2009. However, due to the nature of
the Funds business, these instruments may not be held to
maturity.
|
|
10.
|
Subscriptions
and redemptions
|
Investors must submit subscriptions at least five business days
prior to the applicable month-end closing date and they will be
accepted once payments are received and cleared. All
subscriptions funds are required to be promptly transmitted to
HSBC Bank USA, as escrow agent. Subscriptions must be accepted
or rejected by Superfund Capital Management within five business
days of receipt, and the settlement date for the deposit of
subscription funds in escrow must be within five business days
of acceptance. No fees or costs will be assessed on any
subscription while held in escrow, irrespective of whether the
subscription is accepted or subscription funds returned.
A limited partner of a Series may request any or all of his
investment in such Series be redeemed by such Series at the net
asset value of a Unit within such Series as of the end of the
month, subject to a minimum redemption of $1,000 and subject
further to such limited partner having an investment in such
Series, after giving effect to the requested redemption, at
least equal to the minimum initial investment amount of $5,000.
Limited partners must transmit a written request of such
redemption to Superfund Capital Management not less than five
business days prior to the end of the month (or such shorter
period as permitted by Superfund Capital Management) as of which
redemption is to be effective. Redemptions will generally be
paid within 20 days after the effective date of the
redemption. However, in special circumstances, including, but
not limited to, inability to liquidate dealers positions
as of a redemption date or default or delay in payments due to
each Series from clearing brokers, banks or other persons or
entities, each Series may in turn delay payment to persons
requesting redemption of the proportionate part of the net
assets of each Series represented by the sums that are the
subject of such default or delay. The Funds prospectus
provides if the net asset value per Unit within a Series
as of the end of any business day declines by 50% or more from
either the prior year-end or the prior month-end Unit value of
such Series, Superfund Capital Management will suspend trading
activities, notify all Limited Partners within such Series of
the relevant facts within seven business days and declare a
special redemption period.
75
QUADRIGA
SUPERFUND, L.P. SERIES A AND B
NOTES TO
FINANCIAL STATEMENTS (Continued)
Superfund Capital Management has evaluated the impact of all
subsequent events on the Fund through November 16, 2009,
the date the financial statements were issued, and has
determined that there were no subsequent events requiring
recognition or disclosure in the financial statements other than
the following disclosure:
As discussed in footnote 10, if the net asset value per Unit
within a Series as of the end of any business day declines by
50% or more from either the prior year-end or the prior
month-end Unit value of such Series, Superfund Capital
Management will suspend trading activities, notify all Limited
Partners within such Series of the relevant facts within seven
business day and declare a special redemption period. Superfund
Capital Management estimated that as of November 16, 2009,
the net asset value per unit was $1,536 representing a decline
of 40.94% since the prior year-end.
76
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Partners of
Quadriga Superfund, L.P. Series A and
Series B:
We have audited the accompanying statements of assets and
liabilities of Quadriga Superfund, L.P.
Series A and Series B (the
Fund), including the condensed schedules of
investments, as of December 31, 2008 and 2007, and the
related statements of operations, changes in net assets, and
cash flows for each of the three years in the period then ended.
These financial statements are the responsibility of the
Funds management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. The Fund is not required to have,
nor were we engaged to perform, an audit of its internal control
over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Funds internal control over
financial reporting. Accordingly, we express no such opinion. An
audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of the Fund as of December 31, 2008 and 2007, and the
results of its operations and its cash flows for each of the
three years in the period then ended, in conformity with
accounting principles generally accepted in the United States of
America.
/s/ DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
March 25, 2009
77
QUADRIGA
SUPERFUND, L.P. SERIES A
|
|
|
|
|
|
|
|
|
|
|
December 31, 2008
|
|
|
December 31, 2007
|
|
|
ASSETS
|
US Government securities, at fair value (amortized cost
$31,494,929 and $55,219,759 as of December 31, 2008 and
December 31, 2007, respectively)
|
|
$
|
31,494,929
|
|
|
$
|
55,219,759
|
|
Due from brokers
|
|
|
4,049,967
|
|
|
|
5,505,137
|
|
Unrealized appreciation on open forward contracts
|
|
|
11,138
|
|
|
|
229,714
|
|
Futures contracts purchased
|
|
|
735,529
|
|
|
|
366,012
|
|
Futures contracts sold
|
|
|
109,330
|
|
|
|
758,252
|
|
Cash
|
|
|
810,576
|
|
|
|
114,554
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
37,211,469
|
|
|
|
62,193,428
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
Unrealized depreciation on open forward contracts
|
|
|
43,336
|
|
|
|
918,468
|
|
Redemptions payable
|
|
|
1,714,573
|
|
|
|
2,895,673
|
|
Due to affiliate
|
|
|
300,000
|
|
|
|
133,276
|
|
Fees payable
|
|
|
181,226
|
|
|
|
311,503
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
2,239,135
|
|
|
|
4,258,920
|
|
|
|
|
|
|
|
|
|
|
NET ASSETS
|
|
$
|
34,972,334
|
|
|
$
|
57,934,508
|
|
|
|
|
|
|
|
|
|
|
Number of Units
|
|
|
18,098.830
|
|
|
|
38,975.348
|
|
Net asset value per Unit
|
|
$
|
1,932.30
|
|
|
$
|
1,486.44
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements
78
QUADRIGA
SUPERFUND, L.P. SERIES A
December 31,
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
|
|
|
|
|
|
|
Face Value
|
|
|
Net Assets
|
|
|
Fair Value
|
|
Debt Securities United States, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
United States Treasury Bills due February 26, 2009
(amortized cost $31,494,929), securities are held in margin
accounts as collateral for open futures and forwards
|
|
$
|
31,500,000
|
|
|
|
90.1
|
%
|
|
$
|
31,494,929
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward contracts, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized appreciation on forward contracts
Currency
|
|
|
|
|
|
|
0.0
|
%
|
|
$
|
11,138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total unrealized appreciation on forward contracts
|
|
|
|
|
|
|
0.0
|
*
|
|
|
11,138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized depreciation on forward contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
(43,336
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total unrealized depreciation on forward contracts
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
(43,336
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total forward contracts, at fair value
|
|
|
|
|
|
|
(0.1
|
)%
|
|
$
|
(32,198
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts Purchased
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
0.3
|
%
|
|
$
|
101,136
|
|
Financial
|
|
|
|
|
|
|
1.5
|
|
|
|
508,908
|
|
Food & Fiber
|
|
|
|
|
|
|
0.1
|
|
|
|
33,914
|
|
Indices
|
|
|
|
|
|
|
0.0
|
*
|
|
|
22,836
|
|
Metals
|
|
|
|
|
|
|
0.2
|
|
|
|
68,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures contracts purchased
|
|
|
|
|
|
|
2.1
|
|
|
|
735,529
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts Sold
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
0.1
|
|
|
|
38,025
|
|
Energy
|
|
|
|
|
|
|
0.2
|
|
|
|
88,531
|
|
Financial
|
|
|
|
|
|
|
0.0
|
*
|
|
|
919
|
|
Food & Fiber
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
(40,878
|
)
|
Indices
|
|
|
|
|
|
|
(0.0
|
)*
|
|
|
(7,067
|
)
|
Livestock
|
|
|
|
|
|
|
0.1
|
|
|
|
23,400
|
|
Metals
|
|
|
|
|
|
|
0.0
|
*
|
|
|
6,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures contracts sold
|
|
|
|
|
|
|
0.3
|
|
|
|
109,330
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures contracts, at fair value
|
|
|
|
|
|
|
2.4
|
%
|
|
$
|
844,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures and forward contracts by country composition
|
|
|
|
|
|
|
|
|
|
|
|
|
European Monetary Union
|
|
|
|
|
|
|
0.4
|
%
|
|
$
|
153,538
|
|
Great Britain
|
|
|
|
|
|
|
0.3
|
|
|
|
110,392
|
|
United States
|
|
|
|
|
|
|
1.1
|
|
|
|
369,143
|
|
Other
|
|
|
|
|
|
|
0.5
|
|
|
|
179,588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures and forward contracts by country
|
|
|
|
|
|
|
2.3
|
%
|
|
$
|
812,661
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Due to rounding
See accompanying notes to financial statements
79
QUADRIGA
SUPERFUND, L.P. SERIES A
December 31,
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
|
|
|
|
|
|
|
Face Value
|
|
|
Net Assets
|
|
|
Fair Value
|
|
|
Debt Securities United States, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
United States Treasury Bills due February 28, 2008
(amortized cost $55,219,759), securities are held in margin
accounts as collateral for open futures and forwards
|
|
$
|
55,500,000
|
|
|
|
95.3
|
%
|
|
$
|
55,219,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward contracts, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized appreciation on forward contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
Currencies
|
|
|
|
|
|
|
0.4
|
%
|
|
$
|
229,714
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total unrealized appreciation on forward contracts
|
|
|
|
|
|
|
0.4
|
|
|
|
229,714
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized depreciation on forward contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
Currencies
|
|
|
|
|
|
|
(1.6
|
)
|
|
|
(918,468
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total unrealized depreciation on forward contracts
|
|
|
|
|
|
|
(1.6
|
)
|
|
|
(918,468
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total forward contracts, at fair value
|
|
|
|
|
|
|
(1.2
|
)%
|
|
$
|
(688,754
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts Purchased
|
|
|
|
|
|
|
|
|
|
|
|
|
Currencies
|
|
|
|
|
|
|
(0.3
|
)%
|
|
$
|
(153,958
|
)
|
Energy
|
|
|
|
|
|
|
0.6
|
|
|
|
326,355
|
|
Financial
|
|
|
|
|
|
|
0.2
|
|
|
|
135,282
|
|
Food & Fiber
|
|
|
|
|
|
|
0.0
|
*
|
|
|
12,542
|
|
Indices
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
(77,845
|
)
|
Livestock
|
|
|
|
|
|
|
(0.0
|
)*
|
|
|
(3,100
|
)
|
Metals
|
|
|
|
|
|
|
0.2
|
|
|
|
126,736
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures contracts purchased
|
|
|
|
|
|
|
0.6
|
|
|
|
366,012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts Sold
|
|
|
|
|
|
|
|
|
|
|
|
|
Currencies
|
|
|
|
|
|
|
(0.0
|
)*
|
|
|
(6,020
|
)
|
Energy
|
|
|
|
|
|
|
0.0
|
*
|
|
|
31,270
|
|
Financial
|
|
|
|
|
|
|
0.5
|
|
|
|
269,688
|
|
Food & Fiber
|
|
|
|
|
|
|
(0.0
|
)*
|
|
|
(20,205
|
)
|
Livestock
|
|
|
|
|
|
|
0.1
|
|
|
|
85,950
|
|
Metals
|
|
|
|
|
|
|
0.7
|
|
|
|
397,569
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures contracts sold
|
|
|
|
|
|
|
1.3
|
|
|
|
758,252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures contracts, at fair value
|
|
|
|
|
|
|
1.9
|
%
|
|
$
|
1,124,264
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures and forward contracts by country composition
|
|
|
|
|
|
|
|
|
|
|
|
|
European Monetary Union
|
|
|
|
|
|
|
(0.3
|
)%
|
|
$
|
(160,775
|
)
|
Japan
|
|
|
|
|
|
|
0.5
|
|
|
|
329,554
|
|
United States
|
|
|
|
|
|
|
1.3
|
|
|
|
756,824
|
|
Other
|
|
|
|
|
|
|
(0.8
|
)
|
|
|
(490,093
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures and forward contracts by country
|
|
|
|
|
|
|
0.7
|
%
|
|
$
|
435,510
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Due to rounding
See accompanying notes to financial statements
80
QUADRIGA
SUPERFUND, L.P. SERIES A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
Investment income, interest
|
|
$
|
917,244
|
|
|
$
|
2,882,259
|
|
|
$
|
3,010,369
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive fee
|
|
|
1,786,681
|
|
|
|
|
|
|
|
|
|
Management fee
|
|
|
813,892
|
|
|
|
1,165,114
|
|
|
|
1,237,907
|
|
Ongoing offering expenses
|
|
|
439,942
|
|
|
|
395,190
|
|
|
|
669,139
|
|
Operating expenses
|
|
|
65,991
|
|
|
|
94,469
|
|
|
|
100,371
|
|
Selling commission
|
|
|
1,759,767
|
|
|
|
2,519,166
|
|
|
|
2,676,556
|
|
Brokerage commissions
|
|
|
615,631
|
|
|
|
1,535,369
|
|
|
|
1,953,214
|
|
Other
|
|
|
17,006
|
|
|
|
4,950
|
|
|
|
5,254
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
5,498,910
|
|
|
|
5,714,258
|
|
|
|
6,642,441
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
|
(4,581,666
|
)
|
|
|
(2,831,999
|
)
|
|
|
(3,632,072
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized and unrealized gain (loss) on investments
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gain on futures and forward contracts
|
|
|
17,288,029
|
|
|
|
8,343,543
|
|
|
|
7,720,119
|
|
Net change in unrealized appreciation (depreciation) on futures
and forward contracts
|
|
|
377,151
|
|
|
|
(6,799,351
|
)
|
|
|
3,535,145
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain on investments
|
|
|
17,665,180
|
|
|
|
1,544,192
|
|
|
|
11,255,264
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase from payments by affiliate
|
|
|
|
|
|
|
|
|
|
|
426,879
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets from operations
|
|
$
|
13,083,514
|
|
|
$
|
(1,287,807
|
)
|
|
$
|
8,050,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets from operations per unit
(based upon weighted average number of units outstanding during
period)
|
|
$
|
523.26
|
|
|
$
|
(28.48
|
)
|
|
$
|
166.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets from operations per unit
(based upon change in net asset value per unit during period)
|
|
$
|
445.86
|
|
|
$
|
(13.76
|
)
|
|
$
|
171.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements
81
QUADRIGA
SUPERFUND, L.P. SERIES A
Years ended December 31, 2008, 2007, and 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
Increase (decrease) in net assets from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
$
|
(4,581,666
|
)
|
|
$
|
(2,831,999
|
)
|
|
$
|
(3,632,072
|
)
|
Net realized gain on futures and forward contracts
|
|
|
17,288,029
|
|
|
|
8,343,543
|
|
|
|
7,720,119
|
|
Net change in unrealized appreciation (depreciation) on futures
and forward contracts
|
|
|
377,151
|
|
|
|
(6,799,351
|
)
|
|
|
3,535,145
|
|
Net increase from payment by affiliate
|
|
|
|
|
|
|
|
|
|
|
426,879
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets from operations
|
|
|
13,083,514
|
|
|
|
(1,287,807
|
)
|
|
|
8,050,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital share transactions
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares
|
|
|
6,800,873
|
|
|
|
3,858,253
|
|
|
|
17,399,062
|
|
Redemption of shares
|
|
|
(42,846,561
|
)
|
|
|
(16,941,099
|
)
|
|
|
(12,566,020
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets from capital share
transactions
|
|
|
(36,045,688
|
)
|
|
|
(13,082,846
|
)
|
|
|
4,833,042
|
|
Net increase (decrease) in net assets
|
|
|
(22,962,174
|
)
|
|
|
(14,370,653
|
)
|
|
|
12,883,113
|
|
Net assets, beginning of year
|
|
|
57,934,508
|
|
|
|
72,305,161
|
|
|
|
59,422,048
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of year
|
|
$
|
34,972,334
|
|
|
$
|
57,934,508
|
|
|
$
|
72,305,161
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units, beginning of year
|
|
|
38,975.348
|
|
|
|
48,197.014
|
|
|
|
44,734.441
|
|
Issuance of units
|
|
|
3,874.666
|
|
|
|
2,795.381
|
|
|
|
12,569.711
|
|
Redemption of units
|
|
|
(24,751.184
|
)
|
|
|
(12,017.047
|
)
|
|
|
(9,107.138
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units, end of year
|
|
|
18,098.830
|
|
|
|
38,975.348
|
|
|
|
48,197.014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
82
QUADRIGA
SUPERFUND, L.P. SERIES A
Years ended December 31, 2008, 2007 and 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets from operations
|
|
$
|
13,083,514
|
|
|
$
|
(1,287,807
|
)
|
|
$
|
8,050,071
|
|
Adjustments to reconcile net increase (decrease) in net assets
from operations to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross purchases of U.S. government securities
|
|
|
(155,825,083
|
)
|
|
|
(235,232,002
|
)
|
|
|
(186,849,080
|
)
|
Gross sales of U.S. government securities
|
|
|
180,364,661
|
|
|
|
240,469,358
|
|
|
|
185,042,641
|
|
Amortization of discounts and premiums
|
|
|
(814,748
|
)
|
|
|
(2,624,771
|
)
|
|
|
(2,674,417
|
)
|
Due from brokers
|
|
|
1,455,170
|
|
|
|
4,447,077
|
|
|
|
(7,246,367
|
)
|
Due to affiliate
|
|
|
166,724
|
|
|
|
133,276
|
|
|
|
|
|
Unrealized appreciation on open forward contracts
|
|
|
218,576
|
|
|
|
1,326,543
|
|
|
|
1,177,313
|
|
Futures contracts purchased
|
|
|
(369,517
|
)
|
|
|
327,908
|
|
|
|
1,417,072
|
|
Unrealized depreciation on open forward contracts
|
|
|
(875,132
|
)
|
|
|
(59,004
|
)
|
|
|
(260,312
|
)
|
Unrealized depreciation on open swap contracts
|
|
|
|
|
|
|
|
|
|
|
(193,624
|
)
|
Futures contracts sold
|
|
|
648,922
|
|
|
|
5,203,904
|
|
|
|
(5,675,594
|
)
|
Fees payable
|
|
|
(130,277
|
)
|
|
|
(127,732
|
)
|
|
|
82,207
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
|
37,922,810
|
|
|
|
12,576,750
|
|
|
|
(7,130,090
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscriptions, net of change in advance subscriptions
|
|
|
6,800,873
|
|
|
|
3,580,753
|
|
|
|
16,809,669
|
|
Redemptions, net of redemptions payable
|
|
|
(44,027,661
|
)
|
|
|
(16,598,382
|
)
|
|
|
(10,013,064
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
(37,226,788
|
)
|
|
|
(13,017,629
|
)
|
|
|
6,796,605
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
|
|
|
696,022
|
|
|
|
(440,879
|
)
|
|
|
(333,485
|
)
|
Cash, beginning of year
|
|
|
114,554
|
|
|
|
555,433
|
|
|
|
888,918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, end of year
|
|
$
|
810,576
|
|
|
$
|
114,554
|
|
|
$
|
555,433
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
2006 subscriptions received in 2005
|
|
|
|
|
|
|
|
|
|
$
|
866,893
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007 subscriptions received in 2006
|
|
|
|
|
|
$
|
277,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 subscriptions received in 2007
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redemptions payable
|
|
$
|
1,714,573
|
|
|
$
|
2,895,673
|
|
|
$
|
2,552,956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
83
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
ASSETS
|
US Government securities, at fair value, (amortized cost
$54,825,911 and $24,013,695 as of December 31, 2008 and
December 31, 2007, respectively)
|
|
$
|
54,825,911
|
|
|
$
|
24,013,695
|
|
Due from brokers
|
|
|
5,961,708
|
|
|
|
3,513,469
|
|
Due from affiliate
|
|
|
|
|
|
|
133,276
|
|
Unrealized appreciation on open forward contracts
|
|
|
44,878
|
|
|
|
156,446
|
|
Futures contracts purchased
|
|
|
1,978,090
|
|
|
|
233,786
|
|
Futures contracts sold
|
|
|
407,977
|
|
|
|
501,945
|
|
Cash
|
|
|
668,701
|
|
|
|
73,375
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
63,887,265
|
|
|
|
28,625,992
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
Unrealized depreciation on open forward contracts
|
|
|
163,504
|
|
|
|
607,349
|
|
Redemptions payable
|
|
|
2,767,509
|
|
|
|
2,092,474
|
|
Fees payable
|
|
|
339,201
|
|
|
|
71,022
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
3,270,214
|
|
|
|
2,770,845
|
|
|
|
|
|
|
|
|
|
|
NET ASSETS
|
|
$
|
60,617,051
|
|
|
$
|
25,855,147
|
|
|
|
|
|
|
|
|
|
|
Number of Units
|
|
|
23,305.633
|
|
|
|
14,568.812
|
|
Net asset value per Unit
|
|
$
|
2,600.96
|
|
|
$
|
1,774.69
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
84
QUADRIGA
SUPERFUND, L.P. SERIES B
December 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
|
|
|
|
|
|
|
Face Value
|
|
|
Net Assets
|
|
|
Fair Value
|
|
Debt Securities United States, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
United States Treasury Bills due February 26, 2009
(amortized cost $54,825,911), securities are held in margin
accounts as collateral for open futures and forwards
|
|
$
|
54,835,000
|
|
|
|
90.4
|
%
|
|
$
|
54,825,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward contracts, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized appreciation on forward contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
0.1
|
%
|
|
$
|
44,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total unrealized appreciation on forward contracts
|
|
|
|
|
|
|
0.1
|
|
|
|
44,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized depreciation on forward contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
(0.3
|
)
|
|
|
(163,504
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total unrealized depreciation on forward contracts
|
|
|
|
|
|
|
(0.3
|
)
|
|
|
(163,504
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total forward contracts, at fair value
|
|
|
|
|
|
|
(0.2
|
)%
|
|
$
|
(118,626
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures contracts, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures contracts purchased
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
0.5
|
%
|
|
$
|
282,349
|
|
Financial
|
|
|
|
|
|
|
2.5
|
|
|
|
1,535,102
|
|
Food & Fiber
|
|
|
|
|
|
|
0.2
|
|
|
|
91,596
|
|
Indices
|
|
|
|
|
|
|
0.1
|
|
|
|
69,043
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures contracts purchased
|
|
|
|
|
|
|
3.3
|
|
|
|
1,978,090
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures contracts sold
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
0.2
|
|
|
|
101,335
|
|
Energy
|
|
|
|
|
|
|
0.5
|
|
|
|
319,932
|
|
Financial
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
(30,335
|
)
|
Livestock
|
|
|
|
|
|
|
0.1
|
|
|
|
64,110
|
|
Indices
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
(85,438
|
)
|
Food & Fiber
|
|
|
|
|
|
|
(0.2
|
)
|
|
|
(144,632
|
)
|
Metals
|
|
|
|
|
|
|
0.3
|
|
|
|
183,005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures contracts sold
|
|
|
|
|
|
|
0.7
|
|
|
|
407,977
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures contracts, at fair value
|
|
|
|
|
|
|
4.0
|
%
|
|
$
|
2,386,067
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures and forward contracts by country composition
|
|
|
|
|
|
|
|
|
|
|
|
|
European Monetary Union
|
|
|
|
|
|
|
0.7
|
%
|
|
$
|
425,341
|
|
Great Britain
|
|
|
|
|
|
|
0.5
|
|
|
|
291,376
|
|
United States
|
|
|
|
|
|
|
1.9
|
|
|
|
1,142,037
|
|
Other
|
|
|
|
|
|
|
0.7
|
|
|
|
408,687
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures and forward contracts by country
|
|
|
|
|
|
|
3.8
|
%
|
|
$
|
2,267,441
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
85
QUADRIGA
SUPERFUND, L.P. SERIES B
December 31, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
|
|
|
|
|
|
|
Face Value
|
|
|
Net Assets
|
|
|
Fair Value
|
|
|
Debt Securities United States, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
United States Treasury Bills due February 28, 2008
(amortized cost $24,013,695), securities are held in margin
accounts as collateral for open futures and forwards
|
|
$
|
24,135,000
|
|
|
|
92.9
|
%
|
|
$
|
24,013,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward contracts, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized appreciation on forward contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
0.6
|
%
|
|
$
|
156,446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total unrealized appreciation on forward contracts
|
|
|
|
|
|
|
0.6
|
|
|
|
156,446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized depreciation on forward contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
(2.3
|
)
|
|
|
(607,349
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total unrealized depreciation on forward contracts
|
|
|
|
|
|
|
(2.3
|
)
|
|
|
(607,349
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total forward contracts, at fair value
|
|
|
|
|
|
|
(1.7
|
)%
|
|
$
|
(450,903
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures contracts, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures contracts purchased
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
(0.3
|
)%
|
|
$
|
(97,491
|
)
|
Energy
|
|
|
|
|
|
|
0.8
|
|
|
|
216,449
|
|
Financial
|
|
|
|
|
|
|
0.3
|
|
|
|
75,979
|
|
Food & Fiber
|
|
|
|
|
|
|
0.0
|
*
|
|
|
9,762
|
|
Indices
|
|
|
|
|
|
|
(0.2
|
)
|
|
|
(50,940
|
)
|
Livestock
|
|
|
|
|
|
|
(0.0
|
)*
|
|
|
(2,000
|
)
|
Metals
|
|
|
|
|
|
|
0.3
|
|
|
|
82,027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures contracts purchased
|
|
|
|
|
|
|
0.9
|
|
|
|
233,786
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures contracts sold
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
(0.0
|
)*
|
|
|
(3,870
|
)
|
Energy
|
|
|
|
|
|
|
0.0
|
*
|
|
|
12,840
|
|
Financial
|
|
|
|
|
|
|
0.7
|
|
|
|
185,915
|
|
Livestock
|
|
|
|
|
|
|
0.3
|
|
|
|
57,400
|
|
Food & Fiber
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
(12,415
|
)
|
Metals
|
|
|
|
|
|
|
1.0
|
|
|
|
262,075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures contracts sold
|
|
|
|
|
|
|
1.9
|
|
|
|
501,945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures contracts, at fair value
|
|
|
|
|
|
|
2.8
|
%
|
|
$
|
735,731
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures and forward contracts by country composition
|
|
|
|
|
|
|
|
|
|
|
|
|
European Monetary Union
|
|
|
|
|
|
|
(0.4
|
)%
|
|
$
|
(100,727
|
)
|
Japan
|
|
|
|
|
|
|
0.8
|
|
|
|
200,616
|
|
United States
|
|
|
|
|
|
|
1.9
|
|
|
|
487,685
|
|
Other
|
|
|
|
|
|
|
(1.2
|
)
|
|
|
(302,746
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total futures and forward contracts by country
|
|
|
|
|
|
|
1.1
|
%
|
|
$
|
284,828
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
86
QUADRIGA
SUPERFUND, L.P. SERIES B
Years
ended December 31, 2008, 2007, and 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
Investment income, interest
|
|
$
|
792,092
|
|
|
$
|
1,299,435
|
|
|
$
|
1,662,449
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive fee
|
|
|
3,831,165
|
|
|
|
|
|
|
|
|
|
Management fee
|
|
|
936,891
|
|
|
|
535,198
|
|
|
|
684,468
|
|
Ongoing offering expenses
|
|
|
506,427
|
|
|
|
182,051
|
|
|
|
369,983
|
|
Operating expenses
|
|
|
75,964
|
|
|
|
43,394
|
|
|
|
55,498
|
|
Selling commission
|
|
|
2,025,709
|
|
|
|
1,157,184
|
|
|
|
1,479,931
|
|
Brokerage commissions
|
|
|
971,657
|
|
|
|
1,042,451
|
|
|
|
1,499,287
|
|
Other
|
|
|
25,066
|
|
|
|
1,774
|
|
|
|
5,906
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
8,372,879
|
|
|
|
2,962,052
|
|
|
|
4,095,073
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
|
(7,580,787
|
)
|
|
|
(1,662,617
|
)
|
|
|
(2,432,624
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized and unrealized gain (loss) on investments
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gain on futures and forward contracts
|
|
|
22,944,445
|
|
|
|
4,791,805
|
|
|
|
7,227,032
|
|
Net change in unrealized appreciation (depreciation) on futures
and forward contracts
|
|
|
1,982,613
|
|
|
|
(4,688,831
|
)
|
|
|
1,198,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain on investments
|
|
|
24,927,058
|
|
|
|
102,974
|
|
|
|
8,425,103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase from payments by affiliate
|
|
|
|
|
|
|
|
|
|
|
584,801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets from operations
|
|
$
|
17,346,271
|
|
|
$
|
(1,559,643
|
)
|
|
$
|
6,577,280
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets from operations per unit
(based upon weighted average number of units outstanding during
period)
|
|
$
|
786.52
|
|
|
$
|
(87.18
|
)
|
|
$
|
288.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets from operations per unit
(based upon change in net asset value per unit during period)
|
|
$
|
826.27
|
|
|
$
|
(47.30
|
)
|
|
$
|
300.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
87
QUADRIGA
SUPERFUND, L.P. SERIES B
Years
ended December 31, 2008, 2007 and 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
Increase (decrease) in net assets from operations
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
$
|
(7,580,787
|
)
|
|
$
|
(1,662,617
|
)
|
|
$
|
(2,432,624
|
)
|
Net realized gain on futures and forward contracts
|
|
|
22,944,445
|
|
|
|
4,791,805
|
|
|
|
7,227,032
|
|
Net change in unrealized appreciation (depreciation) on futures
and forward contracts
|
|
|
1,982,613
|
|
|
|
(4,688,831
|
)
|
|
|
1,198,071
|
|
Net increase from payments by affiliate
|
|
|
|
|
|
|
|
|
|
|
584,801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets from operations
|
|
|
17,346,271
|
|
|
|
(1,559,643
|
)
|
|
|
6,577,280
|
|
Capital share transactions
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares
|
|
|
38,379,823
|
|
|
|
6,566,432
|
|
|
|
3,400,981
|
|
Redemption of shares
|
|
|
(20,964,190
|
)
|
|
|
(15,583,335
|
)
|
|
|
(13,330,397
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets from capital share
transactions
|
|
|
17,415,633
|
|
|
|
(9,016,903
|
)
|
|
|
(9,929,416
|
)
|
Net increase (decrease) in net assets
|
|
|
34,761,904
|
|
|
|
(10,576,546
|
)
|
|
|
(3,352,136
|
)
|
Net assets, beginning of year
|
|
|
25,855,147
|
|
|
|
36,431,693
|
|
|
|
39,783,829
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of year
|
|
$
|
60,617,051
|
|
|
$
|
25,855,147
|
|
|
$
|
36,431,693
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units, beginning of year
|
|
|
14,568.812
|
|
|
|
19,995.520
|
|
|
|
26,145.940
|
|
Issuance of units
|
|
|
17,593.459
|
|
|
|
4,138.938
|
|
|
|
2,103.903
|
|
Redemption of units
|
|
|
(8,856.638
|
)
|
|
|
(9,565.646
|
)
|
|
|
(8,254.323
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units, end of year
|
|
|
23,305.633
|
|
|
|
14,568.812
|
|
|
|
19,995.520
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
88
QUADRIGA
SUPERFUND, L.P. SERIES B
Years
ended December 31, 2008, 2007 and 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets from operations
|
|
$
|
17,346,271
|
|
|
$
|
(1,559,643
|
)
|
|
$
|
6,577,280
|
|
Adjustments to reconcile net increase (decrease) in net assets
to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross purchases of U.S. government securities
|
|
|
(181,821,630
|
)
|
|
|
(111,036,480
|
)
|
|
|
(93,416,005
|
)
|
Gross sales of U.S. government securities
|
|
|
151,644,442
|
|
|
|
116,367,155
|
|
|
|
103,132,139
|
|
Amortization of discounts and premiums
|
|
|
(635,028
|
)
|
|
|
(1,172,077
|
)
|
|
|
(1,485,593
|
)
|
Due from brokers
|
|
|
(2,448,239
|
)
|
|
|
1,292,758
|
|
|
|
(4,806,227
|
)
|
Other receivable
|
|
|
|
|
|
|
88,391
|
|
|
|
(88,391
|
)
|
Due from affiliate
|
|
|
133,276
|
|
|
|
(133,276
|
)
|
|
|
|
|
Unrealized appreciation on open forward contracts
|
|
|
111,568
|
|
|
|
903,037
|
|
|
|
1,611,080
|
|
Futures contracts purchased
|
|
|
(1,744,304
|
)
|
|
|
236,301
|
|
|
|
1,499,416
|
|
Unrealized depreciation on open forward contracts
|
|
|
(443,845
|
)
|
|
|
(62,893
|
)
|
|
|
(479,792
|
)
|
Unrealized depreciation on open swap contracts
|
|
|
|
|
|
|
|
|
|
|
(11,333
|
)
|
Due to brokers
|
|
|
|
|
|
|
|
|
|
|
(264,413
|
)
|
Futures contracts sold
|
|
|
93,968
|
|
|
|
3,612,386
|
|
|
|
(3,817,442
|
)
|
Fees payable
|
|
|
268,179
|
|
|
|
(152,096
|
)
|
|
|
(10,316
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
|
(17,495,342
|
)
|
|
|
8,383,563
|
|
|
|
8,440,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscriptions, net of change in advance subscriptions
|
|
|
38,379,823
|
|
|
|
6,306,624
|
|
|
|
3,495,009
|
|
Redemptions, net of redemption payable
|
|
|
(20,289,155
|
)
|
|
|
(15,084,905
|
)
|
|
|
(11,736,353
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
18,090,668
|
|
|
|
(8,778,281
|
)
|
|
|
(8,241,344
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
|
|
|
595,326
|
|
|
|
(394,718
|
)
|
|
|
199,059
|
|
Cash, beginning of year
|
|
|
73,375
|
|
|
|
468,093
|
|
|
|
269,034
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, end of year
|
|
$
|
668,701
|
|
|
|
73,375
|
|
|
$
|
468,093
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
2006 subscriptions received in 2005
|
|
|
|
|
|
|
|
|
|
$
|
165,780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007 subscriptions received in 2006
|
|
|
|
|
|
$
|
259,808
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 subscriptions received in 2007
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redemptions payable
|
|
$
|
2,767,509
|
|
|
$
|
2,092,474
|
|
|
$
|
1,594,044
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
89
Organization
and Business
Quadriga Superfund, L.P. (the Fund), a Delaware
limited partnership, commenced operations on November 5,
2002. The Fund was organized to trade speculatively in the
United States of America (U.S.) and international
commodity futures markets using a fully-automated computerized
trading system. The Fund has issued two classes of Units,
Series A and Series B (the Series). The
two Series will be traded and managed the same way except for
the degree of leverage.
The term of the Fund shall continue until December 31,
2050, unless terminated earlier by the Funds general
partner, Superfund Capital Management, Inc. (Superfund
Capital Management) or by operation of law or a decline in
the aggregate net assets of such Series to less than $500,000.
|
|
(2)
|
Significant
Accounting Policies
|
|
|
(a)
|
Valuation
of Investments in Futures Contracts, Forward Contracts, and U.S
Treasury Bills
|
All commodity interests (including derivative financial
instruments and derivative commodity instruments) are used for
trading purposes. The commodity interests are recorded on a
trade date basis and open contracts are recorded in the
statements of assets and liabilities at fair value on the last
business day of the period, which represents market value for
those commodity interests for which market quotes are readily
available.
Exchange-traded futures contracts are valued at settlement
prices published by the recognized exchange. Any spot and
forward foreign currency contracts held by the Fund will be
valued at published settlement prices or at dealers
quotes. The Fund uses the amortized cost method for valuing
U.S. Treasury Bills due to the short-term nature of such
instrument; accordingly, the cost of securities plus accreted
discount, or minus amortized premium approximates fair value
(See Section (2)(g) Fair Value Measurements).
|
|
(b)
|
Translation
of Foreign Currency
|
Assets and liabilities denominated in foreign currencies are
translated into U.S. dollar amounts at the period end
exchange rates. Purchases and sales of investments, and income
and expenses that are denominated in foreign currencies are
translated into U.S. dollar amounts on the transaction
date. Adjustments arising from foreign currency transactions are
reflected in the statements of operations.
The Fund does not isolate that portion of the results of
operations arising from the effect of changes in foreign
exchange rates on investments from fluctuations from changes in
market prices of investments held. Such fluctuations are
included in net gain (loss) on investments in the statements of
operations.
|
|
(c)
|
Investment
Transactions, Investment Income, and Expenses
|
Investment transactions are accounted for on a trade-date basis.
Interest income and expenses are recognized on the accrual basis.
The Fund does not record a provision for U.S. income taxes
because the partners report their share of the Funds
income or loss on their returns. The financial statements
reflect the Funds transactions without adjustment, if any,
required for income tax purposes.
Superfund Capital Management has continued to evaluate the
application of Financial Accounting Standards Board
(FASB) Interpretation No. 48, Accounting
for Uncertainty in Income Taxes an interpretation of
FASB Statement No. 109 (FIN 48), to
the Fund, and has determined that FIN 48 does not have a
material impact on the
90
QUADRIGA
SUPERFUND, L.P. SERIES A AND
SERIES B
NOTES TO
FINANCIAL STATEMENTS (Continued)
Funds financial statements. The Fund files federal and
state tax returns. The 2005 through 2008 tax years generally
remain subject to examination by the U.S federal and most state
tax authorities.
The preparation of financial statements in conformity with
accounting principles generally accepted in the
U.S. requires Superfund Capital Management to make
estimates and assumptions that affect the amounts disclosed in
the financial statements. Actual results could differ from those
estimates.
|
|
(f)
|
Recently
Issued Accounting Standards
|
In March 2008, the FASB issued SFAS No. 161,
Disclosures about Derivative Instruments and Hedging Activities.
The provisions are effective for fiscal years beginning after
November 15, 2008. SFAS 161 is intended to improve
financial reporting for derivative instruments by requiring
enhanced disclosure that enables investors to understand how and
why an entity uses derivatives, how derivatives are accounted
for, and how derivative instruments affect an entitys
results of operations and financial position. Management is
currently evaluating the implications of SFAS 161. The
impact on the Funds financial statement disclosures, if
any, is currently being assessed.
The effective dates for reporting under SFAS 161 were
clarified in FSP
FAS 133-1,
issued on September 12, 2008. The FASB Staff Position
clarified that the FASBs intent as to the reporting
requirements imposed under SFAS 161 was for entities to
begin providing the additional disclosures for the first
reporting period beginning after November 15, 2008. The
Fund will make the required SFAS 161 disclosures in its
Form 10-Q
for the quarterly period ending March 31, 2009.
|
|
(g)
|
Fair
Value Measurements
|
The Fund follows Statement of Financial Accounting Standards
(SFAS) No. 157, Fair Value Measurements. The provisions of
SFAS No. 157 are effective for fiscal years beginning
after November 15, 2007. SFAS No. 157 establishes
a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value. The hierarchy gives the
highest priority to unadjusted quoted prices in active markets
for identical assets or liabilities (level 1 measurements)
and the lowest priority to unobservable inputs (level 3
measurements). The three levels of the fair value hierarchy
under SFAS No. 157 are described below:
|
|
|
|
Level 1
|
Unadjusted quoted prices in active markets that are accessible
at the measurement date for identical, unrestricted assets or
liabilities.
|
|
|
Level 2
|
Quoted prices in markets that are not considered to be active or
financial instruments for which all significant inputs are
observable, either directly or indirectly.
|
|
|
Level 3
|
Prices or valuations that require inputs that are both
significant to the fair value measurement and unobservable.
|
A financial instruments level within the fair value
hierarchy is based on the lowest level of any input that is
significant to the fair value measurement. In determining fair
value, the Fund separates its financial instruments into two
categories: U.S. government securities and derivative
contracts.
U.S. Government Securities. The
Funds only market exposure in instruments held other than
for trading is in its U.S. Treasury Bill portfolio. As the
Fund uses the amortized cost method for valuing its
U.S. Treasury Bill portfolio, which approximates fair
value, this portfolio is classified within level 2 of the
fair value hierarchy.
Derivative Contracts. Derivative contracts can
be exchange-traded or
over-the-counter
(OTC). Exchange-traded derivatives typically fall
within level 1 or level 2 of the fair value hierarchy
depending on whether they are deemed to be actively traded or
not. The Fund has exposure to exchange-traded derivative
contracts through the
91
QUADRIGA
SUPERFUND, L.P. SERIES A AND
SERIES B
NOTES TO
FINANCIAL STATEMENTS (Continued)
Funds trading of exchange-traded futures contracts. The
Funds exchange-traded futures contract positions are
valued daily at settlement prices published by the applicable
exchanges. In such cases, provided they are deemed to be
actively traded, exchange-traded derivatives are classified
within level 1 of the fair value hierarchy. Less actively
traded exchange-traded derivatives fall within level 2 of
the fair value hierarchy.
OTC derivatives are valued using market transactions and other
market evidence whenever possible, including market-based inputs
to models, model calibration to market-clearing transactions,
broker or dealer quotations, or alternative pricing sources with
reasonable levels of price transparency. Where models are used,
the selection of a particular model to value an OTC derivative
depends upon the contractual terms of, and specific risks
inherent in, the instrument as well as the availability of
pricing information in the market. For OTC derivatives that
trade in liquid markets, such as generic forwards and swaps,
model inputs can generally be verified and model selection does
not involve significant management judgment. The OTC derivatives
held by the Fund include forwards and swaps. Spot and forward
foreign currency contracts held by the Fund are valued at
published daily settlement prices or at dealers quotes.
The Funds forward and swap positions are typically
classified within level 2 of the fair value hierarchy. As
of and during the quarter ended December 31, 2008, the Fund
held no derivative contracts valued using level 3 inputs.
Certain OTC derivatives traded in less liquid markets with
limited pricing information, and the determination of fair value
for these derivatives is inherently more difficult. Such
instruments are classified within level 3 of the fair value
hierarchy. Where the Fund does not have corroborating market
evidence to support significant model inputs and cannot verify
the model to market transactions, transaction price is initially
used as the best estimate of fair value. Accordingly, when a
pricing model is used to value such an instrument, the model is
adjusted so that the model value at inception equals the
transaction price. The valuations of these less liquid OTC
derivatives are typically based on level 1
and/or level
2 inputs that can be observed in the market, as well as
unobservable level 3 inputs. Subsequent to initial
recognition, the Fund updates the level 1 and level 2
inputs to reflect observable market changes, with resulting
gains and losses reflected within level 3. Level 3
inputs are only changed when corroborated by evidence such as
similar market transactions, third-party pricing services
and/or
broker or dealer quotations, or other empirical market data. In
circumstances where the Fund cannot verify the model value to
market transactions, it is possible that a different valuation
model could produce a materially different estimate of fair
value. The Fund attempts to avoid holding less liquid OTC
derivatives. However, once held, the market for any particular
derivative contract could become less liquid during the holding
period.
The following table summarizes the valuation of the Funds
assets and liabilities by the SFAS 157 fair value hierarchy
as of December 31, 2008:
Series A.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2008
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
ASSETS
|
U.S. Government securities
|
|
$
|
31,494,929
|
|
|
$
|
|
|
|
$
|
31,494,929
|
|
|
$
|
|
|
Unrealized appreciation on open forward contracts
|
|
|
11,138
|
|
|
|
|
|
|
|
11,138
|
|
|
|
|
|
Futures contracts purchased
|
|
|
735,529
|
|
|
|
735,529
|
|
|
|
|
|
|
|
|
|
Futures contracts sold
|
|
|
109,330
|
|
|
|
109,330
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets Measured at Fair Value
|
|
$
|
32,350,926
|
|
|
$
|
844,859
|
|
|
$
|
31,506,067
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
Unrealized depreciation on open forward contracts
|
|
$
|
43,336
|
|
|
$
|
|
|
|
$
|
43,336
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities Measured at Fair Value
|
|
$
|
43,336
|
|
|
$
|
|
|
|
$
|
43,336
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
92
QUADRIGA
SUPERFUND, L.P. SERIES A AND
SERIES B
NOTES TO
FINANCIAL STATEMENTS (Continued)
Series B.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2008
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
ASSETS
|
U.S. Government securities
|
|
$
|
54,825,911
|
|
|
$
|
|
|
|
$
|
54,825,911
|
|
|
$
|
|
|
Unrealized appreciation on open forward contracts
|
|
|
44,878
|
|
|
|
|
|
|
|
44,878
|
|
|
|
|
|
Futures contracts purchased
|
|
|
1,978,090
|
|
|
|
1,978,090
|
|
|
|
|
|
|
|
|
|
Futures contracts sold
|
|
|
407,977
|
|
|
|
407,977
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets Measured at Fair Value
|
|
$
|
57,256,856
|
|
|
$
|
2,386,067
|
|
|
$
|
54,870,789
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
Unrealized depreciation on open forward contracts
|
|
$
|
163,504
|
|
|
$
|
|
|
|
$
|
163,504
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities Measured at Fair Value
|
|
$
|
163,504
|
|
|
$
|
|
|
|
$
|
163,504
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Due from brokers consist of proceeds from securities sold.
Amounts due from brokers may be restricted to the extent that
they serve as deposits for securities sold short. Amounts due to
brokers represent margin borrowings that are collateralized by
certain securities. As of December 31, 2008, there were no
amounts due to brokers.
In the normal course of business, all of the Funds
marketable securities transactions, money balances and
marketable security positions are transacted with brokers. The
Fund is subject to credit risk to the extent any broker with
whom it conducts business is unable to fulfill contractual
obligations on its behalf. Superfund Capital Management monitors
the financial condition of such brokers and does not anticipate
any losses from these counterparties.
|
|
(4)
|
Allocation
of Net Profits and Losses
|
In accordance with the Third Amended and Restated Limited
Partnership Agreement (the Limited Partnership
Agreement), net profits and losses of the Fund are
allocated to partners according to their respective interests in
the Fund as of the beginning of each month.
Advance subscriptions, if any, represent cash received prior to
December 31 for contributions of the subsequent month and do not
participate in the earnings of the Fund until the following
January.
|
|
(5)
|
Related
Party Transactions
|
Superfund Capital Management shall be paid a management fee
equal to one-twelfth of 1.85% of month end net assets (1.85% per
annum) of net assets, ongoing offering expenses equal to
one-twelfth of 1% of month end net assets (1% per annum), not to
exceed the amount of actual expenses incurred, and monthly
operating expenses equal to one-twelfth of 0.15% of month end
net assets (0.15% per annum), not to exceed the amount of actual
expenses incurred. In accordance with the Prospectus dated
May 19, 2008, included within the Registration Statement on
Form S-1
(File
No. 333-136804)
as subsequently supplemented, Superfund USA, an entity related
to Superfund Capital Management by common ownership, shall be
paid monthly selling commissions equal to one-twelfth of 4% (4%
per annum) of the month end net asset value of the Fund.
However, the maximum cumulative selling commission per Unit is
limited to 10% of the initial public offering price of Units
sold pursuant to such Prospectus.
93
QUADRIGA
SUPERFUND, L.P. SERIES A AND
SERIES B
NOTES TO
FINANCIAL STATEMENTS (Continued)
Superfund Capital Management will also be paid a monthly
performance/incentive fee equal to 25% of the new appreciation
without respect to interest income. Trading losses will be
carried forward and no further performance/incentive fee may be
paid until the prior losses have been recovered.
Due to affiliate consists of a redemption of capital due to the
general partner, Superfund Capital Management. As of
December 31, 2008, $300,000 was due to Superfund Capital
Management from Series A.
As of December 31, 2008, Superfund Capital Management owned
386.799 Units of Series A, representing 2.14% of the total
issued Units of Series A, and 398.272 Units of
Series B, representing 1.71% of the total issued Units of
Series B, having a combined value of $1,783,301.
Financial highlights for the period January 1, 2008,
through December 31, 2008, are as follows:
|
|
|
|
|
|
|
|
|
|
|
Series A
|
|
|
Series B
|
|
|
Total return
|
|
|
|
|
|
|
|
|
Total return before incentive fees
|
|
|
34.6
|
%
|
|
|
56.6
|
%
|
Incentive fees
|
|
|
4.6
|
|
|
|
10.0
|
|
|
|
|
|
|
|
|
|
|
Total return after incentive fees
|
|
|
30.0
|
%
|
|
|
46.6
|
%
|
|
|
|
|
|
|
|
|
|
Ratio to average partners capital
|
|
|
|
|
|
|
|
|
Operating expenses before incentive fees
|
|
|
8.3
|
%
|
|
|
9.4
|
%
|
Incentive fees
|
|
|
4.0
|
|
|
|
7.9
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
12.3
|
%
|
|
|
17.3
|
%
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
|
(6.3
|
)%
|
|
|
(7.8
|
)%
|
Net assets value per unit, beginning of period
|
|
$
|
1,486.44
|
|
|
$
|
1,774.69
|
|
Net investment loss
|
|
|
(175.42
|
)
|
|
|
(352.33
|
)
|
Net gain on investments
|
|
|
621.28
|
|
|
|
1,178.60
|
|
|
|
|
|
|
|
|
|
|
Net asset value per unit, end of period
|
|
$
|
1,932.30
|
|
|
$
|
2,600.96
|
|
|
|
|
|
|
|
|
|
|
Other per Unit information:
|
|
|
|
|
|
|
|
|
Net increase in net assets from operations per Unit (based upon
weighted average Number of Units during period)
|
|
$
|
523.26
|
|
|
$
|
786.52
|
|
|
|
|
|
|
|
|
|
|
Net increase in net assets from operations per Unit (based upon
change in net asset value per Unit)
|
|
$
|
445.86
|
|
|
$
|
826.27
|
|
|
|
|
|
|
|
|
|
|
94
QUADRIGA
SUPERFUND, L.P. SERIES A AND
SERIES B
NOTES TO
FINANCIAL STATEMENTS (Continued)
Financial highlights for the period January 1, 2007,
through December 31, 2007, are as follows:
|
|
|
|
|
|
|
|
|
|
|
Series A
|
|
|
Series B
|
|
|
Total return
|
|
|
|
|
|
|
|
|
Total return before incentive fees
|
|
|
(0.9
|
)%
|
|
|
(2.6
|
)%
|
Incentive fees
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
|
|
|
|
|
|
|
Total return after incentive fees
|
|
|
(0.9
|
)%
|
|
|
(2.6
|
)%
|
|
|
|
|
|
|
|
|
|
Ratio to average partners capital
|
|
|
|
|
|
|
|
|
Operating expenses before incentive fees
|
|
|
9.0
|
%
|
|
|
10.1
|
%
|
Incentive fees
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
9.0
|
%
|
|
|
10.1
|
%
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
|
(4.5
|
)%
|
|
|
(5.7
|
)%
|
Net assets value per unit, beginning of period
|
|
$
|
1,500.20
|
|
|
$
|
1,821.99
|
|
Net investment loss
|
|
|
(62.28
|
)
|
|
|
(92.06
|
)
|
Net gain on investments
|
|
|
48.52
|
|
|
|
44.76
|
|
|
|
|
|
|
|
|
|
|
Net asset value per unit, end of period
|
|
$
|
1,486.44
|
|
|
$
|
1,774.69
|
|
|
|
|
|
|
|
|
|
|
Other per Unit information:
|
|
|
|
|
|
|
|
|
Net increase in net assets from operations per Unit (based upon
weighted average Number of Units during period)
|
|
$
|
(28.48
|
)
|
|
$
|
(87.18
|
)
|
|
|
|
|
|
|
|
|
|
Net increase in net asset from operations per Unit (based upon
change in net asset value per Unit)
|
|
$
|
(13.76
|
)
|
|
$
|
(47.30
|
)
|
|
|
|
|
|
|
|
|
|
95
QUADRIGA
SUPERFUND, L.P. SERIES A AND
SERIES B
NOTES TO
FINANCIAL STATEMENTS (Continued)
Financial highlights for the period January 1, 2006,
through December 31, 2006, are as follows:
|
|
|
|
|
|
|
|
|
|
|
Series A
|
|
|
Series B
|
|
|
Total return:
|
|
|
|
|
|
|
|
|
Total return before incentive fees*
|
|
|
12.9
|
%
|
|
|
19.7
|
%
|
Incentive fees
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
|
|
|
|
|
|
|
Total return after incentive fees*
|
|
|
12.9
|
%
|
|
|
19.7
|
%
|
|
|
|
|
|
|
|
|
|
Ratio to average partners capital
|
|
|
|
|
|
|
|
|
Operating expenses before incentive fees
|
|
|
10.1
|
%
|
|
|
11.1
|
%
|
Incentive fees
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
10.1
|
%
|
|
|
11.1
|
%
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
|
(5.5
|
)%
|
|
|
(6.6
|
)%
|
Net asset value per unit, beginning of period
|
|
$
|
1,328.33
|
|
|
$
|
1,521.61
|
|
Net investment loss
|
|
|
(75.48
|
)
|
|
|
(105.32
|
)
|
Net gain on investments
|
|
|
238.80
|
|
|
|
377.68
|
|
Net increase from payments by affiliate
|
|
|
8.55
|
|
|
|
28.02
|
|
|
|
|
|
|
|
|
|
|
Net asset value per unit, end of period
|
|
$
|
1,500.20
|
|
|
$
|
1,821.99
|
|
|
|
|
|
|
|
|
|
|
Other per Unit information:
|
|
|
|
|
|
|
|
|
Net increase in net assets from operations per Unit (based upon
weighted average Number of Units during period)
|
|
$
|
166.24
|
|
|
$
|
288.01
|
|
|
|
|
|
|
|
|
|
|
Net increase in net assets from operations per Unit (based upon
change in net asset value per Unit)
|
|
$
|
171.87
|
|
|
$
|
300.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
The total return information includes a net increase in net
assets from payments by affiliates in the amount of $426,879 for
Series A and $584,801 for Series B. If the net
increase in net assets from payments by affiliates was not
included, the total return would have been 12.3% for
Series A and 17.9% for Series B. |
|
|
(7)
|
Financial
Instrument Risk
|
In the normal course of its business, the Fund is party to
financial instruments with off-balance sheet risk, including
derivative financial instruments and derivative commodity
instruments. The term off-balance sheet risk refers
to an unrecorded potential liability that, even though it does
not appear on the balance sheet, may result in a future
obligation or loss. These financial instruments may include
forwards, futures, and options, whose values are based upon an
underlying asset, index, or reference rate, and generally
represent future commitments to exchange currencies or cash
flows, to purchase or sell other financial instruments at
specific terms at specific future dates, or, in the case of
derivative commodity instruments, to have a reasonable
possibility to be settled in cash, through physical delivery or
with another financial instrument. These instruments may be
traded on an exchange or
over-the-counter
(OTC). Exchange traded instruments are standardized
and include futures and certain option contracts. OTC contracts
are negotiated between contracting parties and include forwards
and certain options. Each of these instruments is subject to
various risks similar to those related to the underlying
financial instruments including market and credit risk. In
general, the risks associated with OTC contracts are greater
than those associated with exchange traded instruments because
of the greater risk of default by the counter party to an OTC
contract.
For Series A, gross unrealized gains and losses related to
exchange traded futures were $912,098 and $67,239, respectively,
and gross unrealized gains and losses related to non-exchange
traded forwards were $11,138 and $43,336, respectively, at
December 31, 2008.
96
QUADRIGA
SUPERFUND, L.P. SERIES A AND
SERIES B
NOTES TO
FINANCIAL STATEMENTS (Continued)
For Series B, gross unrealized gains and losses related to
exchange traded futures were $2,689,939 and $303,872,
respectively, and gross unrealized gains and losses related to
non-exchange traded forwards were $44,878 and $163,504,
respectively, at December 31, 2008.
Market risk is the potential for changes in the value of the
financial instruments traded by the Fund due to market changes,
including interest and foreign exchange rate movements and
fluctuations in commodity prices. In entering into these
contracts, there exists a market risk that such contracts may be
significantly influenced by conditions, such as interest rate
volatility, resulting in such contracts being less valuable. If
the markets should move against all of the futures interest
positions at the same time, and Superfund Capital Management is
unable to offset such positions, the Fund could experience
substantial losses.
Credit risk is the possibility that a loss may occur due to the
failure of a counterparty to perform according to the terms of a
contract. Credit risk with respect to exchange-traded
instruments is reduced to the extent that an exchange or
clearing organization acts as a counterparty to the
transactions. The Funds risk of loss in the event of
counterparty default is typically limited to the amounts
recognized in the statements of assets and liabilities and not
represented by the contract or notional amounts of the
instruments. As the Funds assets are held in segregated
accounts with futures commission merchants, the Fund has credit
risk and concentration risk. The Funds futures commission
merchants are currently ADM Investor Services, Inc., Newedge
USA, LLC, Barclays Capital Inc., and RBC Capital Markets
Corporation.
Superfund Capital Management monitors and controls the
Funds risk exposure on a daily basis through financial,
credit and risk management monitoring systems, and accordingly
believes that it has effective procedures for evaluating and
limiting the credit and market risks to which the Fund is
subject. These monitoring systems allow Superfund Capital
Management to statistically analyze actual trading results with
risk adjusted performance indicators and correlation statistics.
In addition, on-line monitoring systems provide account analysis
of futures and forward positions by sector, margin requirements,
gain and loss transactions, and collateral positions.
The majority of these instruments mature within one year of
December 31, 2008. However, due to the nature of the
Funds business, these instruments may not be held to
maturity.
|
|
(8)
|
Subscriptions
and Redemptions
|
Investors must submit subscriptions at least five business days
prior to the applicable month-end closing date and they will be
accepted once payments are received and cleared. All
subscriptions funds are required to be promptly transmitted to
the escrow agent, HSBC Bank USA. Subscriptions must be accepted
or rejected by Superfund Capital Management within five business
days of receipt, and the settlement date for the deposit of
subscription funds in escrow must be within five business days
of acceptance. No fees or costs will be assessed on any
subscription while held in escrow, irrespective of whether the
subscription is accepted or the subscription funds are returned.
A limited partner of a Series may request any or all of his
investment in such Series be redeemed by such Series at the net
asset value of a Unit within such Series as of the end of each
month, subject to a minimum redemption of $1,000 and subject
further to such limited partner having an investment in such
Series, after giving effect to the requested redemption, at
least equal to the minimum initial investment amount of $5,000.
Limited partners must transmit a written request of such
withdrawal to Superfund Capital Management not less than ten
business days prior to the end of the month (or such shorter
period as permitted by Superfund Capital Management) as of which
redemption is to be effective. Redemptions will generally be
paid within 20 days after the date of redemption. However,
in special circumstances, including, but not limited to,
inability to liquidate dealers positions as of a
redemption date or default or delay in payments due to each
Series from clearing brokers, banks or other persons or
entities, each Series may in turn delay payment to persons
requesting redemption of the proportionate part of the net
assets of each Series represented by the sums that are subject
of such default or delay.
97
|
|
|
|
|
ASSETS
|
Current Assets:
|
|
|
|
|
Cash
|
|
$
|
3,080,417
|
|
Due from affiliated limited partnerships
|
|
|
269,551
|
|
Equity investment in affiliated limited partnerships (cost
$3,202,000)
|
|
|
3,564,896
|
|
Equity investment in affiliated Fund of Funds (cost $6,481,750)
|
|
|
7,784,418
|
|
Other short term investments
|
|
|
53,861
|
|
|
|
|
|
|
Total Current Assets
|
|
|
14,753,143
|
|
Fixed assets, net of accumulated depreciation of $181,826
|
|
|
11,179
|
|
Other assets
|
|
|
3,388
|
|
|
|
|
|
|
Total Assets
|
|
$
|
14,767,710
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY
|
Current Liabilities:
|
|
|
|
|
Accrued expenses
|
|
$
|
277,932
|
|
|
|
|
|
|
Total Liabilities
|
|
|
277,932
|
|
|
|
|
|
|
Stockholders equity:
|
|
|
|
|
Contributed capital, $50 par value. Authorized, issued and
outstanding 2,000 shares
|
|
|
100,000
|
|
Additional
paid-in-capital
|
|
|
2,227,378
|
|
Accumulated other comprehensive income
|
|
|
1,231,648
|
|
Retained earnings
|
|
|
10,930,752
|
|
|
|
|
|
|
Total Stockholders Equity
|
|
|
14,489,778
|
|
|
|
|
|
|
Total Liabilities and Stockholders Equity
|
|
$
|
14,767,710
|
|
|
|
|
|
|
See accompanying notes to the financial statements.
PURCHASERS OF UNITS WILL NOT RECEIVE ANY INTEREST IN THIS
ENTITY.
98
SUPERFUND
CAPITAL MANAGEMENT, INC.
September 30,
2009
|
|
(1)
|
General
Information and Summary of Significant Accounting
Policies
|
Nature
of Business
Superfund Capital Management Inc. (the Company), was
incorporated in Grenada, West Indies, in March 2001. The
Companys sole business is the trading and management of
discretionary futures trading accounts, including commodity
pools which are domiciled in the United States of America. The
Company presently serves as commodity pool operator for Quadriga
Superfund, L.P. (Quadriga Superfund) and Superfund
Gold, L.P. (Superfund Gold). Superfund Gold
commenced operations on April 1, 2009. The Company is
wholly owned by one shareholder.
A summary of the significant accounting policies which have been
followed in preparing the accompanying statement of financial
condition is set forth below:
Cash
Cash consists of cash on hand and balances held at banks.
Investment
in Affiliated Limited Partnerships
The Company has invested in Quadriga Superfund, a Delaware
limited partnership, organized to trade speculatively in the
United States of America and international commodity equity
markets using a strategy developed by the Company. The
Companys investment in Quadriga Superfund is recorded
based upon the equity method of accounting.
The Company has invested in Superfund Gold, a Delaware limited
partnership, organized to trade speculatively in the United
States of America and international commodity equity markets
using a strategy developed by the Company. The Companys
investment in Superfund Gold is recorded based upon the equity
method of accounting.
Investment
in Fund of Funds
The Company has invested in the Jupiter Fund SPC, a Cayman
Islands Exempted Limited Liability Company registered as a
Segregated Portfolio Company operating as a Fund of Funds. The
investment adviser is Superfund Invest Inc., a company organized
under the laws of Grenada, West Indies. The sole stockholder of
the Company is also a 50% shareholder of Superfund Invest Inc.
The Companys investment in the Jupiter Fund SPC is
recorded based upon the equity method of accounting.
Fixed
Assets
Fixed assets are stated net of accumulated depreciation.
Depreciation is calculated utilizing the straight-line method
over the estimated useful lives of the assets, ranging from one
to three years.
Use of
Estimates
The accompanying statement of financial condition has been
prepared in accordance with accounting principles generally
accepted in the United States of America (GAAP). The
preparation of the Statement of Financial Condition in
conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and
liabilities as of the date of the statement of financial
condition. Actual amounts could differ from such estimates.
PURCHASERS OF UNITS WILL NOT RECEIVE ANY INTEREST IN THIS
ENTITY.
99
SUPERFUND
CAPITAL MANAGEMENT, INC.
Notes to
the Statement of Financial Condition
(Unaudited) (Continued)
Income
Taxes
The Company is incorporated and operates in Grenada, West
Indies, which does not have corporate income taxes.
Additionally, the Company has no income or loss that is
effectively connected to trade or business carried on in the
United States of America, and services are performed outside the
United States. Therefore, the Company was not subject to income
tax for the nine month period ended September 30, 2009.
The Company has evaluated the application of Accounting
Standards Codification (ASC) 740 to its financial
statements, and has determined whether or not there are
uncertain tax positions that require financial statement
recognition. Based on this evaluation, the Company has
determined no reserves for uncertain tax position are required
to be recorded as a result of the application of ASC 740. The
Company is not aware of any tax positions for which it is
reasonably possible that the total amounts of unrecognized tax
benefits will change materially in the next twelve months. As a
result, no income tax liability or expense has been recorded in
the accompanying Statement of Financial Condition.
Functional
Currency
The Companys functional currency is the U.S. dollar.
In addition to maintaining a bank account in the
U.S. dollar, the Company also has two cash accounts
denominated in foreign currencies (Eastern Caribbean dollars and
euros) used for various operating expenses and investment
accounts in money market funds denominated in Canadian dollars.
Transactions denominated in these foreign currencies are
translated to the U.S. dollar as follows: the current
exchange rate is used when translating transactions based in
Euros and Canadian dollars to the U.S. dollar and a fixed
currency exchange rate of 2.6882 when translating transactions
based in Eastern Caribbean dollar to the U.S. dollar.
Management believes that such exchange rates approximate the
average exchange rates throughout 2009. The resulting
adjustments are a component of other comprehensive income.
Recently
Issued Accounting Pronouncements
ASC
105.10.05
In June 2009, the Financial Accounting Standards Board
(FASB) issued FASB Accounting Standards Codification
(ASC) 105.10.05, Generally Accepted Accounting
Principles (ASC 105.10.05). ASC 105.10.05
establishes the FASB ASC as the single source of authoritative
generally accepted accounting principles (GAAP).
Pursuant to the provisions of ASC 105.10.05, the Company has
updated references to GAAP in its financial statements issued
subsequent to September 15, 2009. The adoption of ASC
105.10.05 did not have any impact on the Companys
statement of financial condition.
ASC
810
In June 2009, FASB issued ASC 810, Consolidation (ASC
810). ASC 810 changes how a company determines when an
entity that is insufficiently capitalized or is not controlled
through voting rights should be consolidated. The determination
of whether a company is required to consolidate an entity is
based on an entitys purpose and design and a
companys ability to direct the activities of the entity
that most significantly impact the entitys economic
performance. ASC 810 is effective for annual reporting periods
ending after November 15, 2009. The Company is currently
evaluating the impact of ASC 810 on its financial statements.
The Company is the general partner and is responsible for the
trading and management of Quadriga Superfund. As general partner
of Quadriga Superfund, the Company receives a 1.85% annual
management fee (1/12 of 1.85%
PURCHASERS OF UNITS WILL NOT RECEIVE ANY INTEREST IN THIS
ENTITY.
100
SUPERFUND
CAPITAL MANAGEMENT, INC.
Notes to
the Statement of Financial Condition
(Unaudited) (Continued)
payable monthly) for each Series of Quadriga Superfund. In
addition, the Company receives an incentive fee of 25% of new
appreciation in each Series net assets computed on a
monthly basis and excluding interest income and as adjusted for
subscriptions and redemptions and one-twelfth of 1% of month end
net assets (1% per annum), not to exceed the amount of actual
expenses incurred, for ongoing organization and offering
expenses. Any organization and offering costs above 1% of net
assets per year will be borne by the Company. The Company also
earns monthly operating fees equal to one-twelfth of 0.15% of
month end net assets (0.15% per annum). At September 30,
2009, the Company had accrued management fee, ongoing
organization and offering fee, and operating fee revenue
receivable of $240,289, which is included in due from affiliated
limited partnerships in the accompanying Statement of Financial
Condition.
The Company is also the general partner and is responsible for
the trading and management of Superfund Gold. As general partner
of Superfund Gold., the Company receives a 2.25% annual
management fee (1/12 of 2.25% payable monthly) for each Series
of Superfund Gold. In addition, the Company receives an
incentive fee of 25% of new appreciation in each Series
net assets computed on a monthly basis and excluding interest
income and changes in the Series dollar for dollar
investment in gold and adjusted for subscriptions and
redemptions. The Company is also reimbursed by Superfund Gold
for actual ongoing offering and operating expenses. The General
Partner is liable for ongoing offering and operating expenses
which, when considered together, are in excess of 0.75% of
average month-end net assets per year of each Series. At
September 30, 2009, the Company had accrued management fee,
ongoing organization and offering fee, and operating fee revenue
receivable of $27,958, which is included in due from affiliated
limited partnerships in the accompanying Statement of Financial
Condition.
The Company was the general partner and was also responsible for
the trading and management of Quadriga Partners, L.P which
closed and ceased trading on July 31, 2008. As manager of
Quadriga Partners, the Company received a quarterly management
fee computed at an annual rate of 2.00% of the net assets of
Quadriga Partners at the beginning of each month.
Management fees, which were accrued ratably as services were
performed, compensated the Company for services rendered to and
on behalf of Quadriga Partners. In addition, the Company
received an incentive fee from Quadriga Partners in an amount
equal to 25% of the excess of net profits over net losses
allocated to the limited partners capital accounts as of
the end of each month. At September 30, 2009, the Company
had accrued management fee revenue receivable of $1,304, which
is included in due from affiliated limited partnerships in the
accompanying statement of financial condition.
The Company utilizes an automated trading system provided by an
affiliated company. This trading system executes its commodity
trades on behalf of Quadriga Superfund, on a non
exclusive basis and at no cost.
The Company executes its trades through Superfund Asset
Management, Inc. (SAM), an introducing broker
located in Chicago, Illinois. The sole shareholder of the
Company is also the sole shareholder of SAM. Brokerage costs are
recognized in the account for which the Company is trading. No
brokerage costs are incurred directly by the Company.
Since November 1, 2005 the Company has been using office
space, provided by Quadriga Office Management Inc.
(Quadriga Office Management), an affiliated company
incorporated in Grenada W.I.
Superfund Strategies Inc. (SSI) is a company based
in Chicago, Illinois. SSI is providing the Company consulting
service, including legal, compliance, risk management and
product structuring. SSI is charging the Company for this
service on a monthly basis.
The accompanying statement of financial condition has been
prepared from the separate records maintained by the Company and
may not necessarily be indicative of the conditions that would
have existed if the Company had been operated as an unaffiliated
company.
PURCHASERS OF UNITS WILL NOT RECEIVE ANY INTEREST IN THIS
ENTITY.
101
SUPERFUND
CAPITAL MANAGEMENT, INC.
Notes to
the Statement of Financial Condition
(Unaudited) (Continued)
|
|
(3)
|
Investment
in Affiliated Limited Partnerships
|
(a) The following represents investments in Quadriga
Superfund as of September 30, 2009:
|
|
|
|
|
Investment in Quadriga Superfund at January 1, 2009
|
|
$
|
1,783,297
|
|
Loss in earnings
|
|
|
(310,984
|
)
|
|
|
|
|
|
Investment in Quadriga Superfund at September 30, 2009
|
|
$
|
1,472,313
|
|
|
|
|
|
|
The summarized assets, liabilities, and net decrease in net
assets from operations for Quadriga Superfund as of and for the
nine months ended September 30, 2009 are as follows:
|
|
|
|
|
Assets
|
|
$
|
97,373,015
|
|
|
|
|
|
|
Liabilities
|
|
$
|
(2,738,114
|
)
|
|
|
|
|
|
Net decrease in net assets from operations
|
|
$
|
(35,483,731
|
)
|
|
|
|
|
|
(b) The following represents investments in Superfund Gold
as of September 30, 2009:
|
|
|
|
|
Investment in Superfund Gold, L.P. at January 1, 2009
|
|
$
|
2,000
|
|
Equity in earnings
|
|
|
90,583
|
|
Investment
|
|
|
2,000,000
|
|
|
|
|
|
|
Investment in Superfund Gold, L.P. at September 30, 2009
|
|
$
|
2,092,583
|
|
|
|
|
|
|
The summarized assets, liabilities, and net increase in net
assets from operations for Superfund Gold as of and for the
period April 1, 2009 (commencement of operations) through
September 30, 2009 are as follows:
|
|
|
|
|
Assets
|
|
$
|
10,484,350
|
|
|
|
|
|
|
Liabilities
|
|
$
|
(1,019,927
|
)
|
|
|
|
|
|
Net increase in net assets from operations
|
|
$
|
495,149
|
|
|
|
|
|
|
(c) The following represents investments in Jupiter
Fund SPC as of September 30, 2009:
|
|
|
|
|
Investment in Jupiter Fund SPC at January 1, 2009
|
|
$
|
6,976,845
|
|
Equity in earnings
|
|
|
450,178
|
|
Foreign exchange conversion
|
|
|
357,395
|
|
|
|
|
|
|
Investment in Jupiter Fund SPC at September 30, 2009
|
|
$
|
7,784,418
|
|
|
|
|
|
|
The summarized assets, liabilities, and net increase in net
assets from operations for Jupiter Fund SPC as of and for
the nine months ended September 30, 2009 are as follows:
|
|
|
|
|
Assets
|
|
$
|
16,346,825
|
|
|
|
|
|
|
Liabilities
|
|
$
|
(65,734
|
)
|
|
|
|
|
|
Net increase in net assets from operations
|
|
$
|
975,923
|
|
|
|
|
|
|
* * * * * *
PURCHASERS OF UNITS WILL NOT RECEIVE ANY INTEREST IN THIS
ENTITY.
102
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholder of
Superfund Capital Management, Inc.:
We have audited the accompanying statement of financial
condition of Superfund Capital Management, Inc. (the
Company) as of December 31, 2008 (expressed in
United States dollars). This financial statement is the
responsibility of the Companys management. Our
responsibility is to express an opinion on the financial
statement based on our audit.
We conducted our audit in accordance with auditing standards of
the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statement is free of material misstatement. The Company is not
required to, nor were we engaged to perform, an audit of its
internal control over financial reporting. An audit includes
consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Companys internal control over
financial reporting. Accordingly, we express no such opinion. An
audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statement, assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, such statement of financial condition presents
fairly, in all material respects, the financial position of the
Company as of December 31, 2008, in conformity with
accounting principles generally accepted in the United States of
America.
As discussed in Note 2, the accompanying financial
statement has been prepared from the separate records maintained
by the Company and may not necessarily be indicative of the
conditions that would have existed if the Company had been
operated as an unaffiliated company.
/s/ DELOITTE &
TOUCHE LLP
Philadelphia, Pennsylvania
July 6, 2009
103
(In U.S. Dollars)
|
|
|
|
|
Assets
|
Current Assets:
|
|
|
|
|
Cash
|
|
$
|
4,320,263
|
|
Due from affiliated limited partnerships
|
|
|
252,901
|
|
Equity investment in affiliated limited partnerships (cost
$1,202,000)
|
|
|
1,785,297
|
|
Equity investment in affiliated Fund of Funds (cost $6,481,750)
|
|
|
6,976,845
|
|
Fair value investment in money market fund (cost $563,626)
|
|
|
502,250
|
|
Other short term investments
|
|
|
63,790
|
|
|
|
|
|
|
Total Current Assets
|
|
|
13,901,346
|
|
Fixed assets, net of accumulated depreciation of $181,826
|
|
|
5,871
|
|
Other assets
|
|
|
1,864
|
|
|
|
|
|
|
Total Assets
|
|
$
|
13,909,081
|
|
|
|
|
|
|
|
Liabilities and Stockholders Equity
|
Current Liabilities:
|
|
|
|
|
Accrued expenses
|
|
$
|
441,398
|
|
Accrued expenses affiliated
|
|
|
29,610
|
|
|
|
|
|
|
Total Liabilities
|
|
$
|
471,008
|
|
|
|
|
|
|
Stockholders Equity:
|
|
|
|
|
Contributed capital, $50 par value. Authorized, issued and
outstanding 2,000 shares
|
|
|
100,000
|
|
Additional paid-in capital
|
|
|
2,227,378
|
|
Accumulated other comprehensive income
|
|
|
927,641
|
|
Retained earnings
|
|
|
10,183,054
|
|
|
|
|
|
|
Total Stockholders Equity
|
|
|
13,438,073
|
|
|
|
|
|
|
Total Liabilities and Stockholders Equity
|
|
$
|
13,909,081
|
|
|
|
|
|
|
See accompanying notes to financial statements
PURCHASERS OF UNITS WILL NOT RECEIVE ANY INTEREST IN THIS
ENTITY.
104
SUPERFUND
CAPITAL MANAGEMENT, INC.
December 31,
2008
|
|
(1)
|
General
Information and Summary of Significant Accounting
Policies
|
Nature
of Business
Superfund Capital Management Inc. (the Company), was
incorporated in Grenada, West Indies, in March 2001. The
Companys sole business is the trading and management of
discretionary futures trading accounts, including commodity
pools which are domiciled in the United States of America. The
Company presently serves as commodity pool operator for Quadriga
Superfund L.P. (Quadriga Superfund) and Superfund
Gold, L.P. (Superfund Gold). As of December 31,
2008, Superfund Gold was dormant and commenced operations on
April 1, 2009. The Company is wholly owned by one
shareholder.
A summary of the significant accounting policies which have been
followed in preparing the accompanying statement of financial
condition is set forth below:
Cash
Cash consists of cash on hand and balances held at banks.
Investment
in Money Market Fund
The Company has investments in a money market fund that is
recorded based upon the investments net asset value at
December 31, 2008.
Investment
in Affiliated Limited Partnerships
The Company has invested in Quadriga Superfund, a Delaware
limited partnership, organized to trade speculatively in the
United States of America and international commodity equity
markets using a strategy developed by the Company. The
Companys investment in Quadriga Superfund is recorded
based upon the equity method of accounting.
The Company has invested in Superfund Gold, a Delaware limited
partnership, organized to trade speculatively in the United
States of America and international commodity equity markets
using a strategy developed by the Company. The Companys
investment in Superfund Gold is recorded based upon the equity
method of accounting.
Investment
in Fund of Funds
The Company has invested in the Jupiter Fund SPC, a Cayman
Islands Exempted Limited Liability Company registered as a
Segregated Portfolio Company operating as a Fund of Funds. The
investment adviser is Superfund Invest Inc., a company organized
under the laws of Grenada, W.I. The sole stockholder of the
Company is also a 50% shareholder of Superfund Invest Inc. The
Companys investment in the Jupiter Fund SPC is
recorded based upon the equity method of accounting.
Fixed
Assets
Fixed assets are stated net of accumulated depreciation.
Depreciation is calculated utilizing the straight-line method
over the estimated useful lives of the assets, ranging from
1 3 years.
PURCHASERS OF UNITS WILL NOT RECEIVE ANY INTEREST IN THIS
ENTITY.
105
SUPERFUND
CAPITAL MANAGEMENT, INC.
Notes to
The Statement of Financial
Condition (Continued)
Use of
Estimates
The accompanying statement of financial condition has been
prepared in accordance with accounting principles generally
accepted in the United States of America (GAAP). The
preparation of the statement of financial condition in
conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and
liabilities as of the date of the statement of financial
condition. Actual amounts could differ from such estimates.
Income
Taxes
The Company is incorporated and operates in Grenada, West
Indies, which does not have corporate income taxes.
Additionally, the Company has no income or loss that is
effectively connected to trade or business carried on in the
United States of America, and services are performed outside the
United States. Therefore, the Company was not subject to income
tax for the year ended December 31, 2008.
The Company adopted FASB Interpretation No. 48,
Uncertainty in Income Taxes (FIN 48) on
January 1, 2008. FIN 48 prescribes the minimum
recognition threshold a tax position meets in connection with
accounting for uncertainties in income tax positions taken or
expected to be taken by a company, before being measured and
recognized in the financial statements. Management has evaluated
the application of FIN 48 to the Company and has determined
that the adoption of FIN 48 does not have a material impact
on the Companys Statement of Financial Condition.
Fair
Value Measurements
The Company follows Statement of Financial Accounting Standards
(SFAS) No. 157, Fair Value Measurements. The
provisions of SFAS No. 157 are effective for fiscal
years beginning after November 15, 2007.
SFAS No. 157 establishes a fair value hierarchy that
prioritizes the inputs to valuation techniques used to measure
fair value. Inputs may be observable or unobservable. Observable
inputs are inputs that reflect the assumptions market
participants would use in pricing the asset or liability
developed based on market data obtained from sources independent
of the reporting entity. Unobservable inputs are inputs that
reflect the reporting entitys own assumptions about the
assumptions market participants would use in pricing the asset
or liability developed based on the best information available
in the circumstances. The hierarchy gives the highest priority
to unadjusted quoted prices in active markets for identical
assets or liabilities (level 1 measurements) and the lowest
priority to unobservable inputs (level 3 measurements). The
three levels of the fair value hierarchy under
SFAS No. 157 are described below:
|
|
|
|
Level 1
|
Unadjusted quoted prices in active markets that are accessible
at the measurement date for identical, unrestricted assets or
liabilities.
|
|
|
Level 2
|
Quoted prices in markets that are not considered to be active or
financial instruments for which all significant inputs are
observable, either directly or indirectly.
|
|
|
Level 3
|
Prices or valuations that require inputs that are both
significant to the fair value measurement and observable.
|
In certain cases, the inputs used to measure fair value may fall
into different levels of the fair value hierarchy. In such
cases, the Companys investment level within the fair value
hierarchy is based on the lowest level of input that is
significant to the fair value measurement.
The inputs or methodology used for valuing securities are not
necessarily an indication of the risk associated with investing
in those securities.
PURCHASERS OF UNITS WILL NOT RECEIVE ANY INTEREST IN THIS
ENTITY.
106
SUPERFUND
CAPITAL MANAGEMENT, INC.
Notes to
The Statement of Financial
Condition (Continued)
The following table summarizes the valuation of the
Companys investments by the SFAS 157 fair value
hierarchy as of December 31, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
2008
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Investment in Money Market Fund
|
|
$
|
502,250
|
|
|
$
|
502,250
|
|
|
|
|
|
|
|
|
|
Total Investments Measured at Fair Value
|
|
$
|
502,250
|
|
|
$
|
502,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Functional
Currency
The Companys functional currency is the U.S. dollar.
In addition to maintaining a bank account in the
U.S. dollar, the Company also has two cash accounts
denominated in foreign currencies (Eastern Caribbean dollars and
euros) used for various operating expenses and investment
accounts in money market funds denominated in Canadian dollars.
Transactions denominated in these foreign currencies are
translated to the U.S. dollar as follows: the current
exchange rate is used when translating transactions based in
euros and Canadian dollars to the U.S. dollar and a fixed
currency exchange rate of 2.6882 when translating transactions
based in Eastern Caribbean dollar to the U.S. dollar.
Management believes that such exchange rates approximate the
average exchange rates throughout 2008. The resulting
adjustments are a component of other comprehensive income.
The Company is the general partner and is responsible for the
trading and management of Quadriga Superfund. As general partner
of Quadriga Superfund, the Company receives a 1.85% annual
management fee (1/12 of 1.85% payable monthly) for each Series
of Quadriga Superfund. In addition, the Company receives an
incentive fee of 25% of new appreciation in each Series
net assets computed on a monthly basis and excluding interest
income and as adjusted for subscriptions and redemptions and
one-twelfth of 1% of month end net assets (1% per annum), not to
exceed the amount of actual expenses incurred, for ongoing
organization and offering expenses. Any organization and
offering costs above 1% of net assets per year will be borne by
the Company. The Company also earns monthly operating fees equal
to one-twelfth of 0.15% of month end net assets (0.15% per
annum). At December 31, 2008, the Company had accrued
management fee, ongoing organization and offering fee, and
operating fee revenue receivable, and operating fee revenue
receivable of $251,597, which is included in due from affiliated
limited partnerships in the accompanying Statement of Financial
Condition.
The Company is also the general partner and is responsible for
the trading and management of Superfund Gold. As general partner
of Superfund Gold., the Company will receives a 2.25% annual
management fee (1/12 of 2.25% payable monthly) for each Series
of Superfund Gold. In addition, the Company receives an
incentive fee of 25% of new appreciation in each Series
net assets computed on a monthly basis and excluding interest
income and changes in the Series dollar for dollar
investment in gold and adjusted for subscriptions and
redemptions. The Company is also reimbursed by Superfund Gold
for actual ongoing offering and operating expenses. The General
Partner will assume liability for ongoing offering and operating
expenses which, when considered together, are in excess of 0.75%
of average month-end net assets per year of each Series.
The Company was the general partner and was also responsible for
the trading and management of Quadriga Partners, L.P which
closed and ceased trading on July 31, 2008. As manager of
Quadriga Partners, the Company received a quarterly management
fee computed at an annual rate of 2.00% of the net assets of
Quadriga Partners at the beginning of each month.
Management fees, which were accrued ratably as services were
performed, compensated the Company for services rendered to and
on behalf of Quadriga Partners. In addition, the Company
received an incentive fee from
PURCHASERS OF UNITS WILL NOT RECEIVE ANY INTEREST IN THIS
ENTITY.
107
SUPERFUND
CAPITAL MANAGEMENT, INC.
Notes to
The Statement of Financial
Condition (Continued)
Quadriga Partners in an amount equal to 25% of the excess of net
profits over net losses allocated to the limited partners
capital accounts as of the end of each month. At
December 31, 2008, the Company had accrued management fee
revenue receivable of $1,304, which is included in due from
affiliated limited partnerships in the accompanying Statement of
Financial Condition.
The Company utilizes an automated trading system provided by an
affiliated company. This trading system executes its commodity
trades on behalf of Quadriga Superfund, on a non
exclusive basis and at no cost.
The Company executes its trades through Superfund Asset
Management, Inc. (SAM), an introducing broker
located in Chicago, IL. The sole stockholder of the Company is
also a majority shareholder of SAM. Brokerage costs are
recognized in the account for which the Company is trading. No
brokerage costs are incurred directly by the Company.
Since November 1, 2005 the Company has been using office
space, provided by Quadriga Office Management Inc.
(Quadriga Office Management), an affiliated company
incorporated in Grenada W.I.
Superfund Strategies Inc., an affiliated company based in
Chicago, Illinois, provides consulting service, including
compliance, risk management and product structuring.
The accompanying statement of financial condition has been
prepared from the separate records maintained by the Company and
may not necessarily be indicative of the conditions that would
have existed if the Company had been operated as an unaffiliated
company.
|
|
(3)
|
Investment
in Affiliated Limited Partnerships
|
(a) The following represents investments in Quadriga
Superfund as of December 31, 2008:
|
|
|
|
|
Investment in Quadriga Superfund at January 1, 2008
|
|
$
|
1,530,767
|
|
Equity in earnings
|
|
|
552,530
|
|
Redemption
|
|
|
(300,000
|
)
|
|
|
|
|
|
Investment in Quadriga Superfund at December 31, 2008
|
|
$
|
1,783,297
|
|
|
|
|
|
|
The summarized assets, liabilities, and net decrease in net
assets from operations for Quadriga Superfund as of and for the
year ended December 31, 2008 is as follows:
|
|
|
|
|
Assets
|
|
$
|
101,098,734
|
|
|
|
|
|
|
Liabilities
|
|
$
|
(5,509,349
|
)
|
|
|
|
|
|
Net increase in net assets from operations
|
|
$
|
30,429,785
|
|
|
|
|
|
|
(b) The following represents investments in Superfund Gold, L.P.
as of December 31, 2008:
|
|
|
|
|
Investment in Superfund Gold, L.P. at May 18, 2008
|
|
$
|
2,000
|
|
Equity in earnings
|
|
|
0
|
|
|
|
|
|
|
Investment in Superfund Gold, L.P. at December 31, 2008
|
|
$
|
2,000
|
|
|
|
|
|
|
PURCHASERS OF UNITS WILL NOT RECEIVE ANY INTEREST IN THIS
ENTITY.
108
SUPERFUND
CAPITAL MANAGEMENT, INC.
Notes to
The Statement of Financial
Condition (Continued)
The summarized assets, liabilities, and change in net assets
from operations for Superfund Gold, L.P. as of and for the year
ended December 31, 2008 is as follows:
|
|
|
|
|
Assets
|
|
$
|
4,000
|
|
|
|
|
|
|
Liabilities
|
|
$
|
0
|
|
|
|
|
|
|
Net increase in net assets from operations
|
|
$
|
0
|
|
|
|
|
|
|
(c) The following represents investments in Jupiter
Fund SPC as of December 31, 2008:
|
|
|
|
|
Investment in Jupiter Fund SPC at November 28, 2008
|
|
$
|
6,481,750
|
|
Loss in earnings
|
|
|
(8,655
|
)
|
Foreign exchange conversion
|
|
|
503,750
|
|
|
|
|
|
|
Investment in Jupiter Fund SPC at December 31, 2008
|
|
$
|
6,976,845
|
|
|
|
|
|
|
The summarized assets, liabilities, and net increase in net
assets from operations for Jupiter Fund SPC as of and for
the year ended December 31, 2008 is as follows:
|
|
|
|
|
Assets
|
|
$
|
14,624,811
|
|
|
|
|
|
|
Liabilities
|
|
$
|
46,246
|
|
|
|
|
|
|
Net increase in net assets from operations
|
|
$
|
654,304
|
|
|
|
|
|
|
PURCHASERS OF UNITS WILL NOT RECEIVE ANY INTEREST IN THIS
ENTITY.
109
PART
TWO STATEMENT OF ADDITIONAL INFORMATION
QUADRIGA SUPERFUND, L.P.
$220,000,000 SERIES A
$320,000,000 SERIES B
UNITS OF LIMITED PARTNERSHIP INTEREST
THIS IS A SPECULATIVE, LEVERAGED INVESTMENT WHICH INVOLVES THE
RISK OF LOSS. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF
FUTURE RESULTS. SEE THE RISKS YOU FACE BEGINNING AT
PAGE 9 IN PART ONE
THIS PROSPECTUS IS IN TWO PARTS: A DISCLOSURE DOCUMENT AND A
STATEMENT OF ADDITIONAL INFORMATION. THESE PARTS ARE BOUND
TOGETHER, AND BOTH CONTAIN IMPORTANT INFORMATION.
SUPERFUND CAPITAL MANAGEMENT, INC.
GENERAL PARTNER
110
PART
TWO
STATEMENT
OF ADDITIONAL INFORMATION
|
|
|
|
|
|
|
Page
|
|
|
Strategy
|
|
|
112
|
|
Why Superfund?
|
|
|
121
|
|
Glossary
|
|
|
121
|
|
The Futures and Forward Markets
|
|
|
123
|
|
Regulation
|
|
|
123
|
|
Investment Considerations
|
|
|
124
|
|
|
Exhibits
|
EXHIBIT A: Quadriga Superfund, L.P. Form of Fourth Amended
and Restated Limited Partnership Agreement
|
|
|
A-1
|
|
EXHIBIT B: Quadriga Superfund, L.P. Request for Redemption
|
|
|
B-1
|
|
EXHIBIT C: Quadriga Superfund, L.P. Subscription
Representations
|
|
|
C-1
|
|
EXHIBIT D: Quadriga Superfund, L.P. Subscription Agreement
|
|
|
D-1
|
|
EXHIBIT E: Quadriga Superfund, L.P. Request for Transfer
Form
|
|
|
E-1
|
|
EXHIBIT F: Quadriga Superfund, L.P. Subscription Agreement
for an Additional Investment
|
|
|
F-1
|
|
EXHIBIT G: Quadriga Superfund, L.P. Series Exchange
Subscription Agreement
|
|
|
G-1
|
|
111
STRATEGY
Market
Diversification
Superfund Capital Management, Inc. and its affiliates and
members of the Superfund group of companies (collectively,
Superfund) use proprietary trading systems designed
to ensure minimal correlation to traditional investments. The
spectrum of traded instruments globally consists of more than
120 futures markets in both commodity and financial futures,
although trading does not occur in all markets at all times.
Fundamental to Superfunds trading style is low correlation
between the different instruments and high liquidity for order
execution.
The above chart is only an indication of the variety of markets
traded or that may be traded by Superfund and is not indicative
of relative allocations among these markets. The actual
allocations among these markets change over time due to
liquidity, volatility and risk considerations.
On October 31, 2009, the approximate allocations among
market sectors traded on behalf of the Series were as follows:
stock indices, 3.1%; currencies, 13.9%; bonds, 74.6%; grains,
0.5%; energies, 2.1%; metals, 5.1%; agricultural markets, 0.5%;
livestock, 0.2%.
Technical
Trading Systems
Positions are initiated using proprietary technical algorithms
that attempt to identify price trends at their early stages.
Most systematic trend following systems employ technical
indicators such as moving averages or Bollinger Bands to
identify trending markets. The Superfund trading strategy is
based on the premise that the key to using such indicators
successfully lies in the way they are interrelated and applied
in combination.
112
At present, the trading system utilized by Superfund Capital
Management is based on short and midterm time horizons. One key
to the prior success of the funds managed by Superfund Capital
Management and its affiliates, employing substantially the same
futures and forwards trading strategy as employed by the Fund,
has been the limiting of drawdowns by daily maintenance of stop
orders. In this way, if a trend reverses, losses are
theoretically limited, while if a trend continues profits are
theoretically protected. By these means, the Superfund trading
system seeks to optimize winning trades. However, there
can be no assurance that stop orders will be effective at
limiting losses to pre-determined amounts. Past performance is
not necessarily indicative of future results.
Risk
Management
Risk management plays a key role in the Superfund investment
strategy. The proprietary program limits initial risk per trade
to a theoretical maximum of 1.5 percent of total fund
assets. In addition, the systems continuously screen volatility
and signal adjustments of portfolio exposure accordingly.
Additional
Performance Information
Certain Units are not subject to selling commissions:
(1) Units purchased through Superfund USA by investors that
participate in a registered investment advisers
asset-based fee or fixed fee advisory program; (2) Units
purchased through Superfund USA by investors who are commodity
pools operated by commodity pool operators registered as such
with the NFA; and (3) Units for which the investor has paid
the maximum cumulative selling commissions of 10% of the
original purchase price. Series A Units not subject to selling
commissions were first sold as of November 1, 2007, and
Series B Units not subject to selling commissions were first
sold as of December 1, 2006.
If a Limited Partners Units are not subject to the selling
commissions described above (and further described in this
Prospectus at CHARGES TO EACH SERIES Brokerage
and Trailing Commissions), as of the end of each month, the
Limited Partners Units will be charged, as a Fund
bookkeeping entry only, the same
1/12
of the 4% annual selling commission as other investors. However,
the amount of that charge will not be taken from the Fund or
paid to any person and, as of the beginning of the next month,
that charge will be reversed and the Fund will issue that
Limited Partner additional Units, calculated to three decimal
places, at the then current Unit net asset value. Accordingly,
the net asset value of that Limited Partners investment in
the Fund will reflect the inapplicability of
113
the annual selling commission to the Limited Partners
Units and a somewhat higher performance fee, if applicable, as a
result of the Limited Partners Units not paying the annual
selling commission. The Fund will use this bookkeeping procedure
and the issuance of additional Units to maintain a uniform net
asset value across all Units.
The following tables compare the historical performance of
Series A Units to the pro-forma performance of
Series A Units for investors not subject to sales
commissions through October 2007 and to the historical
performance of Series A Units for investors not subject to sales
commissions since November 2007. Please see Note to
Additional Performance Information on page 116.
Historical Performance of Series A Units
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2003
|
|
|
2004
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
Jan
|
|
|
11.38%
|
|
|
Jan
|
|
|
2.46
|
%
|
|
Jan
|
|
|
(9.87
|
%)
|
|
Jan
|
|
|
6.87
|
%
|
|
Jan
|
|
|
(3.09
|
%)
|
|
Jan
|
|
|
(2.73%
|
)
|
|
Jan
|
|
|
0.35%
|
|
Feb
|
|
|
12.00%
|
|
|
Feb
|
|
|
12.65
|
%
|
|
Feb
|
|
|
1.78
|
%
|
|
Feb
|
|
|
(3.66
|
%)
|
|
Feb
|
|
|
(7.54
|
%)
|
|
Feb
|
|
|
17.93%
|
|
|
Feb
|
|
|
0.04%
|
|
Mar
|
|
|
(20.12%
|
)
|
|
Mar
|
|
|
(2.10
|
%)
|
|
Mar
|
|
|
6.15
|
%
|
|
Mar
|
|
|
4.48
|
%
|
|
Mar
|
|
|
(8.73
|
%)
|
|
Mar
|
|
|
2.29%
|
|
|
Mar
|
|
|
(2.33%
|
)
|
Apr
|
|
|
0.51%
|
|
|
Apr
|
|
|
(14.20
|
%)
|
|
Apr
|
|
|
(12.22
|
%)
|
|
Apr
|
|
|
5.79
|
%
|
|
Apr
|
|
|
7.99
|
%
|
|
Apr
|
|
|
(1.57%
|
)
|
|
Apr
|
|
|
(6.92%
|
)
|
May
|
|
|
15.04%
|
|
|
May
|
|
|
7.21
|
%
|
|
May
|
|
|
0.30
|
%
|
|
May
|
|
|
(7.57
|
%)
|
|
May
|
|
|
2.39
|
%
|
|
May
|
|
|
5.21%
|
|
|
May
|
|
|
(12.03%
|
)
|
Jun
|
|
|
(8.37%
|
)
|
|
Jun
|
|
|
(11.62
|
%)
|
|
Jun
|
|
|
2.44
|
%
|
|
Jun
|
|
|
(0.33
|
%)
|
|
Jun
|
|
|
6.84
|
%
|
|
Jun
|
|
|
7.73%
|
|
|
Jun
|
|
|
(2.39%
|
)
|
Jul
|
|
|
(8.77%
|
)
|
|
Jul
|
|
|
(0.16
|
%)
|
|
Jul
|
|
|
(2.85
|
%)
|
|
Jul
|
|
|
(10.35
|
%)
|
|
Jul
|
|
|
(6.78
|
%)
|
|
Jul
|
|
|
(9.65%
|
)
|
|
Jul
|
|
|
(7.86%
|
)
|
Aug
|
|
|
2.16%
|
|
|
Aug
|
|
|
(6.84
|
%)
|
|
Aug
|
|
|
5.69
|
%
|
|
Aug
|
|
|
0.38
|
%
|
|
Aug
|
|
|
(3.27
|
%)
|
|
Aug
|
|
|
(4.64%
|
)
|
|
Aug
|
|
|
3.52%
|
|
Sep
|
|
|
0.12%
|
|
|
Sep
|
|
|
10.44
|
%
|
|
Sep
|
|
|
0.51
|
%
|
|
Sep
|
|
|
3.20
|
%
|
|
Sep
|
|
|
5.57
|
%
|
|
Sep
|
|
|
(0.07%
|
)
|
|
Sep
|
|
|
2.81%
|
|
Oct
|
|
|
3.99%
|
|
|
Oct
|
|
|
4.88
|
%
|
|
Oct
|
|
|
(7.93
|
%)
|
|
Oct
|
|
|
5.53
|
%
|
|
Oct
|
|
|
9.92
|
%
|
|
Oct
|
|
|
12.19%
|
|
|
Oct
|
|
|
(11.60%
|
)
|
Nov
|
|
|
(1.75%
|
)
|
|
Nov
|
|
|
12.30
|
%
|
|
Nov
|
|
|
8.81
|
%
|
|
Nov
|
|
|
(1.28
|
%)
|
|
Nov
|
|
|
(4.69
|
%)
|
|
Nov
|
|
|
1.47%
|
|
|
|
|
|
|
|
Dec
|
|
|
19.45%
|
|
|
Dec
|
|
|
0.19
|
%
|
|
Dec
|
|
|
(0.28
|
%)
|
|
Dec
|
|
|
11.36
|
%
|
|
Dec
|
|
|
2.82
|
%
|
|
Dec
|
|
|
1.32%
|
|
|
|
|
|
|
|
Annual
|
|
|
20.23%
|
|
|
Annual
|
|
|
11.35
|
%
|
|
Annual
|
|
|
(9.43
|
%)
|
|
Annual
|
|
|
12.94
|
%
|
|
Annual
|
|
|
(0.92
|
%)
|
|
Annual
|
|
|
30.00%
|
|
|
Annual
|
|
|
(32.07%
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10 mos.
|
)
|
Pro-forma Performance of Series A Units for Investors Not
Subject to Sales Commissions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2003
|
|
|
2004
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
|
Jan
|
|
|
11.71%
|
|
|
Jan
|
|
|
2.79
|
%
|
|
Jan
|
|
|
(9.54
|
%)
|
|
Jan
|
|
|
7.20
|
%
|
|
Jan
|
|
|
(2.76
|
%)
|
Feb
|
|
|
12.33%
|
|
|
Feb
|
|
|
12.98
|
%
|
|
Feb
|
|
|
2.11
|
%
|
|
Feb
|
|
|
(3.33
|
%)
|
|
Feb
|
|
|
(7.21
|
%)
|
Mar
|
|
|
(19.79%
|
)
|
|
Mar
|
|
|
(1.77
|
%)
|
|
Mar
|
|
|
6.48
|
%
|
|
Mar
|
|
|
4.81
|
%
|
|
Mar
|
|
|
(8.40
|
%)
|
Apr
|
|
|
0.84%
|
|
|
Apr
|
|
|
(13.87
|
%)
|
|
Apr
|
|
|
(11.89
|
%)
|
|
Apr
|
|
|
6.12
|
%
|
|
Apr
|
|
|
8.32
|
%
|
May
|
|
|
15.37%
|
|
|
May
|
|
|
7.54
|
%
|
|
May
|
|
|
0.63
|
%
|
|
May
|
|
|
(7.24
|
%)
|
|
May
|
|
|
2.72
|
%
|
Jun
|
|
|
(8.04%
|
)
|
|
Jun
|
|
|
(11.29
|
%)
|
|
Jun
|
|
|
2.77
|
%
|
|
Jun
|
|
|
0.00
|
%
|
|
Jun
|
|
|
7.17
|
%
|
Jul
|
|
|
(8.44%
|
)
|
|
Jul
|
|
|
0.17
|
%
|
|
Jul
|
|
|
(2.52
|
%)
|
|
Jul
|
|
|
(10.02
|
%)
|
|
Jul
|
|
|
(6.45
|
%)
|
Aug
|
|
|
2.49%
|
|
|
Aug
|
|
|
(6.51
|
%)
|
|
Aug
|
|
|
6.02
|
%
|
|
Aug
|
|
|
0.71
|
%
|
|
Aug
|
|
|
(2.94
|
%)
|
Sep
|
|
|
0.45%
|
|
|
Sep
|
|
|
10.77
|
%
|
|
Sep
|
|
|
0.84
|
%
|
|
Sep
|
|
|
3.53
|
%
|
|
Sep
|
|
|
5.90
|
%
|
Oct
|
|
|
4.32%
|
|
|
Oct
|
|
|
5.21
|
%
|
|
Oct
|
|
|
(7.60
|
%)
|
|
Oct
|
|
|
5.86
|
%
|
|
Oct
|
|
|
10.25
|
%
|
Nov
|
|
|
(1.42%
|
)
|
|
Nov
|
|
|
12.63
|
%
|
|
Nov
|
|
|
9.14
|
%
|
|
Nov
|
|
|
(0.95
|
%)
|
|
|
|
|
|
|
Dec
|
|
|
19.78%
|
|
|
Dec
|
|
|
0.52
|
%
|
|
Dec
|
|
|
0.05
|
%
|
|
Dec
|
|
|
11.69
|
%
|
|
|
|
|
|
|
Annual
|
|
|
25.03%
|
|
|
Annual
|
|
|
15.81
|
%
|
|
Annual
|
|
|
(5.74
|
%)
|
|
Annual
|
|
|
17.45
|
%
|
|
Annual
|
|
|
4.50
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10 mos.
|
)
|
Historical Performance of Series A Units for Investors Not
Subject to Sales Commissions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
|
|
|
|
|
|
Jan
|
|
|
(2.40
|
%)
|
|
Jan
|
|
|
0.69
|
%
|
|
|
|
|
|
|
Feb
|
|
|
18.23
|
%
|
|
Feb
|
|
|
0.37
|
%
|
|
|
|
|
|
|
Mar
|
|
|
2.55
|
%
|
|
Mar
|
|
|
(2.01
|
%)
|
|
|
|
|
|
|
Apr
|
|
|
(1.24
|
%)
|
|
Apr
|
|
|
(6.61
|
%)
|
|
|
|
|
|
|
May
|
|
|
5.48
|
%
|
|
May
|
|
|
(11.73
|
%)
|
|
|
|
|
|
|
Jun
|
|
|
8.01
|
%
|
|
Jun
|
|
|
(2.07
|
%)
|
|
|
|
|
|
|
Jul
|
|
|
(9.35
|
%)
|
|
Jul
|
|
|
(7.56
|
%)
|
|
|
|
|
|
|
Aug
|
|
|
(4.32
|
%)
|
|
Aug
|
|
|
3.86
|
%
|
|
|
|
|
|
|
Sep
|
|
|
0.26
|
%
|
|
Sep
|
|
|
3.16
|
%
|
|
|
|
|
|
|
Oct
|
|
|
12.57
|
%
|
|
Oct
|
|
|
(11.31
|
%)
|
Nov
|
|
|
(4.37
|
%)
|
|
Nov
|
|
|
1.81
|
%
|
|
|
|
|
|
|
Dec
|
|
|
3.17
|
%
|
|
Dec
|
|
|
1.66
|
%
|
|
|
|
|
|
|
Annual
|
|
|
(1.35
|
%)
|
|
Annual
|
|
|
34.88
|
%
|
|
Annual
|
|
|
(30.52
|
%)
|
|
|
|
(2 mos.
|
)
|
|
|
|
|
|
|
|
|
|
|
(10 mos.
|
)
|
PAST
PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE
RESULTS
114
The following tables compare the historical performance of
Series B Units to the pro-forma performance of
Series B Units for investors not subject to sales
commissions through November 2006 and to the historical
performance of Series B Units for investors not subject to
sales commissions since December 2006. Please see Note to
Additional Performance Information on page 116.
Historical Performance of Series B Units
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2003
|
|
|
2004
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
Jan
|
|
|
17.59%
|
|
|
Jan
|
|
|
3.49
|
%
|
|
Jan
|
|
|
(14.74
|
%)
|
|
Jan
|
|
|
9.72
|
%
|
|
Jan
|
|
|
(4.60
|
%)
|
|
Jan
|
|
|
(3.61%
|
)
|
|
Jan
|
|
|
1.01%
|
|
Feb
|
|
|
17.08%
|
|
|
Feb
|
|
|
18.63
|
%
|
|
Feb
|
|
|
3.94
|
%
|
|
Feb
|
|
|
(4.95
|
%)
|
|
Feb
|
|
|
(10.67
|
%)
|
|
Feb
|
|
|
24.60%
|
|
|
Feb
|
|
|
0.68%
|
|
Mar
|
|
|
(29.11%
|
)
|
|
Mar
|
|
|
(2.59
|
%)
|
|
Mar
|
|
|
8.49
|
%
|
|
Mar
|
|
|
6.32
|
%
|
|
Mar
|
|
|
(12.65
|
%)
|
|
Mar
|
|
|
1.95%
|
|
|
Mar
|
|
|
(4.49%
|
)
|
Apr
|
|
|
0.87%
|
|
|
Apr
|
|
|
(19.60
|
%)
|
|
Apr
|
|
|
(16.86
|
%)
|
|
Apr
|
|
|
8.31
|
%
|
|
Apr
|
|
|
11.38
|
%
|
|
Apr
|
|
|
(1.20%
|
)
|
|
Apr
|
|
|
(10.83%
|
)
|
May
|
|
|
21.90%
|
|
|
May
|
|
|
9.11
|
%
|
|
May
|
|
|
0.48
|
%
|
|
May
|
|
|
(10.37
|
%)
|
|
May
|
|
|
3.41
|
%
|
|
May
|
|
|
7.33%
|
|
|
May
|
|
|
(19.31%
|
)
|
Jun
|
|
|
(11.57%
|
)
|
|
Jun
|
|
|
(15.07
|
%)
|
|
Jun
|
|
|
3.56
|
%
|
|
Jun
|
|
|
0.29
|
%
|
|
Jun
|
|
|
9.77
|
%
|
|
Jun
|
|
|
12.54%
|
|
|
Jun
|
|
|
(3.52%
|
)
|
Jul
|
|
|
(11.95%
|
)
|
|
Jul
|
|
|
(0.09
|
%)
|
|
Jul
|
|
|
(3.68
|
%)
|
|
Jul
|
|
|
(14.11
|
%)
|
|
Jul
|
|
|
(10.11
|
%)
|
|
Jul
|
|
|
(15.00%
|
)
|
|
Jul
|
|
|
(12.24%
|
)
|
Aug
|
|
|
3.42%
|
|
|
Aug
|
|
|
(9.29
|
%)
|
|
Aug
|
|
|
8.02
|
%
|
|
Aug
|
|
|
0.55
|
%
|
|
Aug
|
|
|
(4.66
|
%)
|
|
Aug
|
|
|
(7.28%
|
)
|
|
Aug
|
|
|
5.62%
|
|
Sep
|
|
|
0.04%
|
|
|
Sep
|
|
|
14.75
|
%
|
|
Sep
|
|
|
1.06
|
%
|
|
Sep
|
|
|
4.45
|
%
|
|
Sep
|
|
|
8.26
|
%
|
|
Sep
|
|
|
0.46%
|
|
|
Sep
|
|
|
4.58%
|
|
Oct
|
|
|
5.92%
|
|
|
Oct
|
|
|
7.01
|
%
|
|
Oct
|
|
|
(10.77
|
%)
|
|
Oct
|
|
|
7.74
|
%
|
|
Oct
|
|
|
14.57
|
%
|
|
Oct
|
|
|
20.14%
|
|
|
Oct
|
|
|
(18.34%
|
)
|
Nov
|
|
|
(2.04%
|
)
|
|
Nov
|
|
|
17.33
|
%
|
|
Nov
|
|
|
12.93
|
%
|
|
Nov
|
|
|
(1.73
|
%)
|
|
Nov
|
|
|
(6.79
|
%)
|
|
Nov
|
|
|
2.78%
|
|
|
|
|
|
|
|
Dec
|
|
|
27.33%
|
|
|
Dec
|
|
|
0.41
|
%
|
|
Dec
|
|
|
(0.22
|
%)
|
|
Dec
|
|
|
16.14
|
%
|
|
Dec
|
|
|
4.44
|
%
|
|
Dec
|
|
|
2.60%
|
|
|
|
|
|
|
|
Annual
|
|
|
27.71%
|
|
|
Annual
|
|
|
16.82
|
%
|
|
Annual
|
|
|
(12.06
|
%)
|
|
Annual
|
|
|
19.74
|
%
|
|
Annual
|
|
|
(2.60
|
%)
|
|
Annual
|
|
|
46.56%
|
|
|
Annual
|
|
|
(46.63%
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10 mos.
|
)
|
Pro-forma
Performance of Series B Units for Investors Not Subject to
Sales Commissions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2003
|
|
|
2004
|
|
|
2005
|
|
|
2006
|
|
|
Jan
|
|
|
17.92%
|
|
|
Jan
|
|
|
3.82
|
%
|
|
Jan
|
|
|
(14.41
|
%)
|
|
Jan
|
|
|
10.05%
|
|
Feb
|
|
|
17.40%
|
|
|
Feb
|
|
|
18.96
|
%
|
|
Feb
|
|
|
4.27
|
%
|
|
Feb
|
|
|
(4.62%
|
)
|
Mar
|
|
|
(28.78%
|
)
|
|
Mar
|
|
|
(2.26
|
%)
|
|
Mar
|
|
|
8.82
|
%
|
|
Mar
|
|
|
6.65%
|
|
Apr
|
|
|
1.20%
|
|
|
Apr
|
|
|
(19.27
|
%)
|
|
Apr
|
|
|
(16.53
|
%)
|
|
Apr
|
|
|
8.64%
|
|
May
|
|
|
22.23%
|
|
|
May
|
|
|
9.44
|
%
|
|
May
|
|
|
0.81
|
%
|
|
May
|
|
|
(10.04%
|
)
|
Jun
|
|
|
(11.24%
|
)
|
|
Jun
|
|
|
(14.74
|
%)
|
|
Jun
|
|
|
3.89
|
%
|
|
Jun
|
|
|
0.62%
|
|
Jul
|
|
|
(11.62%
|
)
|
|
Jul
|
|
|
0.24
|
%
|
|
Jul
|
|
|
(3.35
|
%)
|
|
Jul
|
|
|
(13.78%
|
)
|
Aug
|
|
|
3.75%
|
|
|
Aug
|
|
|
(8.96
|
%)
|
|
Aug
|
|
|
8.35
|
%
|
|
Aug
|
|
|
0.88%
|
|
Sep
|
|
|
0.37%
|
|
|
Sep
|
|
|
15.08
|
%
|
|
Sep
|
|
|
1.39
|
%
|
|
Sep
|
|
|
4.78%
|
|
Oct
|
|
|
6.25%
|
|
|
Oct
|
|
|
7.34
|
%
|
|
Oct
|
|
|
(10.44
|
%)
|
|
Oct
|
|
|
8.07%
|
|
Nov
|
|
|
(1.71%
|
)
|
|
Nov
|
|
|
17.66
|
%
|
|
Nov
|
|
|
13.26
|
%
|
|
Nov
|
|
|
(1.40%
|
)
|
Dec
|
|
|
27.66%
|
|
|
Dec
|
|
|
0.74
|
%
|
|
Dec
|
|
|
0.11
|
%
|
|
|
|
|
|
|
Annual
|
|
|
32.82%
|
|
|
Annual
|
|
|
21.50
|
%
|
|
Annual
|
|
|
(8.46
|
%)
|
|
Annual
|
|
|
6.90%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11 mos.
|
)
|
Historical Performance of Series B Units for Investors Not
Subject to Sales Commissions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
|
|
|
|
|
|
Jan
|
|
|
(4.27
|
%)
|
|
Jan
|
|
|
(3.29%
|
)
|
|
Jan
|
|
|
1.27%
|
|
|
|
|
|
|
|
Feb
|
|
|
(10.37
|
%)
|
|
Feb
|
|
|
24.93%
|
|
|
Feb
|
|
|
0.93%
|
|
|
|
|
|
|
|
Mar
|
|
|
(12.36
|
%)
|
|
Mar
|
|
|
2.21%
|
|
|
Mar
|
|
|
(4.17%
|
)
|
|
|
|
|
|
|
Apr
|
|
|
11.76
|
%
|
|
Apr
|
|
|
(0.87%
|
)
|
|
Apr
|
|
|
(10.53%
|
)
|
|
|
|
|
|
|
May
|
|
|
3.75
|
%
|
|
May
|
|
|
7.61%
|
|
|
May
|
|
|
(19.03%
|
)
|
|
|
|
|
|
|
Jun
|
|
|
10.14
|
%
|
|
Jun
|
|
|
12.83%
|
|
|
Jun
|
|
|
(3.20%
|
)
|
|
|
|
|
|
|
Jul
|
|
|
(9.81
|
%)
|
|
Jul
|
|
|
(14.71%
|
)
|
|
Jul
|
|
|
(11.95%
|
)
|
|
|
|
|
|
|
Aug
|
|
|
(4.34
|
%)
|
|
Aug
|
|
|
(6.97%
|
)
|
|
Aug
|
|
|
5.97%
|
|
|
|
|
|
|
|
Sep
|
|
|
8.62
|
%
|
|
Sep
|
|
|
0.79%
|
|
|
Sep
|
|
|
4.93%
|
|
|
|
|
|
|
|
Oct
|
|
|
14.95
|
%
|
|
Oct
|
|
|
20.54%
|
|
|
Oct
|
|
|
(18.06%
|
)
|
|
|
|
|
|
|
Nov
|
|
|
(6.48
|
%)
|
|
Nov
|
|
|
3.12%
|
|
|
|
|
|
|
|
Dec
|
|
|
16.53%
|
|
|
Dec
|
|
|
4.79
|
%
|
|
Dec
|
|
|
2.94%
|
|
|
|
|
|
|
|
Annual
|
|
|
16.53%
|
|
|
Annual
|
|
|
1.39
|
%
|
|
Annual
|
|
|
52.09%
|
|
|
Annual
|
|
|
(46.09%
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10 mos.
|
)
|
PAST
PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE
RESULTS
115
Note to Additional Performance Information
Series A Units not subject to selling commissions were
first sold as of November 1, 2007, and Series B Units
not subject to selling commissions were first sold as of
December 1, 2006. Performance information presented for
Units not subject to selling commissions prior to their first
sale is presented on a pro-forma basis. Performance information
presented for Units not subject to selling commissions since
their first sale is the actual performance of such Units.
The purpose of the pro-forma presentation is to provide an
approximation of the rates of return Units that are not subject
to selling commissions would have achieved had they been traded
since January 2003. However, there are material limitations
inherent in pro-forma comparisons. It is not feasible to make
all the pro-forma adjustments necessary to reflect the effect of
the absence of selling commissions on the actual performance of
Units prior to their commencement of trading. The pro-forma
performance presented should not be considered indicative of how
such Units would have actually performed had they not been
subject to selling commissions.
The pro-forma calculations were made on a month-to-month basis.
That is, the adjustments of fees and income in one month does
not affect the actual figures used in the following month for
making similar pro-forma calculations. Accordingly, the
pro-forma performance does not reflect on a cumulative basis the
effect of the differences between the fees to be charged and
interest to be earned by Units not subject to selling
commissions and the fees charged and interest earned by Units
that are subject to selling commissions. The following
assumptions were made in calculating the pro-forma rates of
return: a management fee of 1.85%, a performance fee of 25%,
actual interest income, actual brokerage fees, actual ongoing
offering expenses (up to a maximum of 1% per annum of month-end
net assets), actual operating expenses (up to a maximum of 0.15%
per annum of month-end net assets), and no selling commissions.
116
WHY
SUPERFUND?
Why a
Managed Futures Fund?
Managed futures investments are intended to generate medium to
long-term capital growth and provide global portfolio
diversification. A primary reason to invest in a managed futures
product, such as Quadriga Superfund, is to provide a
non-correlated investment to a portfolio of traditional stock
and bond investments that has the potential to improve returns
and lower the portfolios volatility. This is possible
because managed futures products historically have not been
correlated to traditional markets, such as stocks and bonds.
Why
Superfund?
The Superfund trading strategy has a track record of positive
performance over the past thirteen years. The Superfund funds
trade more than 120 futures and forward markets worldwide
using proprietary trading systems, although not in all markets
at all times. The funds, utilizing the Superfund proprietary
trading systems, have often produced positive returns, even
during difficult markets for stocks and bonds, due to
diversified trades and Superfund proprietary trading
systems identification of trends and employment of strict
risk controls. The past performance of these Superfund funds
is not necessarily indicative of the future results of Quadriga
Superfund.
Why
Now?
Stock market performance during this decade has demonstrated
that long-only equity portfolios generally do not make money
during downward cycles. For continued portfolio performance, it
is potentially advantageous for investors to own investments
that have the potential to appreciate in any economic
environment.
Historical
Low-Correlated Performance
Historically, managed futures investments have had very little
correlation to the stock and bond markets. While there is no
guarantee of positive performance in a managed futures component
of a portfolio, the non-correlation characteristic of managed
futures can improve risk adjusted returns in a diversified
investment portfolio. Having the ability to go long and short
provides managed futures the opportunity to make potentially
profitable trades in both up and down markets. In other words,
profit or loss in managed future funds is not dependent on
economic cycles. There can be no assurance, however, that
Quadriga Superfund will trade profitably in the futures and
forwards markets or not incur losses.
GLOSSARY
Quadriga
Superfund
Quadriga Superfund has two series of Units, Series A and
Series B. Series A has a strategy similar to Superfund
Q-AG, which has a managed futures trading strategy and a twelve
year track record. Series B has a strategy similar to
Superfund GCT, which employs more leverage than Superfund Q-AG,
and also has a managed futures trading strategy.
Superfund
Q-AG
Superfund Q-AG is the Superfund group of companies
flagship product and was introduced to the retail investor in
Europe on March 8, 1996. This product is not available for
U.S. investors.
Superfund
GCT
Superfund GCT is the more aggressive fund strategy and was
introduced on January 4, 2000 to investors. This product is
not available for U.S. investors.
Aggregate
subscriptions
Total gross capital subscriptions made to a pool or account from
inception through the date indicated.
121
Drawdown
Losses experienced by a pool or account over a specified period.
Worst
month peak-to-valley drawdown
Greatest cumulative percentage decline in month-end net asset
value due to losses sustained by a pool or account during any
period in which the initial month-end net asset value is not
equaled or exceeded by a subsequent month-end net asset value.
The MSCI World Index is a market capitalization-weighted index.
Consisting of 23 developed market country indices, the MSCI
World Index measures the equity market performance of these
countries.
The National Association of Securities Dealers Automated
Quotation (NASDAQ) is an electronic exchange. Unlike
the New York Stock Exchange auction market where orders meet on
a trading floor, NASDAQ orders are paired and executed on a
computer network. The NASDAQ Composite Index measures the
performance of all domestic and international stocks traded on
the NASDAQ. The NASDAQ Composite Index includes over
3,000 companies.
Net Asset
Value
Net Asset Value of each Series is that Series assets less
liabilities determined in accordance with accounting principles
generally accepted in the United States.
S&P
500
The S&P 500 is one of the most commonly used benchmarks for
the overall U.S. stock market. It is an index consisting of
500 stocks chosen for market size, liquidity and industry
grouping, among other factors. The S&P 500 Index
represents the price trend movements of the common stock of
major U.S. public companies.
CISDM
Center for International Securities and Derivatives Markets
(CISDM) is a non-profit academic research center
that focuses on security and investment fund performance in both
U.S. and international asset markets for approximately
1,800 active hedge funds and 600 active commodity
trading advisors, commodity pool operators and managed futures
programs.
CSFB
The Credit Suisse/Tremont Hedge Fund Index (the
CSFB) is an asset-weighted hedge fund index. The
methodology utilized in the CSFB starts by defining the universe
it is measuring. The index universe is defined as funds with:
(i) a minimum of $50 million in assets under
management (AUM), (ii) a minimum one-year track
record, and (iii) current audited financial statements. The
CSFB uses a rules-based construction methodology, identifies its
constituent funds, and minimizes subjectivity in the CSFB member
selection process. It aims at a maximum representation of the
index universe. To minimize survivorship bias, funds are not
removed from the CSFB until they are fully liquidated or fail to
meet the financial reporting requirements. Funds are separated
into ten primary subcategories based on their investment style.
The CSFB in all cases represents at least 85% of the assets
under management in each respective category of the index
universe.
122
THE
FUTURES AND FORWARD MARKETS
Futures contracts are standardized agreements traded on
commodity exchanges that call for the future delivery of the
commodity or financial instrument at a specified time and place.
A futures trader that enters into a contract to take delivery of
the underlying commodity is long the contract, or
has bought the contract. A trader that is obligated
to make delivery is short the contract or has
sold the contract. Actual delivery on the contract
rarely occurs. Futures traders usually offset (liquidate) their
contract obligations by entering into equal but offsetting
futures positions. For example, a trader who is long one
September Treasury bond contract on the Chicago Board of Trade
can offset the obligation by entering into a short position in a
September Treasury bond contract on that exchange. Futures
positions that have not yet been liquidated are known as
open contracts or positions. Futures contracts are
traded on a wide variety of commodities, including agricultural
products, metals, livestock products, government securities,
currencies and stock market indices. Options on futures
contracts are also traded on U.S. commodity exchanges.
Currencies and other commodities may be purchased or sold for
future delivery or cash settlement through banks or dealers
pursuant to forward or swap contracts. Currencies also can be
traded pursuant to futures contracts on organized futures
exchanges; however, Superfund Capital Management will use the
dealer market in foreign exchange contracts for most of the
Funds trading in currencies. Such dealers will act as
principals in these transactions and will include
their profit in the price quoted on the contracts. Unlike
futures contracts, foreign exchange contracts are not
standardized. In addition, the forward market is largely
unregulated. Forward contracts are not cleared or
guaranteed by a third party. Thus, each Series is subject to the
creditworthiness of the foreign exchange dealer with whom the
Fund maintains assets and positions relating to each
Series forward contract investments. Neither the CFTC nor
the federal or state banking authorities regulate the
Funds forward trading or forward dealers.
The Fund may periodically enter into transactions in the forward
or other markets which could be characterized as swap
transactions and which may involve commodities, interest rates,
currencies, stock indices, and other items. A swap transaction
is an individually negotiated,
non-standardized
agreement between two parties to exchange cash flows measured by
different interest rates, exchange rates, or prices, with
payments calculated by reference to a principal
(notional) amount or quantity. Transactions in these
markets present certain risks similar to those in the futures,
forward and options markets: (1) the swap markets are
generally not regulated by any United States or foreign
governmental authorities; (2) there are generally no
limitations on daily price moves in swap transactions;
(3) speculative position limits are not applicable to swap
transactions, although the counterparties with which the Series
may deal may limit the size or duration of positions available
as a consequence of credit considerations; (4) participants
in the swap markets are not required to make continuous markets
in swaps contracts; and (5) the swap markets are
principal markets, in which performance with respect
to a swap contract is the responsibility only of the
counterparty with which the trader has entered into a contract
(or its guarantor, if any), and not of any exchange or
clearinghouse. As a result, each Series will be subject to the
risk of the inability of or refusal to perform with respect to
such contracts on the part of the counterparties with which the
Fund trades. Also, the CFTC or a court could conclude in the
future that certain primarily agricultural, swap transactions
entered into by the Fund could constitute unauthorized futures
or commodity option contracts. Such a conclusion could limit the
Funds access to certain agricultural markets in the United
States, possibly to the detriment of the Fund.
REGULATION
The U.S. futures markets are regulated under the Commodity
Exchange Act, which is administered by the CFTC, a federal
agency created in 1974. The CFTC licenses and regulates
commodity exchanges, commodity pool operators, commodity trading
advisors and clearing firms which are referred to in the futures
industry as futures
123
commission merchants. Superfund Capital Management is
registered with the CFTC as a commodity pool operator. Futures
professionals are also regulated by the NFA, a self-regulatory
organization for the futures industry that supervises the
dealings between futures professionals and their customers. If
the pertinent CFTC licenses or NFA memberships were to lapse, be
suspended or be revoked, Superfund Capital Management would be
unable to act as each Series commodity pool operator and
commodity trading advisor. The CFTC has adopted disclosure,
reporting and recordkeeping requirements for commodity pool
operators and disclosure and recordkeeping requirements for
commodity trading advisors. The reporting rules require pool
operators to furnish to the participants in their pools a
monthly statement of account, showing the pools income or
loss and change in net asset value, and an annual financial
report, audited by an independent certified public accountant.
The CFTC and the exchanges have pervasive powers over the
futures markets, including the emergency power to suspend
trading and order trading for liquidation of existing positions
only. The exercise of such powers could adversely affect each
Series trading. The CFTC does not regulate forward
contracts. Federal and state banking authorities also do not
regulate forward trading or forward dealers. Trading in foreign
currency futures contracts may be less liquid and each
Series trading results may be adversely affected.
In order to establish and maintain a futures position, a trader
must make a type of good-faith deposit with its broker, known as
margin, of approximately 2%-10% of contract value.
Minimum margins are established for each futures contract by the
exchange on which the contract is traded. The exchanges alter
their margin requirements from time to time, sometimes
significantly. For their protection, clearing brokers may
require higher margins from their customers than the exchange
minimums. When a position is established, initial
margin is deposited. On most exchanges, at the close of
each trading day variation margin, representing the
unrealized gain or loss on the open positions, is either
credited to or debited from a traders account. If
variation margin payments cause a traders
initial margin to fall below maintenance
margin levels, a margin call is made,
requiring the trader to deposit additional margin or have his
position closed out. Collateral is deposited in connection with
forward contracts but is not required by any applicable
regulation. Additional collateral may be required by the
relevant dealer to maintain a forward contract position, similar
to variation margin payments.
INVESTMENT
CONSIDERATIONS
Both the futures and forward markets and funds investing in
those markets offer many potential structural advantages that
make managed futures an efficient way to participate in global
markets.
|
|
|
Enhanced
Profit Potential
|
Established managed futures funds, including Superfund funds,
have often produced strong absolute returns and, in many cases,
have outperformed stocks and bonds during periods in which those
asset classes have not performed well. There can be no
assurance, however, that the Fund will perform positively under
any given set of market conditions or that it will not incur
losses.
Low
Correlation to Traditional Asset Classes and Other Alternative
Asset Classes
Because they trade in numerous financial and commodities futures
markets ranging from cotton to palladium and currencies to stock
indices, managed futures funds, in aggregate, have historically
experienced low long-term correlation to most traditional asset
classes, including stocks, bonds, and real estate. Managed
futures funds may provide a valuable element of diversification
to an investors portfolio, even one in which other
alternative asset classes are represented, because of the low
correlation of their returns to the returns of other alternative
asset classes, including many hedge fund strategies. There
can be no assurance, however, that the Funds performance
will be non-correlated to the performance of traditional asset
classes or that it will not experience sustained periods of
significant correlation to the performance of traditional asset
classes.
|
|
|
Non-Correlated
Investments within the Fund
|
The Fund will trade on more than 120 financial and commodities
futures markets and currency forward markets, many of which
react differently from each other to the same economic or market
condition. Broadly diversifying across a wide range of futures
markets can increase the potential to trade profitably while
protecting the
124
overall portfolio from extensive losses from a single market.
However, the Fund will not trade in all available markets at all
times and may be concentrated in one or two sectors from time to
time.
|
|
|
Potential
to Profit in Bull and Bear Markets
|
Managed futures funds, unlike most mutual funds, which are
long only, have the potential to profit from market
movements in both directions. By having the ability to go
short, managed futures funds may also profit from
anticipating that a futures price will go down in the
future. This potential to profit, whether markets are rising or
falling around the globe, makes managed futures particularly
attractive as a diversification tool. There can be no
assurance, however, that the General Partners trading
systems will correctly recognize any particular profit
opportunity or correctly anticipate price direction or that the
Fund will not incur losses.
Unlike some alternative, or non-traditional, investment funds,
the Fund does not borrow money in order to obtain leverage and
does not incur any interest expense. Rather, margin deposits and
reserve assets are maintained in interest bearing accounts and
cash equivalents, such as U.S. Treasury Bills, and interest
is earned on all, or nearly all, of the Funds assets,
which include unrealized profits credited to the Series
accounts.
|
|
|
Global
Diversification Within a Single Investment
|
Futures and related contracts can be traded in many countries,
which makes it possible to diversify risk around the globe. This
diversification is available both geographically and across
market sectors. For example, an investor can trade interest
rates, stock indices and currencies in several countries around
the world, as well as energy and metals. While the Fund itself
trades across a diverse selection of global markets, an
investment in each Series is not a complete investment program,
but rather should be considered as a diversification opportunity
for an overall portfolio.
Superfund Capital Managements approach includes the
following elements:
|
|
|
|
|
Disciplined Money Management. Superfund
Capital Management generally allocates between 0.6% to 0.8%
of portfolio equity to the initial entry of any single market
position with a maximum risk of 1% to 1.5% from initial
risk. However, no guarantee is provided that losses will be
limited to these percentages.
|
|
|
|
Balanced Risk. Superfund Capital Management
will allocate each Series capital from among more than
120 markets around the world 24 hours a day. Among the
factors considered to determine the portfolio mix are market
volatility, liquidity and trending characteristics. Of course,
the Fund will generally not hold positions in all such markets
at all times.
|
|
|
|
Ongoing Capital Management. When proprietary
risk/reward indicators reach predetermined levels, the Superfund
trading system may increase or decrease commitments in certain
markets in an attempt to reduce performance volatility.
|
|
|
|
Multiple Systems. The Superfund trading system
analyzes multiple technical indicators and perimeters in
combination in an attempt to identify trends in their early
states. Once potential trades are identified, additional filters
are applied which consider volatility and the availability of
risk capital before final trade signals are generated.
|
Convenience
Through an investment in Units, investors can participate in
global markets and opportunities without needing to master
complex trading strategies and monitor multiple international
markets.
125
Liquidity
In most cases the markets traded by the Fund are highly liquid.
Some markets trade 24 hours on business days. While there
can be cases where there may be no buyer or seller for a
particular market, Superfund Capital Management attempts to
select markets for investment based upon, among other things,
their perceived liquidity. Exchanges impose limits on the amount
that a futures price can move in one day. Situations in
which markets have moved the limit for several days in a row
have not been common, but do occur. See The Risks You
Face Illiquidity of Your Investment. Investors
may redeem all or a portion of their Units on a monthly basis.
See Distributions and Redemptions.
Limited
Liability
Investors liability is limited to the amount of their
investment in each Series. Investors will not be required to
contribute additional capital to either Series.
126
EXHIBIT A
QUADRIGA
SUPERFUND, L.P.
FORM OF
FOURTH AMENDED AND RESTATED LIMITED PARTNERSHIP
AGREEMENT
This Fourth Amended and Restated Limited Partnership Agreement
(the Agreement) is made as of
[ ],
2009, by and among Superfund Capital Management, Inc. (formerly,
Quadriga Capital Management, Inc.), a Grenada corporation (the
General Partner) and each other party who becomes a
party to this Limited Partnership Agreement, whether by
execution of a counterpart hereof pursuant to a power of
attorney or otherwise agrees to be bound hereto by separate
instrument, as an owner of a unit (Unit) of
beneficial interest in a series (Series) created
hereunder and who is shown on the books and records of such
Series as a Limited Partner (individually, a Limited
Partner and collectively, the Limited
Partners).
1. Formation; Name. The parties to this
Agreement have formed a limited partnership under the Delaware
Revised Uniform Limited Partnership Act, as amended and in
effect on the date of this Agreement (the Act). The
name of the limited partnership is Quadriga Superfund, L.P. (the
Partnership). The General Partner has executed and
filed a Certificate of Limited Partnership of the Partnership
(the Certificate of Limited Partnership) in
accordance with the Act, and has executed, filed, recorded and
published as appropriate such amendments, assumed name
certificates and other documents as are or become necessary or
advisable in connection with the operation of the Partnership,
as determined by the General Partner, and will take all steps
which the General Partner may deem necessary or advisable to
allow the Partnership to conduct business as a limited
partnership where the Partnership conducts business in any
jurisdiction, and to otherwise provide that Limited Partners
will have limited liability with respect to the activities of
the Partnership in all such jurisdictions, and to comply with
the law of any jurisdiction. Each Limited Partner hereby
undertakes to furnish to the General Partner a power of attorney
and such additional information as the General Partner may
request to complete such documents and to execute and cooperate
in the filing, recording or publishing of such documents as the
General Partner determines appropriate.
2. (a) Units of Limited
Partnership. The beneficial interest in the
Partnership shall be divided into an unlimited number of Units.
The General Partner may, from time to time, authorize the
division of the Units into one or more Series as provided in
Section 2(b) below. All Units issued hereunder shall be
fully paid and nonassessable. The General Partner in its
discretion may, from time to time, without vote of the Limited
Partners, issue Units, in addition to the then issued and
outstanding Units, to such party or parties and for such amount
and type of consideration, subject to applicable law, including
cash or securities, at such time or times and on such terms as
the General Partner may deem appropriate, and may in such manner
acquire other assets (including the acquisition of assets
subject to, and in connection with, the assumption of
liabilities) and businesses. In connection with any issuance of
Units, the General Partner may issue fractional Units. The
General Partner may from time to time divide or combine the
Units into a greater or lesser number without thereby changing
the proportionate beneficial interests in a particular Series.
Contributions to a Series of the Partnership may be accepted
for, and Units of such Series shall be redeemed as, whole Units
and/or 1/1,000 of a Unit or integral multiples thereof.
(b) Creation of Series. The Partnership
shall consist of one or more separate and distinct Series as
contemplated by
Section 17-218
of the Act. The General Partner hereby establishes and
designates the following Series: Quadriga Superfund, L.P.
Series A (Series A) and
Quadriga Superfund, L.P. Series B
(Series B) (each, a Series). Any
additional Series created hereunder shall be established by the
adoption of a resolution by the General Partner and shall be
effective upon the date stated therein (or, if no such date is
stated, upon the date of such adoption). The Units of each
Series shall have the relative rights and preferences provided
for herein and such rights as may be designated by the General
Partner. The General Partner shall cause separate and distinct
records for each Series to be maintained and the Partnership
shall hold and account for the assets belonging thereto
separately from the other Partnership property and the assets
belonging to any other Series. Each Unit of a Series shall
represent an equal beneficial interest in the net assets
belonging to that Series. Unless the establishing resolution or
any other resolution adopted pursuant to this Section 2(b)
A-1
otherwise provides, Units of each Series established hereunder
shall have the following relative rights and preferences:
(i) Limited Partners of a Series shall have no preemptive
or other right to subscribe to any additional Units in such
Series or other securities issued by the Partnership.
(ii) All consideration received by the Partnership for the
issue or sale of the Units within a Series, together with all
assets in which such consideration is invested or reinvested,
all income, earnings, profits, and proceeds thereof, including
any proceeds derived form the sale, exchange, or liquidation of
such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be,
shall be held and accounted for separately from the other assets
of the Partnership and of every other Series and may be referred
to herein as assets belonging to that Series or the
Series Estate. The assets belonging to a
particular Series shall belong to that Series for all purposes,
and to no other Series, subject only to the rights of creditors
of that Series. In addition, any assets, income, earnings,
profits, or payments and proceeds with respect thereto, which
are not readily identifiable as belonging to any particular
Series shall be allocated by the General Partner between and
among one or more of the Series for all purposes and such
assets, income, earnings, profits, or funds, or payments and
proceeds with respect thereto, shall be assets belonging to that
Series.
(iii) A particular Series shall be charged with the
liabilities of that Series, and all expenses, costs, charges and
reserves attributable to any particular Series shall be borne by
such Series. Any general liabilities, expenses, costs, charges
or reserves of the Partnership (or any Series) that are not
readily identifiable as chargeable to or bearable by any
particular Series shall be allocated and charged by the General
Partner between or among any one or more of the Series in such
manner as the General Partner in its sole discretion deems fair
and equitable. Each such allocation shall be conclusive and
binding upon the Limited Partners for all purposes. Without
limitation of the foregoing provisions of this subsection, the
debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to a
particular Series shall be enforceable against the assets of
such Series only, and not against the assets of the Partnership
generally or the assets belonging to any other Series. Notice of
this contractual limitation on inter-Series liabilities is set
forth in the Certificate of Limited Partnership and upon the
giving of such notice in the Certificate of Limited Partnership,
the statutory provisions of
Section 17-218
of the Act relating to limitations on inter-Series liabilities
(and the statutory effect under
Section 17-218
setting forth such notice in the Certificate of Limited
Partnership) shall become applicable to the Partnership and each
Series.
(c) Creation of Accounts. For the benefit
of the Series A Limited Partners, the General Partner shall
establish and maintain a segregated account entitled
Quadriga Superfund, L.P. Series A Account (the
Series A Account). For the benefit of the
Series B Limited Partners, the General Partner shall
establish and maintain a segregated account entitled
Quadriga Superfund, L.P. Series B Account (the
Series B Account). The General Partner hereby
acknowledges that it has deposited the sum of $1,000 in the
Series A Account and that it has deposited the sum of
$1,000 in the Series B Account. The sums held in the
Series A Account shall be held for the benefit of the
Series A Limited Partners and the sums held in the
Series B Account shall be held for the benefit of
Series B Limited Partners and such accounts shall be
segregated and separate records with respect thereto shall be
kept for purposes of Section 17-218 of the Act. The General
Partner shall hold, invest and disburse the funds held in the
accounts at its discretion.
(d) Creation of Additional Accounts. The
General Partner is authorized to establish and maintain one or
more separate accounts for each Series (the Additional
Accounts) with such institutions as the General Partner
shall select for the following purposes:
(i) to receive and deposit subscriptions for such
Series; and
(ii) to pay Limited Partners for such Series for
redemptions of all or a portion of their Units.
The General Partner acknowledges that the funds held in any such
Additional Accounts of a Series will be held for that Series
only and that such Additional Accounts should be segregated from
other Additional Accounts and that separate records shall be
maintained with respect to each Additional Account.
A-2
(e) Limited Liability of Limited
Partners. Each Unit, when purchased by a Limited
Partner in accordance with the terms of this Agreement, will be
fully paid and nonassessable. No Limited Partner will be liable
for the Partnerships obligations in excess of that
Partners unredeemed capital contribution, undistributed
profits, if any, and any distributions and amounts received upon
redemption of Units. The Partnership will not make a claim
against a Limited Partner with respect to amounts distributed to
that Partner or amounts received by that Partner upon redemption
of Units unless the Net Assets of the Partnership (which will
not include any right of contribution from the General Partner
except to the extent previously made by it under this Agreement)
are insufficient to discharge the liabilities of the Partnership
which have arisen before the payment of these amounts.
3. Principal Office. The address of the
principal office of each Series shall be Superfund Capital
Management, Inc., Superfund Office Building, P.O. Box 1479,
Grand Anse, St. Georges, Grenada, West Indies; telephone
(473) 439-2418. The General Partner is located at the same
address. Registered Agents Legal Services, LLC shall receive
service of process on each Series of the Partnership in the
State of Delaware at 1220 North Market Street, Suite 606,
Wilmington, Delaware 19801.
4. Business. Each Series business
and purpose is to trade, buy, sell, swap or otherwise acquire,
hold or dispose of commodities (including, but not limited to,
foreign currencies, mortgage-backed securities, money market
instruments, financial instruments, and any other securities or
items which are now, or may hereafter be, the subject of futures
contract trading), domestic and foreign commodity futures
contracts, commodity forward contracts, foreign exchange
commitments, options on physical commodities and on futures
contracts, spot (cash) commodities and currencies,
securities (such as United States Treasury securities) approved
by the Commodity Futures Trading Commission (CFTC)
for investment of customer funds and other securities on a
limited basis, and any rights pertaining thereto and any options
thereon, whether traded on an organized exchange or otherwise,
and to engage in all activities necessary, convenient or
incidental thereto. Each Series may also engage in
hedge, arbitrage and cash trading of any of the
foregoing instruments. Each Series may engage in such business
and purpose either directly or through joint ventures, entities
or partnerships, provided that each Series participation
in any of the foregoing has no adverse economic or liability
consequences for the Limited Partners, which consequences would
not be present had each Series engaged in that same business or
purpose directly. The objective of each Series business is
appreciation of its assets through speculative trading by the
General Partner and independent professional trading advisors
(Advisors) selected from time to time by the General
Partner.
5. Term, Dissolution, Fiscal Year.
(a) Term. The term of Series A and
Series B commenced on the day on which the Certificate of
Limited Partnership was filed with the Secretary of State of the
State of Delaware pursuant to the provisions of the Act and the
term of any Series shall end upon the first to occur of the
following:
(1) December 31, 2050;
(2) receipt by the General Partner of an approval to
dissolve such Series at a specified time by Limited Partners
owning Units representing more than fifty percent (50%) of the
outstanding Units of such Series then owned by Limited Partners
of such Series, notice of which is sent by certified mail return
receipt requested to the General Partner not less than
90 days prior to the effective date of such dissolution;
(3) withdrawal, insolvency or dissolution of the General
Partner or any other event that causes the General Partner to
cease to be the General Partner of such Series, unless
(i) at the time of such event there is at least one
remaining general partner of such Series who carries on the
business of each Series (and each remaining general partner of
such Series is hereby authorized to carry on the business of
general partner of such Series in such an event), or
(ii) within 120 days after such event Limited Partners
of such Series holding a majority of Units of such Series agree
in writing to continue the business of such Series and to the
appointment, effective as of the date of such event, of one or
more general partners of such Series;
(4) a decline in the aggregate Net Assets of such Series to
less than $500,000 at any time following commencement of trading
in such Series;
A-3
(5) dissolution of such Series pursuant hereto; or
(6) any other event which shall make it unlawful for the
existence of such Series to be continued or require termination
of such Series.
(b) Dissolution. Upon the occurrence of
an event causing the dissolution of such Series, such Series
shall be dissolved and its affairs wound up. Upon dissolution of
a Series, the General Partner, or another person approved by
Limited Partners of a majority of the Units of such Series,
shall act as liquidator trustee.
(c) Fiscal Year. The fiscal year of each
Series shall begin on January 1 of each year and end on the
following December 31.
(d) Net Asset Value; Net Asset Value per
Unit. The Net Assets of each Series
are such Series assets less such Series liabilities
determined in accordance with accounting principles generally
accepted in the United States. If a contract cannot be
liquidated on the day with respect to which Net Assets are being
determined, the settlement price on the first subsequent day on
which the contract can be liquidated shall be the basis for
determining the liquidating value of such contract for such day,
or such other value as the General Partner may deem fair and
reasonable. The liquidating value of a commodity futures or
option contract not traded on a commodity exchange shall mean
its liquidating value as determined by the General Partner on a
basis consistently applied for each different variety of
contract. Accrued Performance Fees (as described in the
Prospectus defined in Section 9 hereof) shall reduce Net
Asset Value, even though such Performance Fees may never, in
fact, be paid. The Net Asset Value per Unit of a
Series is the Net Assets of such Series divided by the number of
Units outstanding within such Series as of the date of
determination. Each Series may issue an unlimited number of
Units at the Net Asset Value per Unit.
6. Net Worth of the General Partner. The
General Partner agrees that at all times so long as it remains
general partner of a Series, it will maintain its net worth at
an amount not less than 5% of the total contributions to the
Partnership by all Partners and to any other limited partnership
for which it acts as a general partner by all partners;
provided, however, that in no event may the General
Partners net worth be less than $50,000 nor will it be
required to be more than $1,000,000. The requirements of the
preceding sentence may be modified if the General Partner
obtains an opinion of counsel for each Series that a proposed
modification will not adversely affect the treatment of such
Series as a partnership for federal income tax purposes and if
such modification will reflect or exceed applicable state
securities and Blue Sky laws limitations and qualify under any
guidelines or statements of policy promulgated by any body or
agency constituted by the various state securities
administrators having jurisdiction in the premises.
7. Capital Contributions; Units. The
Limited Partners respective capital contributions to each
Series shall be as shown on the books and records of the
applicable Series. The General Partner, so long as it is general
partner of a Series and so long as it is required to
characterize such Series as a partnership for federal income tax
purposes, shall invest in such Series, sufficient capital so
that the General Partner will have at all times a capital
account equal to at least 1% of the total capital accounts of
such Series (including the General Partners). The General
Partner may withdraw any interest it may have in such Series in
excess of such requirement, and may redeem as of any month-end
any interest which it may acquire on the same terms as any
Limited Partner of such Series, provided that it must maintain
the minimum interest in such Series described in the preceding
sentence. The requirements of this Section 7 may be
modified if the General Partner obtains an opinion of counsel
for such Series that a proposed modification will not adversely
affect the classification of such Series as a partnership for
federal income tax purposes and if such modification will
reflect or exceed applicable state securities and Blue Sky laws
limitations and qualify under any guidelines or statements of
policy promulgated by any body or agency constituted by the
various state securities administrators having jurisdiction in
the premises. The General Partner may, without the consent of
any Limited Partners of a Series, admit to such Series
purchasers of Units as Limited Partners of each Series. All
Units subscribed for in a Series upon receipt of a check or
draft of the Limited Partner are issued subject to the
collection of the funds represented by such check or draft. In
the event a check or draft of a Limited Partner for Units
representing payment for Units in a Series is returned unpaid,
such Series shall cancel the Units issued to such Limited
Partner represented by such returned check or draft. Any losses
or profits sustained by a Series in connection with such
Series commodity trading allocable to such cancelled Units
of such Series shall be deemed an increase or decrease in Net
Assets of such Series and allocated among the remaining Limited
Partners within such
A-4
Series as described in Section 8. Each Series may require a
Limited Partner to reimburse such Series for any expense or loss
(including any trading loss) incurred in connection with the
issuance and cancellation of any Units issued to him or her. Any
Units acquired by the General Partner or any of its affiliates
will be non-voting, and will not be considered
outstanding for purposes of determining whether the
majority approval of the outstanding Units of a Series has been
obtained. Each Limited Partner of a Unit in a Series shall be
deemed a beneficial owner of such Series within the meaning of
the Act. The General Partner and each person selling Units on
behalf of the Partnership may not complete a sale of the Units
to prospective investors until at least five (5) business days
after the date the prospective investor receives a final
prospectus.
8. Allocation of Profits and Losses.
(a) Capital Accounts and Allocations. A
capital account will be established for each Partner. The
initial balance of each Partners capital account will be
the amount of a Partners initial capital contribution to a
Series less, in the case of a Limited Partner, the amount of
offering expenses and selling commissions initially allocable to
the Limited Partners Units, if any. As of the close of
business (as determined by the General Partner) on the last day
of each calendar month (Determination Date) during
each fiscal year of a Series, the following determinations and
allocations will be made subsequently with respect to each
Series:
(i) Net Assets will be determined.
(ii) Accrued monthly management, ongoing offering,
operating fees and selling commissions will then be charged
against Net Assets; provided that in respect of Net Assets
attributable to Units which are not subject to selling
commissions because (a) such Units were sold by Superfund
USA, Inc., or an affiliated broker, to Limited Partners whose
investment in the Partnership was recommended by a registered
investment adviser with which such Limited Partner maintains an
asset-based or fee-based advisory relationship (b) such
Units were sold on or after February 28, 2005 and have been
charged and have paid selling commissions of 10% of such
Units initial offering price, or (c) such units were sold
by Superfund USA, Inc., or an affiliated broker, to commodity
pools operated by commodity pool operators registered as such
with the NFA, the selling commissions charged as of the end of
each month shall not be paid out to any selling agent but shall
instead be credited to a suspense account (the Suspense
Account) which shall be used solely as a means of
efficiently accounting for the inapplicability of selling
commissions to such Limited Partners while maintaining a uniform
Net Asset Value per Unit.
(iii) Accrued monthly performance fees, if any, will then
be charged against Net Assets, and the amounts credited to the
Suspense Account as provided above as of the end of any month
shall be charged the performance fee if there is an accrued
performance fee in respect of the Net Assets as of the month-end
that such amounts are so credited.
(iv) Any increase or decrease in Net Assets (after the
adjustments in subparagraphs (ii) and (iii) above
and excluding the amount credited in the Suspense Account), over
those of the immediately preceding Determination Date (or, in
the case of the first Determination Date, the first closing of
the sale of Units to the public), will then be credited or
charged to the capital account of each Partner in the ratio that
the balance of each account bears to the balance of all accounts.
(v) Any accrued interest will be credited to the capital
account of each Partner on a pro rata basis.
(vi) The remainder of the Suspense Account (after reduction
by the performance fee, if any) shall then be reinvested in
Units as of such month-end, at Net Asset Value, for the benefit
of the appropriate Limited Partners.
(vii) The amount of any distribution to a Partner, any
amount paid to a Partner on redemption of Units and any
redemption fee paid to the General Partner upon the redemption
of Units will be charged to that Partners capital account.
(b) Allocation of Profit and Loss for Federal Income Tax
Purposes. As of the end of each fiscal year of a
Series, the Partnerships realized profit or loss
attributable to that Series will be allocated among the Partners
under the following subparagraphs for federal income tax
purposes. These allocations of profit and loss will be pro rata
A-5
from net capital gain or loss and net operating income or loss
realized by such Series. For United States federal income tax
purposes, a distinction will be made between net short-term gain
or loss and net long-term gain or loss.
(i) Items of ordinary income (such as interest or credits
in lieu of interest) and expense (such as the management fees,
performance fees, brokerage fees and extraordinary expenses)
will be allocated pro rata among the Partners based on their
capital accounts (exclusive of these items of ordinary income or
expense) as of the end of each month in which the items of
ordinary income or expense accrued.
(ii) Net realized capital gain or loss from the
Series trading activities will be allocated as follows:
(A) For the purpose of allocating the Series net
realized capital gain or loss among the Partners, the General
Partner will establish an allocation account with respect to
each outstanding Unit. The initial balance of each allocation
account will be the amount paid by the Partner for the Unit.
Amounts reinvested in Units from the Suspense Account, as
described in Section 8(a) above, shall not increase the
aggregate tax basis of the affected Limited Partners in their
Units; rather the Units acquired upon reinvestment will have an
initial tax basis of $0. Allocation accounts will be adjusted as
of the end of each fiscal year and as of the date a Partner
completely redeems his Units as follows:
(1) Each allocation account will be increased by the amount
of income allocated to the holder of the Unit under
subparagraph (b)(i) above and subparagraph (b)(ii)(C)
below.
(2) Each allocation account will be decreased by the amount
of expense or loss allocated to the holder of the Unit under
subparagraph (b)(i) above and subparagraph (b)(ii)(E)
below and by the amount of any distribution the holder of the
Unit has received with respect to the Unit (other than on
redemption of the Unit).
(3) When a Unit is redeemed, the allocation account with
respect to that Unit will be eliminated.
(B) Net realized capital gain will be allocated first to
each Partner who has partially redeemed his Units during the
fiscal year up to the excess, if any, of the amount received
upon redemption of the Units over the allocation account
attributable to the redeemed Units.
(C) Net realized capital gain remaining after the
allocation of that capital gain under
subparagraph (b)(ii)(B) above will be allocated next among
all Partners whose capital accounts are in excess of their
Units allocation accounts (after the adjustments in
subparagraph (b)(ii)(B) above) in the ratio that each such
Partners excess bears to all such Partners excesses.
If gain to be allocated under this subparagraph (b)(ii)(C)
is greater than the excess of all such Partners capital
accounts over all such allocation accounts, the excess will be
allocated among all Partners in the ratio that each
Partners capital account bears to all Partners
capital accounts.
(D) Net realized capital loss will be allocated first to
each Partner who has partially redeemed his Units during the
fiscal year up to the excess, if any, of the allocation account
attributable to the redeemed Units over the amount received upon
redemption of the Units.
(E) Net realized capital loss remaining after the
allocation of such capital loss under
subparagraph (b)(ii)(D) above will be allocated next among
all Partners whose Units allocation accounts are in excess
of their capital accounts (after the adjustments in
subparagraph (b)(ii)(D) above) in the ratio that each such
Partners excess bears to all such Partners excesses.
If loss to be allocated under this subparagraph (b)(ii)(E)
is greater than the excess of all of these allocation accounts
over all such Partners capital accounts, the excess loss
will be allocated among all Partners in the ratio that each
Partners capital account bears to all Partners
capital accounts.
(iii) The tax allocations prescribed by this
Section 8(b) will be made to each holder of a Unit whether
or not the holder is a substituted Limited Partner. If a Unit
has been transferred or assigned, the allocations prescribed by
this Section 8(b) will be made with respect to such Unit
without regard to the transfer or assignment, except that in the
year of transfer or assignment the allocations prescribed by
this Section 8(b) will be divided between the transferor or
assignor and the transferee or assignee based on the number of
months
A-6
each held the transferred or assigned Unit. For purposes of this
Section 8(b), tax allocations will be made to the General
Partners Units of General Partnership Interest in a Series
on a Unit-equivalent basis.
(iv) The allocation of profit and loss for federal income
tax purposes set forth in this Agreement is intended to allocate
taxable profits and losses among Partners in a Series generally
in the ratio and to the extent that net profit and net loss are
allocated to the Partners under Section 8(a) of this
Agreement so as to eliminate, to the extent possible, any
disparity between a Partners capital account and his
allocation account with respect to each Unit then outstanding,
consistent with the principles set forth in
Section 704(c)(2) of the Internal Revenue Code of 1986, as
amended (the Code).
(c) Performance Fees. Performance Fees
shall be payable by a Series to the General Partner as of the
end of each month and upon redemption of Units within such
Series. Performance Fees shall equal a percentage, as specified
in the current prospectus in respect of the Units of a Series of
New Appreciation (if any) calculated as of the end of each month
and upon redemption of Units within such Series. New
Appreciation shall be the total increase, if any, in Net
Asset Value of a series from the end of the last period for
which a performance fee was earned by the Managing Partner, net
of all fees and expenses paid or accrued by such Series other
than the Performance Fee itself and after subtraction of all
interest income received by such Series. Performance Fees shall
be paid by each Series as a whole, irrespective of whether the
Net Asset Value of such Series has declined below the purchase
price of a Unit of such Series. Accrued Performance Fees payable
by a Series shall reduce the redemption price of Units of such
Series and shall be paid to the General Partner by such Series
upon redemptions within such Series. The amount (if any) of the
accrued Performance Fee that shall be paid to the General
Partner upon the redemption of any Unit within a Series shall be
determined by dividing the total Performance Fee as of such
redemption date payable by such Series by the number of Units
within such Series then outstanding (including Units within such
Series redeemed as of such date); the remainder of the accrued
Performance Fee payable by such Series shall be paid to the
General Partner on the last day of each month. In the event
assets are withdrawn from a Limited Partners account or a
Series as a whole (other than to pay expenses), any loss carry
forward shall be proportionally reduced for purposes of
calculating subsequent Performance Fees. Loss carry forward
reductions shall not be restored as a result of subsequent
additions of capital. The General Partner may adjust the
payments set forth in this Section 8(c), in the General
Partners discretion, if the General Partner believes that
doing so will achieve more equitable payments or payments more
consistent with the Code.
(d) Expenses.
(1) The General Partner shall advance the ongoing offering
expenses of the initial and continuous offerings of the Units of
each Series, and no such expenses shall be deducted from the
proceeds of the offering. The General Partner shall be
reimbursed such amounts advanced on behalf of a Series by such
Series via payments equal to
1/12
of 1% per month (1% per annum) of such Series
month-end
Net Asset Value, not to exceed the amount of actual expenses
incurred. The General Partner shall have discretion to adopt
reasonable procedures to implement the authorization of such
expenses, including grouping expenses related to the same
offering period and expensing de minimus amounts as they
are incurred. In the event a Series terminates prior to
completion of its reimbursement of advanced expenses, the
General Partner will not be entitled to receive additional
reimbursement from such Series and such Series will have no
obligation to make further reimbursement payments to the General
Partner. For purposes of this Agreement, ongoing offering
expenses shall mean all costs paid or incurred by the General
Partner or a Series in organizing such Series and offering the
Units of such Series, including legal and accounting fees
incurred, bank account charges, all Blue Sky filing fees, filing
fees payable upon formation and activation of such Series, and
expenses of preparing, printing and distributing the prospectus
and registration statement, but in no event shall exceed limits
set forth in Section 9 herein or guidelines imposed by
appropriate regulatory bodies.
(2) Each Series shall be obligated to pay all liabilities
incurred by such Series, including without limitation,
(i) brokerage fees (up to 5% (Series A) and 7%
(Series B) annually of the average annual net assets of the
Series); (ii) operating expenses (whether direct or
indirect) in an amount equal to
1/12
of 0.15% of such Series month-end Net Asset Value
(0.15% per annum), not to exceed the amount of actual
expenses incurred, management fees equal to
1/12
of 1.85% of such Series month-end Net Asset Value
(1.85% per annum), and performance fees; (iii) subject
to a maximum cumulative selling commission of 10% of the gross
offering
A-7
proceeds of a Unit, monthly selling commissions of
1/12
of 4% (4% per annum), provided, however, that the selling
commission expense charged against a Series in respect of
(a) Units sold by Superfund USA, Inc., or an affiliated
broker, attributable to Limited Partners whose investments in
the Partnership were recommended by registered investment
advisers with whom such persons maintain asset-based fee or
fixed fee investment advisory relationships (b) Units sold
by Superfund USA, Inc., or an affiliated broker, to investors
who are commodity pools operated by commodity pool operators
registered as such with the NFA; and (c) Limited
Partners Units purchased on or after February 28,
2005, which Units have been charged and have paid selling
commissions of 10% of the initial offering price of such Units,
shall be reversed in respect of such Limited Partners as
described above in Section 8(a); (iv) legal and
accounting fees; and (v) taxes and other extraordinary
expenses incurred by such Series. During any year of operations,
the General Partner shall be responsible for payment of
operating expenses of a Series in excess of 0.15% of such
Series month-end Net Asset Value during that year.
Indirect expenses of the General Partner, such as indirect
salaries, rent and other overhead expenses, shall not be
liabilities of a Series. Each Series shall receive all interest
earned on its assets.
(3) Compensation to any party, including the General
Partner (or any Advisor which may be retained in the future),
shall not exceed the limitations, if any, imposed by the North
American Securities Administrators Association
(NASAA) currently in effect. In the event the
compensation exceeds such limitations, the General Partner shall
promptly reimburse each Series for such excess.
(4) Each Series shall also be obligated to pay any costs of
indemnification payable by such Series to the extent permitted
under Section 17 of this Agreement.
(e) Limited Liability of Limited
Partners. Each Unit, when purchased in accordance
with this Agreement, shall, except as otherwise provided by law,
be fully paid and nonassessable. Any provisions of this
Agreement to the contrary notwithstanding, except as otherwise
provided by law, no Limited Partner of a Series shall be liable
for such Series obligations in excess of the capital
contributed by such Limited Partner, plus his share of
undistributed profits and assets of such Series. Each Limited
Partner will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for
profit, except as otherwise provided by the Act.
(f) Return of Capital Contributions. No
Limited Partner or subsequent assignee shall have any right to
demand the return of his capital contribution or any profits
added thereto, except through redeeming Units or upon
dissolution of each Series, in each case as provided herein and
in accordance with the Act. In no event shall a Limited Partner
or subsequent assignee be entitled to demand or receive property
other than cash.
9. Management of each Series and the Limited
Partnership. The General Partner, to the
exclusion of all Limited Partners, shall have the power to
control, conduct and manage the business of each Series and the
Partnership. The General Partner shall have full power and
authority to do any and all acts and to make and execute any and
all contracts and instruments that it may consider necessary or
appropriate in connection with the management of the
Partnership. The General Partner shall have sole discretion in
determining what distributions of profits and income, if any,
shall be made to the Limited Partners of any Series (subject to
the allocation provisions hereof), shall execute various
documents on behalf of each Series and the Limited Partners
pursuant to powers of attorney and supervise the liquidation of
each Series if an event causing dissolution of such Series
occurs. The General Partner may in furtherance of the business
of each Series cause such Series to retain Advisors, including,
but not limited to, the General Partner, to act in furtherance
of such Series purposes set forth in Section 4, all
as described in the Prospectus relating to the offering of the
Units of such Series (the Prospectus) in effect as
of the time that such Limited Partner last purchased Units. The
General Partner may engage, and compensate on behalf of a Series
from funds of such Series, or agree to share profits and losses
with, such persons, firms or corporations, including (except as
described in Section 8(d) of this Agreement) the General
Partner and any affiliated person or entity, as the General
Partner in its sole judgment shall deem advisable for the
conduct and operation of the business of such Series, provided,
that no such arrangement shall allow brokerage commissions paid
by a Series in excess of the amount described in the Prospectus
or as permitted under applicable North American Securities
Administrators Association, Inc. Guidelines for the Registration
of Commodity Pool Programs (NASAA Guidelines) in
effect as of the date of the Prospectus, whichever is higher
(the Cap Amount). The General Partner shall
reimburse each Series, on an annual basis, to the extent that
such Series brokerage commissions paid to the General
Partner and the Performance Fee, as described in the Prospectus,
exceed the Cap Amount. The General Partner is hereby
A-8
specifically authorized to enter into, on behalf of each Series,
the initial subscription escrow agreements, any advisory
agreements and selling agreements as may be described in the
Prospectus. The General Partner shall not enter into an advisory
agreement with any trading advisor that does not satisfy the
relevant experience (i.e., ordinarily a minimum of three years)
requirements under the NASAA Guidelines. Each Series
brokerage commissions may not be increased without prior written
notice to Limited Partners within such Series within sufficient
time for the exercise of their redemption rights prior to such
increase becoming effective. Such notification shall contain a
description of such Limited Partners voting and redemption
rights and a description of any material effect of such
increase. In addition to any specific contract or agreements
described herein, the General Partner on behalf of each Series
may enter into any other contracts or agreements specifically
described in or contemplated by the Prospectus without any
further act, approval or vote of the Limited Partners of such
Series notwithstanding any other provisions of this Agreement,
the Act or any applicable law, rule or regulations. The General
Partner shall be under a fiduciary duty to conduct the affairs
of each Series in the best interests of such Series. The Limited
Partners of a Series will under no circumstances be deemed to
have contracted away the fiduciary obligations owed them by the
General Partner. The General Partners fiduciary duty
includes, among other things, the safekeeping of all Series
funds and assets and the use thereof for the benefit of such
Series. The General Partner shall at all times act with
integrity and good faith and exercise due diligence in all
activities relating to the conduct of the business of each
Series and in resolving conflicts of interest. Each Series
brokerage arrangements shall be
non-exclusive,
and the brokerage commissions paid by each Series shall be
competitive. Each Series shall seek the best price and services
available for its commodity transactions. The General Partner is
hereby authorized to perform all other duties imposed by
Sections 6221 through 6234 of the Code on the General
Partner as the tax matters partner of each Series
and the Partnership.
Each Series shall make no loans to any party, and the funds of
each Series will not be commingled with the funds of any other
person or entity or other Series (deposit of funds with a
clearing broker, clearinghouse or forward dealer or entering
into joint ventures or partnerships shall not be deemed to
constitute commingling for these purposes). Except
in respect of the Performance Fee, no person or entity may
receive, directly or indirectly, any advisory, management or
performance fees, or any profit-sharing allocation from joint
ventures, partnerships or similar arrangements in which a Series
participates, for investment advice or management, who shares or
participates in any clearing brokerage commissions; no broker
may pay, directly or indirectly, rebates or give-ups to any
trading manager or Advisor or to the General Partner or any of
their respective affiliates in respect of sales of the Units
within such Series; and such prohibitions may not be
circumvented by any reciprocal business arrangements. The
foregoing prohibition shall not prevent each Series from
executing, at the direction of any Advisor, transactions with
any futures commission merchant, broker or dealer. The maximum
period covered by any contract entered into by each Series,
except for the various provisions of the Selling Agreement which
survive each closing of the sales of the Units of such Series,
shall not exceed one year. Any material change in a Series
basic investment policies or structure shall require the
approval of all Limited Partners of such Series then owned by
the Limited Partners. Any agreements between a Series and the
General Partner or any affiliate of the General Partner (as well
as any agreements between the General Partner or any affiliate
of the General Partner and any Advisor) shall be terminable
without penalty by such Series upon no more than
60 days written notice. All sales of Units in the
United States will be conducted by registered brokers. Each
Series is prohibited from employing the trading technique
commonly known as pyramiding as such term is defined
in Section I.B. of the NASAA Guidelines. A trading manager or
Advisor of each Series taking into account each Series
open trade equity on existing positions in determining generally
whether to acquire additional commodity positions on behalf of
each Series will not be considered to be engaging in
pyramiding. The General Partner may take such other
actions on behalf of each Series as the General Partner deems
necessary or desirable to manage the business of such Series.
The General Partner is engaged, and may in the future engage, in
other business activities and shall not be required to refrain
from any other activity nor forego any profits from any such
activity, whether or not in competition with each Series.
Limited Partners may similarly engage in any such other business
activities. The General Partner shall devote to each Series such
time as the General Partner may deem advisable to conduct such
Series business and affairs.
10. Audits and Reports to Limited
Partners. Each Series books shall be
audited annually by an independent certified public accountant.
The General Partner will use its best efforts to cause each
Limited Partner of a Series to receive (i) within
90 days after the close of each fiscal year, certified
financial statements of such Series for the fiscal year then
ended, (ii) within 90 days of the end of each fiscal
year (but in no event later than March 15 of each year),
A-9
such tax information as is necessary for a Limited Partner to
complete his federal income tax return, (iii) any
applicable Form 1099 or other documentation evidencing
payment of interest income to each Limited Partner, and
(iv) such other annual and monthly information as the CFTC
may by regulation require. The General Partner of a Series shall
notify its Limited Partners within seven business days of
any material change (i) in the agreements with such
Series Advisors, including any modification in the method
of calculating the Performance Fee and (ii) in the
compensation of any party relating to such Series. Limited
Partners of a Series or their duly authorized representatives
may inspect such Series books and records during normal
business hours upon reasonable written notice to the General
Partner and obtain copies of such records (including by post
upon payment of reasonable mailing costs), upon payment of
reasonable reproduction costs; provided, however, upon request
by the General Partner, the Limited Partner shall represent that
the inspection and/or copies of such records will not be for
commercial purposes unrelated to such Limited Partners
interest as a beneficial owner of such Series. The General
Partner shall have the right to keep confidential from the
Limited Partners of a Series, for such period of time as the
General Partner deems reasonable, any information that the
General Partner reasonably believes that such Series is required
by law or by agreement with a third party to keep confidential,
provided that such information may not be kept confidential if
it involved a transaction between such Series and an affiliate
of the General Partner. The General Partner shall calculate the
approximate Net Asset Value per Unit of each Series on a daily
basis and furnish such information upon request to any Limited
Partner of the applicable Series. The General Partner shall
maintain and preserve all Partnership records for a period of
not less than six years. The General Partner will, with the
assistance of each Series clearing brokers, make an annual
review of the clearing brokerage arrangements applicable to such
Series. In connection with such review, the General Partner will
ascertain, to the extent practicable, the clearing brokerage
rates charged to other major commodity pools whose trading and
operations are, in the opinion of the General Partner,
comparable to those of each Series in order to assess whether
the rates charged each Series are competitive in light of the
services it receives. If, as a result of such review, the
General Partner determines that such rates are not competitive
in light of the services provided to each Series, the General
Partner will notify the Limited Partners, setting forth the
rates charged to each Series and several funds which are, in the
General Partners opinion, comparable to each Series.
11. Assignability of Units. Each Limited
Partner expressly agrees that he will not voluntarily assign,
transfer or dispose of, by gift or otherwise, any of his Units
or any part or all of his right, title and interest in the
capital or profits of a Unit in violation of any applicable
federal or state securities laws or without giving written
notice to the General Partner at least 30 days prior to the
date of such assignment, transfer or disposition. No assignment,
transfer or disposition by an assignee of Units of any Series or
of any part of his right, title and interest in the capital or
profits of such Units shall be effective against such Series or
the General Partner until the General Partner receives the
written notice of the assignment; the General Partner shall not
be required to give any assignee any rights hereunder prior to
receipt of such notice. The General Partner may, in its sole
discretion, waive any such notice. No such assignee, except with
the consent of the General Partner, which consent may be
withheld only to prevent or minimize potential adverse legal or
tax consequences to a Series, may become a substituted Limited
Partner of a Series, nor will the estate or any beneficiary of a
deceased Limited Partner or assignee have any right to redeem
Units from such Series except by redemption as provided in
Section 12 hereof. Each Limited Partner agrees that with
the consent of the General Partner any assignee may become a
substituted Limited Partner without need of the further act or
approval of any Limited Partner. If the General Partner
withholds consent, an assignee shall not become a substituted
Limited Partner, and shall not have any of the rights of a
Limited Partner, except that the assignee shall be entitled to
receive that share of capital and profits and shall have that
right of redemption to which his assignor would otherwise have
been entitled. No assignment, transfer or disposition of Units
of a Series shall be effective against each Series or the
General Partner until the first day of the month succeeding the
month in which the General Partner consents to such assignment,
transfer or disposition. No Units of a Series may be transferred
where, after the transfer, either the transferee or the
transferor would hold less than the minimum number of Units of
such Series equivalent to an initial minimum purchase, except
for transfers by gift, inheritance, intrafamily transfers,
family dissolutions, and transfers to Affiliates.
12. Redemptions. A Limited Partner or any
assignee of Units of whom the General Partner has received
written notice as described above may redeem all or, subject to
the provisions of this Section 12, a portion of his Units,
in an amount not less than $1,000 within a Series (such
redemption being herein referred to as a redemption)
effective as of the close of business (as determined by the
General Partner) on the last day of
A-10
any month; provided that: (i) all liabilities, contingent
or otherwise, of such Series (including such Series
allocable share of the liabilities, contingent or otherwise, of
any entities in which such Series invests), except any liability
to Limited Partners within such Series on account of their
capital contributions, have been paid or there remains property
of such Series sufficient to pay them; (ii) the General
Partner shall have timely received a request for redemption, as
provided in the following paragraph, and (iii) with respect
to a partial redemption, such Limited Partner shall have a
remaining investment in such Series after giving effect to the
requested redemption at least equal to the minimum initial
investment amount of $5,000.
Requests for redemption must be received by the General Partner
at least five calendar days, or such lesser period as shall be
acceptable to the General Partner, in advance of the requested
effective date of redemption. The General Partner may declare
additional redemption dates upon notice to the Limited Partners
of a Series as well as to those assignees of whom the General
Partner has received notice as described above.
Requests for redemption accepted by the General Partner are
payable at the applicable month-end Net Asset Value per Unit of
the Series being redeemed. The General Partner is authorized to
liquidate positions to the extent it deems necessary or
appropriate to honor any such redemption requests.
A Limited Partner (or an assignee of Units) may redeem his Units
in a Series effective as of the last business day of any month
and authorize the General Partner to use the net proceeds of
such redemption to purchase Units of the other Series (a
Series Exchange). The minimum amount of any
Series Exchange is $5,000, unless a Limited Partner is
redeeming his entire interest in a Series. A Limited Partner
seeking to effect a Series Exchange by partial redemption
from a Series must continue to hold Units of such Series with a
Net Asset Value of not less than $5,000 as of the Exchange Date
(defined below).
A Series Exchange shall be effective as of the last
business day of the month ending after an exchange subscription
agreement in proper form has been received by the General
Partner (Exchange Date), provided, that the Series
has assets sufficient to discharge its liabilities and to redeem
Units on the Exchange Date. Upon requesting a
Series Exchange, a Limited Partner shall have authorized
the General Partner to redeem from the Series identified in the
exchange subscription agreement the number of Units or dollar
amount of Units specified therein and to utilize the net
proceeds of such redemption to purchase an amount of Units in
the other Series at a price per Unit equal to 100% of the Net
Asset Value of a Unit of such other Series as of the close of
business on the relevant Exchange Date. The General Partner
shall cause the net proceeds of the redemption to be delivered
to the account of the other Series and shall cause to be mailed
to such Limited Partner, generally within 20 business days after
such Exchange Date, a written confirmation thereof.
Each Limited Partner understands that its ability to effect a
Series Exchange is conditioned upon Units being registered
and qualified for sale pursuant to a current prospectus
immediately prior to each Exchange Date. The General Partner
shall not have any obligation to have Units registered under
federal, state or foreign securities laws, and may withdraw or
terminate such registrations at any time. In the event that not
all exchange subscription agreements can be processed because an
insufficient number of Units are available for sale on an
Exchange Date, the General Partner is hereby authorized to
allocate Units of limited partnership interest in any manner
which it deems is reasonable under the circumstances and may
allocate a substantial portion of such Units to new subscribers
for Units.
The General Partner, on behalf of the Partnership, each Series
and each Limited Partner, is authorized to execute, file,
record, and publish such amendments to this Agreement and such
other documents as shall be necessary to reflect any
Series Exchange pursuant to this Section 12.
If at the close of business (as determined by the General
Partner) on any day, the Net Asset Value per Unit of a Series
has decreased to less than 50% of the Net Asset Value per Unit
of such Series as of the most recent month-end, after adding
back all distributions, the General Partner shall notify Limited
Partners within such Series within seven business days
thereafter and shall liquidate all open positions with respect
to such Series as expeditiously as possible and suspend trading.
Within ten business days after the date of suspension of
trading, the General Partner (and any other general partners of
such Series) shall declare a Special Redemption Date with
respect to such Series. Such Special Redemption Date shall be a
business day within 30 business days from the date of suspension
of trading by such Series, and the General Partner shall mail
notice of such date to each Limited Partner of such Series
A-11
and assignee of Units within such Series of whom it has received
written notice, by first-class mail, postage prepaid, not later
than ten business days prior to such Special Redemption
Date, together with instructions as to the procedure such
Limited Partner or assignee must follow to have his interest in
such Series redeemed on such date (only entire, not partial,
interests may be so redeemed unless otherwise determined by the
General Partner). Upon redemption pursuant to a Special
Redemption Date, a Limited Partner or any other assignee of whom
the General Partner has received written notice as described
above, shall receive from the applicable Series an amount equal
to the Net Asset Value of his interest in such Series,
determined as of the close of business (as determined by the
General Partner) on such Special Redemption Date. No redemption
charges shall be assessed on any such Special Redemption Date.
As in the case of a regular redemption, an assignee shall not be
entitled to redemption until the General Partner has received
written notice (as described above) of the assignment, transfer
or disposition under which the assignee claims an interest in
the Units to be redeemed. If, after such Special Redemption
Date, the Net Assets of such Series are at least $500,000 and
the Net Asset Value of a Unit within such Series is in excess of
$250, such Series may, in the discretion of the General Partner,
resume trading. The General Partner may at any time and in its
discretion declare a Special Redemption Date, should the General
Partner determine that it is in the best interests of a Series
to do so. The General Partner in its notice of a Special
Redemption Date may, in its discretion, establish the
conditions, if any, under which other Special Redemption Dates
must be called, which conditions may be determined in the sole
discretion of the General Partner, irrespective of the
provisions of this paragraph. The General Partner may also, in
its discretion, declare additional regular redemption dates for
Units within a Series and permit certain Limited Partners to
redeem at other than
month-end.
Except as otherwise set forth above, redemption payments will be
made within 20 business days after the month-end of
redemption, except that under special circumstances, including,
but not limited to, inability to liquidate dealers
positions as of a redemption date or default or delay in
payments due a Series from clearing brokers, banks or other
persons or entities, such Series may in turn delay payment to
Limited Partners or assignees requesting redemption of their
Units of the proportionate part of the Net Asset Value of such
Units within such Series equal to that proportionate part of
such Series aggregate Net Asset Value represented by the
sums which are the subject of such default or delay. The General
Partner shall cause redemption payments to be sent from the
Additional Accounts to the last known addresses of the Limited
Partner requesting redemption; provided, however, that such
Limited Partners shall cease to be Limited Partners upon payment
of the redemption amounts and such Limited Partners shall have
no claim against the assets of a Series in which they were
Limited Partners except for such redemption payments.
The General Partner may require a Limited Partner to redeem all
or a portion of such Limited Partners Units within a
Series if the General Partner considers doing so to be desirable
for the protection of such Series, and will use best efforts to
do so to the extent necessary to prevent each Series from being
deemed to constitute plan assets under
Section 3(42) of the Employee Retirement Income Security
Act of 1974, as amended (ERISA), or the Code, with
respect to any employee benefit plan subject to
ERISA or with respect to any plan or account subject to
Section 4975 of the Code.
13. Offering of Units. The General
Partner on behalf of each Series shall (i) cause to be
filed a Registration Statement or Registration Statements, and
such amendments thereto as the General Partner deems advisable,
with the Securities and Exchange Commission for the registration
and ongoing public offering of the Units, (ii) use its best
efforts to qualify and to keep qualified Units for sale under
the securities laws of such States of the United States or other
jurisdictions as the General Partner shall deem advisable and
(iii) take such action with respect to the matters
described in (i) and (ii) as the General Partner shall
deem advisable or necessary. The General Partner shall use its
best efforts not to accept any subscriptions for Units if doing
so would cause the assets of a Series to constitute plan
assets under ERISA Section 3(42) with respect to any
employee benefit plan subject to ERISA or with
respect to any plan or account subject to Section 4975 of
the Code. If such a Limited Partner has its subscription reduced
for such reason, such Limited Partner shall be entitled to
rescind its subscription in its entirety even though
subscriptions are otherwise irrevocable.
14. Additional Offerings. The General
Partner may, in its discretion, make additional public or
private offerings of Units, provided that the net proceeds to a
Series of any such sales of additional Units of such Series
shall in no event be less than the Net Asset Value per Unit
within such Series (as defined in Section 5(d) hereof) at
the time of sale (unless the new Units participation in
the profits and losses of such Series is appropriately
adjusted). No
A-12
Limited Partner shall have any preemptive, preferential or other
rights with respect to the issuance or sale of any additional
Units, other than as set forth in the preceding sentence. The
Partnership may offer different Series or classes of Units
having different economic terms than previously offered Series
or classes of Units as determined by the General Partner;
provided that the issuance of such a new Series or class of
Units shall in no respect adversely affect the holders of
outstanding Units; and provided further that the assets
attributable to each such Series or class shall, to the maximum
extent permitted by law, be treated as legally separate and
distinct pools of assets, and the assets attributable to one
such Series or class be prevented from being used in any respect
to satisfy or discharge any debt or obligation of any other such
Series or class.
15. Special Power of Attorney. Each
Limited Partner by his execution of this Agreement does hereby
irrevocably constitute and appoint the General Partner and each
officer of the General Partner, with power of substitution, as
his true and lawful
attorney-in-fact,
in his name, place and stead, to execute, acknowledge, swear to
(and deliver as may be appropriate) on his behalf and file and
record in the appropriate public offices and publish (as may in
the reasonable judgment of the General Partner be required by
law): (i) this Agreement, including any amendments and/or
restatements hereto duly adopted as provided herein;
(ii) certificates in various jurisdictions, and amendments
and/or restatements thereto, and of assumed name or of doing
business under a fictitious name with respect to each Series or
the Partnership; (iii) all conveyances and other
instruments which the General Partner deems appropriate to
qualify or continue each Series or the Partnership in the State
of Delaware and the jurisdictions in which each Series or the
Partnership may conduct business, or which may be required to be
filed by each Series or the Limited Partners under the laws of
any jurisdiction or under any amendments or successor statutes
to the Act, to reflect the dissolution or termination of each
Series or the Partnership, or each Series or the Partnership
being governed by any amendments or successor statutes to the
Act or to reorganize or refile each Series or the Partnership in
a different jurisdiction; and (iv) to file, prosecute,
defend, settle or compromise litigation, claims or arbitrations
on behalf of each Series. The Power of Attorney granted herein
shall be irrevocable and deemed to be a power coupled with an
interest (including, without limitation, the interest of the
other Limited Partners in the General Partner being able to rely
on the General Partners authority to act as contemplated
by this Section 15) and shall survive and shall not be
affected by the subsequent incapacity, disability or death of a
Limited Partner.
16. Withdrawal of the General Partner or a Limited
Partner. The Partnership shall be dissolved upon
the final dissolution of each Series created hereunder. Each
Series shall be dissolved upon the withdrawal, dissolution,
insolvency or removal of the General Partner with respect to
such Series, or any other event that causes the General Partner
to cease to be a general partner with respect to such Series
under the Act, unless such Series is continued pursuant to the
terms of Section 5(a)(3). In addition, the General Partner
may withdraw from each Series, without any breach of this
Agreement, at any time upon 120 days written notice
by first class mail, postage prepaid, to each Limited Partner of
such Series and assignee of whom the General Partner has notice;
provided, that such resignation shall not become effective
unless and until a successor general partner is in place. If the
General Partner withdraws as general partner with respect to a
Series and such Series business is continued, the
withdrawing General Partner shall pay all expenses incurred
directly as a result of its withdrawal. In the event of the
General Partners removal or withdrawal, with respect to a
Series, the General Partner shall be entitled to a redemption of
its interest in such Series at its Net Asset Value with respect
to such Series on the next closing date following the date of
removal or withdrawal. The General Partner may not assign its
interest in the Partnership or its obligation to direct the
trading of each Series assets without the consent of each
Limited Partner of the effected Series. The death, incompetency,
withdrawal, insolvency or dissolution of a Limited Partner or
any other event that causes a Limited Partner to cease to be a
Limited Partner (within the meaning of the Act) in a Series
shall not terminate or dissolve such Series, and a Limited
Partner, his estate, custodian or personal representative shall
have no right to redeem or value such Limited Partners
interest in such Series except as provided in Section 12
hereof. Each Limited Partner within a Series agrees that in the
event of his death, he waives on behalf of himself and his
estate, and directs the legal representatives of his estate and
any person interested therein to waive, the furnishing of any
inventory, accounting or appraisal of the assets of such Series
or the Partnership and any right to an audit or examination of
the books of such Series or the Partnership. Nothing in this
Section 16 shall, however, waive any right given elsewhere
in this Agreement for a Limited Partner to be informed of the
Net Asset Value of his Units, to receive periodic reports,
audited financial statements and other information from the
General Partner or to redeem or transfer Units.
A-13
17. Standard of Liability; Indemnification.
(a) Standard of Liability for the General
Partner. The General Partner and its Affiliates,
as defined below, shall have no liability to any Series or to
any Limited Partner of such Series for any loss suffered by such
Series or such Limited Partner which arises out of any action or
inaction of the General Partner or its Affiliates if the General
Partner, in good faith, determined that such course of conduct
was in the best interests of such Series and such course of
conduct did not constitute negligence or misconduct of the
General Partner or its Affiliates.
(b) Indemnification of the General Partner by each
Series. To the fullest extent permitted by law,
subject to this Section 17, the General Partner and its
Affiliates shall be indemnified by each Series against any
losses, judgments, liabilities, expenses and amounts paid in
settlement of any claims sustained by them in connection with
such Series; provided that such claims were not the result of
negligence or misconduct on the part of the General Partner or
its Affiliates, and the General Partner, in good faith,
determined that such conduct was in the best interests of such
Series; and provided further that Affiliates of the General
Partner shall be entitled to indemnification only for losses
incurred by such Affiliates in performing the duties of the
General Partner with respect to such Series and acting wholly
within the scope of the authority of the General Partner.
Notwithstanding anything to the contrary contained in the
preceding two paragraphs, the General Partner and its Affiliates
and any persons acting as selling agents for the Units shall not
be indemnified for any losses, liabilities or expenses arising
from or out of an alleged violation of federal or state
securities laws unless (1) there has been a successful
adjudication on the merits of each count involving alleged
securities law violations as to the particular indemnitee and
the court approves indemnification of the litigation costs, or
(2) such claims have been dismissed with prejudice on the
merits by a court of competent jurisdiction as to the particular
indemnitee and the court approves indemnification of the
litigation costs, or (3) a court of competent jurisdiction
approves a settlement of the claims against a particular
indemnitee and finds that indemnification of the settlement and
related costs should be made. In any claim for indemnification
for federal or state securities law violations, the party
seeking indemnification shall place before the court the
position of the Securities and Exchange Commission, the
California Department of Corporations, the Massachusetts
Securities Division, the Missouri Securities Division, the
Pennsylvania Securities Commission, the Tennessee Securities
Division, the Texas Securities Board and any other state or
applicable regulatory authority with respect to the issue of
indemnification for securities law violations. Each Series shall
not bear the cost of that portion of any insurance which insures
any party against any liability the indemnification of which is
herein prohibited. For the purposes of this Section 17, the
term Affiliates shall mean any person acting on
behalf of or performing services on behalf of any Series who:
(1) directly or indirectly controls, is controlled by, or
is under common control with the General Partner; or
(2) owns or controls 10% or more of the outstanding voting
securities of the General Partner; or (3) is an officer or
director of the General Partner; or (4) if the General
Partner is an officer, director, partner or trustee, is any
entity for which the General Partner acts in any such capacity.
Advances from a Series Estate to the General Partner and
its Affiliates for legal expenses and other costs incurred as a
result of any legal action initiated against the General Partner
by a Limited Partner are prohibited. Advances from any
Series Estate to the General Partner and its Affiliates
for legal expenses and other costs incurred as a result of a
legal action will be made only if the following three conditions
are satisfied: (1) the legal action relates to the
performance of duties or services by the General Partner or its
Affiliates on behalf of such Series; (2) the legal action
is initiated by a third party who is not a Limited Partner; and
(3) the General Partner or its Affiliates undertake to
repay the advanced funds, with interest from the date of such
advance, to such Series in cases in which they would not be
entitled to indemnification under the standard of liability set
forth in Section 17(a). In no event shall any indemnity or
exculpation provided for herein be more favorable to the General
Partner or any Affiliate than that contemplated by the NASAA
Guidelines as currently in effect. In no event shall any
indemnification permitted by this subsection (b) of
Section 17 be made by a Series unless all provisions of
this Section for the payment of indemnification have been
complied with in all respects. Furthermore, it shall be a
precondition of any such indemnification that the effected
Series receive a determination of qualified independent legal
counsel in a written opinion that the party which seeks to be
indemnified hereunder has met the applicable standard of conduct
set forth herein. Receipt of any such opinion shall not,
however, in itself, entitle any such party to indemnification
unless indemnification is otherwise proper hereunder. Any
indemnification payable by a Series hereunder shall be made only
as provided in the specific case. In no event shall any
indemnification obligations of a Series under this
subsection (b) of this Section 17 subject a
Limited Partner to any liability in excess of that contemplated
by subsection (e) of Section 8 hereof.
A-14
(c) Indemnification of each Series by the Limited
Partners. In the event a Series is made a party
to any claim, dispute or litigation or otherwise incurs any loss
or expense as a result of or in connection with any of such
Series Limited Partners activities, obligations or
liabilities unrelated to such Series business, such
Limited Partner shall indemnify and reimburse such Series for
all loss and expense incurred, including reasonable
attorneys fees.
18. Amendments; Meetings.
(a) Amendments with Consent of the General
Partner. The General Partner may amend this
Agreement with the approval of more than fifty percent (50%) of
the Units then owned by Limited Partners of each Series. No
meeting procedure or specified notice period is required in the
case of amendments made with the consent of the General Partner,
mere receipt of an adequate number of unrevoked written consents
from Limited Partners of each Series being sufficient. The
General Partner may amend this Agreement without the consent of
the Limited Partners of each Series in order (i) to clarify
any clerical inaccuracy or ambiguity or reconcile any
inconsistency (including any inconsistency between this
Agreement and the Prospectus), (ii) to effect the intent of
the tax allocations proposed herein to the maximum extent
possible in the event of a change in the Code or the
interpretations thereof affecting such allocations,
(iii) to attempt to ensure that either Series is not
treated as an association taxable as a corporation for federal
income tax purposes, (iv) to qualify or maintain the
qualification of the Partnership as a limited partnership in any
jurisdiction, (v) to delete or add any provision of or to
this Agreement required to be deleted or added by the Staff of
the Securities and Exchange Commission or any other federal
agency or any state Blue Sky official or similar
official or in order to opt to be governed by any amendment or
successor statute to the Act, (vi) to make any amendment to
this Agreement which the General Partner deems advisable,
including amendments that reflect the offering and issuance of
additional Units, whether or not issued through a Series,
provided that such amendment is not adverse to the Limited
Partners of either Series, or that is required by law, and
(vii) to make any amendment that is appropriate or
necessary, in the opinion of the general partner, to prevent
each Series or the General Partner or its directors, officers or
controlling persons from in any manner being subjected to the
provisions of the Investment Company Act of 1940, as amended, or
to prevent the assets of either Series from being considered for
any purpose of ERISA or Section 4975 of the Code to
constitute assets of any employee benefit plan as
defined in and subject to ERISA or of any plan
subject to Section 4975 of the Code.
(b) Amendments and Actions without Consent of the
General Partner. In any vote called by the
General Partner or pursuant to section (c) of this
Section 18, upon the affirmative vote (which may be in
person or by proxy) of more than fifty percent (50%) of the
Units then owned by Limited Partners of each Series, the
following actions may be taken, irrespective of whether the
General Partner concurs: (i) this Agreement may be amended,
provided, however, that approval of all Limited Partners of each
Series shall be required in the case of amendments changing or
altering this Section 18, extending the term of each Series
or the Partnership, or materially changing each Series
basic investment policies or structure; in addition, reduction
of the capital account of any Limited Partner or assignee or
modification of the percentage of profits, losses or
distributions to which a Limited Partner or an assignee is
entitled hereunder shall not be effected by any amendment or
supplement to this Agreement without such Limited Partners
or assignees written consent; (ii) each Series or the
Partnership may be dissolved; (iii) the General Partner may
be removed and replaced; (iv) a new general partner or
general partners may be elected if the General Partner withdraws
from each Series; (v) the sale of all or substantially all
of the assets of each Series may be approved; and (vi) any
contract with the General Partner or any affiliate thereof may
be disapproved of and, as a result, terminated upon
60 days notice.
(c) Meetings; Other Voting Matters. A
Limited Partner in either Series upon request addressed to the
General Partner shall be entitled to obtain from the General
Partner, upon payment in advance of reasonable reproduction and
mailing costs, a list of the names and addresses of record of
all Limited Partners within such Series and the number of Units
held by each (which shall be mailed by the General Partner to
the Limited Partner within ten days of the receipt of the
request); provided, that the General Partner may require any
Limited Partner requesting such information to submit written
confirmation that such information will not be used for
commercial purposes and will only be used for a legitimate
purpose related to such person being a Limited Partner. Upon
receipt of a written proposal, signed by Limited Partners owning
Units representing at least 10% of the Units then owned by
Limited Partners, that a meeting of such Series be called to
vote upon any matter upon which the Limited Partners may vote
pursuant to this Agreement, the General Partner shall, by
written notice to each Limited Partner within that Series of
record sent by certified mail within 15 days after such
receipt, call a meeting of such Series or the Partnership. Such
meeting shall be held at least 30 but not more than 60 days
after the mailing of such notice, and
A-15
such notice shall specify the date of, a reasonable place and
time for, and the purpose of such meeting. The General Partner
may not restrict the voting rights of Limited Partners as set
forth herein. In the event that the General Partner or the
Limited Partners vote to amend this Agreement in any material
respect, the amendment will not become effective prior to all
Limited Partners having an opportunity to redeem their Units.
19. Miscellaneous.
(a) Notices. All notices under this
Agreement shall be in writing and shall be effective upon
personal delivery, or if sent by first class mail, postage
prepaid, addressed to the last known address of the party to
whom such notice is to be given, upon the deposit of such notice
in the United States mail.
(b) Binding Effect. This Agreement shall
inure to and be binding upon all of the parties, all parties
indemnified under Section 17 hereof, and their respective
successors and assigns, custodians, estates, heirs and personal
representatives. For purposes of determining the rights of any
Limited Partner or assignee hereunder, each Series and the
Partnership, the General Partner may rely upon each Series
records as to who are Limited Partners and assignees of such
Series, and all Limited Partners and assignees agree that their
rights shall be determined and they shall be bound thereby.
(c) Captions. Captions in no way define,
limit, extend or describe the scope of this Agreement nor the
effect of any of its provisions. Any reference to
persons in this Agreement shall also be deemed to
include entities, unless the context otherwise requires.
20. Benefit Plan Investors. Each Limited
Partner that is an employee benefit plan as defined
in, and subject to the fiduciary responsibility provisions of
ERISA, a plan as defined in Section 4975 of the
Code (each such employee benefit plan and plan, a
Plan), or any entity deemed for any purpose of ERISA
or Section 4975 of the Code to hold assets of any Plan and
each fiduciary thereof who has caused the Plan to become a
Limited Partner (a Plan Fiduciary), represents and
warrants that:
(a) the Plan Fiduciary has considered an investment in each
Series for such Plan in light of the risks relating thereto;
(b) the Plan Fiduciary has determined that, in view of such
considerations, the investment in each Series for such Plan is
consistent with the Plan Fiduciarys responsibilities under
ERISA;
(c) the investment in a Series by the Plan does not violate
and is not otherwise inconsistent with the terms of any legal
document constituting the Plan or any trust agreement thereunder;
(d) the Plans investment in a Series has been duly
authorized and approved by all necessary parties;
(e) none of the General Partner, any selling agent, any
clearing broker, the escrow agent, the introducing broker, the
administrator, any of their respective affiliates or any of
their respective agents or employees: (i) has investment
discretion with respect to the investment of assets of the Plan
used to purchase the Units; (ii) has authority or
responsibility to or regularly gives investment advice with
respect to the assets of the Plan used to purchase the Units for
a fee and pursuant to an agreement or understanding that such
advice will serve as a primary basis for investment decisions
with respect to the Plan and that such advice will be based on
the particular investment needs of the Plan; or (iii) is an
employer maintaining or contributing to the Plan; and
(f) the Plan Fiduciary: (i) is authorized to make, and
is responsible for, the decision for the Plan to invest in each
Series, including the determination that such investment is
consistent with the requirement imposed by Section 404 of
ERISA that Plan investments be diversified so as to the risks of
large losses; (ii) is independent of the General Partner,
each selling agent, each clearing broker, the escrow agent, the
introducing broker, the administrator, and each of their
respective affiliates; and (iii) is qualified to make such
investment decision.
21. No Legal Title to
Series Estate. The Limited Partners within a
Series shall not have legal title to any part of such
Series Estate.
22. Legal Title. Legal title to all
Series Estate shall be vested in such Series; except where
applicable law in any jurisdiction requires any part of such
Series Estate to be vested otherwise, the General Partner
may cause legal title to each Series Estate or any portion
thereof to be held by or in the name of the General Partner or
any other person as nominee for and on behalf of such Series.
23. Creditors. No creditors of any
Limited Partners within a Series shall have any right to obtain
possession of, or otherwise exercise legal or equitable remedies
with respect to, such Series Estate.
A-16
IN WITNESS WHEREOF, the undersigned have duly executed this
Fourth Amended and Restated Limited Partnership Agreement as of
the day and year first above written.
Superfund Capital
Management, Inc.
Name: Nigel James
Title: President
A-17
EXHIBIT C
QUADRIGA
SUPERFUND, L.P.
SUBSCRIPTION REPRESENTATIONS
By executing the Subscription Agreement for Quadriga Superfund,
L.P. (the Fund), each purchaser
(Purchaser) of units (Units) of
beneficial interest in each Series (Series)
irrevocably subscribes for Units at a price equal to the net
asset value per Unit as of the end of the month in which the
subscription is accepted, provided such subscription is received
at least five business days prior to such month-end, as
described in the prospectus dated
[ ],
2009 (the Prospectus). The minimum subscription is
$5,000 per Series; additional Units may be purchased with a
minimum investment of $1,000 for each Series in which the
investor has made the minimum investment. Subscriptions must be
accompanied by a check in the full amount of the subscription
and made payable to Quadriga Superfund, L.P.
Series (A or B, as applicable) ESCROW ACCOUNT unless
the Purchasers payment will be made by debiting their
brokerage account maintained with their selling agent. Purchaser
is also delivering to the selling agent an executed Subscription
Agreement (Exhibit D to the Prospectus) and any other
documents needed (i.e., Trust, Pension, Corporate). If
Purchasers Subscription Agreement is accepted, Purchaser
agrees to contribute Purchasers subscription to each
Series and to be bound by the terms of the Fourth Amended and
Restated Limited Partnership Agreement of the Fund (the
Partnership Agreement) attached as Exhibit A to
the Prospectus. Purchaser agrees to reimburse each Series and
Superfund Capital Management, Inc. (Superfund Capital
Management), as general partner, for any expense or loss
incurred as a result of the cancellation of Purchasers
Units due to a failure of Purchaser to deliver good funds in the
amount of the subscription price. By execution of the
Subscription Agreement, Purchaser shall be deemed to have
executed the Partnership Agreement. As an inducement to
Superfund Capital Management to accept this subscription,
Purchaser (for the Purchaser and, if Purchaser is an entity, on
behalf of and with respect to each of purchasers
shareholders, partners, members or beneficiaries), by executing
and delivering Purchasers Subscription Agreement,
represents and warrants to Superfund Capital Management, the
clearing brokers, the selling agent who solicited
Purchasers subscription and each Series, as follows:
(a) Purchaser is of legal age to execute the Subscription
Agreement and is legally competent to do so. (b) Purchaser
acknowledges that Purchaser has received a copy of the
Prospectus, including the Partnership Agreement. (c) All
information that Purchaser has furnished to Superfund Capital
Management or that is set forth in the Subscription Agreement
submitted by Purchaser is correct and complete as of the date of
such Subscription Agreement, and if there should be any change
in such information prior to acceptance of Purchasers
subscription, purchaser will immediately furnish such revised or
corrected information to Superfund Capital Management.
(d) Unless (e) or (f) below is applicable,
Purchasers subscription is made with Purchasers
funds for Purchasers own account and not as trustee,
custodian or nominee for another. (e) The subscription, if
made as custodian for a minor, is a gift purchaser has made to
such minor and is not made with such minors funds or, if
not a gift, the representations as to net worth and annual
income set forth below apply only to such minor. (f) If
Purchaser is subscribing in a representative capacity, purchaser
has full power and authority to purchase the Units and enter
into and be bound by the Subscription Agreement on behalf of the
entity for which he is purchasing the Units, and such entity has
full right and power to purchase such Units and enter into and
be bound by the Subscription Agreement and become a limited
partner of the Fund pursuant to the Partnership Agreement.
(g) Purchaser either is not required to be registered with
the Commodity Futures Trading Commission (CFTC) or
to be a member of the National Futures Association
(NFA) or if required to be so registered is duly
registered with the CFTC and is a member in good standing of the
NFA. (h) Purchaser represents and warrants that Purchaser
has (i) a net worth of at least $250,000 (exclusive of
home, furnishings and automobiles) or (ii) an annual gross
income of at least $70,000 and a net worth (similarly
calculated) of at least $70,000. Residents of the following
states must meet the requirements set forth below (net worth in
all cases is exclusive of home, furnishings and automobiles). In
addition, Purchaser may not invest more than 10% of his net
worth (exclusive of home, furnishings and automobiles) in each
Series. (i) If the Purchaser is, or is acting on behalf of,
an employee benefit plan, as defined in and subject
to the Employee Retirement Income Security Act of 1974, as
amended (ERISA), a plan as defined in
and subject to Section 4975 of the Internal Revenue Code of
1986, as amended (the Code) (a Plan) or
an entity (Plan Assets Entity) deemed for any
purposes of ERISA or Section 4975 of the Code to hold
assets of any Plan due to investments made in such entity by
benefit plan investors (in which case, the following
representations and warranties are made with respect to each
Plan holding an investment in such Plan Assets Entity), the
individual signing this Subscription Agreement on behalf of the
Purchaser, in addition to the representations and warranties set
forth
C-1
above, hereby further represents and warrants as, or on behalf
of, the fiduciary of the Plan responsible for purchasing Units
(the Plan Fiduciary) that: (a) the Plan
Fiduciary has considered an investment in each Series for such
plan in light of the risks relating thereto; (b) the Plan
Fiduciary has determined that, in view of such considerations,
the investment in each Series is consistent with the Plan
Fiduciarys responsibilities under ERISA; (c) the
Plans investment in each Series does not violate and is
not otherwise inconsistent with the terms of any legal document
constituting the Plan or any trust agreement thereunder;
(d) the Plans investment in each Series has been duly
authorized and approved by all necessary parties; (e) none
of Superfund Capital Management, HSBC Bank USA, PNC Global
Investment Servicing Inc., Superfund Asset Management, Inc., ADM
Investor Services, Inc., Rosenthal Collins Group, L.L.C.,
Barclays Capital Inc., and Superfund USA, Inc., any other
selling agent, any of their respective affiliates or any of
their respective agents or employees: (i) has investment
discretion with respect to the investment of assets of the Plan
used to purchase Units; (ii) has authority or
responsibility to or regularly gives investment advice with
respect to the assets of the Plan used to purchase Units for a
fee and pursuant to an agreement or understanding that such
advice will serve as a primary basis for investment decisions
with respect to the Plan and that such advice will be based on
the particular investment needs of the Plan; or (iii) is an
employer maintaining or contributing to the Plan; and
(f) the Plan Fiduciary (i) is authorized to make, and
is responsible for, the decision to invest in each Series,
including the determination that such investment is consistent
with the requirement imposed by Section 404 of ERISA that
Plan investments be diversified so as to minimize the risks of
large losses, (ii) is independent of Superfund Capital
Management, HSBC Bank USA, PNC Global Investment Servicing Inc.,
Superfund Asset Management, Inc., ADM Investor Services, Inc.,
Rosenthal Collins Group, L.L.C., Barclays Capital Inc.,
Superfund USA, Inc., each other selling agent, and each of their
respective affiliates, and (iii) is qualified to make such
investment decision. The Purchaser will, at the request of
Superfund Capital Management, furnish Superfund Capital
Management with such information as Superfund Capital Management
may reasonably require to establish that the purchase of the
Units by the Plan does not violate any provision of ERISA or the
Code, including without limitation, those provisions relating to
prohibited transactions by parties in
interest or disqualified persons as defined
therein. (j) If the Purchaser is acting on behalf of a
trust (a Limited Partner Trust), the individual
signing the Subscription Agreement on behalf of the Limited
Partner Trust hereby further represents and warrants that an
investment in the applicable Series is permitted under the trust
agreement of the Limited Partner Trust, and that the undersigned
is authorized to act on behalf of the Limited Partner Trust
under the trust agreement thereof.
1. Alabama Alabama investors should limit their
investment in the Fund and other managed futures programs to not
more than 10% of their liquid net worth (cash, cash equivalents
and readily marketable securities.
2. California Net worth of at least $500,000 or
a net worth of at least $250,000 and an annual income of at
least $70,000. California investors should limit their
investment in the Fund and other managed futures programs to not
more than 10% of their liquid net worth (cash, cash equivalents
and readily marketable securities).
3. Iowa Net worth of at least $500,000 or a net
worth of at least $250,000 and an annual taxable income of at
least $70,000.
4. Kansas Kansas investors should limit their
investment in the Fund and other managed futures programs to not
more than 10% of their liquid net worth (cash, cash equivalents
and readily marketable securities).
5. Kentucky Net worth of at least $300,000 or a
net worth of at least $85,000 and an annual taxable income of
$85,000. Kentucky investors should limit their investment in any
commodity pool program to not more than 10% of their liquid net
worth (cash, cash equivalents and readily marketable securities).
6. Minnesota By executing the Subscription
Agreement of the Fund, a Minnesota Purchaser is deemed to
represent and warrant to the Fund that such person is an
accredited investor as defined in Rule 501(a)
under the Securities Act of 1933. An accredited investor
includes: (1) any natural person whose individual net
worth, or joint net worth with that persons spouse, at the
time of such persons purchase of the Units exceeds
$1,000,000; or (2) any natural person who had individual
income in excess of $200,000 in each of the two most recent
years, or joint income with that persons spouse in excess
of $300,000 in each of those years, and has a reasonable
expectation of reaching the same income level in the current
year.
7. New Mexico Net worth of at least $250,000 or
a net worth of at least $75,000 and an annual income of at least
$75,000.
C-2
8. Oregon Net worth of at least $500,000 or a
net worth of at least $250,000 and an annual income of at least
$70,000.
9. Tennessee Net worth of at least $250,000 or
a net worth of at least $70,000 and an annual taxable income of
at least $70,000. Tennessee investors should be aware that the
rate at which each Series performance fee is calculated
exceeds the maximum rate for incentive/performance fees payable
under the Guidelines for Registration of Commodity Pool Programs
(the Guidelines) adopted by the North American
Securities Administrators Association, and may, under certain
circumstances, result in Superfund Capital Management receiving
combined management and incentive fees that exceed the maximum
compensation permitted by the Guidelines. The Guidelines provide
that the maximum incentive or performance fee that the Fund may
charge investors is 23.3% of new trading profits per quarter.
Investors in the Fund will be subject to a monthly performance
fee of 25% of new appreciation per month. On comparing the
Funds fee structure to that permitted under the
Guidelines, any Series which experiences new appreciation in any
given month in excess of 3.46% (equivalent to annual new
appreciation in excess of 41.5%) will pay a combination of
management and incentive fees to Superfund Capital Management
that would exceed the maximum fees payable under the Guidelines.
C-3
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item 13. Other
Expenses of Issuance and Distribution
In connection with the ongoing offering costs of the Fund, the
Fund pays Superfund Capital Management a monthly fee equal to
one-twelfth of 1% (1% annually) of the month-end net asset
value, not to exceed the actual amount of such expenses.
Superfund Capital Management has estimated the ongoing offering
costs for the life of the offering below, which amount is
approximately $1,912,695.74. Superfund Capital Management then
pays all such ongoing offering costs on behalf of the Fund,
including:
|
|
|
|
|
|
|
Approximate
|
|
|
|
Amount
|
|
|
Securities and Exchange Commission Registration Fee
|
|
$
|
8,665.74
|
*
|
Financial Industry Regulatory Authority, Inc. Filing Fee
|
|
$
|
16,030.00
|
*
|
Printing Expenses
|
|
|
623,000.00
|
|
Fees of Certified Public Accountants
|
|
|
550,000.00
|
|
Blue Sky Expenses (Excluding Legal Fees)
|
|
|
215,000.00
|
|
Fees of Counsel
|
|
|
500,000.00
|
|
|
|
|
|
|
Total
|
|
$
|
1,912,695.74
|
|
|
|
|
|
|
|
|
Item 14.
|
Indemnification
of Directors and Officers
|
Section 17 of the Partnership Agreement (attached as
Exhibit A to the Prospectus which forms a part of this
Registration Statement) provides for indemnification of
Superfund Capital Management and certain of its controlling
persons by each Series in certain circumstances. Such
indemnification is limited to claims sustained by such persons
in connection with each Series; provided that such claims were
not the result of negligence or misconduct on the part of
Superfund Capital Management or such controlling persons. Each
Series is prohibited from incurring the cost of any insurance
covering any broader indemnification than that provided above.
Advances of each Series funds to cover legal expenses and
other costs incurred as a result of any legal action initiated
against Superfund Capital Management by a Limited Partner are
prohibited unless specific court approval is obtained.
Item 15. Recent
Sales of Unregistered Securities
There have been no sales of unregistered Units in the past three
years.
Item 16. Exhibits
and Financial Statement Schedules
The following documents (unless indicted) are filed herewith and
made a part of this Registration Statement.
II-1
(a) Exhibits.
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Description of Document
|
|
|
1
|
.02
|
|
Form of Additional Selling Agreement among each Series,
Superfund USA, Inc., Superfund Capital Management, Inc. and the
Additional Selling Agent.
|
|
1
|
.03
|
|
Form of Intermediary Selling Agent Agreement among each Series,
Superfund USA, Inc., Superfund Capital Management, Inc. and the
Intermediary Selling Agent.
|
|
3
|
.01
|
|
Form of Fourth Amended and Restated Limited Partnership
Agreement of Quadriga Superfund, L.P. (included as
Exhibit A to the Prospectus).
|
|
5
|
.01
|
|
Opinion of Sidley Austin LLP relating to the legality of the
Units.
|
|
8
|
.01
|
|
Opinion of Sidley Austin LLP with respect to federal income tax
consequences.
|
|
10
|
.01(g)
|
|
Administration, Accounting and Investor Services Agreement.
|
|
10
|
.02
|
|
Form of Subscription Agreement (included as Exhibit D to
the Prospectus).
|
|
10
|
.03(a)
|
|
Escrow Agreement between Series A and HSBC Bank USA.
|
|
10
|
.03(b)
|
|
Escrow Agreement between Series B and HSBC Bank USA.
|
|
23
|
.01
|
|
Consent of Deloitte & Touche LLP.
|
|
23
|
.02
|
|
Consent of Sidley Austin LLP.
|
The following exhibit is incorporated by reference herein from
the exhibit of the same description filed on November 1,
2008 with Registrants
Form 8-K
(File No. 000-51634).
|
|
|
|
|
|
1
|
.01(a)
|
|
Selling Agreement, dated effective as of November 1, 2008,
among Quadriga Superfund, L.P. and Superfund USA, Inc.
|
The following exhibit is incorporated by reference herein from
the exhibit of the same description and number filed on
January 21, 2005 with Registrants Registration
Statement on
Form S-1
(Reg.
No. 333-122229).
|
|
|
|
|
|
3
|
.02
|
|
Certificate of Limited Partnership.
|
(b) Financial Statement Schedules.
No Financial Schedules are required to be filed herewith.
The undersigned registrant hereby undertakes:
(a) (1) To file, during any period in which
offers or sales are being made, a post-effective amendment to
this registration statement;
(i) To include any prospectus required by
section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to
Rule 424(b) (§ 230.424(b) of this chapter) if, in
the aggregate the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set
forth in the Calculation of Registration Fee table
in the effective registration statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the bona
fide offering thereof.
II-2
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(4) That, for the purpose of determining any liability
under the Securities Act of 1933, each Prospectus filed pursuant
to Rule 424(b) as part of a registration statement relating
to an offering, other than registration statements relying on
Rule 430B or other than Prospectuses filed in reliance on
Rule 430A, shall be deemed to be part of and included in
the registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a
registration statement or Prospectus that is part of the
registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement
or Prospectus that is part of the registration statement will,
as to a purchaser with a time of contact of sale prior to such
first use, supersede or modify any statement that was made in
the registration statement or Prospectus that was part of the
registration statement or made in any such document immediately
prior to such date of first use.
(5) That, for the purpose of determining liability under
the Securities Act of 1933 to any purchaser:
(i) If the registrant is subject to Rule 430C, each
prospectus filed pursuant to Rule 424(b) as part of a
registration statement relating to an offering, other than
registration statements relying on 430B or other than
prospectuses filed in reliance on Rule 430A, shall be
deemed to be part of and included in the registration statement
as of the date it is first used after effectiveness. Provided,
however, that no statement made in a registration statement or a
prospectus that is part of the registration statement or made in
a document incorporated or deemed incorporated by reference into
the registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of
contact of sale prior to such first use, supersede or modify any
statement that was made in the registration statement or
prospectus that was part of the registration statement or made
in any such document immediately prior to such date of first use.
(6) That, for the purpose of determining liability of the
registrant under the Securities Act of 1933 to any purchaser in
the initial distribution of securities: The undersigned
registrant undertakes that in a primary offering of securities
of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell
the securities to the purchaser, if the securities are offered
or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to
the purchaser and will be considered to offer or sell such
securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the
undersigned registrant relating to the offering required to be
filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering
prepared by or on behalf of the undersigned registrant or used
or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus
relating to the offering containing material information about
the undersigned registrant or its securities provided by or on
behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the
offering made by the undersigned registrant to the purchaser.
(b) The Undersigned registrant hereby undertakes that:
(1) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
II-3
(c) Insofar as indemnification for liabilities under
Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant to
the provisions described in Item 14 above, or otherwise,
the Registrant had been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the
successful defense of any such action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
Superfund Capital Management, Inc., as general partner of the
Registrant, has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in St. Georges, Grenada, West Indies, on
the 19th day of November, 2009.
Quadriga Superfund, L.P.
|
|
|
|
By:
|
Superfund Capital
Management, Inc.
|
General Partner
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons on behalf of Superfund Capital Management, Inc., general
partner of the Registrant, in the capacity and on the date
indicated.
|
|
|
|
|
|
|
/s/ Nigel
James
Nigel
James
|
|
Principal Executive Officer
|
|
November 19, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Roman
Gregorig
Roman
Gregorig
|
|
Principal Financial Officer,
Principal Accounting Officer
and Director
|
|
November 19, 2009
|
(Being
the principal executive officer, the principal financial
and accounting officer and the sole director of Superfund
Capital Management, Inc.)
Superfund Capital
Management, Inc.
General Partner of Registrant
Title: President
November 19, 2009
EXHIBIT
INDEX
The following documents (unless indicted) are filed herewith and
made a part of this Registration Statement.
(a) Exhibits.
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Description of Document
|
|
|
1
|
.02
|
|
Form of Additional Selling Agreement among each Series,
Superfund USA, Inc., Superfund Capital Management, Inc. and the
Additional Selling Agent.
|
|
1
|
.03
|
|
Form of Intermediary Selling Agent Agreement among each Series,
Superfund USA, Inc., Superfund Capital Management, Inc. and
the Intermediary Selling Agent.
|
|
3
|
.01
|
|
Form of Fourth Amended and Restated Limited Partnership
Agreement of Quadriga Superfund, L.P. (included as
Exhibit A to the Prospectus).
|
|
5
|
.01
|
|
Opinion of Sidley Austin LLP relating to the legality of the
Units.
|
|
8
|
.01
|
|
Opinion of Sidley Austin LLP with respect to Federal Income Tax
Aspects.
|
|
10
|
.01(g)
|
|
Administration, Accounting and Investor Services Agreement.
|
|
10
|
.02
|
|
Form of Subscription Agreement (included as Exhibit D to
the Prospectus).
|
|
10
|
.03(a)
|
|
Escrow Agreement between Series A and HSBC Bank USA.
|
|
10
|
.03(b)
|
|
Escrow Agreement between Series B and HSBC Bank USA.
|
|
23
|
.01
|
|
Consent of Deloitte & Touche LLP.
|
|
23
|
.02
|
|
Consent of Sidley Austin LLP.
|
The following exhibit is incorporated by reference herein from
the exhibit of the same description filed on November 1,
2008 with Registrants
Form 8-K
(File. No. 000-51634).
|
|
|
|
|
|
1
|
.01(a)
|
|
Selling Agreement, dated effective as of November 1, 2008,
among Quadriga Superfund, L.P. and Superfund USA, Inc.
|
The following exhibit is incorporated by reference herein from
the exhibit of the same description and number filed on
January 21, 2005 with Registrants Registration
Statement on
Form S-1
(Reg.
No. 333-122229).
|
|
|
|
|
|
3
|
.02
|
|
Certificate of Limited Partnership.
|
(b) Financial Statement Schedules.
No Financial Schedules are required to be filed herewith.