Graham Alternative Investment Fund II Posts $161K Loss Amid Market Volatility
| Field | Detail |
|---|---|
| Company | Graham Alternative Investment Fund II LLC |
| Form Type | 10-Q |
| Filed Date | Nov 14, 2025 |
| Risk Level | medium |
| Pages | 15 |
| Reading Time | 18 min |
| Sentiment | bearish |
Sentiment: bearish
Topics: Alternative Investments, Macro Strategy, Net Loss, Investment Performance, Commodity Pool, SEC Filing, Fund Management
TL;DR
**Graham Alternative Investment Fund II is bleeding cash, with a $161,913 net loss, signaling a tough macro environment for its trading strategy.**
AI Summary
GRAHAM ALTERNATIVE INVESTMENT FUND II LLC (GAIF II) Core Macro Portfolio reported a net loss of $161,913 for the nine months ended September 30, 2025, a significant decline from the net income of $914,938 reported in the same period of 2024. This was primarily driven by a net realized loss on investment of $589,977 in 2025, compared to a loss of $128,679 in 2024, and a net decrease in unrealized appreciation of $110,316 in 2025, contrasting with an increase of $884,414 in 2024. Total members' capital decreased from $35,478,713 at December 31, 2024, to $33,945,496 at September 30, 2025. The fund's investment in Graham Alternative Investment Trading LLC (GAIT) at fair value also decreased from $35,478,713 to $33,945,496 over the same period. Despite the losses, interest income remained robust at $1,057,168 for the nine months ended September 30, 2025, though slightly down from $1,206,986 in 2024. Total expenses increased to $864,778 in 2025 from $980,350 in 2024, largely due to a lower incentive allocation of $27,654 in 2025 compared to $171,915 in 2024. The fund continues to invest all its trading assets in GAIT, which in turn invests in various master trading vehicles.
Why It Matters
This filing reveals a significant downturn in performance for GRAHAM ALTERNATIVE INVESTMENT FUND II LLC, shifting from a substantial net income in 2024 to a net loss in 2025. For investors, this indicates potential underperformance in its core macro strategy, impacting capital appreciation. Employees of Graham Capital Management, L.P. might face pressure to improve trading results, while customers of the fund are seeing their capital erode. In the broader market, this could signal challenges within the alternative investment space, particularly for macro-focused strategies, potentially affecting competitive funds and investor confidence in similar offerings.
Risk Assessment
Risk Level: medium — The fund experienced a net loss of $161,913 for the nine months ended September 30, 2025, a stark contrast to the $914,938 net income in the prior year. This shift, coupled with a decrease in total members' capital from $35,478,713 to $33,945,496, indicates a decline in investment performance and potential capital outflows, raising concerns about sustained profitability.
Analyst Insight
Investors should scrutinize the underlying performance of Graham Alternative Investment Trading LLC and its Master Funds, as the Core Macro Portfolio's losses are directly tied to these investments. Consider re-evaluating the fund's macro strategy given the recent negative returns and assess if the risk-reward profile still aligns with investment objectives.
Financial Highlights
- debt To Equity
- N/A
- revenue
- $1,057,168
- operating Margin
- N/A
- total Assets
- $35,233,550
- total Debt
- $1,288,054
- net Income
- -$161,913
- eps
- N/A
- gross Margin
- N/A
- cash Position
- $130,000
- revenue Growth
- -12.4%
Revenue Breakdown
| Segment | Revenue | Growth |
|---|---|---|
| Interest Income | $1,057,168 | -12.4% |
Key Numbers
- $161,913 — Net Loss (For the nine months ended September 30, 2025, a significant reversal from prior year's net income.)
- $914,938 — Net Income (For the nine months ended September 30, 2024, highlighting the year-over-year decline.)
- $33,945,496 — Total Members' Capital (As of September 30, 2025, a decrease from $35,478,713 at December 31, 2024.)
- $589,977 — Net Realized Loss on Investment (For the nine months ended September 30, 2025, contributing to the overall net loss.)
- $110,316 — Net Decrease in Unrealized Appreciation (For the nine months ended September 30, 2025, further impacting negative performance.)
- $1,057,168 — Interest Income (For the nine months ended September 30, 2025, a key source of revenue despite overall losses.)
- $864,778 — Total Expenses (For the nine months ended September 30, 2025, including advisory and professional fees.)
- 184,583.788 — Units Outstanding (As of November 1, 2025, indicating the total number of investment units.)
- 51.19% — Ownership of GAIT (The Fund's proportionate share of Graham Alternative Investment Trading LLC at September 30, 2025.)
Key Players & Entities
- GRAHAM ALTERNATIVE INVESTMENT FUND II LLC (company) — registrant and investment fund
- Graham Alternative Investment Trading LLC (company) — primary investment vehicle for the fund
- Graham Capital Management, L.P. (company) — advisor and manager of the fund
- Brian Douglas (person) — contact for Graham Capital Management, L.P.
- SEI Global Services, Inc. (company) — fund's independent administrator and transfer agent
- $161,913 (dollar_amount) — net loss for nine months ended September 30, 2025
- $914,938 (dollar_amount) — net income for nine months ended September 30, 2024
- $33,945,496 (dollar_amount) — total members' capital at September 30, 2025
- $35,478,713 (dollar_amount) — total members' capital at December 31, 2024
- 51.19% (dollar_amount) — ownership of GAIT by the Fund at September 30, 2025
FAQ
What caused the net loss for Graham Alternative Investment Fund II LLC in Q3 2025?
The net loss of $161,913 for the nine months ended September 30, 2025, was primarily driven by a net realized loss on investment of $589,977 and a net decrease in unrealized appreciation of $110,316 allocated from its investment in Graham Alternative Investment Trading LLC.
How did Graham Alternative Investment Fund II LLC's members' capital change?
Total members' capital for Graham Alternative Investment Fund II LLC decreased from $35,478,713 at December 31, 2024, to $33,945,496 at September 30, 2025, reflecting the net loss and redemptions.
What is the role of Graham Alternative Investment Trading LLC in the fund's operations?
Graham Alternative Investment Trading LLC (GAIT) is the primary investment vehicle; the Fund invests all of its assets dedicated to trading in GAIT, which in turn invests in various master trading vehicles. The Fund owned 51.19% of GAIT at September 30, 2025.
Who manages Graham Alternative Investment Fund II LLC?
Graham Capital Management, L.P. acts as the Manager and Advisor, holding complete and exclusive responsibility for managing and administering the affairs of the Fund and directing its investment and reinvestment of assets.
What are the key expenses incurred by Graham Alternative Investment Fund II LLC?
Key expenses for the nine months ended September 30, 2025, included advisory fees of $425,623, professional fees of $180,001, sponsor fees of $166,796, and an incentive allocation of $27,654.
What is the investment objective of Graham Alternative Investment Fund II LLC?
The Fund's investment objective is to achieve long-term capital appreciation through professionally managed trading in both U.S. and foreign markets, primarily in futures contracts, forwards contracts, spot currency contracts, and associated derivative instruments, via its investment in GAIT.
Are there any new accounting pronouncements affecting Graham Alternative Investment Fund II LLC?
The FASB issued ASU No. 2023-07, Segment Reporting (Topic 280) — Improvements to Reportable Segment Disclosures, in November 2023. The Fund represents a single operating segment, as its Investment Committee monitors the Fund as a whole.
What is the fair value measurement approach used by Graham Alternative Investment Fund II LLC?
The Fund values its investment in GAIT at net asset value using the practical expedient, which excludes it from categorization in the fair value hierarchy. No Level 3 assets or liabilities were held during the nine months ended September 30, 2025.
How does the fund handle cash and cash equivalents?
The Fund classifies all highly liquid investments with a maturity of three months or less at the time of purchase as cash equivalents. At September 30, 2025, the Fund held $130,000 in cash and no cash equivalents.
What is the termination date for Graham Alternative Investment Fund II LLC?
The Fund will terminate on December 31, 2050, or at an earlier date if certain conditions outlined in the Amended and Restated Limited Liability Company Agreement occur.
Risk Factors
- Investment Performance Volatility [high — market]: The fund experienced a net loss of $161,913 for the nine months ended September 30, 2025, a significant reversal from a net income of $914,938 in the same period of 2024. This was driven by a net realized loss on investment of $589,977 and a net decrease in unrealized appreciation of $110,316.
- Declining Members' Capital [medium — financial]: Total members' capital decreased from $35,478,713 at December 31, 2024, to $33,945,496 at September 30, 2025, reflecting the negative performance of the fund.
- Dependence on GAIT [medium — operational]: The fund's entire trading assets are invested in Graham Alternative Investment Trading LLC (GAIT), and its investment in GAIT decreased in fair value from $35,478,713 to $33,945,496. This concentration poses a risk if GAIT's performance deteriorates.
- Increased Expenses [medium — financial]: Total expenses increased to $864,778 for the nine months ended September 30, 2025, from $980,350 in the prior year, although this is primarily due to a lower incentive allocation in 2025 ($27,654 vs $171,915). Other expenses like advisory and professional fees have increased.
Industry Context
The alternative investment fund industry is characterized by diverse strategies, including macro investing, which aims to profit from broad economic trends. Performance can be highly volatile, influenced by market conditions, interest rate changes, and geopolitical events. Competition is intense, with many funds vying for investor capital, often differentiating through specialized strategies or manager expertise.
Regulatory Implications
As an investment fund, GAIF II is subject to various regulations concerning investor protection, disclosure, and market conduct. Changes in financial regulations, particularly those affecting alternative investments or trading activities, could impact the fund's operations and profitability. Compliance with reporting requirements is crucial to maintain investor trust and avoid penalties.
What Investors Should Do
- Review GAIT's underlying strategies and performance drivers.
- Analyze the drivers of realized and unrealized losses.
- Monitor expense trends beyond incentive allocation.
- Assess the fund's ability to generate positive returns in the current market environment.
Key Dates
- 2025-09-30: Nine months ended September 30, 2025 — Reported a net loss of $161,913, a significant decline from the prior year, driven by realized and unrealized investment losses.
- 2024-09-30: Nine months ended September 30, 2024 — Reported a net income of $914,938, highlighting the substantial year-over-year performance deterioration.
- 2025-12-31: As of December 31, 2024 — Total members' capital was $35,478,713.
- 2025-09-30: As of September 30, 2025 — Total members' capital decreased to $33,945,496, reflecting investment losses.
Glossary
- Net realized loss on investment
- The loss incurred when an investment is sold for less than its purchase price. (A significant driver of the fund's net loss in the current period, totaling $589,977.)
- Net decrease in unrealized appreciation
- The reduction in the estimated value of investments that have not yet been sold, indicating a decline in their market value. (Contributed to the fund's losses, with a decrease of $110,316 in the current period.)
- Members' capital
- The total investment made by the fund's investors. (Decreased by approximately $1.5 million, from $35,478,713 to $33,945,496, indicating a reduction in the fund's equity base.)
- Graham Alternative Investment Trading LLC (GAIT)
- A related entity in which GAIF II invests all its trading assets. (The performance of GAIT directly impacts GAIF II, as GAIF II's investment in GAIT decreased in fair value.)
- Incentive allocation
- A performance-based fee paid to the fund manager. (Significantly lower in the current period ($27,654) compared to the prior year ($171,915), due to the fund's negative performance.)
Year-Over-Year Comparison
GRAHAM ALTERNATIVE INVESTMENT FUND II LLC reported a significant downturn in performance for the nine months ended September 30, 2025, compared to the same period in 2024. Net income of $914,938 has reversed into a net loss of $161,913. This is primarily due to a substantial increase in net realized losses on investments and a shift from unrealized appreciation to a decrease. Consequently, total members' capital has declined from $35,478,713 to $33,945,496. While interest income saw a slight decrease, total expenses also decreased due to a much lower incentive allocation, reflecting the fund's underperformance.
Filing Stats: 4,523 words · 18 min read · ~15 pages · Grade level 11.6 · Accepted 2025-11-14 11:24:39
Filing Documents
- ef20054996_10q.htm (10-Q) — 4172KB
- ef20054996_ex31-1.htm (EX-31.1) — 9KB
- ef20054996_ex31-2.htm (EX-31.2) — 9KB
- ef20054996_ex32-1.htm (EX-32.1) — 4KB
- 0001140361-25-042167.txt ( ) — 7043KB
- gaifb-20250930.xsd (EX-101.SCH) — 23KB
- gaifb-20250930_def.xml (EX-101.DEF) — 81KB
- gaifb-20250930_lab.xml (EX-101.LAB) — 156KB
- gaifb-20250930_pre.xml (EX-101.PRE) — 92KB
- gaifb-20250930_cal.xml (EX-101.CAL) — 19KB
- ef20054996_10q_htm.xml (XML) — 720KB
- Financial Information
PART I - Financial Information: Item 1.
Financial Statements
Financial Statements: Graham Alternative Investment Fund II LLC Core Macro Portfolio Consolidated Statements of Financial Condition at September 30, 2025 (Unaudited) and December 31, 2024 (Audited) 1 Unaudited Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 2 Unaudited Consolidated Statements of Changes in Members' Capital for the Three and Nine Months Ended September 30, 2025 and 2024 3 Unaudited Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 5 Notes to Unaudited Consolidated Financial Statements 6 Graham Alternative Investment Trading LLC 16 Condensed Schedules of Investments at September 30, 2025 (Unaudited) and December 31, 2024 (Audited) 17 Unaudited Statements of Operations and Incentive Allocation for the Three and Nine Months Ended September 30, 2025 and 2024 18 Unaudited Statements of Changes in Members' Capital for the Three and Nine Months Ended September 30, 2025 and 2024 19 Unaudited Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 23 Notes to Unaudited Financial Statements 24 Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
Management's Discussion and Analysis of Financial Condition and Results of Operations 72 Item 3.
Quantitative and Qualitative Disclosures about Market Risk
Quantitative and Qualitative Disclosures about Market Risk 81 Item 4.
Controls and Procedures
Controls and Procedures 82
- Other Information
PART II - Other Information 83 Item 1.
Legal Proceedings
Legal Proceedings Item 1A.
Risk Factors
Risk Factors Item 2. Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Purchases of Equity Item 3. Defaults Upon Senior Securities Item 4. Mine Safety Disclosures Item 5. Other Information Item 6. Exhibits 84 EX - 31.1 Certification EX - 31.2 Certification EX - 32.1 Certification Index PART I Item 1.
Financial Statements
Financial Statements Graham Alternative Investment Fund II LLC Core Macro Portfolio Consolidated Statements of Financial Condition September 30, 2025 (Unaudited) December 31, 2024 (Audited) Assets Investment in Graham Alternative Investment Trading LLC, at fair value $ 33,945,496 $ 35,478,713 Redemptions receivable from Graham Alternative Investment Trading LLC 1,158,054 1,365,282 Cash and cash equivalents 130,000 255,000 Total assets $ 35,233,550 $ 37,098,995 Liabilities and members' capital Liabilities: Redemptions payable $ 1,158,054 $ 1,365,282 Subscriptions received in advance 130,000 255,000 Total liabilities 1,288,054 1,620,282 Members' capital: Class 0 Units ( 88,741.115 and 92,145.410 units issued and outstanding at $ 234.57 and $ 235.13 , respectively) 20,815,972 21,665,923 Class 2 Units ( 52,084.054 and 56,059.973 units issued and outstanding at $ 163.38 and $ 164.69 , respectively) 8,509,344 9,232,454 Class 3-A Units ( 1,842.786 and no units issued and outstanding at $ 97.42 and $ – , respectively) 179,529 – Class 3-B Units ( 46,868.877 and 47,955.304 units issued and outstanding at $ 94.75 and $ 95.51 , respectively) 4,440,651 4,580,336 Total members' capital 33,945,496 35,478,713 Total liabilities and members' capital $ 35,233,550 $ 37,098,995 See accompanying notes and the attached financial statements of Graham Alternative Investment Trading LLC. 1 Index Graham Alternative Investment Fund II LLC Core Macro Portfolio Unaudited Consolidated Statements of Operations Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net (loss) gain allocated from investment in Graham Alternative Investment Trading LLC: Net realized loss on investment $ ( 945,397 ) $ ( 1,839,276 ) $ ( 589,977 ) $ ( 128,679 ) Net (decrease) increase in unrealized appreciation on investment ( 110,316 ) 78,806 327,479 884,414 Brok