UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-21480
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The Topiary Fund for Benefit Plan Investors (BPI) LLC
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(Exact name of registrant as specified in charter)
345 Park Avenue
New York, NY 10154
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(Address of principal executive offices) (Zip code)
John H. Kim, Director & Senior Counsel
Deutsche Asset Management
345 Park Avenue
New York, NY 10154
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(Name and address of agent for service)
registrant's telephone number, including area code: 212-454-6849
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Date of fiscal year end: March 31
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Date of reporting period: September 30, 2007
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
THE TOPIARY FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended September 30, 2007
The Topiary Fund for Benefit Plan Investors (BPI) LLC
Consolidated Financial Statements
For the Six Months Ended September 30, 2007
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The financial statements of The Topiary Master Fund for Benefit Plan Investors
(BPI) LLC are attached and should be read in conjunction with the consolidated
financial statements of The Topiary Fund for Benefit Plan Investors (BPI) LLC.
CONTENTS
Report of Independent Registered Public Accounting Firm ................ 1
Consolidated Statement of Assets, Liabilities and Members' Capital...... 2
Consolidated Statement of Operations.................................... 3
Consolidated Statement of Changes in Members' Capital................... 4
Consolidated Statement of Cash Flows.................................... 5
Consolidated Financial Highlights....................................... 6
Notes to Consolidated Financial Statements.............................. 7-13
Directors and Officers Biographical Data................................ 14-18
Portfolio Proxy Voting Policies and Procedures; SEC Filings ............ 19
THE TOPIARY MASTER FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC .... ATTACHMENT A
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Members of
The Topiary Fund for Benefit Plan Investors (BPI) LLC
In our opinion, the accompanying consolidated statement of assets, liabilities
and members' capital, and the related consolidated statements of operations, of
changes in members' capital and of cash flows and the financial highlights
present fairly, in all material respects, the financial position of The Topiary
Fund for Benefit Plan Investors (BPI) LLC and its subsidiary (the "Fund") at
September 30, 2007, the results of their operations and their cash flows for the
period from April 1, 2007 through September 30, 2007, and the changes in their
members' capital and the financial highlights for each of the periods presented,
in conformity with accounting principles generally accepted in the United States
of America. These consolidated financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As more fully described in Note 10 to the financial statements, the Members of
the Fund have approved a reorganization plan whereby substantially all of the
assets and liabilities of the Fund will be acquired by another fund in exchange
for interests in the latter. The reorganization plan became effective on October
1, 2007.
November 28, 2007
1
The Topiary Fund for Benefit Plan Investors (BPI) LLC
Consolidated Statement of Assets, Liabilities and Members' Capital
September 30, 2007
ASSETS
Investment in the Master Fund $ 88,460,586
Receivable from Adviser 112,508
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TOTAL ASSETS $ 88,573,094
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LIABILITIES
Professional fees payable $ 110,300
Custodian fees payable 2,208
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TOTAL LIABILITIES 112,508
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MEMBERS' CAPITAL 88,460,586
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TOTAL LIABILITIES AND MEMBERS' CAPITAL $ 88,573,094
================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
2
The Topiary Fund for Benefit Plan Investors (BPI) LLC
Consolidated Statement of Operations
For the Six Months Ended September 30, 2007
NET INVESTMENT LOSS ALLOCATED FROM THE MASTER FUND:
Income $ 98,430
Expenses (772,234)
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Net investment loss allocated from the Master Fund (673,804)
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FUND EXPENSES
Professional fees 93,495
Administration fees 12,000
Custodian fees 5,670
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Total expenses 111,165
Fund expenses reimbursed (111,165)
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Net expenses --
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NET INVESTMENT INCOME FROM FUND --
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Net investment loss (673,804)
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GAINS FROM INVESTMENT FUND TRANSACTIONS
Net realized gains from investment funds allocated from the
Master Fund 8,757,697
Net change in unrealized depreciation on investment funds allocated
from the Master Fund (net of taxes: $181,335) (4,936,771)
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NET GAINS FROM INVESTMENT FUNDS TRANSACTIONS 3,820,926
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NET INCREASE IN MEMBERS' CAPITAL DERIVED FROM OPERATIONS $ 3,147,122
===============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
3
The Topiary Fund for Benefit Plan Investors (BPI) LLC
Consolidated Statements of Changes in Members' Capital
SPECIAL ADVISORY OTHER
MEMBER MEMBERS' CAPITAL
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FOR THE YEAR ENDED MARCH 31, 2007
FROM INVESTMENT ACTIVITIES
Net investment loss $ -- $ (1,237,351)
Net realized gain from investment funds allocated from the Master
Fund -- 1,689,054
Net change in unrealized appreciation on investment funds allocated
from the Master Fund -- 5,441,558
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NET INCREASE IN MEMBERS' CAPITAL DERIVED FROM OPERATIONS -- 5,893,261
FROM MEMBERS' CAPITAL TRANSACTIONS
Subscriptions -- 28,316,789
Redemptions (466,201) (19,108,141)
Reallocation of incentive allocation 186,483 (186,483)
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NET CHANGE IN MEMBERS' CAPITAL FROM CAPITAL TRANSACTIONS (279,718) 9,022,165
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NET CHANGE IN MEMBERS' CAPITAL (279,718) 14,915,426
Members' Capital at beginning of year 464,280 70,401,041
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Members' Capital at end of year $ 184,562 $ 85,316,467
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TOTAL CAPITAL ($85,501,029)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2007
FROM INVESTMENT ACTIVITIES
Net investment loss $ -- $ (673,804)
Net realized gains from investment funds allocated from the Master
Fund -- 8,757,697
Net change in unrealized depreciation on investment funds allocated
from the Master Fund -- (4,936,771)
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NET INCREASE IN MEMBERS' CAPITAL DERIVED FROM OPERATIONS -- 3,147,122
FROM MEMBERS' CAPITAL TRANSACTIONS
Subscriptions -- --
Redemptions (184,562) (3,003)
Reallocation of incentive allocation 120,437 (120,437)
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NET CHANGE IN MEMBERS' CAPITAL FROM CAPITAL TRANSACTIONS (64,125) (123,440)
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NET CHANGE IN MEMBERS' CAPITAL (64,125) 3,023,682
Members' Capital at beginning of period 184,562 85,316,467
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Members' Capital at end of period $ 120,437 $88,340,149
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TOTAL CAPITAL ($88,460,586)
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
4
The Topiary Fund for Benefit Plan Investors (BPI) LLC
Consolidated Statement of Cash Flows
For the Six Months Ended September 30, 2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net increase in Members' Capital from operations $ 3,147,122
Adjustments to reconcile net increase in Members' Capital from operations to net
cash provided by operating activities:
Redemption of investment in Master Fund 187,565
Net investment loss allocated from the Master Fund 673,804
Net realized gains from investment funds allocated from the Master Fund
(8,757,697)
Net change in unrealized appreciation on investment funds allocated from the
Master Fund 4,936,771
Increase in receivable from Adviser (12,070)
Increase in professional fees payable 17,642
Decrease in custodian fees payable (1,572)
Decrease in administration fees payable (4,000)
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NET CASH PROVIDED BY OPERATING ACTIVITIES 187,565
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CASH FLOWS FROM FINANCING ACTIVITIES
Subscriptions -
Redemptions (187,565)
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NET CASH USED IN FINANCING ACTIVITIES (187,565)
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NET CHANGE IN CASH AND CASH EQUIVALENTS -
Cash and cash equivalents at beginning of period -
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Cash and cash equivalents at end of period $ -
================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
5
The Topiary Fund for Benefit Plan Investors (BPI) LLC
Consolidated Financial Highlights
PERIOD FROM
THE FOLLOWING REPRESENTS THE RATIOS TO FOR THE OCTOBER 1, 2004
AVERAGE MEMBERS' CAPITAL AND OTHER SIX YEAR YEAR (COMMENCEMENT OF
FINANCIAL HIGHLIGHTS INFORMATION FOR THE MONTHS ENDED ENDED ENDED OPERATIONS)
PERIOD/YEAR: SEPTEMBER 30, MARCH 31, MARCH 31, THROUGH MARCH 31,
2007 2007 2006 2005
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Ratios to average Members' capital:
Net investment loss (b) (1.53%)(a) (1.47%) (1.57%) (1.67%)(a)
Net expenses (b)(c) 1.75%(a) 1.75% 1.75% 1.75%(a)
Incentive allocation 0.15% 0.22% 0.82% 0.58%
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Net expenses and incentive allocation
1.90% 1.97% 2.57% 2.33%
Total return 3.69%(d) 6.87% 11.18% 5.04% (d)
Incentive allocation (0.15%)(d) (0.22%) (0.70%) (0.20%)(d)
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Total return net of incentive allocation 3.54%(d) 6.65% 10.48% 4.84% (d)
Portfolio turnover rate of Master Fund 0% 26% 39% 3%
Members' capital, end of year (thousands)
$ 88,461 $ 85,501 $ 70,865 $ 29,173
(a) Annualized for periods of less than one year.
(b) The Adviser waived and reimbursed $111,165 of fees for the six months
ended September 30, 2007. The net investment loss ratio would have been
0.25% greater and the net expenses ratio would have been 0.25% greater
had these fees and expenses not been waived and reimbursed by the
Adviser. The Adviser waived and reimbursed $170,913, $322,273 and
$349,691 of fees and expenses for the periods ended March 31, 2007, 2006
and 2005, respectively. The net investment loss ratio would have been
0.20%, 0.59% and 3.57% greater and the net expenses ratio would have been
0.20%, 0.59% and 3.57% greater had these fees and expenses not been
waived and reimbursed by the Adviser.
(c) Expenses of the underlying Investment Funds are not included in the
expense ratio; however expenses of the Master Fund are included.
(d) Not annualized.
The above ratios and total returns are calculated for all Members taken as a
whole. An individual investor's return may vary from these returns based on the
timing of capital transactions.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
6
THE TOPIARY FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2007
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1. ORGANIZATION
The Topiary Fund for Benefit Plan Investors (BPI) LLC (the "Fund") is a Delaware
limited liability company organized on December 8, 2003 and commenced operations
October 1, 2004. The Fund is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as a closed-end, non-diversified, management
investment company. The Fund's interests (the "Interests") are registered under
the Securities Act of 1933, as amended (the "1933 Act"), but are subject to
substantial limits on transferability and resale. The Fund's investment
objective is to generate long-term capital appreciation. The Fund seeks to
achieve this objective by investing substantially all of its investable assets
into The Topiary Offshore Fund for Benefit Plan Investors (BPI) LDC (the
"Offshore Fund"), a Cayman Islands limited duration company with the same
investment objectives as the Fund. The Offshore Fund in turn invests
substantially all of its investable assets in The Topiary Master Fund for
Benefit Plan Investors (BPI) LLC (the "Master Fund"), a registered investment
company with the same investment objectives as the Fund and the Offshore Fund.
The Fund owns 100% of the beneficial interests of the Offshore Fund, and the
Offshore Fund owns approximately 98.6% of the beneficial interests in the Master
Fund at September 30, 2007. The remaining balance of the Master Fund is owned by
DBAH Capital, L.L.C, an affiliate of DB Investment Managers, Inc. These
financials statements are the consolidation of the Fund and the Offshore Fund.
Inter-company balances have been eliminated through consolidation. The Offshore
Fund commenced operations on October 1, 2004.
The Fund's Board of Directors (the "Board") has overall responsibility to manage
and control the business operations of the Fund on behalf of the members (the
"Members"). All of the Board are and will be persons who are not "interested
persons" (as defined in the 1940 Act) with respect to the Fund.
DB Investment Managers, Inc., performing services as Topiary Fund Management,
(the "Adviser") serves as the investment adviser of the Fund subject to the
ultimate supervision of and subject to any policies established by the Board,
pursuant to the terms of an investment management agreement with the Fund (the
"Investment Management Agreement"). Pursuant to the Investment Management
Agreement, the Adviser provides the Fund with ongoing investment guidance,
policy direction, and monitoring of the Fund. The Adviser is an indirect wholly
owned subsidiary of Deutsche Bank AG ("Deutsche Bank"), an international
commercial and investment banking group, and is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended (the "Advisers
Act").
Generally, initial and additional applications for Interests by eligible
investors may be accepted at such times as the Fund's operating agreement may
determine. The Fund reserves the right to reject any applications for interests
in the Fund. The Fund from time
8
THE TOPIARY FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2007
--------------------------------------------------------------------------------
1. ORGANIZATION (CONTINUED)
to time may offer to repurchase Interests. These repurchases will be made at
such times and on such terms as may be determined by the Board, in its complete
and absolute discretion. A Member's Interest in the Fund can only be transferred
or assigned with the written consent of the Board, which may be withheld in its
sole discretion.
The performance of the Fund is directly affected by the performance of the
Master Fund. Attached are the financial statements of the Master Fund, which are
an integral part of these financial statements.
2. SIGNIFICANT ACCOUNTING POLICIES
A. VALUATIONS
The Fund's investment in the Master Fund represents substantially all of the
Fund's assets. All investments owned are carried at value which is the portion
of the net asset value of the Master Fund held by the Fund. The accounting for
and valuation of investments by the Master Fund is discussed in the notes to the
financial statements for the Master Fund, which are included elsewhere in this
report.
B. INCOME RECOGNITION AND SECURITY TRANSACTIONS
Investments in the Master Fund are recorded on the effective date of the
subscription in the Master Fund. The Fund records its proportionate share of the
Master Fund's income, expenses, and realized and unrealized gains and losses. In
addition, interest income on the Fund's cash balance is recorded on an accrual
basis and the Fund accrues its own expenses as incurred.
C. FUND COSTS
The Fund bears all expenses incurred in its business other than those that the
Adviser assumes. The expenses of the Fund include, but are not limited to, the
following: all costs and expenses related to investment transactions and
positions for the Fund's account; legal fees; accounting and auditing fees;
custodial fees; costs of computing the Fund's net asset value; costs of
insurance; registration expenses; due diligence, including travel and related
expenses; expenses of meetings of the Board and Members; all costs with respect
to communications to Members; and other types of expenses as may be approved
from time to time by the Board.
8
THE TOPIARY FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2007
--------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. INCOME TAXES
The Fund intends to operate and has elected to be treated as a partnership for
Federal income tax purposes. Accordingly, no provision for the payment of
Federal, state or local income taxes has been provided. Each Member is
individually required to report on its own tax return its distributive share of
the Fund's taxable income or loss. The Master Fund withholds and pays taxes on
U.S. source income and U.S. effectively connected income, if any, allocated from
underlying investments to the extent such income is not exempted from
withholding under the Internal Revenue Code and Regulations there under. Such
amounts are treated by the Members as withholding tax credits for Federal income
tax purposes. The actual amount of such taxes is not known until all K-1s from
underlying funds are received, usually in the following tax year. Prior to the
final determination, the amount of the tax is estimated based on information
available. The final tax could be different from the estimated tax and the
difference could be significant.
E. CASH AND CASH EQUIVALENTS
Cash and cash equivalents, if any, consist of monies on deposit at PNC Bank,
N.A. The Fund treats all financial instruments that mature within three months
as cash equivalents.
F. USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires the Adviser to make
estimates and assumptions that affect the amounts and disclosures in the
financial statements and accompanying notes. The Adviser believes that the
estimates utilized in preparing the Fund's financial statements are reasonable
and prudent; however, actual results could differ from these estimates.
G. ALLOCATION OF NET PROFITS AND LOSSES
Net investment income (loss) and net realized and unrealized gains and losses on
investments for the Fund are allocated to the Members' Capital Accounts based on
their respective capital balances at the beginning of each allocation period
relative to the capital of all Members' Capital Accounts. The beginning of an
allocation period is defined as the beginning of each fiscal year, the date of
admission of any new member, or the date of any additional subscription or
redemption by a member.
H. EXPENSE LIMITATION
Pursuant to the Expense Limitation Agreement, the Adviser has contractually
agreed to waive and/or reimburse the Fund's expenses to the extent necessary to
ensure that the Fund's annualized expenses (excluding the Incentive Allocation,
if any) will not exceed 1.75% including the Fund's allocated portion of expense
incurred by the Master Fund. The initial
9
THE TOPIARY FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2007
--------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
term of the Expense Limitation Agreement is the first fiscal year of the Fund's
operations, and will be automatically renewed for each fiscal year thereafter
unless the Adviser provides written notice to the Fund and the Master Fund of
the termination of the Expense Limitation Agreement at least 30 days prior to
the end of the then-current term.
3. RELATED PARTY TRANSACTIONS
A. MANAGEMENT FEE
The Adviser provides certain management and administration services to the Fund,
including, among other things, providing office space and other support
services. In consideration for such management services, the Master Fund pays
the Adviser a management fee (the "Management Fee") at an annual rate of 1.00%
of the Master Fund's month end net assets, including assets attributable to the
Adviser (or its affiliates) and before giving effect to any repurchases by the
Master Fund of interests in the Master Fund. The Management Fee accrues monthly
and is payable at the end of each quarter. As an investor in the Master Fund,
the Fund's value of its investment in the Master Fund is reduced by the
Management Fee accrued by the Master Fund.
B. BOARD FEES
Board fees are paid at the Master Fund level. See accompanying note in the
Master Fund notes attached.
C. INCENTIVE ALLOCATION
As of each March 31, upon any repurchases of Interests (solely with respect to
the Interest repurchased), and upon termination of the Fund (each, a
"Performance Period"), a reallocation (the "Incentive Allocation") will be made
from the Capital Account of each Member to the Capital Account of the Special
Advisory Member (the Adviser) equal to 10% of the amount, if any, by which the
net profit allocated to such Member's Capital Account for such Performance
Period in excess of the Hurdle Rate (based on the 90-day U.S. Treasury bill
rates) for such Performance Period exceeds the positive balance of such Member's
Loss Carryforward Account. The Incentive Allocation will be applied on a "high
water mark" basis such that in the event a Capital Account suffers a net loss in
a particular Performance Period, no Incentive Allocation will be made with
respect to such Performance Period or any subsequent Performance Period, until
such net loss is first recovered (taking into account interim repurchases, if
any). For the six months ended September 30, 2007, the Adviser earned an
Incentive Allocation of $120,437.
The Hurdle Rate is calculated monthly using the average of the weekly 91-day
U.S. Treasury bill for that month. For the six months ended September 30, 2007,
the average Hurdle Rate was 4.549%.
10
THE TOPIARY FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2007
--------------------------------------------------------------------------------
3. RELATED PARTY TRANSACTIONS (CONTINUED)
D. UNDERWRITING
Under the terms of an investor servicing agreement (the "Underwriting
Agreement") between the Fund and Scudder Distributors, Inc. (the "Distributor"),
the Distributor is authorized to retain brokers, dealers and certain financial
advisers ("Investor Service Providers") to provide ongoing investor services and
account maintenance services to Members that are their customers. The
Distributor bears all of its expenses of providing distribution services as
described under the Underwriting Agreement.
E. SUB-ADMINISTRATION
The Adviser has also retained one of its affiliates, Deustche Investment
Management Americas, Inc. ("DIMA"), to provide sub-administration services
pursuant to the Board services agreement. Under this agreement, DIMA, among
other things: drafts Board agendas and resolutions; prepares Board materials;
communicates with the Directors; and drafts Board-meeting minutes.
4. ADMINISTRATION AND OTHER FEES
In accordance with the terms of the administration agreement (the
"Administration Agreement") and with the approval of the Fund's Board, PFPC,
Inc. (an affiliate of PNC Bank, N.A.) ("PFPC") serves as the Fund's
administrator pursuant to the administration agreement between PFPC and the Fund
(Administration Agreement"). Under the Administration Agreement, PFPC provides
administrative and accounting services to the Fund. As compensation for services
set forth herein that are rendered by PFPC during the term of this Agreement,
the Fund pays PFPC a fee for services rendered.
The Fund has entered into an investor services agreement with PFPC, whereby PFPC
provides investor services and transfer agency functions for the Fund. As
compensation for services set forth herein that are rendered by PFPC during the
term of this Agreement, the Fund pays PFPC a fee for services rendered.
PFPC Trust Company (also an affiliate of PNC Bank, N.A.) serves as custodian of
the Fund's assets and provides custodial services to the Fund.
5. SECURITY TRANSACTIONS
As of September 30, 2007, the Fund's only investment was its investment in the
Master Fund. Aggregate purchases of the Master Fund amounted to $0 and aggregate
sales of the Master Fund amounted to $187,565 for the six months ended September
30, 2007.
11
THE TOPIARY FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2007
--------------------------------------------------------------------------------
6. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
In the normal course of business, the Investment Funds (the "Investment Funds")
in which the Master Fund invests trade various financial instruments and enter
into various investment activities with off-balance sheet risk. The Master
Fund's off-balance sheet risk in these financial instruments is discussed in the
notes to the Master Fund's financial statements.
7. CONCENTRATION OF RISK
The Master Fund invests primarily in Investment Funds that are not registered
under the 1940 Act and invest in and actively trade securities and other
financial instruments using different strategies and investment techniques,
including leverage that may involve significant risks.
The Master Fund's concentration of risk is discussed in the notes to the Master
Fund's financial statements.
8. GUARANTOR OBLIGATIONS AND INDEMNIFICATIONS
In the normal course of business, the Fund enters into contracts that contain a
variety of warranties and representations that provide general indemnifications.
The Fund's maximum exposure under these arrangements is unknown, as this would
involve future claims that may be made against the Fund that have not yet
occurred. However, the Fund expects the risk of loss to be remote.
9. NEW ACCOUNTING PRONOUNCEMENTS
In July 2006, the Financial Accounting Standards Board (the "FASB") issued
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an
interpretation of FASB Statement No. 109" ("FIN 48"). FIN 48 establishes for all
entities, including pass-through entities such as the Fund, a minimum threshold
for financial statement recognition of the benefit of positions taken in filing
tax returns (including whether an entity is taxable in a particular
jurisdiction), and requires certain expanded tax disclosures. FIN 48 is
effective for fiscal years beginning after December 15, 2006, and is to be
applied to all open tax years as of the date of effectiveness. Based on the
Manager's analysis, the determination has been made that the adoption of FIN 48
did not have an impact to the Fund's financial statements upon adoption. The
Manager continually reviews the Fund's tax positions and such conclusions under
FIN 48 based on factors, including, but not limited to, ongoing analyses of tax
laws, regulations and interpretations, thereof.
12
THE TOPIARY FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2007
--------------------------------------------------------------------------------
10. SUBSEQUENT EVENT
At a special meeting held on September 20, 2007, the Fund's members, by a
majority of the total number of votes eligible to be cast, approved an Agreement
and Plan of Reorganization (the "Reorganization") whereby (i) the Hatteras
Multi-Strategy TEI Fund, L.P. (the "Hatteras Fund"), a closed-end management
investment company whose investment adviser is Hatteras Investment Partners LLC,
would acquire substantially all of the assets and liabilities of the Fund in
exchange for interests in the Hatteras Fund, (ii) the Fund would distribute
interests received from the Hatteras Fund to its members and (iii) the Fund
would subsequently be dissolved.
The Reorganization as approved was effective as of October 1, 2007.
13
THE TOPIARY FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
DIRECTORS AND OFFICERS BIOGRAPHICAL DATA (UNAUDITED)
--------------------------------------------------------------------------------
The business of the Fund is managed under the direction of the Board. Subject to
the provisions of the Operating Agreement and Delaware law, the Directors have
all powers necessary and convenient to carry out the responsibility. The
Directors and Officers of the Fund, their addresses, their ages and descriptions
of their principal occupations during the past five years are listed below.
------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS
TERM OF PRINCIPAL IN FUND
POSITION(S) OFFICE(I) & OCCUPATION(S) COMPLEX OTHER
HELD WITH LENGTH OF DURING THE PAST OVERSEEN BY DIRECTORSHIPS
NAME, ADDRESS AND AGE FUND TIME SERVED 5 YEARS DIRECTOR HELD BY DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT DIRECTORS
------------------------------------------------------------------------------------------------------------------------------------
Nolan T. Altman (ii) Director Since President, NTA 3 Directorships: State
c/o The Topiary Master Fund for inception Consulting (financial University of New York at
Benefit Plan Investors (BPI) LLC services consulting) Albany Foundation (1998
25 DeForest Ave. (2001 to present). to present); Tiger Asia
Summit, NJ 07901-2154 Formerly, Chief Overseas Fund, Ltd.
(9/18/55) Financial Officer, Offshore Fund; Tiger
Tiger Management Global, Ltd., TS I
(Investment adviser Offshore Limited (2004 to
to hedge funds) (1993 present); Tiger Consumer
to 2001). Partners Offshore Fund,
Ltd (2006 to present); K2
Alternative Strategies
(Offshore), Ltd. (2007 to
present).
------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(i) Each Director serves for the duration of the Fund, or until his death,
resignation, termination, removal or retirement.
(ii) Since March 2003, Messrs. Altman and Citron have served as members of the
Conflicts Advisory Board of certain private investment funds managed by
DBIM or its affiliates. This Conflicts Advisory Board meets on an
intermittent basis to evaluate whether specific transactions involving the
private investment funds raise conflicts of interest with DBIM, its
affiliates, or accounts managed by DBIM or its affiliates.
14
THE TOPIARY MASTER FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
DIRECTORS AND OFFICERS BIOGRAPHICAL DATA (CONTINUED)(UNAUDITED)
--------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS
TERM OF PRINCIPAL IN FUND
POSITION(S) OFFICE(I) & OCCUPATION(S) COMPLEX OTHER
HELD WITH LENGTH OF DURING THE PAST OVERSEEN BY DIRECTORSHIPS
NAME, ADDRESS AND AGE FUND TIME SERVED 5 YEARS DIRECTOR HELD BY DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT DIRECTORS (CONTINUED)
------------------------------------------------------------------------------------------------------------------------------------
Louis S. Citron (ii) Director Since Partner and General Counsel, 3 None
c/o The Topiary Master Fund for Inception New Enterprise Associates
Benefit Plan Investors (BPI) LLC (venture capital firm) (2001
25 DeForest Ave. to present).
Summit, NJ 07901-2154
(1/31/65)
------------------------------------------------------------------------------------------------------------------------------------
15
THE TOPIARY MASTER FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
DIRECTORS AND OFFICERS BIOGRAPHICAL DATA (CONTINUED)(UNAUDITED)
--------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS
TERM OF PRINCIPAL IN FUND
POSITION(S) OFFICE(I) & OCCUPATION(S) COMPLEX OTHER
HELD WITH LENGTH OF DURING THE PAST OVERSEEN BY DIRECTORSHIPS
NAME, ADDRESS AND AGE FUND TIME SERVED 5 YEARS DIRECTOR HELD BY DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT DIRECTORS (CONTINUED)
------------------------------------------------------------------------------------------------------------------------------------
Edward T. Tokar Director Since Sr. Managing Director 3 Directorships:
c/o The Topiary Master Fund for Inception of Investments, Beacon Gabelli Dividend &
Benefit Plan Investors (BPI) LLC Trust Co. (2004 to Income Trust (2003 to
25 DeForest Ave. present); Chief present); Gabelli
Summit, NJ 07901-2154 Executive Officer, Global Deal Fund
(6/12/47) Allied Capital Mgmt. (2007 to present);
LLC (registered Trustee, Levco Series
investment adviser - Trust Mutual Funds
wholly owned subsidiary (2 portfolios) (2001
of Honeywell) (1998 to to 2005); Allied
2004); and Vice Capital Management
President - LLC (1998 to 2004).
Investments, Honeywell Formerly, Trustee,
International, Inc. Scudder MG Investment
(advanced technology Trust (formerly
and manufacturer) (1977 Morgan Grenfell
to 2004). Investment Trust (11
portfolios) (1994 to
2002).
------------------------------------------------------------------------------------------------------------------------------------
16
THE TOPIARY MASTER FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
DIRECTORS AND OFFICERS BIOGRAPHICAL DATA (CONTINUED)(UNAUDITED)
--------------------------------------------------------------------------------
OFFICERS
---------------------------------------------------------------------------------------------------------------------
NAME, ADDRESS AND AGE POSITIONS HELD WITH FUND PRINCIPAL OCCUPATION(S) DURING THE
LAST 5 YEARS
---------------------------------------------------------------------------------------------------------------------
Pamela Kiernan(iii) President Chief Operating Officer, DB Absolute Return
DB Absolute Return Strategies Strategies (2005 to present). Formerly, Chief
345 Park Avenue, 24Th Floor Operating Officer - Americas, DB Advisors LLC
New York, NY 10154 (2004); Chief Operations Officer - America, Deutsche
(9/16/68) Bank Global Equities (2002 to 2004); Business
Management - Trading, Deutsche Bank Global Equities
(1997 to 2002).
---------------------------------------------------------------------------------------------------------------------
Joshua Kestler(iii) Vice President Head of Product Structuring, DB Absolute Return
Deutsche Asset Management Strategies (2004 to present); Associate, Schulte
25 DeForest Ave., 2nd Floor Roth & Zabel LLP (law firm) (2001-2004).
Summit, NJ 07901-2154
(04/27/75)
---------------------------------------------------------------------------------------------------------------------
Marielena Glassman(iii) Treasurer, Chief Administration Officer, DB Absolute Return
Deutsche Asset Management Principal Strategies (2002 to present). Formerly Global Head
25 DeForest Ave., 2nd Floor Financial & Accounting of Business Management, Deutsche Asset Management
Summit, NJ 07901-2154 Officer (1990 to 2002).
(06/06/63)
---------------------------------------------------------------------------------------------------------------------
Neil Novembre(iii) Assistant Treasurer Head of Fund Accounting, DB Absolute Return
Deutsche Asset Management Strategies (2002 to present). Formerly,
25 DeForest Ave., 2nd Floor Assurance/Business Advisory Services,
Summit, NJ 07901-2154 PricewaterhouseCoopers, New York (2000-2002).
(06/18/73)
---------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(iii) All Officers also serve in similar capacities as Officers for other funds
advised by the Investment Manager or its affiliates.
17
THE TOPIARY MASTER FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
DIRECTORS AND OFFICERS BIOGRAPHICAL DATA (CONTINUED)(UNAUDITED)
--------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Anthony Conte(iii) Chief Compliance Head of Alternative Assets Compliance (06/2005 to
Deutsche Asset Management Officer present); Head of Compliance, DB Absolute Return
345 Park Avenue, 16th Floor Strategies (2003 to present); Head of Business Risk,
New York, NY 10154 DB Absolute Return Strategies (2001 to 2003).
(3/28/69)
---------------------------------------------------------------------------------------------------------------------
John H. Kim(iii) Secretary Director and Senior Counsel, Deutsche Asset Management
Deutsche Asset Management (asset management division of Deutsche Bank) (2001 to
345 Park Avenue, 16th Floor present).
New York, NY 10154
(1/9/71)
---------------------------------------------------------------------------------------------------------------------
The Fund's Statement of Additional Information ("SAI") has additional
information about the Fund's Directors and Officers and is available without
charge upon request. Contact your financial representative for a free prospectus
or SAI.
--------------------------------------------------------------------------------
(iii) All Officers also serve in similar capacities as Officers for other funds
advised by the Investment Manager or its affiliates.
18
THE TOPIARY FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; SEC FILINGS (UNAUDITED)
--------------------------------------------------------------------------------
The Fund invests substantially all of its assets in the securities of Investment
Funds, which are privately placed investment vehicles, typically referred to as
"hedge funds." These securities do not typically convey traditional voting
rights to the holder and the occurrence of corporate governance or other notices
for this type of investment is substantially less than that encountered in
connection with registered equity securities. However, to the extent the Fund
receives notices or proxies from Investment Funds (or receives proxy statements
or similar notices in connection with any other portfolio securities); the Fund
has delegated proxy voting responsibilities to the Adviser. The Adviser has
adopted its own Proxy Voting Policies and Procedures ("Policies"). The Policies
address, among other things, conflicts of interest that may arise between the
interests of the Fund, and the interests of the Adviser and its affiliates,
including the Fund's principal underwriter.
A description of the Adviser's Policies is available (i) without charge, upon
request, by calling the Fund toll-free at 1-888-262-0695, and (ii) on the SEC's
website at WWW.SEC.GOV.
In addition, the Fund is required to file new Form N-PX with its complete proxy
voting record for the 12 months ended June 30th, no later than August 31st of
each year. The funds Form N-PX is available (i) without charge, upon request, by
calling the Fund toll free at 1-888-262-0695 and (ii) on the SEC's website at
WWW.SEC.GOV.
The Fund files its complete schedule of portfolio holdings with the SEC for the
first quarter and the third quarter of each fiscal year on Form N-Q. The Fund's
Form N-Q filings are available on the SEC's website at WWW.SEC.GOV. Those forms
may be reviewed and copied at the SEC's Public Reference Room in Washington D.C.
Information on the operation of the Public Reference Room may be obtained by
calling 1-800-SEC-0330.
19
ATTACHMENT A
THE TOPIARY MASTER FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
FINANCIAL STATEMENTS
For the Six Months Ended September 30, 2007
The Topiary Master Fund for Benefit Plan Investors (BPI) LLC
Financial Statements
For the Six Months Ended September 30, 2007
CONTENTS
Report of Independent Registered Public Accounting Firm ................. 1
Statement of Assets, Liabilities, and Members' Capital .................. 2
Schedule of Investments.................................................. 3-4
Statement of Operations.................................................. 5
Statement of Changes in Members' Capital................................. 6
Statement of Cash Flows.................................................. 7
Financial Highlights..................................................... 8
Notes to Financial Statements............................................ 9-15
Directors and Officers Biographical Data................................. 16-20
Portfolio Proxy Voting Policies and Procedures; SEC Filings.............. 21
Components of Net Assets by Investment Strategy ...... .................. 22
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Members of
The Topiary Master Fund for Benefit Plan Investors (BPI) LLC
In our opinion, the accompanying statement of assets, liabilities and members'
capital, including the schedule of investments, and the related statements of
operations, of changes in members' capital and of cash flows and the financial
highlights present fairly, in all material respects, the financial position of
The Topiary Master Fund for Benefit Plan Investors (BPI) LLC (the "Master Fund")
at September 30, 2007, the results of its operations and its cash flows for the
period from April 1, 2007 through September 30, 2007, and the changes in its
members' capital and the financial highlights for each of the periods presented,
in conformity with accounting principles generally accepted in the United States
of America. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of investments at
September 30, 2007 by correspondence with the general partners/ managing members
of the investment funds, provide a reasonable basis for our opinion.
As more fully described in Note 9 to the financial statements, the Members of
the Master Fund have approved a reorganization plan whereby substantially all of
the assets and liabilities of the Master Fund will be acquired by another fund
in exchange for interests in the latter. The reorganization plan became
effective on October 1, 2007.
November 28, 2007
1
The Topiary Master Fund for Benefit Plan Investors (BPI) LLC
Statement of Assets, Liabilities and Members' Capital
SEPTEMBER 30, 2007
ASSETS
Investments in investment funds, at fair value
(cost $26,989,872) $ 38,275,528
Cash and cash equivalents 3,720,847
Receivable for investment funds sold 47,997,429
Receivable from Advisor 210,945
Other assets 13,826
-----------------
TOTAL ASSETS $ 90,218,575
=================
LIABILITIES
Taxes payable $ 242,110
Professional fees payable 171,687
Administration fees payable 37,331
Board preparation fees payable 9,375
Custodian fees payable 949
Other fees payable 18,500
-----------------
TOTAL LIABILITIES 479,952
-----------------
MEMBERS' CAPITAL 89,738,623
-----------------
TOTAL LIABILITIES AND MEMBERS' CAPITAL $ 90,218,575
=================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
2
The Topiary Master Fund for Benefit Plan Investors (BPI) LLC
Schedule of Investments
September 30, 2007
% OF
MEMBERS'
STRATEGY INVESTMENT FUND COST FAIR VALUE LIQUIDITY* CAPITAL
-------- --------------- ---- ---------- ---------- -------
Event Driven Gracie Capital L.P. $ 1,452,431 $ 1,822,620 Annually 2.0%
Harbinger Capital Partners I, L.P. 1,374,966 3,067,661 Quarterly 3.4%
Jana Partners Qualified, L.P. 2,450,000 3,146,300 Quarterly 3.5%
Marathon Special Opportunity Fund,
L.P. 1,500,000 1,937,116 Annually 2.2%
Merced Partners, L.P. 1,550,000 1,955,174 Annually 2.2%
Perry Partners, L.P. 2,600,000 3,404,723 Annually 3.8%
Strategic Value Restructuring Fund, L.P. 870,036 1,428,312 Quarterly 1.6%
---------------- -------------- -------
Total Event Driven 11,797,433 16,761,906 18.7%
Global Macro Drawbridge Global Macro Fund, L.P. 1,208,209 1,855,840 Quarterly 2.1%
---------------- -------------- -------
Total Global Macro 1,208,209 1,855,840 2.1%
Long/Short Equity SR Global, L.P. Asia 1,273,243 2,269,224 Monthly 2.5%
Talaris Fund, L.P. 1,000,000 1,062,155 Monthly 1.2%
TCS Capital II, L.P. 1,283,017 2,495,312 Annually 2.8%
UC Financials Fund Limited 962,044 1,371,553 Monthly 1.5%
---------------- -------------- -------
Total Long/Short Equity 4,518,304 7,198,244 8.0%
Black River Global Multi-Strategy Leveraged
Relative Value Fund, L.L.C. 2,900,000 3,327,861 Annually 3.7%
Citadel Wellington Partners, L.L.C. 3,015,926 5,375,438 Quarterly 6.0%
CPIM Structured Credit Fund 1000 Inc.
AQ1 1,300,000 1,042,483 Quarterly 1.2%
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
3
The Topiary Master Fund for Benefit Plan Investors (BPI) LLC
Schedule of Investments (continued)
September 30, 2007
D.B. Zwirn Special Opportunities, L.P. 1,250,000 1,592,619 Annually 1.8%
Marathon Fund L.P. 1,000,000 1,121,137 Quarterly 1.2%
---------------- -------------- -------
Total Relative Value 9,465,926 12,459,538 13.9%
---------------- -------------- -------
Total $ 26,989,872 38,275,528 42.7%
Other Assets in Excess of Liabilities 51,463,095 57.3%
-------------- -------
Members' Capital $ 89,738,623 100.0%
============== =======
* Investment Funds may also be subject to initial lock-up periods, gates
and/or other limitations on redemptions.
Note: In the absence of information about the underlying Investment Fund's
portfolio, the Fund's proportional share of investment owned by the
underlying Investment Fund exceeding 5% of the Fund's Members' Capital, if
any, at September 30, 2007, has not been disclosed.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
4
Topiary Master Fund for Benefit Plan Investors (BPI) LLC
Statement of Operations
For the Six Months Ended September 30, 2007
INVESTMENT INCOME
Interest income $ 99,849
EXPENSES
Management fees $ 446,413
Professional fees 228,133
Administration fees 116,982
Insurance fees 114,672
Board of Directors fees and expenses 84,687
Custodian fees 6,600
Other expenses 11,706
------------
Total expenses 1,009,193
Management fees waived by Adviser (225,836)
------------
Net expenses 783,357
----------
NET INVESTMENT LOSS (683,508)
----------
GAINS FROM INVESTMENT FUND TRANSACTIONS
Net realized gain from investment funds redeemed 8,884,209
Net change in unrealized depreciation on investment
funds (4,824,253)
------------
NET GAINS FROM INVESTMENT FUNDS TRANSACTIONS 4,059,956
----------
NET INCREASE IN MEMBERS' CAPITAL DERIVED FROM OPERATIONS $3,376,448
==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
5
The Topiary Master Fund for Benefit Plan Investors (BPI) LLC
Statements of Changes in Members' Capital
FOR THE SIX MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, 2007 MARCH 31, 2007
------------------------ -----------------------
FROM INVESTMENT ACTIVITIES
Net investment loss $ (683,508) $ (1,255,756)
Net realized gains of investment funds
redeemed 8,884,209 1,709,003
Net change in unrealized appreciation/(depreciation)
on investment funds (4,824,253) 5,920,329
------------------ ---------------
NET INCREASE IN MEMBERS' CAPITAL DERIVED FROM OPERATIONS 3,376,448 6,373,576
FROM MEMBERS' CAPITAL TRANSACTIONS
Subscriptions -- 28,318,125
Redemptions (187,580) (19,574,444)
Distributions (181,335) (397,489)
------------------ ---------------
NET CHANGE IN MEMBERS' CAPITAL FROM CAPITAL
TRANSACTIONS (368,915) 8,346,192
------------------ ---------------
NET CHANGE IN MEMBERS' CAPITAL 3,007,533 14,719,768
Members' Capital at beginning of period 86,731,090 72,011,322
------------------ ---------------
Members' Capital at end of period $ 89,738,623 $ 86,731,090
================== ===============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
6
The Topiary Master Fund for Benefit Plan Investors (BPI) LLC
Statement of Cash Flows
For the Six Months Ended September 30, 2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net increase in Members' Capital from operations $ 3,376,448
Adjustments to reconcile net increase in Members' Capital from operations to net
cash provided by operating activities:
Sales of investment funds 48,076,414
Net realized gains from investment funds redeemed (8,884,209)
Net change in unrealized depreciation on investment funds 4,824,253
Increase in receivable for investment funds sold (47,087,687)
Increase in receivable from Advisor (188,814)
Decrease in other assets 937
Decrease in prepaid expenses 13,737
Increase in taxes payable 180,295
Decrease in professional fees payable (16,712)
Increase in administration fees payable 23,997
Decrease in custodian fees payable (3,451)
Decrease in registration fees payable (23,100)
Decrease in management fee payable (20,276)
Decrease in investor services fees payable (15,425)
Decrease in other fees payable (20,339)
------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 236,068
------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Subscriptions --
Redemptions (190,045)
Distributions (181,335)
------------------
NET CASH USED IN FINANCING ACTIVITIES (371,380)
------------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (135,312)
Cash and cash equivalents at beginning of period 3,856,159
------------------
Cash and cash equivalents at end of period $ 3,720,847
==================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW ACTIVITY
Taxes paid $ 1,040
------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
7
The Topiary Master Fund for Benefit Plan Investors (BPI) LLC
Financial Highlights
PERIOD FROM
THE FOLLOWING REPRESENTS THE RATIOS TO FOR THE OCTOBER 1, 2004
AVERAGE MEMBERS' CAPITAL AND OTHER SIX YEAR YEAR (COMMENCEMENT OF
FINANCIAL HIGHLIGHTS INFORMATION FOR THE MONTHS ENDED ENDED ENDED OPERATIONS)
PERIOD/YEAR: SEPTEMBER 30, MARCH 31, MARCH 31, THROUGH MARCH 31,
2007 2007 2006 2005
---------------------------------------------------------------------------
Ratios to average Members'
capital:
Net investment loss (b) (1.53%)(a) (1.46%) (1.60%) (1.67%)(a)
Net expenses (b)(c) 1.75%(a) 1.75% 1.75% 1.75%(a)
Total return 3.90%(d) 7.37% 11.27% 5.04% (d)
Portfolio turnover rate 0% 26% 39% 3%
Members' Capital, end of period
(thousands) $ 89,739 $ 86,731 $ 72,011 $ 55,014
(a) Annualized for periods of less than one year.
(b) The Adviser waived $225,836 of fees for the six months ended September 30,
2007. The net investment loss ratio would have been 0.50% greater and the
total expenses ratio would have been 0.50% greater had these fees and
expenses not been waived and reimbursed by the Adviser. The Adviser waived
and reimbursed $213,692, $113,973 and $265,284 of fees and expenses for the
periods ended March 31, 2007, 2006 and 2005, respectively. The net
investment loss ratio would have been 0.25%, 0.17% and 1.17% greater and
the total expenses ratio would have been 0.25%, 0.17% and 1.17% greater had
these fees and expenses not been waived and reimbursed by the Adviser.
(c) Expense ratios for the underlying Investment Funds are not included in the
Fund's expense ratio.
(d) Not annualized.
The above ratios and total returns are calculated for all Members taken as
a whole. An individual investor's return may vary from these returns based
on the timing of capital transactions.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
8
THE TOPIARY MASTER FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2007
--------------------------------------------------------------------------------
1. ORGANIZATION
The Topiary Master Fund for Benefit Plan Investors (BPI) LLC (the "Fund") was
organized as a Delaware limited liability company on July 16, 2004. The Fund is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as a closed-end, non-diversified, management investment company. The
Fund's interests (the "Interests") are registered under the Securities Act of
1933, as amended (the "1933 Act"), but are subject to substantial limits on
transferability and resale.
The Fund's investment objective is to generate long-term capital appreciation
through a diversified portfolio with volatility that is lower than that of the
equity markets and returns that demonstrate little to no correlation with either
equity or bond markets. The Fund acts as a "Master Fund" utilizing capital
generated by investments by The Topiary Offshore Fund for Benefit Plan Investors
(BPI) LDC (the "Offshore Fund") and through direct investments by other Members.
The Offshore Fund's capital is generated by investments by The Topiary Fund for
Benefit Plan Investors (BPI) LLC (the "Onshore Fund"). At September 30, 2007,
the investment by the Offshore Fund constitutes 98.6% of the investment capital
of the Master Fund, and the Onshore Fund constitutes 100% of the investment
capital of the Offshore Fund. The balance of the Fund's capital, approximately
1.4%, comprises a direct investment by DBAH Capital LLC, an affiliate of DB
Investment Managers, Inc. The Fund will attempt to achieve its investment
objective by investing in the securities of approximately 50 to 100 Investment
Funds (the "Investment Funds") to be managed pursuant to various alternatives or
non-traditional investment strategies, which may be viewed as encompassing four
broadly defined primary categories; Relative Value; Event Driven; Long/Short
Equity; and Global Macro. The Fund commenced operations on October 1, 2004.
The Fund's Board of Directors (the "Board") has overall responsibility to manage
and control the business operations of the Fund on behalf of the members (the
"Members"). All of the Board are and will be persons who are not "interested
persons" (as defined in the 1940 Act) with respect to the Fund.
DB Investment Managers, Inc., performing services as Topiary Fund Management,
(the "Adviser") serves as the investment adviser of the Fund subject to the
ultimate supervision of and subject to any policies established by the Board,
pursuant to the terms of an investment management agreement with the Fund (the
"Investment Management Agreement"). Pursuant to the Investment Management
Agreement, the Adviser provides the Fund with ongoing investment guidance,
policy direction, and monitoring of the Fund. The Adviser is an indirect wholly
owned subsidiary of Deutsche Bank AG ("Deutsche Bank"), an international
commercial and investment banking group, and is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended (the "Advisers
Act").
9
THE TOPIARY MASTER FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2007
--------------------------------------------------------------------------------
1. ORGANIZATION (CONTINUED)
Generally, initial and additional applications for interests by eligible
investors may be accepted at such times as the Fund may determine. The Fund
reserves the right to reject any applications for interests in the Fund. The
Fund from time to time may offer to repurchase Interests. These repurchases will
be made at such times and on such terms as may be determined by the Board, in
its complete and absolute discretion. On behalf of non-U.S. Members the Fund
withholds and pays taxes on U.S. source income allocated from Investment Funds.
2. SIGNIFICANT ACCOUNTING POLICIES
A. PORTFOLIO VALUATION
The net asset value of the Fund is determined by or at the direction of the
Adviser as of the last business day of each month in accordance with the
valuation principles set forth below or as may be determined from time to time
pursuant to policies established by the Board.
The net asset value of the Fund equals the value of the Fund's assets less the
Fund's liabilities, including accrued fees and expenses. The Fund's investments
in the Investment Funds are considered to be illiquid and can only be redeemed
periodically. The Board has approved procedures pursuant to which the Fund
values its investments in Investment Funds at fair value. In accordance with
these procedures, fair value as of each month-end ordinarily is the value
determined as of such month-end for each Investment Fund in accordance with the
Investment Fund's valuation policies and reported at the time of the Fund's
valuation. As a general matter, the fair value of the Fund's interest in an
Investment Fund represents the amount that the Fund could reasonably expect to
receive from an Investment Fund if the Fund's interest were redeemed at the time
of the valuation, based on information reasonably available at the time the
valuation is made and that the Fund believes to be reliable. In the event that
an Investment Fund does not report a month-end value to the Fund on a timely
basis, the Fund would determine the fair value of such Investment Fund based on
the most recent value reported by the Investment Fund, as well any other
relevant information available at the time the Fund values its portfolio. The
values assigned to these investments are based on available information and do
not necessarily represent amounts that might ultimately be realized, as such
amounts depend on future circumstances and cannot reasonably be determined until
the individual investments are actually liquidated.
B. INCOME RECOGNITION AND SECURITY TRANSACTIONS
Interest income is recorded on an accrual basis. Dividend income is recorded on
the ex-dividend date. Realized gains and losses from investment fund
transactions are calculated on the identified cost basis. Investments are
recorded on the effective date of the subscription in the Investment Fund.
10
THE TOPIARY MASTER FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2007
--------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. FUND COSTS
The Fund bears all expenses incurred in its business other than those that the
Adviser assumes. The expenses of the Fund include, but are not limited to, the
following: all costs and expenses related to investment transactions and
positions for the Fund's account; legal fees; accounting and auditing fees;
custodial fees; costs of computing the Fund's net asset value; costs of
insurance; registration expenses; due diligence, including travel and related
expenses; expenses of meetings of the Board and Members; all costs with respect
to communications to Members; and other types of expenses as may be approved
from time to time by the Board.
D. INCOME TAXES
The Fund intends to operate and has elected to be treated as a partnership for
Federal income tax purposes. Accordingly, no provision for the payment of
Federal, state or local income taxes has been provided. Each Member is
individually required to report on its own tax return its distributive share of
the Fund's taxable income or loss. On behalf of the Fund's foreign members', the
Fund withholds and pays taxes on U.S. source income and U.S. effectively
connected income, if any, allocated from underlying Investment Funds to the
extent such income is not exempted from withholdings under the Internal Revenue
Code and Regulations there under. Such amounts recorded as distributions are
treated by the Members as withholding tax credits for federal income tax
purposes. The actual amount of such taxes is not known until all K-1s from
underlying funds are received, usually in the following tax year. Prior to the
final determination, the amount of the tax is estimated based on information
available. The final tax could be different from the estimated tax and the
difference could be significant.
E. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of monies on deposit at PNC Bank, N.A. The
Fund treats all financial instruments that mature within three months as cash
equivalents.
F. USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires the Adviser to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. The Adviser believes that the estimates
utilized in preparing the Fund's financial statements are reasonable and
prudent; however, actual results could differ from these estimates.
11
THE TOPIARY MASTER FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2007
--------------------------------------------------------------------------------
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
G. EXPENSE LIMITATION
Pursuant to the Expense Limitation Agreement, the Adviser has contractually
agreed to waive fees and/or reimburse the Fund's expenses to the extent
necessary to ensure that the Fund's annualized expenses (excluding the Incentive
Allocation, if any) will not exceed 1.75%. The initial term of the Expense
Limitation Agreement is the first fiscal year of the Fund's operations, and will
be automatically renewed for each fiscal year thereafter unless the Adviser
provides written notice to the Fund and the Master Fund of the termination of
the Expense Limitation Agreement at least 30 days prior to the end of the
then-current term.
3. MANAGEMENT FEE, RELATED PARTY TRANSACTIONS AND OTHER
The Adviser provides certain management and administration services to the Fund,
including, among other things, providing office space and other support
services. In consideration for such management services, the Fund pays the
Adviser a monthly management fee (the "Management Fee") at an annual rate of
1.00% of the Fund's month end net assets, including assets attributable to the
Adviser (or its affiliates) and before giving effect to any repurchases by the
Fund. The Management Fee accrues monthly and is payable at the end of each
quarter. Management fee for the six months ended September 30, 2007 was $446,413
of which none was payable at period end.
The Adviser has contractually agreed to a waiver of its fees and/or
reimbursement of the Fund's expenses to the extent necessary so that the Fund's
annualized expenses do not exceed 1.75% ("Expense Limitation Agreement") during
the six months through September 30, 2007. For the six months ended September
30, 2007, the Adviser waived management fees of $225,836.
In accordance with the terms of the administration agreement (the
"Administration Agreement") and with the approval of the Fund's Board, PFPC,
Inc. (an affiliate of PNC Bank, N.A.) ("PFPC") serves as the Fund's
administrator pursuant to the administration agreement between PFPC and the
Fund. Under the Administration Agreement, PFPC provides administrative and
accounting services to the Fund. As compensation for services set forth herein
that are rendered by PFPC during the term of this Agreement, the Fund pays PFPC
a fee for services rendered.
The Fund has entered into an investor services agreement with PFPC, whereby PFPC
provides investor services and transfer agency functions for the Fund. As
compensation for services set forth herein that are rendered by PFPC during the
term of this Agreement, the Fund pays PFPC a fee for services rendered.
12
THE TOPIARY MASTER FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2007
--------------------------------------------------------------------------------
3. MANAGEMENT FEE, RELATED PARTY TRANSACTIONS AND OTHER (CONTINUED)
The Adviser has also retained one of its affiliates, Deutsche Investment
Management Americas, Inc. ("DIMA"), to provide sub-administration services
pursuant to the Board services agreement.
Under this agreement, DIMA, among other things: drafts Board agendas and
resolutions; prepares Board materials; communicates with the Directors; and
drafts Board-meeting minutes. As compensation for services set forth herein that
are rendered by DIMA during the term of this Agreement, the Funds pays DIMA a
fee for services rendered.
Each Board member who is not an employee of the Adviser, or one of its
affiliates, receives an annual retainer of $16,000 plus a fee for each meeting
attended. The chairman of the audit committee also receives an additional annual
fee of $2,000. These Board members are also reimbursed by the Fund for all
reasonable out of pocket expenses.
PFPC Trust Company (also an affiliate of PNC Bank, N.A.) serves as custodian of
the Fund's assets and provides custodial services to the Fund.
Under the terms of an investor servicing agreement (the "Underwriting
Agreement") between the Fund and Scudder Distributors, Inc. (the "Distributor"),
the Distributor is authorized to retain brokers, dealers and certain financial
advisers ("Investor Service Providers") to provide ongoing investor services and
account maintenance services to Members that are their customers. The
Distributor bears all of its expenses of providing distribution services as
described under the Underwriting Agreement.
4. SECURITY TRANSACTIONS
As of September 30, 2007, the Fund had investments in Investment Funds, none of
which were related parties. Aggregate purchases of Investment Funds amounted to
$0 and aggregate sales of Investment Funds amounted to $48,076,414 for the six
months ended September 30, 2007.
At September 30, 2007, the estimated cost of investments for Federal income tax
purposes was $30,222,652. As of that date, net unrealized appreciation on
investments was estimated to be $8,052,876, made up of gross unrealized
appreciation on investments of $8,053,947 and gross unrealized depreciation on
investments of $1,071.
5. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
In the normal course of business, the Investment Funds in which the Fund invests
trade various financial instruments and enter into various investment activities
with off-balance sheet risk.
13
THE TOPIARY MASTER FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2007
--------------------------------------------------------------------------------
5. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK (CONTINUED)
These include, but are not limited to, short selling activities, writing option
contracts, contracts for differences, and interest rate, credit default and
total return equity swaps contracts. The Fund's risk of loss in these Investment
Funds is limited to the value of these investments reported by the Fund. The
Fund itself does not invest in securities with off-balance sheet risk.
6. CONCENTRATION OF RISK
The Master Fund invests primarily in Investment Funds that are not registered
under the 1940 Act and invest in and actively trade securities and other
financial instruments using different strategies and investment techniques,
including leverage, that may involve significant risks. These Investment Funds
may invest a high percentage of their assets in specific sectors of the market
in order to achieve a potentially greater investment return. As a result, the
Investment Funds may be more susceptible to economic, political, and regulatory
developments in a particular sector of the market, positive or negative, and may
experience increased volatility of the Investment Funds' net asset value.
Various risks are also associated with an investment in the Fund, including
risks relating to the multi-manager structure of the Fund, risks relating to
compensation arrangements and risks relating to limited liquidity.
7. GUARANTOR OBLIGATIONS AND INDEMNIFICATIONS
In the normal course of business, the Fund enters into contracts that contain a
variety of warranties and representations that provide general indemnifications.
The Fund's maximum exposure under these arrangements is unknown, as this would
involve future claims that may be made against the Fund that have not yet
occurred. However, the Fund's management expects the risk of loss to be remote.
8. NEW ACCOUNTING PRONOUNCEMENTS
In July 2006, the Financial Accounting Standards Board (the "FASB") issued
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an
interpretation of FASB Statement No. 109" ("FIN 48"). FIN 48 establishes for all
entities, including pass-through entities such as the Fund, a minimum threshold
for financial statement recognition of the benefit of positions taken in filing
tax returns (including whether an entity is taxable in a particular
jurisdiction), and requires certain expanded tax disclosures. FIN 48 is
effective for fiscal years beginning after December 15, 2006, and is to be
applied to all open tax years as of the date of effectiveness. Based on the
Manager's analysis, the determination has been made that the adoption of FIN 48
did not have an impact to the Fund's financial statements upon adoption. The
Manager continually reviews the Fund's tax positions and such conclusions under
FIN 48 based on factors, including, but not limited to, ongoing analyses of tax
laws, regulations and interpretations, thereof.
14
THE TOPIARY MASTER FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2007
--------------------------------------------------------------------------------
9. SUBSEQUENT EVENT
At a special meeting held on September 20, 2007, the Fund's members, by a
majority of the total number of votes eligible to be cast, approved an Agreement
and Plan of Reorganization (the "Reorganization") whereby (i) the Hatteras
Master Fund, L.P., a closed-end management investment company whose investment
adviser is Hatteras Investment Partners LLC, would acquire substantially all of
the assets and liabilities of the Fund in exchange for interests in the Hatteras
Master Fund, L.P. (ii) the Fund would distribute interests received from the
Hatteras Master Fund, L.P. to its members.
Per the reorganization agreement, the costs associated with the transaction will
be borne by DB Investment Managers, Inc., Hatteras Investment Partners, LLC or
their affiliates.
The Reorganization as approved was effective as of October 1, 2007.
15
THE TOPIARY MASTER FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
DIRECTORS AND OFFICERS BIOGRAPHICAL DATA (UNAUDITED)
--------------------------------------------------------------------------------
The business of the Fund is managed under the direction of the Board. Subject to
the provisions of the Operating Agreement and Delaware law, the Directors have
all powers necessary and convenient to carry out the responsibility. The
Directors and Officers of the Fund, their addresses, their ages and descriptions
of their principal occupations during the past five years are listed below.
------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS
TERM OF PRINCIPAL IN FUND
POSITION(S) OFFICE(I) & OCCUPATION(S) COMPLEX OTHER
HELD WITH LENGTH OF DURING THE PAST OVERSEEN BY DIRECTORSHIPS
NAME, ADDRESS AND AGE FUND TIME SERVED 5 YEARS DIRECTOR HELD BY DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT DIRECTORS
------------------------------------------------------------------------------------------------------------------------------------
Nolan T. Altman (ii) Director Since President, NTA 3 Directorships: State
c/o The Topiary Master Fund for inception Consulting (financial University of New York at
Benefit Plan Investors (BPI) LLC services consulting) Albany Foundation (1998
25 DeForest Ave. (2001 to present). to present); Tiger Asia
Summit, NJ 07901-2154 Formerly, Chief Overseas Fund, Ltd.
(9/18/55) Financial Officer, Offshore Fund; Tiger
Tiger Management Global, Ltd., TS I
(Investment adviser Offshore Limited (2004 to
to hedge funds) (1993 present); Tiger Consumer
to 2001). Partners Offshore Fund,
Ltd (2006 to present); K2
Alternative Strategies
(Offshore), Ltd. (2007 to
present).
------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(i) Each Director serves for the duration of the Fund, or until his death,
resignation, termination, removal or retirement.
(ii) Since March 2003, Messrs. Altman and Citron have served as members of the
Conflicts Advisory Board of certain private investment funds managed by
DBIM or its affiliates. This Conflicts Advisory Board meets on an
intermittent basis to evaluate whether specific transactions involving the
private investment funds raise conflicts of interest with DBIM, its
affiliates, or accounts managed by DBIM or its affiliates.
16
THE TOPIARY MASTER FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
DIRECTORS AND OFFICERS BIOGRAPHICAL DATA (CONTINUED)(UNAUDITED)
--------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS
TERM OF PRINCIPAL IN FUND
POSITION(S) OFFICE(I) & OCCUPATION(S) COMPLEX OTHER
HELD WITH LENGTH OF DURING THE PAST OVERSEEN BY DIRECTORSHIPS
NAME, ADDRESS AND AGE FUND TIME SERVED 5 YEARS DIRECTOR HELD BY DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT DIRECTORS (CONTINUED)
------------------------------------------------------------------------------------------------------------------------------------
Louis S. Citron (ii) Director Since Partner and General Counsel, 3 None
c/o The Topiary Master Fund for Inception New Enterprise Associates
Benefit Plan Investors (BPI) LLC (venture capital firm) (2001
25 DeForest Ave. to present).
Summit, NJ 07901-2154
(1/31/65)
------------------------------------------------------------------------------------------------------------------------------------
17
THE TOPIARY MASTER FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
DIRECTORS AND OFFICERS BIOGRAPHICAL DATA (CONTINUED)(UNAUDITED)
--------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS
TERM OF PRINCIPAL IN FUND
POSITION(S) OFFICE(I) & OCCUPATION(S) COMPLEX OTHER
HELD WITH LENGTH OF DURING THE PAST OVERSEEN BY DIRECTORSHIPS
NAME, ADDRESS AND AGE FUND TIME SERVED 5 YEARS DIRECTOR HELD BY DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT DIRECTORS (CONTINUED)
------------------------------------------------------------------------------------------------------------------------------------
Edward T. Tokar Director Since Sr. Managing Director 3 Directorships:
c/o The Topiary Master Fund for Inception of Investments, Beacon Gabelli Dividend &
Benefit Plan Investors (BPI) LLC Trust Co. (2004 to Income Trust (2003 to
25 DeForest Ave. present); Chief present); Gabelli
Summit, NJ 07901-2154 Executive Officer, Global Deal Fund
(6/12/47) Allied Capital Mgmt. (2007 to present);
LLC (registered Trustee, Levco Series
investment adviser - Trust Mutual Funds
wholly owned subsidiary (2 portfolios) (2001
of Honeywell) (1998 to to 2005); Allied
2004); and Vice Capital Management
President - LLC (1998 to 2004).
Investments, Honeywell Formerly, Trustee,
International, Inc. Scudder MG Investment
(advanced technology Trust (formerly
and manufacturer) (1977 Morgan Grenfell
to 2004). Investment Trust (11
portfolios) (1994 to
2002).
------------------------------------------------------------------------------------------------------------------------------------
18
THE TOPIARY MASTER FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
DIRECTORS AND OFFICERS BIOGRAPHICAL DATA (CONTINUED)(UNAUDITED)
--------------------------------------------------------------------------------
OFFICERS
---------------------------------------------------------------------------------------------------------------------
NAME, ADDRESS AND AGE POSITIONS HELD WITH FUND PRINCIPAL OCCUPATION(S) DURING THE
LAST 5 YEARS
---------------------------------------------------------------------------------------------------------------------
Pamela Kiernan(iii) President Chief Operating Officer, DB Absolute Return
DB Absolute Return Strategies Strategies (2005 to present). Formerly, Chief
345 Park Avenue, 24Th Floor Operating Officer - Americas, DB Advisors LLC
New York, NY 10154 (2004); Chief Operations Officer - America, Deutsche
(9/16/68) Bank Global Equities (2002 to 2004); Business
Management - Trading, Deutsche Bank Global Equities
(1997 to 2002).
---------------------------------------------------------------------------------------------------------------------
Joshua Kestler(iii) Vice President Head of Product Structuring, DB Absolute Return
Deutsche Asset Management Strategies (2004 to present); Associate, Schulte
25 DeForest Ave., 2nd Floor Roth & Zabel LLP (law firm) (2001-2004).
Summit, NJ 07901-2154
(04/27/75)
---------------------------------------------------------------------------------------------------------------------
Marielena Glassman(iii) Treasurer, Chief Administration Officer, DB Absolute Return
Deutsche Asset Management Principal Strategies (2002 to present). Formerly Global Head
25 DeForest Ave., 2nd Floor Financial & Accounting of Business Management, Deutsche Asset Management
Summit, NJ 07901-2154 Officer (1990 to 2002).
(06/06/63)
---------------------------------------------------------------------------------------------------------------------
Neil Novembre(iii) Assistant Treasurer Head of Fund Accounting, DB Absolute Return
Deutsche Asset Management Strategies (2002 to present). Formerly,
25 DeForest Ave., 2nd Floor Assurance/Business Advisory Services,
Summit, NJ 07901-2154 PricewaterhouseCoopers, New York (2000-2002).
(06/18/73)
---------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(iii) All Officers also serve in similar capacities as Officers for other funds
advised by the Investment Manager or its affiliates.
19
THE TOPIARY MASTER FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
DIRECTORS AND OFFICERS BIOGRAPHICAL DATA (CONTINUED)(UNAUDITED)
--------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Anthony Conte(iii) Chief Compliance Head of Alternative Assets Compliance (06/2005 to
Deutsche Asset Management Officer present); Head of Compliance, DB Absolute Return
345 Park Avenue, 16th Floor Strategies (2003 to present); Head of Business Risk,
New York, NY 10154 DB Absolute Return Strategies (2001 to 2003).
(3/28/69)
---------------------------------------------------------------------------------------------------------------------
John H. Kim(iii) Secretary Director and Senior Counsel, Deutsche Asset Management
Deutsche Asset Management (asset management division of Deutsche Bank) (2001 to
345 Park Avenue, 16th Floor present).
New York, NY 10154
(1/9/71)
---------------------------------------------------------------------------------------------------------------------
The Fund's Statement of Additional Information ("SAI") has additional
information about the Fund's Directors and Officers and is available without
charge upon request. Contact your financial representative for a free prospectus
or SAI.
--------------------------------------------------------------------------------
(iii) All Officers also serve in similar capacities as Officers for other funds
advised by the Investment Manager or its affiliates.
20
THE TOPIARY MASTER FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; SEC FILINGS (UNAUDITED)
--------------------------------------------------------------------------------
The Fund invests substantially all of its assets in the securities of Investment
Funds, which are privately placed investment vehicles, typically referred to as
"hedge funds." These securities do not typically convey traditional voting
rights to the holder and the occurrence of corporate governance or other notices
for this type of investment is substantially less than that encountered in
connection with registered equity securities. However, to the extent the Fund
receives notices or proxies from Investment Funds (or receives proxy statements
or similar notices in connection with any other portfolio securities); the Fund
has delegated proxy voting responsibilities to the Adviser. The Adviser has
adopted its own Proxy Voting Policies and Procedures ("Policies"). The Policies
address, among other things, conflicts of interest that may arise between the
interests of the Fund, and the interests of the Adviser and its affiliates,
including the Fund's principal underwriter.
A description of the Adviser's Policies is available (i) without charge, upon
request, by calling the Fund toll-free at 1-888-262-0695, and (ii) on the SEC's
website at WWW.SEC.GOV.
In addition, the Fund is required to file new Form N-PX with its complete proxy
voting record for the 12 months ended June 30th, no later than August 31st of
each year. The funds Form N-PX is available (i) without charge, upon request, by
calling the Fund toll free at 1-888-262-0695 and (ii) on the SEC's website at
WWW.SEC.GOV.
The Fund files its complete schedule of portfolio holdings with the SEC for the
first quarter and the third quarter of each fiscal year on Form N-Q. The Fund's
Form N-Q filings are available on the SEC's website at WWW.SEC.GOV. Those forms
may be reviewed and copied at the SEC's Public Reference Room in Washington D.C.
Information on the operation of the Public Reference Room may be obtained by
calling 1-800-SEC-0330.
21
THE TOPIARY MASTER FUND FOR BENEFIT PLAN INVESTORS (BPI) LLC
COMPONENTS OF NET ASSETS BY INVESTMENT STRATEGY (UNAUDITED)
--------------------------------------------------------------------------------
COMPONENTS OF NET ASSETS BY
INVESTMENT STRATEGY
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS:
EVENT DRIVEN 18.7%
GLOBAL MACRO 2.1%
LONG/SHORT EQUITY 8.0%
RELATIVE VALUE 13.9%
OTHER ASSETS 57.3%
22
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is included as part of the report to shareholders filed
under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
There has been no change, as of the date of this filing, in any of the portfolio
managers identified in response to paragraph (a)(1) of this Item in the
registrant's most recently filed annual report on Form N-CSR.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's board of directors, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)),
or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these
controls and procedures required by Rule 30a-3(b) under the 1940 Act
(17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the
Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the registrant's second
fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) The Topiary Fund for Benefit Plan Investors (BPI) LLC
-------------------------------------------------------------------
By (Signature and Title)* /s/ Pamela Kiernan
-------------------------------------------------------
Pamela Kiernan, President
(principal executive officer)
Date December 3, 2007
----------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Pamela Kiernan
-------------------------------------------------------
Pamela Kiernan, President
(principal executive officer)
Date December 3, 2007
----------------------------------------------------------------------------
By (Signature and Title)* /s/ Marie Glassman
-------------------------------------------------------
Marie Glassman, Treasurer, Principal Financial Officer
and Accounting Officer
(principal financial officer)
Date December 3, 2007
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.