Ceres Tactical Macro L.P. - FORM 10-Q

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EXCEL - IDEA: XBRL DOCUMENT - Ceres Tactical Macro L.P.	Financial_Report.xls
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EX-32.2 - EX-32.2 - Ceres Tactical Macro L.P.	d805233dex322.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-54284

MANAGED FUTURES PREMIER BHM L.P.

(Exact name of registrant as specified in its charter)

Delaware

27-3371689

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

c/o Ceres Managed Futures LLC

522 Fifth Avenue

New York, New York 10036

(Address of principal executive offices) (Zip Code)

(855) 672-4468

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes X No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes X No

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		Accelerated filer		Non-accelerated filer X		Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes No X

As of October 31, 2014, 266,026.056 Limited Partnership Redeemable Units Class A were outstanding, 5,819.883 Limited Partnership Redeemable Units Class D were outstanding and 2,137.155 Limited Partnership Redeemable Units Class Z were outstanding.

MANAGED FUTURES PREMIER BHM L.P.

FORM 10-Q

INDEX


	Page Number
PART I — Financial Information:
Item 1. Financial Statements:
Statements of Financial Condition at September 30, 2014 (unaudited) and December 31, 2013		3
Statements of Income and Expenses for the three and nine months ended September 30, 2014 and 2013 (unaudited)		4
Statement of Changes in Partners’ Capital for the nine months ended September 30, 2014 and 2013 (unaudited)		5
Notes to Financial Statements, including the Financial Statements of BHM I, LLC (unaudited)		6-23
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		24-26
Item 3. Quantitative and Qualitative Disclosures about Market Risk		27-29
Item 4. Controls and Procedures		30
PART II — Other Information
Item 1. Legal Proceedings		31-37
Item 1A. Risk Factors		38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		38
Item 3. Defaults Upon Senior Securities		38
Item 4. Mine Safety Disclosures		38
Item 6. Exhibits		39

PART I

Item1. Financial Statements

Managed Futures Premier BHM L.P.

Statements of Financial Condition


	(Unaudited) September 30, 2014		December 31, 2013
Assets:
Investment in Trading Company, at fair value	$	228,040,651	$	217,368,680

Total assets	$	228,040,651	$	217,368,680

Liabilities and Partners’ Capital
Liabilities:
Redemptions payable to General Partner	$	436,316	$	0
Redemptions payable to Limited Partners		2,401,743		5,296,504

Total liabilities		2,838,059		5,296,504

Partners’ Capital:
General Partner, Class Z (2,870.787 and 3,373.305 unit equivalents outstanding at September 30, 2014 and December 31, 2013, respectively)		2,492,583		2,600,380
Limited Partners, Class A (265,014.318 and 276,167.845 units outstanding at September 30, 2014 and December 31, 2013, respectively)		216,205,985		203,521,796
Limited Partners, Class D (5,819.883 units outstanding at September 30, 2014 and December 31, 2013)		4,628,124		4,131,876
Limited Partners, Class Z (2,160.533 and 2,358.574 units outstanding at September 30, 2014 and December 31, 2013, respectively)		1,875,900		1,818,124

Total Partners’ Capital		225,202,592		212,072,176

Total liabilities and Partners’ Capital	$	228,040,651	$	217,368,680

Net asset value per Unit:
Class A	$	815.83	$	736.95

Class D	$	795.23	$	709.96

Class Z	$	868.26	$	770.87

The accompanying notes are an integral part of these financial statements.

Managed Futures Premier BHM L.P.

Statements of Income and Expenses

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Investment income:
Interest income allocated from Trading Company	$	0		$	0		$	0		$	0

Expenses:
Expenses allocated from Trading Company		1,407,175			1,332,723			3,939,631			4,299,994
Ongoing Placement Agent fees		1,158,970			1,707,815			3,757,354			5,503,175
Administrative fees		599,686			589,390			1,678,211			1,905,840
Other		76,539			54,286			208,066			194,923

Total expenses		3,242,370			3,684,214			9,583,262			11,903,932

Net investment income (loss)		(3,242,370	)		(3,684,214	)		(9,583,262	)		(11,903,932	)

Trading Results:
Net realized gains (losses) on closed contracts allocated from Trading Company		14,820,411			3,069,052			39,872,570			577,721
Change in net unrealized gains (losses) on open contracts allocated from Trading Company		(18,557,040	)		9,563,265			(7,956,319	)		7,197,093

Total trading results allocated from Trading Company		(3,736,629	)		12,632,317			31,916,251			7,774,814

Net income (loss)	$	(6,978,999	)	$	8,948,103		$	22,332,989		$	(4,129,118	)

Net income (loss) allocation from Trading Company
Class A	$	(6,726,762	)	$	8,545,145		$	21,296,155		$	(4,146,533	)

Class D	$	(127,840	)	$	179,068		$	496,248		$	(17,055	)

Class Z	$	(124,397	)	$	223,890		$	540,586		$	34,470

Net asset value per unit
Class A	$	815.83		$	751.90		$	815.83		$	751.90

Class D	$	795.23		$	720.27		$	795.23		$	720.27

Class Z	$	868.26		$	780.59		$	868.26		$	780.59

Net income (loss) per unit*
Class A	$	(25.18	)	$	27.66		$	78.88		$	(12.03	)

Class D	$	(21.96	)	$	30.33		$	85.27		$	0.73

Class Z	$	(22.29	)	$	34.25		$	97.39		$	5.17

Weighted average units outstanding
Class A		267,778.086			309,593.130			269,640.147			322,428.388

Class D		5,819.883			5,905.475			5,819.883			8,098.587

Class Z		5,534.216			6,547.896			5,570.806			6,687.896

*	Based on change in net asset value per Unit.

The accompanying notes are an integral part of these financial statements.

Managed Futures Premier BHM L.P.

Statements of Changes in Partners’ Capital

For the Nine Months Ended September 30, 2014 and 2013

(Unaudited)


	Class A						Class D						Class Z						Total
	Amount			Units			Amount			Units			Amount			Units			Amount			Units
Partners’ Capital at December 31, 2013	$	203,521,796			276,167.845		$	4,131,876			5,819.883		$	4,418,504			5,731.879		$	212,072,176			287,719.607
Subscriptions - Limited Partners		24,357,318			30,584.221			0			0			55,290			59.943			24,412,608			30,644.164
Net income (loss)		21,296,155			0			496,248			0			540,586			0			22,332,989			0
Redemptions - Limited Partners		(32,969,284	)		(41,737.748	)		0			0			(209,581	)		(257.984	)		(33,178,865	)		(41,995.732	)
Redemptions - General Partner		0			0			0			0			(436,316	)		(502.518	)		(436,316	)		(502.518	)

Partners’ Capital at September 30, 2014	$	216,205,985			265,014.318		$	4,628,124			5,819.883		$	4,368,483			5,031.320		$	225,202,592			275,865.521


	Class A						Class D						Class Z						Total
	Amount			Units			Amount			Units			Amount			Units			Amount			Units
Partners’ Capital at December 31, 2012	$	254,758,737			333,484.211		$	6,894,422			9,581.734		$	5,408,195			6,974.502		$	267,061,354			350,040.447
Subscriptions - Limited Partners		23,849,503			31,537.588			141,247			196.302			116,733			150.346			24,107,483			31,884.236
Net income (loss)		(4,146,533	)		0			(17,055	)		0			34,470			0			(4,129,118	)		0
Redemptions - Limited Partners		(51,938,704	)		(69,072.325	)		(2,826,730	)		(3,958.153	)		(678,712	)		(872.278	)		(55,444,146	)		(73,902.756	)

Partners’ Capital at September 30, 2013	$	222,523,003			295,949.474		$	4,191,884			5,819.883		$	4,880,686			6,252.570		$	231,595,573			308,021.927

The accompanying notes are an integral part of these financial statements.

Managed Futures Premier BHM L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

1. General:

Managed Futures Premier BHM L.P. (formerly known as BHM Discretionary Futures Fund L.P.) (the “Partnership”) is a limited partnership organized on August 23, 2010 under the partnership laws of the State of Delaware to engage, directly or indirectly, in the speculative trading of a diversified portfolio of commodity interests including futures contracts, options, swaps and forward contracts. The Partnership commenced trading on November 1, 2010. The commodity interests that are traded by the Partnership through its investment in the Trading Company (as defined below) are volatile and involve a high degree of market risk. The Partnership is authorized to sell an unlimited number of units of limited partnership interest (“Units”) on a continuous basis.

Ceres Managed Futures LLC, a Delaware limited liability company, serves as the Partnership’s general partner (the “General Partner” or “Ceres”) and commodity pool operator. Demeter Management LLC (“Demeter”) previously served as the Partnership’s general partner. Demeter was merged into Ceres effective December 1, 2010. Ceres is a wholly-owned subsidiary of Morgan Stanley Smith Barney Holdings LLC (“MSSBH”). MSSBH is wholly-owned indirectly by Morgan Stanley. Prior to June 28, 2013, Citigroup was the indirect minority owner of MSSBH.

On November 1, 2010, the Partnership allocated substantially all of its capital to Morgan Stanley Smith Barney BHM I, LLC (the “Trading Company”), a limited liability company organized under the Delaware Limited Liability Company Law. The Trading Company was formed in order to permit accounts managed by Blenheim Capital Management LLC (“Blenheim” or the “Advisor”) using Blenheim’s Global Markets Strategy-Futures/FX program, a proprietary, discretionary trading program, to invest together in one trading vehicle. The General Partner is also the trading manager of the Trading Company. Individual and pooled accounts currently managed by the General Partner, including the Partnership, are permitted to be members of the Trading Company. The General Partner and the Advisor believe that trading through this Trading Company/feeder structure promotes efficiency and economy in the trading process.

On February 1, 2011, the Units offered pursuant to the Partnership’s limited partnership agreement, as amended from time to time (the “Limited Partnership Agreement”), were deemed “Class A Units.” The rights, liabilities, risks, and fees associated with investment in the Class A Units were not changed. In addition, beginning on February 1, 2011, Class D Units were offered. Beginning August 1, 2011, Class Z Units were offered to certain employees of Morgan Stanley Smith Barney LLC and its affiliates (and their family members). Class A, Class D and Class Z will each be referred to as a “Class” and collectively referred to as the “Classes.” The Class of Units that a limited partner of the Partnership (each a “Limited Partner” or collectively the “Limited Partners”) receives upon a subscription will generally depend upon the amount invested in the Partnership, although the General Partner may determine to offer Units to investors at its discretion.

Morgan Stanley Smith Barney LLC is doing business as Morgan Stanley Wealth Management. This entity previously acted as a non-clearing broker for the Trading Company and currently serves as the placement agent to the Partnership (the “Placement Agent”). The clearing commodity broker for the Trading Company is Morgan Stanley & Co. LLC (“MS&Co.”).

Effective April 1, 2014, the monthly ongoing Placement Agent fee for Class A was reduced from an annual rate of 3.0% to an annual rate of 2.0%.

At September 30, 2014, the Partnership owned approximately 76.7% of the Trading Company. At December 31, 2013, the Partnership owned approximately 69.3% of the Trading Company. The Partnership intends to continue to invest substantially all of its assets in the Trading Company. The performance of the Partnership is directly affected by the performance of the Trading Company. The Trading Company’s trading of futures, forwards, and options contracts, as applicable, is done primarily on U.S. and foreign commodity exchanges. The Trading Company’s Statements of Financial Condition, including Condensed Schedules of Investments, and Statements of Income and Expenses and Changes in Members’ Capital are included herein.

The General Partner and each Limited Partner of the Partnership share in the profits and losses of the Partnership in proportion to the amount of partnership interest owned by each except that no Limited Partner shall be liable for obligations of the Partnership in excess of its capital contribution and profits, if any, net of distributions or losses, if any.

Managed Futures Premier BHM L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

The accompanying financial statements and accompanying notes are unaudited but, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the Partnership’s financial condition at September 30, 2014 and December 31, 2013, and the results of its operations for the three and nine months ended September 30, 2014 and 2013. These financial statements present the results of interim periods and do not include all disclosures normally provided in annual financial statements. These financial statements should be read together with the financial statements and notes included in the Partnership’s Annual Report on the Form 10-K (the “Form 10-K”) filed with the Securities and Exchange Commission (the “SEC”) for the year ended December 31, 2013.

The preparation of financial statements and accompanying notes in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires the General Partner to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosure of contingent assets and liabilities in the financial statements and accompanying notes. As a result, actual results could differ from these estimates.

Due to the nature of commodity trading, the results of operations for the interim periods presented should not be considered indicative of the results that may be expected for the entire year.

Managed Futures Premier BHM L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

The Trading Company’s Statements of Financial Condition and Condensed Schedules of Investments as of September 30, 2014 and December 31, 2013, and Statements of Income and Expenses and Changes in Members’ Capital for the three and nine months ended September 30, 2014 and 2013 are presented below:

BHM I, LLC

Statements of Financial Condition


	(Unaudited) September 30, 2014			December 31, 2013
Assets:
Equity in trading account:
Unrestricted cash	$	265,550,179		$	265,338,000
Restricted cash		31,028,330			40,048,892

Total cash		296,578,509			305,386,892

Net unrealized gain (loss) on open contracts		(10,354,706	)		4,943,325

Options purchased, (premiums paid $10,265,433 and $5,954,505, respectively)		12,869,660			4,873,395

Total trading equity		299,093,463			315,203,612
Expense reimbursements		14,720			11,575

Total assets		299,108,183		$	315,215,187

Liabilities and Members’ Capital:
Liabilities:
Options written (premiums received $3,448,987 and $1,802,311, respectively)	$	1,141,578		$	1,151,355
Accrued management fees		524,653			443,730
Brokerage commissions payable		16,927			10,014
Accrued administrative fees		2,146			2,231
Accrued incentive fees		37			15

Total liabilities		1,685,341			1,607,345

Members’ Capital:
Non-Managing Members		297,422,842			313,607,842

Total members’ capital		297,422,842			313,607,842

Total liabilities and members’ capital	$	299,108,183		$	315,215,187

Managed Futures Premier BHM L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

BHM I, LLC

Condensed Schedule of Investments

September 30, 2014

(Unaudited)


	Fair Value			% of Members’ Capital
Futures and Forward Contracts Purchased
Commodity	$	(32,739,202	)		(11.00	)%
Equity		42,201			0.01
Foreign currency		(355,569	)		(0.12	)

Total Futures and Forward Contracts Purchased		(33,052,570	)		(11.11	)


Futures and Forward Contracts Sold
Commodity		19,825,417			6.67
Foreign currency		4,000,783			1.34
Interest rate		(2,812	)		(0.00	)*

Total Futures and Forward Contracts Sold		23,823,388			8.01

Unrealized Currency Loss		(1,125,524	)		(0.38	)

Net fair value	$	(10,354,706	)		(3.48	)%


Options Contracts
Options purchased on Futures Contracts	$	12,869,660			4.33	%
Options written on Futures Contracts	$	(1,141,578	)		(0.38	)%

*	Due to rounding

Managed Futures Premier BHM L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

BHM I, LLC

Condensed Schedule of Investments

December 31, 2013


	Fair Value			% of Members’ Capital
Futures and Forward Contracts Purchased
Commodity	$	3,974,101			1.27	%
Equity		1,668,281			0.53
Interest rate		(1,828	)		(0.00	)*

Total Futures and Forward Contracts Purchased		5,640,554			1.80


Futures and Forward Contracts Sold
Commodity		(148,407	)		(0.05	)
Foreign currency		247,490			0.08
Interest rate		17,542			0.01

Total Futures and Forward Contracts Sold		116,625			0.04

Unrealized Currency Loss		(813,854	)		(0.26	)

Net fair value	$	4,943,325			1.58	%


Options Contracts
Options purchased on Futures Contracts	$	4,873,395			1.55	%
Options written on Futures Contracts	$	(1,151,355	)		(0.37	)%

*	Due to rounding.

Managed Futures Premier BHM L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

BHM I, LLC

Statements of Income and Expenses and Changes in Members’ Capital

(Unaudited)


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2014			2013			2014			2013
Investment income:
Interest income	$	—		$	—		$	—		$	—

Expenses:
Management fees		1,570,959			1,442,143			4,361,287			4,656,231
Brokerage, clearing and transaction fees		276,686			228,000			797,915			723,654
Administrative fees		6,433			6,472			18,639			15,136
Incentive fees		37			21,417			97,537			21,417

Total expenses		1,854,115			1,698,032			5,275,378			5,416,438
Expense reimbursements		(35,105	)		(34,317	)		(108,581	)		(109,649	)

Net expenses		1,819,010			1,663,715			5,166,797			5,306,789

Net investment loss		(1,819,010	)		(1,663,715	)		(5,166,797	)		(5,306,789	)

Trading results:
Trading profit (loss):
Net realized		19,521,649			4,275,702			53,444,783			730,335
Net change in unrealized		(24,203,408	)		13,994,385			(9,956,241	)		10,650,261

Total trading results		(4,681,759	)		18,270,087			43,488,542			11,380,596

Net income (loss)	$	(6,500,769	)	$	16,606,372		$	38,321,745		$	6,073,807


	Managing Member		Non-Managing Members			Total
Members’ Capital, December 31, 2013	$	—	$	313,607,842		$	313,607,842
Capital Contributions		—		5,984,868			5,984,868
Net income		—		38,321,745			38,321,745
Capital withdrawals		—		(60,491,613	)		(60,491,613	)

Members’ Capital, September 30, 2014	$	—	$	297,422,842		$	297,422,842

Members’ Capital, December 31, 2012	$	—	$	400,129,363		$	400,129,363
Capital Contributions		—		257,750,677			257,750,677
Net Income		—		6,073,807			6,073,807
Capital withdrawals		—		(321,667,797	)		(321,667,797	)

Members’ Capital, September 30, 2013	$	—	$	342,286,050		$	342,286,050

Managed Futures Premier BHM L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

2. Financial Highlights:

Changes in the net asset value per Unit for each Class for the three and nine months ended September 30, 2014 and 2013 were as follows:


Financial Highlights:	Three Months Ended September 30, 2014									Three Months Ended September 30, 2013
	Class A			Class D			Class Z			Class A			Class D			Class Z
Net realized and unrealized gains (losses)⁽¹⁾	$	(18.48	)	$	(15.44	)	$	(15.19	)	$	33.30		$	35.72		$	40.08
Net investment loss⁽²⁾		(6.70	)		(6.52	)		(7.10	)		(5.64	)		(5.39	)		(5.83	)

Increase (decrease) for the period		(25.18	)		(21.96	)		(22.29	)		27.66			30.33			34.25
Net asset value per Unit, beginning of period		841.01			817.19			890.55			724.24			689.94			746.34

Net asset value per Unit, end of period	$	815.83		$	795.23		$	868.26		$	751.90		$	720.27		$	780.59


Financial Highlights:	Nine Months Ended September 30, 2014									Nine Months Ended September 30, 2013
	Class A			Class D			Class Z			Class A			Class D			Class Z
Net realized and unrealized gains (losses)⁽¹⁾	$	97.51		$	103.33		$	117.03		$	5.45		$	17.33		$	23.10
Net investment loss⁽²⁾		(18.63	)		(18.06	)		(19.64	)		(17.48	)		(16.60	)		(17.93	)

Increase (decrease) for the period		78.88			85.27			97.39			(12.03	)		0.73			5.17
Net asset value per Unit, beginning of period		736.95			709.96			770.87			763.93			719.54			775.42

Net asset value per Unit, end of period	$	815.83		$	795.23		$	868.26		$	751.90		$	720.27		$	780.59

⁽¹⁾	Includes clearing fees and ongoing Placement Agent fees, if applicable to Class.

Net realized and unrealized gains (losses) excluding ongoing selling agent fees and clearing fees of Class A for the three and nine months ended September 30, 2014 and 2013 were $(13.43), $39.28, $113.44 and $23.91, respectively.

Net realized and unrealized gains (losses) excluding ongoing selling agent fees and clearing fees of Class D for the three and nine months ended September 30, 2014 and 2013 were $(13.14), $37.50, $109.71 and $22.77, respectively.

Net realized and unrealized gains (losses) excluding clearing fees of Class Z for the three and nine months ended September 30, 2014 and 2013 were $(14.39), $40.59, $119.26 and $24.64, respectively.

⁽²⁾	Excludes clearing fees and ongoing Placement Agent fees, if applicable to Class.

Total expenses including ongoing selling agent fees and clearing fees of Class A for the three and nine months ended September 30, 2014 and 2013 were $(11.75), $(11.62), $(34.56), and $(35.94), respectively.

Total expenses including ongoing selling agent fees and clearing fees of Class D for the three and nine months ended September 30, 2014 and 2013 were $(8.82), $(7.17), $(24.44) and $(22.04), respectively.

Total expenses including clearing fees of Class Z for the three and nine months ended September 30, 2014 and 2013 were $(7.90), $(6.34), $(21.87), $(19.47), respectively.

Managed Futures Premier BHM L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)


	Three Months Ended September 30, 2014									Three Months Ended September 30, 2013
	Class A			Class D			Class Z			Class A			Class D			Class Z
Ratios to average net assets:⁽³⁾
Net investment income (loss)		(5.6	)%		(4.2	)%		(3.9	)%		(6.4	)%		(4.1	)%		(3.2	)%
Incentive fees allocated from the Trading company		—	%		—	%		—	%		—	%		—	%		—	%

Net investment income (loss) before incentive fees⁽⁴⁾		(5.6	)%		(4.2	)%		(3.9	)%		(6.4	)%		(4.1	)%		(3.2	)%

Operating expenses		5.6	%		4.2	%		3.9	%		6.4	%		4.1	%		3.2	%
Incentive fees		—	%		—	%		—	%		—	%		—	%		—	%

Total expenses		5.6	%		4.2	%		3.9	%		6.4	%		4.1	%		3.2	%

Total return:
Total return before incentive fees		(3.0	)%		(2.7	)%		(2.5	)%		3.8	%		4.4	%		4.6	%
Incentive fees		—	%		—	%		—	%		—	%		—	%		—	%

Total return after incentive fees		(3.0	)%		(2.7	)%		(2.5	)%		3.8	%		4.4	%		4.6	%


	Nine Months Ended September 30, 2014									Nine Months Ended September 30, 2013
	Class A			Class D			Class Z			Class A			Class D			Class Z
Ratios to average net assets:⁽³⁾
Net investment income (loss)		(5.9	)%		(4.2	)%		(3.8	)%		(6.5	)%		(4.2	)%		(3.1	)%
Incentive fees allocated from the Trading company		—	%		—	%		—	%		—	%		—	%		—	%

Net investment income (loss) before incentive fees⁽⁴⁾		(5.9	)%		(4.2	)%		(3.8	)%		(6.5	)%		(4.2	)%		(3.1	)%

Operating expenses		5.9	%		4.2	%		3.8	%		6.5	%		4.2	%		3.1	%
Incentive fees		—	%		—	%		—	%		—	%		—	%		—	%

Total expenses		5.9	%		4.2	%		3.8	%		6.5	%		4.2	%		3.1	%

Total return:
Total return before incentive fees		10.7	%		12.0	%		12.6	%		(1.6	)%		0.1	%		0.7	%
Incentive fees		—	%		—	%		—	%		—	%		—	%		—	%

Total return after incentive fees		10.7	%		12.0	%		12.6	%		(1.6	)%		0.1	%		0.7	%

⁽³⁾	Annualized (other than incentive fees).

⁽⁴⁾	Interest income less operating expenses which exclude incentive fees allocated from the Trading Company.

The above ratios may vary for individual investors based on the timing of capital transactions during the period. Additionally, these ratios are calculated for the Limited Partner class using the Limited Partners’ share of income, expenses and average net assets.

Managed Futures Premier BHM L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

Financial Highlights of the Trading Company:


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2014			2013			2014			2013
Ratios to average Members’ Capital: ⁽¹⁾
Net investment loss⁽²⁾		(2.30	)%		(1.92	)%		(2.29	)%		(1.94	)%
Expenses before incentive fees⁽²⁾		2.30	%		1.92	%		2.25	%		1.93	%
Expenses after incentive fees⁽²⁾		2.30	%		1.92	%		2.29	%		1.94	%
Total return before incentive fees		(2.22	)%		4.97	%		13.70	%		1.76	%
Total return after incentive fees		(2.22	)%		4.97	%		13.67	%		1.76	%

⁽¹⁾	The calculation is based on non-managing Members’ allocated income and expenses and average non-managing Members’ Capital.

⁽²⁾	Annualized except for incentive fees.

Managed Futures Premier BHM L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

3. Trading Activities:

The Partnership’s pro rata share of the results of the Trading Company’s trading activities is shown in the Statements of Income and Expenses.

The Partnership and Trading Company, in the normal course of business, enter into various contracts with MS&Co. acting as their commodity broker. The brokerage agreement with MS&Co. gives the Partnership and the Trading Company, respectively, the legal right to net unrealized gains and losses on open futures and forward contracts. The Trading Company nets, for financial reporting purposes, the unrealized gains and losses on open futures and forward contracts on its Statements of Financial Condition as the criteria under Accounting Standards Codification (“ASC”) 210-20, “Balance Sheet,” have been met.

On January 1, 2013, the Partnership adopted Accounting Standards Update (“ASU”) 2011-11, “Disclosure about Offsetting Assets and Liabilities” and ASU 2013-01, “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities”. ASU 2011-11 created a new disclosure requirement about the nature of an entity’s rights to setoff and the related arrangements associated with its financial instruments and derivative instruments, while ASU 2013-01 clarified the types of instruments and transactions that are subject to the offsetting disclosure requirements established by ASU 2011-11. Entities are required to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. The objective of these disclosures is to facilitate comparison between those entities that prepare their financial statements on the basis of GAAP and those entities that prepare their financial statements on the basis of International Financial Reporting Standards. The new guidance did not have a significant impact on the Partnership’s financial statements.

The following tables summarize the valuation of the Trading Company’s investments as of September 30, 2014 and December 31, 2013, respectively.

Offsetting of Derivative Assets and Liabilities as of September 30, 2014:


	Gross Amounts Recognized			Gross Amounts Offset in the Statements of Financial Condition			Net Amounts Presented in the Statements of Financial Condition			Gross amounts not offset in the Statements of Financial Condition
	Gross Amounts Recognized									Financial Instruments			Cash Collateral Received		Net Amount
Assets
Futures	$	15,390,825		$	(15,390,825	)	$	—		$	—		$	—	$	—
Forwards		18,420,472			(18,420,472	)		—			—			—		—
Options purchased		12,869,660			—			12,869,660			(1,141,578	)		—		11,728,082

Total Assets		46,680,957			(33,811,297	)		12,869,660			(1,141,578	)		–		11,728,082

Liabilities
Futures	$	(20,971,273	)	$	15,390,825		$	(5,580,448	)	$	—		$	—	$	(5,580,448	)
Forwards		(22,069,206	)		18,420,472			(3,648,734	)		—			—		(3,648,734	)
Options written		(1,141,578	)		—			(1,141,578	)		1,141,578			—		—

Total Liabilities		(44,182,057	)		33,811,297			(10,370,760	)		1,141,578			—		(9,229,182	)

Unrealized currency loss																(1,125,524	)

Net fair value															$	1,373,376

Managed Futures Premier BHM L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

Offsetting of Derivative Assets and Liabilities as of December 31, 2013:


	Gross Amounts Recognized			Gross Amounts Offset in the Statements of Financial Condition			Net Amounts Presented in the Statements of Financial Condition			Gross amounts not offset in the Statements of Financial Condition
	Gross Amounts Recognized									Financial Instruments			Cash Collateral Received		Net Amount
Assets
Futures	$	16,690,128		$	(10,932,949	)	$	5,757,179		$	—		$	—	$	5,757,179
Options purchased		4,873,395			—			4,873,395			(1,151,355	)		—		3,722,040

Total Assets		21,563,523			(10,932,949	)		10,630,574			(1,151,355	)		—		9,479,219

Liabilities
Futures	$	(10,932,949	)	$	10,932,949		$	—		$	—		$	—	$	—
Options written		(1,151,355	)		—			(1,151,355	)		1,151,355			—		—

Total Liabilities		(12,084,304	)		10,932,949			(1,151,355	)		1,151,355			—		—

Unrealized currency loss																(813,854	)

Net fair value															$	8,665,365

The effect of trading activities on the Statements of Financial Condition as of September 30, 2014 and December 31, 2013:

September 30, 2014


Futures and Forward Contracts	Long Unrealized Gain		Long Unrealized Loss			Short Unrealized Gain		Short Unrealized Loss			Net Unrealized Gain/(Loss)			Average number of contracts outstanding for nine months (absolute quantity)
Commodity	$	9,399,269	$	(42,138,471	)	$	20,233,844	$	(408,427	)	$	(12,913,785	)		21,354
Equity		172,261		(130,060	)		—		—			42,201			1,277
Foreign currency		2,432		(358,001	)		4,000,783		—			3,645,214			739
Interest rates		—		—			2,708		(5,520	)		(2,812	)		1,016

Total	$	9,573,962	$	(42,626,532	)	$	24,237,335	$	(413,947	)	$	(9,229,182	)

Unrealized currency loss												(1,125,524	)

Total net unrealized loss on open contracts											$	(10,354,706	)*


			Average number of contracts outstanding for the nine months (absolute quantity)
Option Contracts at Fair Value
Options purchased	12,869,660	**		4,924
Options written	(1,141,578	)***		1,765

*	This amount is in “Total net unrealized loss on open contracts” on the Trading Company’s Statements of Financial Condition.

**	This amount is in “Options purchased,” on the Trading Company’s Statements of Financial Condition.

***	This amount is in “Options written,” on the Trading Company’s Statements of Financial Condition.

Managed Futures Premier BHM L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

December 31, 2013


Futures and Forward Contracts	Long Unrealized Gain		Long Unrealized Loss			Short Unrealized Gain		Short Unrealized Loss			Net Unrealized Gain/(Loss)			Average number of contracts outstanding for the year (absolute quantity)
Commodity	$	11,607,939	$	(7,633,838	)	$	3,137,087	$	(3,285,494	)	$	3,825,694			15,640
Equity		1,668,281		—			—		—			1,668,281			606
Foreign currency		—		—			258,728		(11,238	)		247,490			1,291
Interest rates		—		(1,828	)		18,093		(551	)		15,714			2,088

Total	$	13,276,220	$	(7,635,666	)	$	3,413,908	$	(3,297,283	)	$	5,757,179


Unrealized currency loss												(813,854	)


Total net unrealized gain on open contracts											$	4,943,325	*


Option Contracts at Fair Value				Average number of contracts outstanding for the year (absolute quantity)
Options purchased	$	4,873,395	**		3,686
Options written	$	(1,151,355	)***		1,711

*	This amount is in “Total net unrealized gain on open contracts” on the Trading Company’s Statements of Financial Condition.

**	This amount is in “Options purchased,” on the Trading Company’s Statements of Financial Condition.

***	This amount is in “Options written,” on the Trading Company’s Statements of Financial Condition.

The following tables indicate the trading gains and losses, by market sector, on derivative instruments for the three and nine months ended September 30, 2014 and 2013.


Sector	For the Three Months Ended September 30, 2014			For the Nine Months Ended September 30, 2014			For the Three Months Ended September 30, 2013			For the Nine Months Ended September 30, 2013
Commodity	$	(9,832,158	)	$	42,414,680		$	19,188,241		$	18,189,061
Equity		335,172			2,126,634			647,571			(645,701	)
Foreign currency		7,666,993			2,381,556			(14,033	)		(2,259,471	)
Interest rates		(2,164,767	)		(3,122,658	)		(1,132,816	)		(3,898,792	)
Unrealized currency loss		(686,999	)		(311,670	)		(418,876	)		(4,501	)

Total	$	(4,681,759	)****	$	43,488,542	****	$	18,270,087	****	$	11,380,596	****

****	This amount is in “Total trading results” on the Trading Company’s Statements of Income and Expenses and Changes in Members’ Capital.

Managed Futures Premier BHM L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

4. Fair Value Measurements:

Partnership’s Investments. The Partnership values its investment in the Trading Company at its net asset value per Unit as calculated by the Trading Company. The Trading Company values its investments as described in Note 2. of the Partnership’s notes to the annual financial statements as of December 31, 2013.

Partnership’s Fair Value Measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to fair values derived from unobservable inputs (Level 3). The level in the fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest level input that is significant to the fair value measurement in its entirety.

GAAP also requires the use of judgment in determining if a formerly active market has become inactive and in determining fair values when the market has become inactive. The General Partner has concluded that, based on available information in the marketplace, there has not been a significant decrease in the volume and level of activity in the Partnership’s Level 2 assets and liabilities.

The Partnership will separately present purchases, sales, issuances, and settlements in its reconciliation of Level 3 fair value measurements (i.e., to present such items on a gross basis rather than on a net basis), and make disclosures regarding the level of disaggregation and the inputs and valuation techniques used to measure fair value for measurements that fall within either Level 2 or Level 3 of the fair value hierarchy as required under GAAP.

On October 1, 2012, the Financial Accounting Standards Board (the “FASB”) issued ASU 2012-04, “Technical Corrections and Improvements,” which makes minor technical corrections and clarifications to ASC 820, “Fair Value Measurements and Disclosures”. When the FASB issued Statement 157 (codified in ASC 820), it conformed the use of the term “fair value” in certain pre-Codification standards but not others. ASU 2012-04 conforms the term’s use throughout the ASC “to fully reflect the fair value measurement and disclosure requirements” of ASC 820. ASU 2012-04 also amends the requirements that must be met for an investment company to qualify for the exemption from presenting a statement of cash flows. Specifically, it eliminates the requirements that substantially all of an entity’s investments be carried at “market value” and that the investments be highly liquid. Instead, it requires substantially all of the entity’s investments to be carried at “fair value” and classified as Level 1 or Level 2 measurements under ASC 820.

The Partnership values investments in the Trading Company where there are no other rights or obligations inherent within the ownership interest held by the Partnership based on the end of the day net asset value of the Trading Company (Level 2). The value of the Partnership’s investment in the Trading Company reflects its proportional interest in the Trading Company. As of and for the periods ended September 30, 2014 and December 31, 2013, the Partnership did not hold any derivative instruments that were based on unadjusted quoted prices in active markets for identical assets (Level 1) or priced at fair value using unobservable inputs through the application of management’s assumptions and internal valuation pricing models (Level 3).

During the nine months ended September 30, 2014 and twelve months ended December 31, 2013, there were no Level 3 assets or liabilities, and there were no transfers of assets and liabilities between Level 1 and Level 2.


	September 30, 2014		Unadjusted Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Investment in Trading Company	$	228,040,651	$	—	$	228,040,651	$	—

Net fair value	$	228,040,651	$	—	$	228,040,651	$	—


	December 31, 2013		Unadjusted Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Investment in Trading Company	$	217,368,680	$	—	$	217,368,680	$	—

Net fair value	$	217,368,680	$	—	$	217,368,680	$	—

Managed Futures Premier BHM L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

Trading Company’s Investments. All commodity interests of the Trading Company (including derivative financial instruments and derivative commodity instruments) are held for trading purposes. The commodity interests are recorded on trade date and open contracts are recorded at fair value (as described below) at the measurement date. Investments in commodity interests denominated in foreign currencies are translated into U.S. dollars at the exchange rates prevailing at the measurement date. Gains or losses are realized when contracts are liquidated. Unrealized gains or losses on open contracts are included as a component of equity in trading account on the Statements of Financial Condition. Net realized gains or losses and any change in net unrealized gains or losses from the preceding period are reported in the Statements of Income and Expenses and Changes in Members’ Capital.

Trading Company’s Fair Value Measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to fair values derived from unobservable inputs (Level 3). The level in the fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest level input that is significant to the fair value measurement in its entirety. The General Partner has concluded that, based on available information in the marketplace, the Trading Company’s Level 1 assets and liabilities are actively traded.

GAAP also requires the use of judgment in determining if a formerly active market has become inactive and in determining fair values when the market has become inactive. The General Partner has concluded that, based on available information in the marketplace, there has not been a significant decrease in the volume and level of activity of the Trading Company’s Level 2 assets and liabilities.

The Trading Company will separately present purchases, sales, issuances, and settlements in its reconciliation of Level 3 fair value measurements (i.e., to present such items on a gross basis rather than on a net basis), and make disclosures regarding the level of disaggregation and the inputs and valuation techniques used to measure fair value for measurements that fall within either Level 2 or Level 3 of the fair value hierarchy as required under GAAP.

The Trading Company considers prices for exchange-traded commodity futures, forwards and options contracts to be based on unadjusted quoted prices in active markets for identical assets and liabilities (Level 1). The values of non-exchange traded forwards, swaps and certain options contracts for which market quotations are not readily available are priced by broker-dealers who derive fair values for those assets and liabilities from observable inputs (Level 2). As of and for the periods ended September 30, 2014 and December 31, 2013, the Trading Company did not hold any derivative instruments for which market quotations were not readily available and which were priced by broker-dealers who derive fair values for those assets from observable inputs (Level 2) or that were priced at fair value using unobservable inputs through the application of management’s assumptions and internal valuation pricing models (Level 3). During the nine months ended September 30, 2014 and twelve months ended December 31, 2013, there were no transfers of assets or liabilities between Level 1 and Level 2.


	Unadjusted Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)	September 30, 2014
Assets
Futures	$	15,390,825	$	—	n/a	$	15,390,825
Forwards		16,786,310		1,634,162	n/a		18,420,472
Options Purchased		12,869,660		—	n/a		12,869,660

Total Assets	$	45,046,795	$	1,634,162	n/a	$	46,680,957

Liabilities
Futures	$	20,971,273	$	—	n/a	$	20,971,273
Forwards		21,711,223		357,983	n/a		22,069,206
Options Written		1,141,578		—	n/a		1,141,578

Total Liabilities	$	43,824,074	$	357,983	n/a	$	44,182,057

Unrealized currency loss							(1,125,524	)

*Net fair value	$	1,222,721	$	1,276,179	n/a	$	1,373,376

Managed Futures Premier BHM L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)


	Unadjusted Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		December 31, 2013
Assets
Futures	$	16,690,128	$	—		n/a	$	16,690,128
Options purchased		4,873,395		—		n/a		4,873,395

Total assets	$	21,563,523	$	—		n/a	$	21,563,523

Liabilities
Futures	$	10,932,949	$	—		n/a	$	10,932,949
Options written		1,151,355		—		n/a		1,151,355

Total liabilities	$	12,084,304	$	—		n/a	$	12,084,304

Unrealized currency loss								(813,854	)

*Net fair value	$	9,479,219	$	—		n/a	$	8,665,365

*	This amount comprises of the “Net unrealized gain on open contracts”, “Options purchased” and “Options written” on the Statements of Financial Condition.

Managed Futures Premier BHM L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

5. Financial Instrument Risks:

In the normal course of business, the Partnership, through its investment in the Trading Company, is party to financial instruments with off-balance sheet risk, including derivative financial instruments and derivative commodity instruments. These financial instruments may include forwards, futures, options and swaps, whose values are based upon an underlying asset, index, or reference rate, and generally represent future commitments to exchange currencies or cash balances, or to purchase or sell other financial instruments at specific terms at specified 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 forwards and option contracts. OTC contracts are negotiated between contracting parties and include certain forwards and option contracts. Specific market movements of commodities or futures contracts underlying an option cannot accurately be predicted. The purchaser of an option may lose the entire premium paid for the option. The writer or seller of an option has unlimited risk. 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.

The risk to the Limited Partners that have purchased Units in the Partnership is limited to the amount of their share of the Partnership’s net assets and undistributed profits. This limited liability is a result of the organization of the Partnership as a limited partnership under Delaware law.

Market risk is the potential for changes in the value of the financial instruments traded by the Trading Company due to market changes, including interest and foreign exchange rate movements and fluctuations in commodity or security prices. Market risk is directly impacted by the volatility and liquidity in the markets in which the related underlying assets are traded. The Trading Company is exposed to a market risk equal to the value of futures and forward contracts purchased and unlimited liability on such contracts sold short.

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. The Partnership’s/Trading Company’s risk of loss in the event of a counterparty default is typically limited to the asset amounts recognized in the Statements of Financial Condition and is not represented by the contract or notional amounts of the instruments. The Partnership’s/Trading Company’s risk of loss is reduced through the use of legally enforceable Trading Company netting agreements with counterparties that permit the Partnership/Trading Company to offset unrealized gains and losses and other assets and liabilities with such counterparties upon the occurrence of certain events. The Partnership/Trading Company has credit risk and concentration risk, as MS&Co., or a MS&Co. affiliate, is the sole counterparty or broker with respect to the Partnership’s/Trading Company’s assets. Credit risk with respect to exchange-traded instruments is reduced to the extent that, through MS&Co., the Partnership’s/Trading Company’s counterparty is an exchange or clearing organization.

The Trading Company may buy or write put and call options through listed exchanges and the over-the-counter market. The buyer of an option has the right to purchase (in the case of a call option) or sell (in the case of a put option) a specified quantity of a specific Futures Interest, on the underlying asset at a specified price prior to or on a specified expiration date. The writer of an option is exposed to the risk of loss if the fair value of the Futures Interest, on the underlying asset declines (in the case of a put option) or increases (in the case of a call option). The writer of an option can never profit by more than the premium paid by the buyer but can potentially lose an unlimited amount. Premiums received/premiums paid from writing/purchasing options are recorded as liabilities/assets on the Statements of Financial Condition. The difference between the fair value of the option and the premiums received/premiums paid is treated as an unrealized gain or loss.

As both a buyer and seller of options, the Partnership/Trading Company pays or receives a premium at the outset and then bears the risk of unfavorable changes in the price of the contract underlying the option. Written options expose the Partnership/Trading Company to potentially unlimited liability; for purchased options, the risk of loss is limited to the premiums paid. Certain written put options permit cash settlement and do not require the option holder to own the reference asset.

The General Partner/managing member monitors and attempts to control the Partnership’s/Trading Company’s 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 Partnership/Trading Company may be subject. These monitoring systems generally allow the General Partner/managing member to statistically analyze actual trading results with risk adjusted performance indicators and correlation statistics. In addition, online monitoring systems provide account analysis of futures, forwards and options positions by sector, margin requirements, gain and loss transactions and collateral positions.

The majority of these financial instruments mature within one year of the inception date. However, due to the nature of the Trading Company’s business, these instruments may not be held to maturity.

Managed Futures Premier BHM L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

6. Critical Accounting Policies:

Use of Estimates. The preparation of financial statements and accompanying notes in conformity with GAAP requires the General Partner to make estimates and assumptions that affect the reported amounts of assets and liabilities, income and expenses, and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. As a result, actual results could differ from these estimates.

Partnership’s Investments. The Partnership values its investment in the Trading Company at its net asset value per unit as calculated by the Trading Company. The Trading Company values its investments as described in Note 2 of the Partnership’s notes to the annual financial statements as of December 31, 2013.

Partnership’s and the Trading Company’s Fair Value Measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to fair values derived from unobservable inputs (Level 3). The level in the fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest level input that is significant to the fair value measurement in its entirety. Management has concluded that, based on available information in the marketplace, the Trading Company Level 1 assets and liabilities are actively traded.

The Trading Company considers prices for exchange-traded commodity futures, forwards and options contracts to be based on unadjusted quoted prices in active markets for identical assets and liabilities (Level 1). The values of non-exchange-traded forwards, swaps and certain options contracts for which market quotations are not readily available are priced by broker-dealers who derive fair values for those assets and liabilities from observable inputs (Level 2). As of and for the periods ended September 30, 2014 and December 31, 2013, the Trading Company did not hold any derivative instruments for which market quotations were not readily available, and were priced by broker-dealers who derive fair values for those assets from observable inputs (Level 2) or that were priced at fair value using unobservable inputs through the application of management’s assumptions and internal valuation pricing models (Level 3). During the nine months ended September 30, 2014 and twelve months ended December 31, 2013, there were no Level 3 assets and liabilities, and there were no transfers of assets or liabilities between Level 1 and Level 2.

Futures Contracts. The Trading Company trades futures contracts. A futures contract is a firm commitment to buy or sell a specified quantity of investments, currency or a standardized amount of a deliverable grade commodity, at a specified price on a specified future date, unless the contract is closed before the delivery date or if the delivery quantity is something where physical delivery cannot occur (such as the S&P 500 Index), whereby such contract is settled in cash. Payments (“variation margin”) may be made or received by the Trading Company each business day, depending on the daily fluctuations in the value of the underlying contracts, and are recorded as unrealized gains or losses by the Trading Company. When the contract is closed, the Trading Company records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Transactions in futures contracts require participants to make both initial margin deposits of cash or other assets and variation margin deposits, through the futures broker, directly with the exchange on which the contracts are traded. Net realized gains (losses) and changes in net unrealized gains (losses) on futures contracts are included in the Statements of Income and Expenses and Changes in Members’ Capital.

Managed Futures Premier BHM L.P.

Notes to Financial Statements

September 30, 2014

(Unaudited)

Forward Foreign Currency Contracts. Forward foreign currency contracts are those contracts where the Trading Company agrees to receive or deliver a fixed quantity of foreign currency for an agreed-upon price on an agreed future date. Forward foreign currency contracts are valued daily, and the Trading Company’s net equity therein, representing unrealized gain or loss on the contracts as measured by the difference between the forward foreign exchange rates at the dates of entry into the contracts and the forward rates at the reporting date, is included in the Statements of Financial Condition. Net realized gains (losses) and changes in net unrealized gains (losses) on foreign currency contracts are recognized in the period in which the contract is closed or the changes occur, respectively, and are included in the Statements of Income and Expenses and Changes in Members’ Capital.

The Trading Company does not isolate the 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 income (loss) in the Statements of Income and Expenses and Changes in Members’ Capital.

Options. The Trading Company may purchase and write (sell) both exchange-listed and OTC options on commodities or financial instruments. An option is a contract allowing, but not requiring, its holder to buy (call) or sell (put) a specific or standard commodity or financial instrument at a specified price during a specified time period. The option premium is the total price paid or received for the option contract. When the Trading Company writes an option, the premium received is recorded as a liability in the Statements of Financial Condition and marked to market daily. When the Trading Company purchases an option, the premium paid is recorded as an asset in the Statements of Financial Condition and marked to market daily. Net realized gains (losses) and changes in net unrealized gains (losses) on options contracts are included in the Statements of Income and Expenses and Changes in Members’ Capital.

Investment Company Status. Effective January 1, 2014, the Partnership adopted ASU 2013-08, “Financial Services — Investment Companies (Topic 946): Amendments to the Scope, Measurement and Disclosure Requirements.” ASU 2013-08 changes the approach to the investment company assessment, requires non-controlling ownership interests in other investment companies to be measured at fair value, and requires additional disclosures about the investment company’s status as an investment company. ASU 2013-08 is effective for interim and annual reporting periods beginning after December 15, 2013. The adoption of this ASU did not have a material impact on the Partnership’s financial statements. Based on management’s assessment, the Partnership has been deemed to be an investment company since inception. It has all of the fundamental characteristics of an investment company. Although the Partnership does not possess all of the typical characteristics of an investment company, its activities are consistent with those of an investment company.

Income Taxes. Income taxes have not been provided as each partner is individually liable for the taxes, if any, on its share of the Partnership’s income and expenses.

GAAP provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements and requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Partnership’s financial statements to determine whether the tax positions are “more-likely than-not” to be sustained by the applicable tax authority. Tax positions with respect to tax at the Partnership level not deemed to meet the “more-likely-than-not” threshold would be recorded as a tax benefit or expense in the current year. The General Partner concluded that no provision for income tax is required in the Partnership’s financial statements.

The Partnership files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. In general, the statute of limitations of the Partnership’s U.S. federal tax returns remains open three years after a tax return is filed. The statutes of limitations on the Partnership’s state and local tax returns may remain open for an additional year depending upon the jurisdiction. Management does not believe that there are any uncertain tax positions that require recognition of a tax liability.

Net Income (Loss) per Unit. Net income (loss) per Unit for each Class is calculated in accordance with investment company guidance. See Note 2, “Financial Highlights.”

Subsequent Events. The General Partner evaluates events that occur after the balance sheet date but before financial statements are issued. The General Partner has assessed the subsequent events through the date of issuance and has determined that, other than as referenced in Note 1 to the financial statements, there were no subsequent events requiring adjustments of or disclosure in the financial statements.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Liquidity and Capital Resources

The Partnership does not engage in sales of goods or services. Its only assets are its investment in the Trading Company. The Trading Company does not engage in the sale of goods or services. Because of the low margin deposits normally required in commodity futures trading, relatively small price movements may result in substantial losses to the Partnership, through its investment in the Trading Company. While substantial losses could lead to a material decrease in liquidity, no such illiquidity occurred during the third quarter of 2014.

There are no known trends, demands, commitments, events, or uncertainties at the present time that are reasonably likely to result in the Partnership’s liquidity increasing or decreasing in any material way.

The Partnership’s capital consists of the capital contributions of the partners as increased or decreased by income (loss) from its investment in the Trading Company and by expenses, interest income, subscriptions and redemptions of Units and distributions of profits, if any.

For the nine months ended September 30, 2014, the Partnership’s capital increased 6.2% from $212,072,176 to $225,202,592. This increase was attributable to the subscriptions of 30,644.164 Units totaling $24,412,608, coupled with net income of $22,332,989, which was partially offset by the redemptions of 502.518 General Partner Units totaling $436,316 and redemptions of 41,995.732 of Limited Partners Units totaling $33,178,865. Future redemptions could impact the amount of funds available for investment in the Trading Company in subsequent periods.

The Trading Company’s capital consists of the capital contributions of the members as increased or decreased by realized and/or unrealized gains or losses on commodity futures trading and by expenses, interest income, redemptions of Units and distributions of profits, if any.

For the nine months ended September 30, 2014, the Trading Company’s capital decreased 5.2% from $313,607,842 to $297,422,842. This decrease was attributable to the withdrawals of $60,491,613 which were partially offset by the net income of $38,321,745, coupled with the contributions of $5,984,868. Future withdrawals can impact the amount of funds available for investments in commodity contract positions in subsequent periods.

There are no known material trends, favorable or unfavorable, that would affect, nor any expected material changes to, the Partnership’s capital resource arrangement at the present time.

Critical Accounting Policies

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. The General Partner believes that the estimates and assumptions utilized in preparing the financial statements are reasonable. Actual results could differ from those estimates. The Partnership’s significant accounting policies are described in detail in Note 6. of the Financial Statements.

The Trading Company records all investments at fair value in its financial statements, with changes in fair value reported as a component of net realized gains (losses) and change in net unrealized gains (losses) in the Statements of Income and Expenses and Changes in Members’ Capital.

Results of Operations

During the Partnership’s third quarter of 2014, the net asset value per Unit for Class A decreased 3.0% from $841.01 to $815.83, as compared to an increase of 3.8% in the third quarter of 2013. During the Partnership’s third quarter of 2014, the net asset value per Unit for Class D decreased 2.7% from $817.19 to $795.23, as compared an increase of 4.4% in the third quarter of 2013. During the Partnership’s third quarter of 2014, the net asset value per Unit for Class Z decreased 2.5% from $890.55 to $868.26, as compared to an increase of 4.6% in the third quarter of 2013. The Partnership, through its investment in the Trading Company, experienced a net trading loss in the third quarter of 2014 of $3,736,629. Losses were primarily attributable to the Trading Company’s trading in commodities and interest rates and were partially offset by gains in currencies and equities. The Partnership, through its investment in the Trading Company, experienced a net trading gain in the third quarter of 2013 of $12,632,317. Gains were primarily attributable to the Trading Company’s trading in commodities and equities and were partially offset by losses in interest rates and currencies.

The most significant losses were experienced within the metals markets primarily during September from long positions in palladium futures as prices declined sharply on signs that European demand for the metal is faltering. Additional losses in this sector during September were recorded from long positions in platinum, nickel, and tin futures. Within the energy markets, losses were recorded during September from long positions in crude oil and heating oil as prices declined on concern global supply growth will outpace demand. Additional losses were incurred during July from long futures positions in crude oil as prices declined after an industry report showed crude stockpiles increased in the U.S. during the second quarter of 2014. Within the global interest rate sector, losses were experienced primarily during August from short positions in U.S. fixed income futures as prices advanced as resurgent financial stress in Europe spurred demand for the relative “safety” of U.S. government debt. A portion of the Partnership’s losses for the quarter was offset by gains achieved within the agricultural sector during July, August and September from short positions in soybean futures as prices declined after a government report indicated mild summer weather in the U.S. would lead to bumper crops in the Midwest. Additional gains in this sector were recorded from long positions in cocoa futures during July, August and September as prices advanced on speculation cocoa production will continue to fail to meet current global demand. Within the currency markets, gains were achieved primarily during September from short positions in the euro versus the U.S. dollar as the value of the U.S. dollar advanced against the euro. The dollar’s strength was precipitated by the U.S. employment rate, which fell to its lowest level since 2008 and the economy added more jobs than forecast, bolstering the case for the U.S. Federal Reserve to raise interest rates next year. Additional gains in this sector were recorded during September from positions in the Brazilian real and South African rand. Within the global stock index markets, gains were experienced during September from long positions in European equity index futures as prices advanced during the first half of the month as investors speculated that the European Central Bank would boost stimulus after a report showed euro-area inflation was slowing down.

During the nine months ended September 30, 2014, the net asset value per Unit for Class A increased 10.7% from $736.95 to $815.83, as compared to a decrease of 1.6% in the same period of 2013. During the nine months ended September 30, 2014, the net asset value per Unit for Class D increased 12.0% from $709.96 to $795.23, as compared an increase of 0.1% in the same period of 2013. During the nine months ended September 30, 2014, the net asset value per Unit for Class Z increased 12.6% from $770.87 to $868.26, as compared to an increase of 0.7% in the same period of 2013. The Partnership, through its investment in the Trading Company, experienced a net trading gain in the nine months ended September 30, 2014 of $31,916,251. Gains were primarily attributable to the Trading Company’s trading in commodities, currencies and equities and were partially offset by losses in interest rates. The Partnership, through its investment in the Trading Company, experienced a net trading gain in the nine months ended September 30, 2013 of $7,774,814. Gains were primarily attributable to the Trading Company’s trading in commodities, and were partially offset by losses in currencies, interest rates and equities.

The most significant gains were achieved within the agricultural sector during January from long positions in cocoa futures as prices advanced to the highest level in more than 28 months after crop threats in Indonesia added to supply concerns. Gains were also recorded in the agricultural sector during May and September from long positions in cocoa futures as prices rallied after industry reports indicated that the global supply shortfall would continue for the foreseeable future. Within the metals sector, gains were experienced during February, March, April, May, and June from long positions in palladium futures as prices advanced on concern that sanctions against Russia, the world’s biggest supplier of the metal, would trim supplies. This supply threat coincided with a miners strike in South Africa, the world’s second-biggest palladium producer. Additional gains in this sector were achieved from long positions in copper futures during June and July. Within the currency markets, gains were recorded primarily during September from short positions in the euro versus the U.S. dollar as the value of the U.S. dollar advanced against the euro after strong economic indicators were reported in the U.S. Within the global stock index sector, gains were experienced during February from long positions in U.S. and European equity index futures as prices advanced amid improving U.S. consumer confidence and speculation the Federal Reserve would continue to support the U.S. economy. Additional gains were recorded in this sector during September from long positions in European equity index futures as prices advanced during the first half of the month as investors speculated that the European Central Bank would boost stimulus after a report showed euro-area inflation was slowing down. Within the energy sector, gains were experienced during June from long positions in crude oil futures as prices rallied on reports of declining U.S. crude oil stockpiles. Additional gains in the energy markets were recorded during February from long positions in crude oil and its related products as prices rose following signs of increased demand spurred by an improving U.S. economy. The Partnership’s trading gains for the first nine months of the year were partially offset by trading losses within the global interest rate sector during August from short positions in U.S. fixed income futures as prices advanced as resurgent financial stress in Europe spurred demand for the relative “safety” of U.S. government debt. Additional losses in this sector were experienced from short positions in U.S. Treasury note futures during May.

Commodity futures markets are highly volatile. The potential for broad and rapid price fluctuations increases the risks involved in commodity trading, but also increases the possibility of profit. The profitability of the Partnership (and the Trading Company) depends on the Advisor’s ability to forecast price changes in energy and energy-related commodities. Such price changes are influenced by, among other things, changing supply and demand relationships, weather, governmental, agricultural, commercial and trade programs and policies, national and international political and economic events and changes in interest rates. To the extent that the Advisor correctly makes such forecasts, the Partnership (and the Trading Company) expects to increase capital through operations.

Effective July 1, 2012, MS&Co. credits the Trading Company on 100% of the average daily equity maintained in cash in the Trading Company’s account during each month at the rate equal to the monthly average of the 4-week U.S. Treasury bill discount less 0.15% during such month. There was no interest income earned allocated from the Trading Company for the three and nine months ended September 30, 2014 and 2013. The amount of interest income earned by the Partnership depends on the average daily equity in the Trading Company over which neither the Partnership/Trading Company nor MS&Co. has control.

Placement Agent fees are calculated on a monthly basis as a percentage of the net assets (as defined in the Limited Partnership Agreement) of the Partnership as of the beginning of each month. The Placement Agent fees rate for the three and nine months ended September 30, 2014 decreased $548,845 and $1,745,821, respectively, as compared to the corresponding periods in 2013. The decrease in Placement Agent fees is due to lower average net assets and a reduction of the Placement Agent fee for Class A Units during the nine months ended September 30, 2014, as compared to the corresponding periods in 2013.

The Partnership pays the ongoing administrative, operating, offering and organizational expenses of the Partnership and the Trading Company as such expenses are incurred, not to exceed 0.25% annually of the net assets of the Partnership. Administrative fees for the three months ended September 30, 2014 increased $10,296 and for the nine months ended September 30, 2014 decreased $227,629, as compared to the corresponding periods in 2013.

Management and incentive fees are borne by the Trading Company.

In allocating substantially all of the assets of the Partnership to the Trading Company, the General Partner considers the Advisor’s past performance, trading style, volatility of markets traded and fee requirements. The General Partner may modify or terminate the allocation of assets to the Advisor at any time and allocate assets to additional advisors at any time.

Off-Balance Sheet Arrangements and Contractual Obligations

The Partnership does not have any off-balance sheet arrangements, nor does it have contractual obligations or commercial commitments to make future payments, that would affect its liquidity or capital resources.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

All of the Partnership’s assets are subject to the risk of trading loss through its investment in the Trading Company. The Trading Company is a speculative commodity pool. The market sensitive instruments held by the Trading Company are acquired for speculative trading purposes, and all or substantially all of the Partnership’s capital is subject to the risk of trading loss, through its investment in the Trading Company. Unlike an operating company, the risk of market sensitive instruments is integral, not incidental, to the Trading Company’s and the Partnership’s main line of business.

The Limited Partners will not be liable for losses exceeding the current net asset value of their investment.

Market movements result in frequent changes in the fair value of the Trading Company’s open positions and, consequently, in its earnings and cash balances. The Trading Company’s and the Partnership’s market risk is influenced by a wide variety of factors, including the level and volatility of interest rates, exchange rates, equity price levels, the value of financial instruments and contracts, the diversification results among the Trading Company’s open positions and the liquidity of the markets in which it trades.

The Trading Company rapidly acquires and liquidates both long and short positions in a range of different markets. Consequently, it is not possible to predict how a particular future market scenario will affect performance, and the Trading Company’s past performance is not necessarily indicative of its future results.

Quantifying the Trading Company Trading Value at Risk

The following quantitative disclosures regarding the Trading Company’s market risk exposures contain “forward-looking statements” within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended). All quantitative disclosures in this section are deemed to be forward-looking statements for purpose of the safe harbor, except for the statements of historical fact.

The Trading Company accounts for open positions on the basis of mark to market accounting principles. Any loss in the market value of the Trading Company’s open positions is directly reflected in the Trading Company’s earnings and cash balance.

The Trading Company Value at Risk computation is based on the risk representation of the underlying benchmark for each instrument or contract and does not distinguish between exchange and non-exchange dealer-based instruments. It’s also not based on exchange and/or dealer-based maintenance margin requirements. Value at Risk models, including the models used by Morgan Stanley and Ceres, are continually evolving as trading portfolios become more diverse and modeling techniques and systems capabilities improve. Please note that the Value at Risk model is used to quantify market risk for historic reporting purposes only and is not utilized by either Ceres or the Advisor in its daily risk management activities. Please further note that Value at Risk as described above may not be comparable to similarly-titled measures used by other entities.

Limitations on Value at Risk as an Assessment of Market Risk

Value at Risk models permit estimation of a portfolio’s aggregate market risk exposure, incorporating a range of Value at Risk market risks, reflect risk reduction due to portfolio diversification or hedging activities, and can cover a wide range of portfolio assets. However, Value at Risk risk measures should be viewed in light of the methodology’s limitations, which include, but may not be limited to the following:

•

past changes in market risk factors will not always result in accurate predictions of the distributions and correlations of future market movements;

•

changes in portfolio value caused by market movements may differ from those of the Value at Risk model;

•

Value at Risk results reflect past market fluctuations applied to current trading positions while future risk depends on future positions;

•

Value at Risk using a one-day time horizon does not fully capture the market risk of positions that cannot be liquidated or hedged within one day; and

•

the historical market risk factor data used for Value at Risk estimation may provide only limited insight into losses that could be incurred under certain unusual market movements.

In addition, the Value at Risk tables below, as well as the past performance of the Partnership and the Trading Company, give no indication of the Partnership’s potential “risk of ruin.”

The Value at Risk tables provided present the results of the Partnership’s Value at Risk for each of the Trading Company’s market risk exposures and on an aggregate basis at September 30, 2014 and December 31, 2013.

Value at Risk is not necessarily representative of the Trading Company’s historic risk, nor should it be used to predict the Partnership or the Trading Company’s future financial performance or their ability to manage or monitor risk. There can be no assurance that the Trading Company’s actual losses on a particular day will not exceed the Value at Risk amounts indicated above or that such losses will not occur more than once in 100 trading days.

“Value at Risk” is a measure of the maximum amount which the Trading Company could reasonably be expected to lose in a given market sector. However, the inherent uncertainty of the Trading Company’s speculative trading and the recurrence in the markets traded by the Trading Company of market movements far exceeding expectations could result in actual trading or non-trading losses far beyond the indicated Value at Risk or the Trading Company’s experience to date (i.e., “risk of ruin”). In light of the foregoing, as well as the risks and uncertainties intrinsic to all future projections, the inclusion of the quantification in this section should not be considered to constitute any assurance or representation that the Trading Company’s losses in any market sector will be limited to Value at Risk or by the Trading Company’s attempts to manage its market risk.

Margin requirements have been used by the Trading Company as the measure of its Value at Risk. Margin requirements are set by exchanges to equal or exceed the maximum losses reasonably expected to be incurred in the fair value of any given contract in 95%-99% of any one-day interval. The margin levels are established by dealers and exchanges using historical price studies as well as an assessment of current market volatility (including the implied volatility of the options on a given futures contract) and economic fundamentals to provide a probabilistic estimate of the maximum expected near-term one-day price fluctuation.

Value at Risk tables represent a probabilistic assessment of the risk of loss in market risk sensitive instruments. There has been no material change in the trading Value at Risk information previously disclosed in the Partnership’s Form 10-K filed with the SEC for the year ended December 31, 2013.

As of September 30, 2014, the Trading Company’s total capitalization was $297,422,842, and the Partnership owned approximately 76.7% of the Trading Company. The Partnership invests substantially all of its assets in the Trading Company. The Trading Company’s Value at Risk as of September 30, 2014 was as follows:

September 30, 2014


						Three months ended September 30, 2014
Market Sector	Value at Risk		% of Total Capitalization			High Value at Risk		Low Value at Risk		Average Value at Risk*
Commodity	$	6,783,057		2.28	%	$	31,038,620	$	6,783,057	$	26,429,673
Equity		2,177,334		0.73	%		4,574,059		856,354		2,323,872
Interest Rate		27,656		0.01	%		4,170,826		9,431		2,368,720
Currency		5,982,897		2.01	%		6,633,967		2,670,607		3,604,957

Total	$	14,970,944		5.03	%

*	Average month-end Values at Risk.

As of December 31, 2013, the Trading Company’s total capitalization was $313,607,842 and the Partnership owned approximately 69.3% of the Trading Company. The Partnership invests substantially all of its assets in the Trading Company. The Trading Company’s Value at Risk as of December 31, 2013 was as follows:

December 31, 2013


						Twelve months ended December 31, 2013
Market Sector	Value at Risk		% of Total Capitalization			High Value at Risk		Low Value at Risk		Average Value at Risk*
Commodity	$	35,095,155		11.19	%	$	42,361,561	$	16,149,300	$	26,558,961
Equity		2,767,009		0.88	%		5,369,695		0		1,612,129
Currency		488,620		0.16	%		7,162,892		0		1,716,463
Interest Rate		67,027		0.02	%		6,444,482		0		1,519,739

Total	$	38,417,811		12.25	%

*	Annual average month-end Values at Risk.

Non-Trading Risk

The Trading Company has non-trading market risk on its foreign cash balances not needed for margin. However, these balances (as well as any market risk they represent) are immaterial.

Qualitative Disclosures Regarding Primary Trading Risk Exposures

The following qualitative disclosures regarding the Partnership’s market risk exposures — except for (A) those disclosures that are statements of historical fact and (B) the descriptions of how the Partnership manages its primary market risk exposures — constitute forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. The Partnership’s primary market risk exposures, as well as the strategies used and to be used by Ceres and the Advisor for managing such exposures, are subject to numerous uncertainties, contingencies and risks, any one of these could cause the actual results of the Partnership’s risk controls to differ materially from the objectives of such strategies. Government interventions, defaults and expropriations, illiquid markets, the emergence of dominant fundamental factors, political upheavals, changes in historical price relationships, an influx of new market participants, increased regulation, and many other factors could result in material losses, as well as in material changes to the risk exposures and the risk management strategies of the Partnership.

Investors must be prepared to lose all or substantially all of their investment in the Partnership.

Qualitative Disclosures Regarding Means of Managing Risk Exposure

The General Partner monitors and attempts to control the Partnership’s, through its investment in the Trading Company, 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 Trading Company may be subject.

The General Partner monitors the Trading Company’s performance and the concentration of open positions, and consults with the Advisor concerning the Trading Company’s overall risk profile. If the General Partner felt it necessary to do so, the General Partner could require the Advisor to close out positions as well as enter positions traded on behalf of the Trading Company. However, any such intervention would be a highly unusual event. The General Partner primarily relies on the Advisor’s own risk control policies while maintaining a general supervisory overview of the Trading Company’s market risk exposures.

The Advisor applies its own risk management policies to its trading. The Advisor often follows diversification guidelines, margin limits and stop loss points to exit a position. The Advisor’s research of risk management often suggests ongoing modifications to its trading programs.

As part of the General Partner’s risk management, the General Partner periodically meets with the Advisor to discuss its risk management and to look for any material changes to the Advisor’s portfolio balance and trading techniques. The Advisor is required to notify the General Partner of any material changes to its programs.

Item 4. Controls and Procedures

The Partnership’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Partnership on the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods expected in the SEC’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Partnership in the reports it files is accumulated and communicated to management, including the President and Chief Financial Officer (“CFO”) of the General Partner, to allow for timely decisions regarding required disclosure and appropriate SEC filings.

The General Partner is responsible for ensuring that there is an adequate and effective process for establishing, maintaining and evaluating disclosure controls and procedures for the Partnership’s external disclosures.

The General Partner’s President and CFO have evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2014 and, based on that evaluation, the General Partner’s President and CFO have concluded that, at that date, the Partnership’s disclosure controls and procedures were effective.

The Partnership’s internal control over financial reporting is a process under the supervision of the General Partner’s President and CFO to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. These controls include policies and procedures that:

•

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Partnership;

•

provide reasonable assurance that (i) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and (ii) the Partnership’s receipts are handled and expenditures are made only pursuant to authorizations of the General Partner; and

•

provide reasonable assurance regarding prevention or timely detection and correction of unauthorized acquisition, use or disposition of the Partnership’s assets that could have a material effect on the financial statements.

There were no changes in the Partnership’s internal control over financial reporting process during the fiscal quarter ended September 30, 2014 that materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

Limitations on the Effectiveness of Controls

Any control system, no matter how well designed and operated, can provide reasonable (not absolute) assurance that its objectives will be met. Furthermore, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

There are no material legal proceedings pending against the Partnership nor the General Partner.

The following information supplements and amends the discussion set forth under Part I, Item 3 “Legal Proceedings” in the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, as updated by the Partnership’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2014 and June 30, 2014.

On June 1, 2011, Morgan Stanley & Co. Incorporated converted from a Delaware corporation to a Delaware limited liability company. As a result of that conversion, Morgan Stanley & Co. Incorporated is now named Morgan Stanley & Co. LLC.

MS&Co. is a wholly-owned, indirect subsidiary of Morgan Stanley, a Delaware holding company. Morgan Stanley files periodic reports with the SEC as required by the Exchange Act, which include current descriptions of material litigation and material proceedings and investigations, if any, by governmental and/or regulatory agencies or self-regulatory organizations concerning Morgan Stanley and its subsidiaries, including MS&Co. As a consolidated subsidiary of Morgan Stanley, MS&Co. does not file its own periodic reports with the SEC that contain descriptions of material litigation, proceedings and investigations. As a result, please refer to the “Legal Proceedings” section of Morgan Stanley’s SEC 10-K filings for 2013, 2012, 2011, 2010, and 2009.

In addition to the matters described in those filings, in the normal course of business, each of Morgan Stanley and MS&Co. has been named, from time to time, as a defendant in various legal actions, including arbitrations, class actions, and other litigation, arising in connection with its activities as a global diversified financial services institution. Certain of the legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. Each of Morgan Stanley and MS&Co. is also involved, from time to time, in investigations and proceedings by governmental and/or regulatory agencies or self-regulatory organizations, certain of which may result in adverse judgments, fines or penalties. The number of these investigations and proceedings has increased in recent years with regard to many financial services institutions, including Morgan Stanley and MS&Co.

MS&Co. is a Delaware limited liability company with its main business office located at 1585 Broadway, New York, New York 10036. Among other registrations and memberships, MS&Co. is registered as a futures commission merchant and is a member of National Futures Association.

On May 7, 2009, MS&Co. was named as a defendant in a purported class action lawsuit brought under Sections 11, 12 and 15 of the Securities Act of 1933, as amended, which is now styled In re Morgan Stanley Mortgage Pass-Through Certificates Litigation and is pending in the United States District Court for the Southern District of New York (“SDNY”). The third amended complaint, filed on September 30, 2011, alleges, among other things, that the registration statements and offering documents related to the offerings of certain mortgage pass-through certificates in 2006 contained false and misleading information concerning the pools of

residential loans that backed these securitizations. The plaintiffs seek, among other relief, class certification, unspecified compensatory and rescissionary damages, costs, interest and fees. On July 22, 2014, the parties reached an agreement in principle to settle the litigation. The settlement is subject to approval by the court, which has set a final approval hearing for December 18, 2014.

On December 23, 2009, the Federal Home Loan Bank of Seattle filed a complaint against MS&Co. and an affiliate and other defendants in the Superior Court of the State of Washington, styled Federal Home Loan Bank of Seattle v. Morgan Stanley & Co. Inc., et al. The amended complaint, filed on September 28, 2010, alleges that defendants made untrue statements and material omissions in the sale to plaintiff of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sold to plaintiff by MS&Co. was approximately $233 million. The complaint raises claims under the Washington State Securities Act and seeks, among other things, to rescind the plaintiff’s purchase of such certificates. On October 18, 2010, defendants filed a motion to dismiss the action. By orders dated June 23, 2011 and July 18, 2011, the court denied defendants’ omnibus motion to dismiss plaintiff’s amended complaint and on August 15, 2011, the court denied MS&Co.’s individual motion to dismiss the amended complaint. At June 25, 2014, the current unpaid balance of the mortgage pass-through certificates at issue in these cases was approximately $54 million, and the certificates had not yet incurred actual losses. Based on currently available information, MS&Co. believes it and/or its affiliates could incur a loss for this action up to the difference between the $54 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co. and/or its affiliates, or upon sale, plus pre- and post-judgment interest, fees and costs. MS&Co. and/or its affiliates may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff prior to a judgment.

On March 15, 2010, the Federal Home Loan Bank of San Francisco filed two complaints against MS&Co. and other defendants in the Superior Court of the State of California. These actions are styled Federal Home Loan Bank of San Francisco v. Credit Suisse Securities (USA) LLC, et al., and Federal Home Loan Bank of San Francisco v. Deutsche Bank Securities Inc. et al., respectively. Amended complaints filed on June 10, 2010 allege that defendants made untrue statements and material omissions in connection with the sale to plaintiff of a number of mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The amount of certificates allegedly sold to plaintiff by MS&Co. in these cases was approximately $704 million and $276 million, respectively. The complaints raise claims under both the federal securities laws and California law and seek, among other things, to rescind the plaintiff’s purchase of such certificates. On August 11, 2011, plaintiff’s Securities Act of 1933, as amended, claims were dismissed with prejudice. The defendants filed answers to the amended complaints on October 7, 2011. On February 9, 2012, defendants’ demurrers with respect to all other claims were overruled. On December 20, 2013, plaintiff’s negligent misrepresentation claims were dismissed with prejudice. A bellwether trial is currently scheduled to begin in January 2015. MS&Co. is not a defendant in connection with the securitizations at issue in that trial. On May 23, 2014, plaintiff and the defendants in the bellwether trial filed motions for summary adjudication, which were denied. At September 25, 2014, the current unpaid balance of the mortgage pass-through certificates at issue in these cases was approximately $291 million, and the certificates had incurred actual losses of approximately $6 million. Based on currently available information, MS&Co. believes it could incur a loss for this

action up to the difference between the $291 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co., or upon sale, plus pre- and post-judgment interest, fees and costs. MS&Co. may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff prior to a judgment.

On October 15, 2010, the Federal Home Loan Bank of Chicago filed a complaint against MS&Co. and its affiliates and other defendants in the Circuit Court of the State of Illinois styled Federal Home Loan Bank of Chicago v. Bank of America Funding Corporation et al. The complaint alleges that defendants made untrue statements and material omissions in the sale to plaintiff of a number of mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sold to plaintiff by MS&Co. and/or its affiliates in this action was approximately $203 million. The complaint raises claims under Illinois law and seeks, among other things, to rescind the plaintiff’s purchase of such certificates. On March 24, 2011, the court granted plaintiff leave to file an amended complaint. MS&Co. and its affiliates filed an answer on December 21, 2012. On December 13, 2013, the court entered an order dismissing all claims related to one of the securitizations at issue. At September 25, 2014, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $55 million and the certificates had not yet incurred actual losses. Based on currently available information, MS&Co. believes it and/or its affiliates could incur a loss in this action up to the difference between the $55 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co. and/or its affiliates, or upon sale, plus pre- and post-judgment interest, fees and costs. MS&Co. and/or its affiliates may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff prior to a judgment.

On July 5, 2011, Allstate Insurance Company and certain of its affiliated entities filed a complaint against MS&Co. and certain of its affiliates in the Supreme Court of NY, styled Allstate Insurance Company, et al. v. Morgan Stanley, et al. An amended complaint was filed on September 9, 2011 and alleges that defendants made untrue statements and material omissions in the sale to plaintiff of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly issued and/or sold to plaintiffs by MS&Co. and/or its affiliates was approximately $104 million. The complaint raises common law claims of fraud, fraudulent inducement, aiding and abetting fraud and negligent misrepresentation and seeks, among other things, compensatory and/or recessionary damages associated with plaintiffs’ purchases of such certificates. On March 15, 2013, the court denied in substantial part the defendants’ motion to dismiss the amended complaint, which order MS&Co. and its affiliates appealed on April 11, 2013. On May 3, 2013, MS&Co. and its affiliates filed an answer to the amended complaint. At September 25, 2014, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $82 million, and the certificates had not yet incurred actual losses. Based on currently available information, MS&Co. believes it and/or its affiliates could incur a loss in this action up to the difference between the $82 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co. and/or its affiliates, or upon sale, plus pre- and post-judgment interest, fees and costs. MS&Co. and/or its affiliates may be entitled to an offset for interest received by the plaintiff prior to a judgment.

On July 18, 2011, the Western and Southern Life Insurance Company and certain affiliated companies filed a complaint against MS&Co. and certain affiliates and other defendants in the Court of Common Pleas in Ohio, styled Western and Southern Life Insurance Company, et al. v. Morgan Stanley Mortgage Capital Inc., et al. An amended complaint was filed on April 2, 2012 and alleges that defendants made untrue statements and material omissions in the sale to plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The amount of the certificates allegedly sold to plaintiffs by MS&Co. and/or its affiliates was approximately $153 million. The amended complaint raises claims under the Ohio Securities Act, federal securities laws, and common law and seeks, among other things, to rescind the plaintiffs’ purchases of such certificates. MS&Co. and its affiliates filed an answer on August 17, 2012. Trial is currently scheduled to begin in July 2015. At September 25, 2014, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $111 million, and the certificates had incurred actual losses of approximately $2 million. Based on currently available information, MS&Co. believes it and/or its affiliates could incur a loss in this action up to the difference between the $111 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co. and/or its affiliates, or upon sale, plus post-judgment interest, fees and costs. MS&Co. and/or its affiliates may be entitled to an offset for interest received by the plaintiff prior to a judgment.

On November 4, 2011, the Federal Deposit Insurance Corporation (“FDIC”), as receiver for Franklin Bank S.S.B., filed two complaints against MS&Co. in the District Court of the State of Texas. Each was styled Federal Deposit Insurance Corporation, as Receiver for Franklin Bank S.S.B. v. Morgan Stanley & Company LLC F/K/A Morgan Stanley & Co. Inc. and alleged that MS&Co. made untrue statements and material omissions in connection with the sale to plaintiff of mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The amount of certificates allegedly underwritten and sold to the plaintiff by MS&Co. in these cases was approximately $67 million and $35 million, respectively. The complaints each raised claims under both federal securities law and the Texas Securities Act and each seeks, among other things, compensatory damages associated with plaintiff’s purchase of such certificates. On March 20, 2012, MS&Co. filed answers to the complaints in both cases. On June 7, 2012, the two cases were consolidated. On January 10, 2013, MS&Co. filed a motion for summary judgment and special exceptions with respect to plaintiff’s claims. On February 6, 2013, the FDIC filed an amended consolidated complaint. On February 25, 2013, MS&Co. filed a motion for summary judgment and special exceptions, which motion was denied in substantial part on April 26, 2013. On May 3, 2013, the FDIC filed a second amended consolidated complaint. On October 7, 2014, the court denied MS&Co.’s motion for reconsideration of the court’s order denying its motion for summary judgment and granted its motion for reconsideration of the court’s order denying permission for interlocutory appeal. On October 22, 2014, MS&Co. filed a petition for permissive interlocutory appeal with the appellate court. Trial is currently scheduled to begin in March 2015. At September 25, 2014, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $44 million, and the certificates had incurred actual losses of approximately $5 million. Based on currently available information, MS&Co. believes it could incur a loss in this action up to the difference between the $44 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co., or upon sale, plus pre- and post-judgment interest, fees and costs. MS&Co. may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff prior to a judgment.

On April 25, 2012, The Prudential Insurance Company of America and certain affiliates filed a complaint against MS&Co. and certain affiliates in the Superior Court of the State of New Jersey styled The Prudential Insurance Company of America, et al. v. Morgan Stanley, et al. The complaint alleges that defendants made untrue statements and material omissions in connection with the sale to plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by MS&Co. is approximately $1 billion. The complaint raises claims under the New Jersey Uniform Securities Law, as well as common law claims of negligent misrepresentation, fraud and tortious interference with contract and seeks, among other things, compensatory damages, punitive damages, rescission and rescissionary damages associated with plaintiffs’ purchases of such certificates. On October 16, 2012, plaintiffs filed an amended complaint which, among other things, increases the total amount of the certificates at issue by approximately $80 million, adds causes of action for fraudulent inducement, equitable fraud, aiding and abetting fraud, and violations of the New Jersey Racketeer Influenced and Corrupt Organizations Act, and includes a claim for treble damages. On March 15, 2013, the court denied the defendants’ motion to dismiss the amended complaint. On April 26, 2013, the defendants filed an answer to the amended complaint. On June 5, 2014, the defendants filed a renewed motion to dismiss the amended complaint. At September 25, 2014, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $613 million, and the certificates had not yet incurred actual losses. Based on currently available information, MS&Co. believes it and/or its affiliates could incur a loss in this action up to the difference between the $613 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co. and/or its affiliates, or upon sale, plus pre- and post-judgment interest, fees and costs. MS&Co. and/or its affiliates may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff prior to a judgment.

On April 20, 2011, the Federal Home Loan Bank of Boston filed a complaint against MS&Co. and certain affiliates and other defendants in the Superior Court of the Commonwealth of Massachusetts styled Federal Home Loan Bank of Boston v. Ally Financial, Inc. F/K/A GMAC LLC et al. An amended complaint was filed on June 19, 2012 and alleges that defendants made untrue statements and material omissions in the sale to plaintiff of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly issued by MS&Co. and/or its affiliates or sold to plaintiff by MS&Co. and/or its affiliates was approximately $385 million. The amended complaint raises claims under the Massachusetts Uniform Securities Act, the Massachusetts Consumer Protection Act and common law and seeks, among other things, to rescind the plaintiff’s purchase of such certificates. On May 26, 2011, defendants removed the case to the United States District Court for the District of Massachusetts. On October 11, 2012, defendants filed motions to dismiss the amended complaint, which was granted in part and denied in part on September 30, 2013. The defendants filed an answer to the amended complaint on December 16, 2013. Plaintiff voluntarily dismissed its claims against MS&Co. and its affiliates with respect to two of the securitizations at issue. At September 25, 2014, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $66 million, and the certificates had

not yet incurred actual losses. Based on currently available information, MS&Co. believes it and/or its affiliates could incur a loss in this action up to the difference between the $66 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co. and/or its affiliates, or upon sale, plus pre- and post-judgment interest, fees and costs. MS&Co. and/or its affiliates may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff prior to a judgment.

On February 14, 2013, Bank Hapoalim B.M. filed a complaint against MS&Co. and certain affiliates in the Supreme Court of NY, styled Bank Hapoalim B.M. v. Morgan Stanley et al. The complaint alleges that defendants made material misrepresentations and omissions in the sale to plaintiff of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by MS&Co. and/or its affiliates to plaintiff was approximately $141 million. The complaint alleges causes of action against MS&Co. and its affiliates for common law fraud, fraudulent concealment, aiding and abetting fraud, and negligent misrepresentation, and seeks, among other things, compensatory and punitive damages. On April 22, 2014, the defendants’ motion to dismiss was denied in substantial part. On August 29, 2014, the defendants filed an answer to the complaint, and on September 18, 2014, the defendants filed a notice of appeal from the ruling denying their motion to dismiss. At September 25, 2014, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $73 million, and the certificates had not yet incurred actual losses. Based on currently available information, MS&Co. believes it and/or its affiliates could incur a loss in this action up to the difference between the $73 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co. and/or its affiliates, or upon sale, plus pre- and post-judgment interest, fees and costs.

On May 3, 2013, plaintiffs in Deutsche Zentral-Genossenschaftsbank AG et al. v. Morgan Stanley et al. filed a complaint against MS&Co., certain affiliates, and other defendants in the Supreme Court of NY. The complaint alleges that defendants made material misrepresentations and omissions in the sale to plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by MS&Co. and/or its affiliates to plaintiff was approximately $694 million. The complaint alleges causes of action against MS&Co. and its affiliates for common law fraud, fraudulent concealment, aiding and abetting fraud, negligent misrepresentation, and rescission and seeks, among other things, compensatory and punitive damages. On June 10, 2014, the court denied defendants’ motion to dismiss. On July 10, 2014, MS&Co. and its affiliates filed a renewed motion to dismiss with respect to two certificates at issue in the case. On October 13, 2014, MS&Co. filed its answer to the complaint. At September 25, 2014, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $300 million, and the certificates had incurred actual losses of approximately $78 million. Based on currently available information, MS&Co. believes it and/or its affiliates could incur a loss in this action up to the difference between the $300 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co. and/or its affiliates, or upon sale, plus pre- and post-judgment interest, fees and costs. MS&Co. and/or its affiliates may be entitled to be indemnified for some of these losses.

On September 23, 2013, plaintiffs in National Credit Union Administration Board v. Morgan Stanley & Co. Inc., et al. filed a complaint against MS&Co. and certain affiliates in the United States District Court for the Southern District of New York. The complaint alleges that defendants made untrue statements of material fact or omitted to state material facts in the sale to plaintiffs of certain mortgage pass-through certificates issued by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by MS&Co. and/or its affiliates to plaintiffs was approximately $417 million. The complaint alleges causes of action against MS&Co. and its affiliates for violations of Section 11 and Section 12(a)(2) of the Securities Act of 1933, as amended, violations of the Texas Securities Act, and violations of the Illinois Securities Law of 1953 and seeks, among other things, rescissionary and compensatory damages. The defendants filed a motion to dismiss the complaint on November 13, 2013. On January 22, 2014, the court granted defendants’ motion to dismiss with respect to claims arising under the Securities Act of 1933, as amended, and denied defendants’ motion to dismiss with respect to claims arising under Texas Securities Act and the Illinois Securities Law of 1953. On April 28, 2014, the court granted in part and denied in part plaintiff’s motion to strike certain of the defendants’ affirmative defenses. On July 11, 2014, the defendants filed a motion for reconsideration of the court’s order on the motion to dismiss the complaint or, in the alternative, for certification of interlocutory appeal and a stay of all proceedings, which was denied on September 30, 2014. At September 25, 2014, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $211 million, and the certificates had incurred actual losses of approximately $27 million. Based on currently available information, MS&Co. believes it and/or its affiliates could incur a loss in this action up to the difference between the $211 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co. and/or its affiliates, or upon sale, plus pre- and post-judgment interest, fees and costs. MS&Co. and/or its affiliates may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff prior to a judgment.

Additional lawsuits containing claims similar to those described above may be filed in the future. In the course of its business, MS&Co., as a major futures commission merchant, is party to various civil actions, claims and routine regulatory investigations and proceedings that the General Partner believes do not have a material effect on the business of MS&Co. MS&Co. may establish reserves from time to time in connections with such actions.

Item 1A. Risk Factors

There have been no material changes to the risk factors set forth under Part I, Item 1A. “Risk Factors” in the Partnership’s Annual Report on the Form 10-K for the fiscal year ended December 31, 2013 and under Part II, Item 1A. “Risk Factors” in the Partnership’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2014 and June 30, 2014.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

For the three months ended September 30, 2014, there were subscriptions of 7,591.760 Units of Class A totaling $6,520,379 and 59.943 Units of Class Z totaling $55,290. The Units were issued in reliance upon applicable exemptions from registration under Section 4(a)(2) of the Securities Act, and Section 506 of Regulation D promulgated thereunder. The Units were purchased by accredited investors as described in Regulation D.

Proceeds from the sale of Units are used in the trading of commodity interests including futures contracts, swaps, options and forward contracts.

The following chart sets forth the purchases of Units for each Class by the Partnership.


Period	Class A (a) Total Number of Units Purchased*		Class A (b) Average Price Paid per Unit**		Class Z (a) Total Number of Units Purchased*		Class Z (b) Average Price Paid per Unit**		(c) Total Number of Units Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Units that May Yet Be Purchased Under the Plans or Programs
July 1, 2014 - July 31, 2014		3,401.133	$	869.67		—	$	922.38	N/A	N/A
August 1, 2014 - August 31, 2014		2,430.107	$	865.84		30.538	$	919.85	N/A	N/A
September 1, 2014 - September 30, 2014		2,943.925	$	815.83		—	$	868.26	N/A	N/A
		8,775.165	$	850.55		30.538	$	919.85	N/A	N/A

Generally, Limited Partners are permitted to redeem their Units as of the end of each month on three business days’ notice to the General Partner. Under certain circumstances, the General Partner may compel redemption but to date the General Partner has not exercised this right. Purchases of Units by the Partnership reflected in the chart above were made in the ordinary course of the Partnership’s business in connection with effecting redemptions for Limited Partners.

**	Redemptions of Units are effected as of the last day of each month at the net asset value per Unit as of that day.

Item 3. Defaults Upon Senior Securities — None.

Item 4. Mine Safety Disclosures. Not Applicable.

Item 6. Exhibits

Exhibits:

31.1 Rule 13a-14(a)/15d-14(a) Certification (Certification of Director).

31.2 Rule 13a-14(a)/15d-14(a) Certification (Certification of Chief Financial Officer).

32.1 Section 1350 Certification (Certification of Director).

32.2 Section 1350 Certification (Certification of Chief Financial Officer).


101.INS*		XBRL Instance Document

101.SCH*		XBRL Taxonomy Extension Schema Document

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB*		XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document

Notes to Exhibits List

* Submitted electronically herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Managed Futures Premier BHM L.P.

By:		Ceres Managed Futures LLC (General Partner)



By:		/s/ Patrick T. Egan
		Patrick T. Egan
		Director

Date: November 13, 2014



By:		/s/ Steven Ross
		Steven Ross
		Chief Financial Officer (Principal Accounting Officer)

Date: November 13, 2014

Ceres Tactical Macro L.P. - FORM 10-Q - November 13, 2014

Attached files

Ceres Tactical Macro L.P. Reports