N-CSR

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-22635

Blackstone Alternative Alpha Master Fund

(Exact name of registrant as specified in charter)

345 Park Avenue, 28^th Floor

New York, NY 10154

(Address of principal executive offices)

Peter Koffler, Esq.

c/o Blackstone Alternative Asset Management L.P.

345 Park Avenue

28^th Floor

New York, NY 10154

(Name and address of agent for service)

With a copy to:

James E. Thomas, Esq.

Ropes & Gray LLP

Prudential Tower

800 Boylston Street

Boston, MA 02199-3600

Registrant’s telephone number, including area code: (212) 583-5000

Date of fiscal year end: March 31

Date of reporting period: March 31, 2013

Item 1. Reports to Stockholders.

The Report to Shareholders is attached hereto.

Blackstone

Blackstone Alternative Asset Management L.P.

ANNUAL REPORT (Unaudited)

For the Period Ended March 31, 2013

Blackstone Alternative Alpha Master Fund and Subsidiary

TABLE OF CONTENTS

Blackstone Alternative Alpha Master Fund and Subsidiary
Report of Independent Registered Public Accounting Firm	1
Consolidated Statement of Assets and Liabilities	2
Consolidated Schedule of Investments	3
Consolidated Statement of Operations	5
Consolidated Statement of Changes in Net Assets	6
Consolidated Statement of Cash Flows	7
Consolidated Financial Highlights	8
Notes to Consolidated Financial Statements	9
Supplemental Information (Unaudited)	17

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholder and Board of Trustees of

Blackstone Alternative Alpha Master Fund and Subsidiary:

We have audited the accompanying consolidated statement of assets and liabilities of Blackstone Alternative Alpha Master Fund and Subsidiary (the “Master Fund”), including the consolidated schedule of investments, as of March 31, 2013, and the related consolidated statements of operations, changes in net assets, and cash flows, and the consolidated financial highlights for year then ended. These financial statements and financial highlights are the responsibility of the Master Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Master Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Master Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of investments in investee funds owned as of March 31, 2013, by correspondence with the investee funds’ investment advisor or administrator. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements and consolidated financial highlights referred to above present fairly, in all material respects, the financial position of Blackstone Alternative Alpha Master Fund and Subsidiary as of March 31, 2013, the results of their operations, the changes in their net assets, and their cash flows, and the consolidated financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP

New York, New York

May 28, 2013

Member of                         

Deloitte Touche Tohmatsu

1

Blackstone Alternative Alpha Master Fund and Subsidiary

Consolidated Statement of Assets and Liabilities

As of March 31, 2013

Assets:
Investments in Investee Funds, at fair value (cost $173,479,796)	$	190,159,469
Cash and cash equivalents		1,499,677
Investment subscriptions paid in advance to Investee Funds		25,000,000
Interest receivable		251
Receivable from investments sold		1,582,435
Prepaid expenses		102,071
Total assets		218,343,903
Liabilities:
Shareholder subscriptions received in advance		21,200,000
Management Fees payable		558,625
Trustee fees payable		10,250
Payable to Investment Manager		63,869
Accrued expenses and other liabilities		162,783
Total liabilities		21,995,527
Net assets	$	196,348,376
Components of net assets:
Paid-in capital	$	182,694,636
Accumulated net investment loss		(2,530,769	)
Accumulated net realized loss		(495,164	)
Net unrealized appreciation on investments		16,679,673
Net assets	$	196,348,376
Net asset value:
Net assets	$	196,348,376
Shares of beneficial interests outstanding, no par value, unlimited shares authorized		182,177
Net asset value per share	$	1,077.79

See accompanying notes to consolidated financial statements.

2

Blackstone Alternative Alpha Master Fund and Subsidiary

Consolidated Schedule of Investments

March 31, 2013

	Shares		Cost		Fair Value		Percentage of Total Net Assets			Redemptions Permitted(1)	Redemption Notification Period(1)
Investments in Investee Funds:
Equity(a)
Glenview Institutional Partners, L.P.			$	12,400,000	$	16,454,699		8.38	%	Quarterly	45 Days
Bay Pond Partners, L.P.(3)				13,700,000		15,008,678		7.64	%	Semi-annually	45 Days
Southpoint Qualified Fund, L.P.				13,800,000		14,870,698		7.57	%	Quarterly	60 Days
Turiya Fund, L.P.				12,950,000		14,189,656		7.23	%	Quarterly	45 Days
Pershing Square, L.P.				12,600,000		13,944,960		7.10	%	Quarterly	65 Days
Viking Global Equities III Ltd.(2)		6,279		12,400,000		13,927,470		7.08	%	Annually	45 Days
Hoplite Partners, L.P.				12,100,000		12,813,157		6.53	%	Quarterly	45 Days
Visium Balanced Offshore Fund Ltd.(2)		4,683		9,230,000		10,130,328		5.16	%	Quarterly	60 Days
AKO Partners, L.P.(2)				7,936,864		9,593,974		4.89	%	Quarterly	90 Days
Merchants’ Gate Offshore Fund Ltd.(2)		8,000		8,000,000		8,308,573		4.23	%	Semi-annually	60 Business Days
Vinik Fund, L.P.(3)				8,200,000		8,081,548		4.12	%	Quarterly	30 Days
Soroban Cayman Fund Ltd.(2)		1,308		1,738,000		2,201,112		1.12	%	Quarterly	60 Days
Total				125,054,864		139,524,853		71.05	%
Credit-Driven(b)
Magnetar Constellation Fund Ltd.(2)		13,300		13,300,000		14,256,794		7.26	%	Quarterly	90 Days
Global Macro(c)
Tudor BVI Global Fund Ltd.(2)		1,551		7,050,000		7,656,900		3.90	%	Quarterly	60 Days
BlueCrest Capital International Ltd.(2)		21,630		6,500,000		6,558,335		3.34	%	Quarterly	90 Days
Total				13,550,000		14,215,235		7.24	%
Event-Driven(d)
Corvex Partners, L.P.				12,800,000		12,979,656		6.61	%	Quarterly	60 Days
Multi-Category(e)
HBK Offshore Fund II, L.P.(2)				4,237,012		4,470,364		2.28	%	Quarterly	90 Days
Elliott International Ltd.(2)		354		287,920		321,967		0.17	%	Quarterly - Semi-annually	60 Days
Total				4,524,932		4,792,331		2.45	%
Managed Futures(f)
BlueTrend Fund Ltd.(2)		14,433		4,250,000		4,390,600		2.24	%	Monthly	30 Days
Total Investments in Investee Funds(4)(5)			$	173,479,796	$	190,159,469		96.85	%
Other assets, less liabilities						6,188,907		3.15	%
Total Net Assets					$	196,348,376		100.00	%

See accompanying notes to consolidated financial statements.

3

Blackstone Alternative Alpha Master Fund and Subsidiary

Consolidated Schedule of Investments, (continued)

March 31, 2013

Percentage represents each respective investment in Investee Fund at fair value as compared to total net assets.

The Consolidated Master Fund is not able to obtain information about certain specific investments held by the Investee Funds due to lack of available data.

Investee Funds are organized in the United States, unless otherwise noted.

Investee Funds are non-income producing securities.

(1) Reflects general redemption terms for each Investee Fund. See Note 4 for Fair Value Hierarchy disclosure.

(2) Investee Fund organized in a non-U.S. offshore jurisdiction.

(3) Investee Fund is held by Blackstone Alternative Alpha Sub Fund I Ltd., which is wholly owned by the Master Fund.

(4) The total cost of Investee Funds organized in the United States is $98,550,000, with a fair value of $108,343,052.

(5) The total cost of Investee Funds organized in non-U.S. offshore jurisdictions is $74,929,796, with a fair value of $81,816,417.

(a) The Equity strategy generally includes equity-focused Investee Funds with a bottom-up analysis that do not actively trade exposures, with trading strategies focusing on shorter-term dynamics and appreciation for market technicals, top-down thematic/macro views, and technically driven statistical arbitrage with fundamental quantitative long/short strategies.

(b) The Credit-Driven strategy generally includes credit-driven focused Investee Funds with a focus on fundamental hedged products or otherwise low net exposure, positional concentration and opportunistic directional exposures, mortgages, and non-mortgage asset-backed securities.

(c) The Global Macro strategy generally includes global macro-focused Investee Funds with discretionary, directional, and inter-country exposure to commodities, equity, interest rates and currencies.

(d) The Event-Driven strategy generally includes Investee Funds that are generally event-driven-focused and seek returns by investing in strategies including catalyst events, share class arbitrage, share buybacks, post re-organization equity, recapitalizations, spin-offs and stub trades.

(e) The Multi-Category strategy generally includes Investee Funds that invest across multiple strategies.

(f) The Managed Futures strategy generally includes managed futures-focused Investee Funds that invest in systematic futures and foreign exchange forward trading strategies.

See accompanying notes to consolidated financial statements.

4

Blackstone Alternative Alpha Master Fund and Subsidiary

Consolidated Statement of Operations

For the Year Ended March 31, 2013

Net investment loss:
Income:
Interest	$	2,350
Expenses:
Management fees		1,424,001
Organization		104,095
Legal		182,500
Risk monitoring		170,117
Professional		149,218
Insurance		144,104
Administration		95,130
Printing		95,000
Custody		63,368
Trustee		56,982
Offering		43,478
Other		61,930
Total expenses		2,589,923
Net investment loss					(2,587,573	)
Net increase in net assets from investments:
Net realized loss from investments in Investee Funds		(212,497	)
Net unrealized appreciation from investments in Investee Funds		16,679,673
Net increase in net assets from investments					16,467,176
Net increase in net assets from operations				$	13,879,603

See accompanying notes to consolidated financial statements.

5

Blackstone Alternative Alpha Master Fund and Subsidiary

Consolidated Statement of Changes in Net Assets

For the Year Ended March 31, 2013

Increase (Decrease) in Net Assets:
Operations:
Net investment loss	$	(2,587,573	)
Net realized loss from investments in Investee Funds		(212,497	)
Net unrealized appreciation from investments in Investee Funds		16,679,673
Net increase in net assets from operations		13,879,603
Distributions of realized gains to shareholders		(282,667	)
Capital Transactions:
Shareholder subscriptions		182,368,773
Reinvestment of dividends		282,667
Increase in net assets from capital transactions		182,651,440
Net Assets:
Total increase in net assets		196,248,376
Beginning of period		100,000
End of period (including accumulated net investment loss of $2,530,769)	$	196,348,376
Share Transactions:
Beginning of period		100
Shares issued		181,800
Shares reinvested		277
End of period		182,177

See accompanying notes to consolidated financial statements.

6

Blackstone Alternative Alpha Master Fund and Subsidiary

Consolidated Statement of Cash Flows

For the Year Ended March 31, 2013

Cash flows from operating activities:
Net increase in net assets resulting from operations	$	13,879,603
Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:
Net realized loss from investments in Investee Funds		212,497
Net unrealized appreciation from investments in Investee Funds		(16,679,673	)
Purchases of investments in Investee Funds and subscriptions paid in advance to Investee Funds		(208,330,919	)
Proceeds from redemptions of investments in Investee Funds		8,056,191
Increase in interest receivable		(251	)
Increase in prepaid expenses		(102,071	)
Increase in management fees payable		558,625
Increase in trustee fees payable		10,250
Increase in payable to Investment Manager		63,869
Increase in accrued expenses and other liabilities		162,783
Net cash used in operating activities		(202,169,096	)
Cash flows from financing activities:
Proceeds from shareholder subscriptions and subscriptions received in advance		203,568,773
Cash provided by financing activities		203,568,773
Net change in cash and cash equivalents		1,399,677
Cash and cash equivalents, beginning of period		100,000
Cash and cash equivalents, end of period	$	1,499,677
Supplemental disclosure of non-cash financing activities:
Reinvestment of dividends	$	282,667

See accompanying notes to consolidated financial statements.

7

Blackstone Alternative Alpha Master Fund and Subsidiary

Consolidated Financial Highlights

As of March 31, 2013

Per share operating performance:
Net asset value, April 1, 2012 1	$	1,000.00
Income from investment operations:
Net investment loss 2		(23.23	)
Net realized and unrealized gain from investments		102.99
Net income from investment operations		79.76
Distributions of realized gains to shareholders		(1.97	)
Net asset value, March 31, 2013	$	1,077.79
Financial Ratios:
Expenses to average net assets		2.28	%
Net investment loss to average net assets		(2.27	)%
Portfolio turnover		9.01	%
Total return		7.99	%
Net assets, March 31, 2013 (000s)	$	196,348

¹  Commencement of operations.

²  Calculated using average shares outstanding during the period.

The financial ratios represent the expenses and net investment loss to average monthly net assets for the period. The ratios do not reflect the Consolidated Master Fund’s share of the income and expenses of the underlying Investee Funds.

See accompanying notes to consolidated financial statements.

8

Blackstone Alternative Alpha Master Fund and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013

1. ORGANIZATION

Blackstone Alternative Alpha Master Fund (the “Master Fund”), a Massachusetts business trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a continuously offered, non-diversified, closed-end management investment company, commenced operations on April 1, 2012. Blackstone Alternative Alpha Fund (the “Feeder Fund”) invests substantially all of its assets in the Master Fund. The Master Fund’s investment objective is to seek to earn long-term risk-adjusted returns that are attractive as compared to those of traditional public-equity and fixed income markets.

The Master Fund owns 100% of the shareholder interest of Blackstone Alternative Alpha Sub Fund I Ltd. (the “Intermediate Fund”), an exempted company incorporated under the laws of the Cayman Islands on March 14, 2012, for the purpose of facilitating the implementation of the Master Fund’s investment objectives. The Consolidated Financial Statements include the financial statements of the Master Fund and the Intermediate Fund (collectively, the “Consolidated Master Fund”).

The investment manager of the Consolidated Master Fund and the Feeder Fund is Blackstone Alternative Asset Management L.P. (“BAAM” or the “Investment Manager”), a registered investment adviser under the Investment Advisers Act of 1940, as amended, and a commodity trading advisor and commodity pool operator under the Commodity Exchange Act and the rules of the Commodity Futures Trading Commission. The Board of Trustees (the “Board” and each member a “Trustee”) of the Master Fund supervises the conduct of the Consolidated Master Fund’s and the Feeder Fund’s affairs and pursuant to the investment advisory agreement, has engaged BAAM to manage the Consolidated Master Fund’s and the Feeder Fund’s day-to-day investment activities.

Capitalized terms used, but not defined herein, shall have the meaning assigned to them in the Prospectus of the Master Fund.

2. BASIS OF PRESENTATION

The Consolidated Master Fund’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and are stated in U.S. dollars. All inter-company accounts and transactions have been eliminated in consolidation.

The preparation of financial statements in accordance with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of income and expenses during the reporting period. Actual results could differ from these estimates and these differences could be material.

3. SIGNIFICANT ACCOUNTING POLICIES

Fair Value Measurements

Valuation Process

The valuation of the Consolidated Master Fund’s investments is reviewed monthly by the valuation committee (“Valuation Committee”). The Valuation Committee is delegated by the Board with the administration and oversight of the Consolidated Master Fund’s valuation policies and procedures. The Valuation Committee determines the fair value of investments in accordance with the current fair value guidance and as described below. In the event the Valuation Committee determines, in its discretion and

9

Blackstone Alternative Alpha Master Fund and Subsidiary

Notes to Consolidated Financial Statements, (continued)

March 31, 2013

based on its own due diligence and investment monitoring procedures, that the valuation of any investment determined, as set further below, does not represent fair value, the Valuation Committee will value such investments at fair value in accordance with procedures adopted in good faith and approved by the Board as the same may be amended from time to time.

Investments in Investee Funds

The fair value of investments in limited partnerships and investment funds (“Investee Fund(s)”) is generally determined using the reported net asset value per share of the Investee Fund, or its equivalent, as a practical expedient for fair value.

The Consolidated Master Fund may, as a practical expedient, estimate the fair value of an Investee Fund based on the reported net asset value per share or its equivalent (“NAV”) if the reported NAV of the Investee Fund is calculated in a manner consistent with the measurement principles applied to investment companies, in accordance with Accounting Standards Codification 946, Financial Services-Investment Companies (“ASC 946”). In order to use the practical expedient, the Investment Manager has internal processes to independently evaluate the fair value measurement process utilized by the underlying Investee Fund to calculate the Investee Fund’s NAV in accordance with ASC 946. Such internal process includes the evaluation of the Investee Fund’s process and related internal controls in place to estimate the fair value of its underlying investments that are included in the NAV calculation, performing ongoing operational due diligence, review of the Investee Fund’s audited financial statements, and ongoing monitoring of other relevant qualitative and quantitative factors.

The fair value of investments in Investee Funds is reported net of management fees and incentive allocations/fees. The Investee Funds’ management fees and incentive allocations/fees are reflected in the net increase in net assets from investments in the Consolidated Statement of Operations.

Due to the inherent uncertainty of these estimates, these values may differ from the values that would have been used had a ready market for these investments existed and the differences could be material.

The investments in Investee Funds may involve varying degrees of interest rate risk, credit risk, foreign exchange risk, and market, industry or geographic concentration risk. While the Investment Manager monitors and attempts to manage these risks, the varying degrees of transparency into and potential illiquidity of the financial instruments held by the Investee Funds may hinder the Investment Manager’s ability to effectively manage and mitigate these risks.

The fair value of the Consolidated Master Fund’s assets and liabilities which qualify as financial instruments under the existing accounting guidance for Financial Instruments, approximates the carrying amounts presented in the Consolidated Statement of Assets and Liabilities due to their short term nature.

Investment Transactions and Related Investment Income and Expense

Investment transactions are accounted for on a trade date basis. Income and expenses, including interest, are recorded on an accrual basis.

The net realized gains or losses from investments in Investee Funds are recorded when the Consolidated Master Fund redeems or partially redeems its interest in the Investee Funds or receives distributions in excess of return of capital. Realized gains and losses from redemptions of investments are calculated using the first-in, first-out cost basis methodology.

10

Blackstone Alternative Alpha Master Fund and Subsidiary

Notes to Consolidated Financial Statements, (continued)

March 31, 2013

Cash and Cash Equivalents

The Consolidated Master Fund considers short-term, highly liquid investments with original maturities of 90 days or less when acquired to be cash equivalents. At March 31, 2013, the Consolidated Master Fund had $1,499,677 of cash held at a major U.S. bank.

Contingencies

Under the Master Fund’s Declaration of Trust, the Master Fund’s officers and each Trustee are indemnified against certain liabilities that may arise out of the performance of their duties to the Master Fund. Additionally, in the normal course of business, the Consolidated Master Fund enters into contracts that contain a variety of representations and indemnifications. The Consolidated Master Fund’s maximum exposure under these arrangements is unknown. However, the Consolidated Master Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

Income Taxes

The Consolidated Master Fund’s policy is to qualify each year as a “regulated investment company” under Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company taxable income and net long-term capital gains to its shareholders. Therefore, no federal income tax provision is expected to be required. The Consolidated Master Fund files U.S. federal and various state and local tax returns.

Management of the Master Fund has evaluated the tax positions taken or expected to be taken in the course of preparing the Master Fund’s tax return for the current open tax year ended October 31, 2012, and has concluded, as of March 31, 2013, no provision for income tax would be required in the Consolidated Master Fund’s financial statements. The Master Fund’s federal and state income and federal excise tax returns for the current open tax year are subject to examination by the Internal Revenue Service and state taxing authorities.

The Intermediate Fund is a controlled foreign corporation (“CFC”) for U.S. income tax purposes, and is therefore not subject to U.S. income tax. However, as a wholly-owned CFC, the Intermediate Fund’s net income and capital gains, to the extent of its earnings and profits, are consolidated into the Master Fund’s investment company taxable income.

For the current open tax year and for all major jurisdictions, management of the Intermediate Fund has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. Management is also not aware of any tax positions for which it is reasonably possible that the total amounts of uncertain unrecognized tax benefits will significantly change in the next twelve months.

Organization and Offering Costs

Organization costs associated with the establishment of the Consolidated Master Fund were expensed by the Consolidated Master Fund and reimbursed by the Investment Manager.

Offering costs have been amortized over 12 months on a straight-line basis beginning from the date of commencement of operations.

Dividends and Distributions to Shareholders

Dividends from net investment income and distributions of capital gains, if any, are declared and paid annually. Dividends and capital gain distributions paid by the Master Fund will be reinvested in additional Shares of the Master Fund unless a shareholder elects not to reinvest in Shares or is otherwise ineligible. Shares purchased by reinvestment will be issued at their net asset value on the ex-dividend date.

11

Blackstone Alternative Alpha Master Fund and Subsidiary

Notes to Consolidated Financial Statements, (continued)

March 31, 2013

4. FAIR VALUE HIERARCHY

Current fair value guidance defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The Consolidated Master Fund may, as a practical expedient, estimate the fair value of an Investee Fund based on the reported net asset value per share or its equivalent if the reported net asset value of the Investee Fund is calculated in a manner consistent with the measurement principles applied to investment companies. The hierarchy established under the fair value guidance gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

Investments measured and reported at fair value are classified and disclosed in one of the following levels within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement or based on liquidity, as indicated by the redemption terms:

• Level 1 – Quoted prices are available in active markets for identical investments as of the measurement date. The Consolidated Master Fund does not adjust the quoted price for these investments.

• Level 2 – Quoted prices are available in markets that are not active or model inputs are based on inputs that are either directly or indirectly observable as of the measurement date.

The Consolidated Master Fund’s investment in the Investee Fund shall be categorized within Level 2 if the Consolidated Master Fund has the ability to redeem its investment in the Investee Funds at the reported net asset value per share (or its equivalent) at the measurement date or within 90 days thereof, upon no greater than 90 days prior written notice.

• Level 3 – Pricing inputs are unobservable for the investment and include instances where there is little, if any, market activity for the investment.

The Consolidated Master Fund has categorized within Level 3, investments in Investee Funds that are subject to a minimum holding period or lockup greater than 90 days from the measurement date, are in liquidation, cannot be redeemed within 90 days of the measurement date, are subject to redemption notice periods in excess of 90 days, have limited the individual amount of shareholder redemptions and/or aggregate amount of shareholder redemptions, or have suspended redemptions.

Investee Funds as set forth in their governing legal agreements may offer various liquidity terms for differing classes of investors. The Consolidated Master Fund’s investment in a particular Investee Fund may be comprised of investments with differing liquidity terms or which were made at different points in time that result in differences in the effective minimum holding period or lockup or participation in side pocket investments. As such, the classification of investments in Investee Funds may not be indicative of the actual liquidity available to the Consolidated Master Fund associated with each investment at March 31, 2013.

The classification of investments in Investee Funds included in the table below is meant to be indicative of the Consolidated Master Fund’s classification of its investments in Investee Funds. It is not meant to be indicative of the classification of investments in the underlying portfolios of the Investee Funds within the fair value hierarchy.

12

Blackstone Alternative Alpha Master Fund and Subsidiary

Notes to Consolidated Financial Statements, (continued)

March 31, 2013

The following is a summary categorization, as of March 31, 2013, of the Consolidated Master Fund’s investments based on the level of inputs utilized in determining the value of such investments:

	Level 1		Level 2		Level 3		Total
Investments in Investee Funds by Strategy
Equity	$	-	$	18,353,394	$	121,171,459	$	139,524,853
Credit-Driven		-		-		14,256,794		14,256,794
Global Macro		-		7,656,900		6,558,335		14,215,235
Event-Driven		-		-		12,979,656		12,979,656
Multi-Category		-		-		4,792,331		4,792,331
Managed Futures		-		4,390,600		-		4,390,600
	$	-	$	30,400,894	$	159,758,575	$	190,159,469

The changes in investments measured at fair value for which the Consolidated Master Fund used Level 3 inputs to determine fair value are as follows:

	Investments in Investee Funds by Strategy
	Equity		Credit-Driven		Global Macro		Event-Driven		Multi-Category			Total
April 1, 2012 (commencement of operations)	$	-	$	-		-	$	-	$	-		$	-
Transfers into Level 3		-		-		-		-		-			-
Transfers out of Level 3		-		-		-		-		-			-
Net realized gain		-		-		-		-		69,029			69,029
Net change in unrealized appreciation		11,603,459		956,794		58,335		179,656		267,400			13,065,644
Purchases		109,568,000		13,300,000		6,500,000		12,800,000		5,912,919			148,080,919
Sales		-		-		-		-		(1,457,017	)		(1,457,017	)
Ending Balance March 31, 2013	$	121,171,459	$	14,256,794	$	6,558,335	$	12,979,656	$	4,792,331		$	159,758,575
Change in unrealized appreciation related to investments still held as of March 31, 2013	$	11,603,459	$	956,794	$	58,335	$	179,656	$	267,400		$	13,065,644

The Consolidated Master Fund recognizes transfers within the fair value hierarchy as of the beginning of the period. There were no transfers between Levels 1, 2, or 3 for the year ended March 31, 2013.

13

Blackstone Alternative Alpha Master Fund and Subsidiary

Notes to Consolidated Financial Statements, (continued)

March 31, 2013

The following table summarizes investments in Investee Funds, by investment strategy and the amount of the investments in Investee Funds that cannot be redeemed because of redemption restrictions put in place by the Investee Funds. In instances where redemptions were restricted, the maximum remaining redemption restriction period is disclosed. Where the remaining redemption restriction period is not known, the date the redemption restriction commenced is disclosed.

			Category (A)				Category (B)
Investments in Investee Funds  by Strategy	Unfunded Commitment $		Amount $		Maximum Remaining Redemption Restriction Period		Amount $		Redemption Restriction Commencement Date		Total $ (A) + (B)
Equity	$	-	$	121,171,459		24 months	$	-		N/A	$	121,171,459
Credit-Driven		-		14,256,794		24 months		-		N/A		14,256,794
Global Macro		-		6,558,335		12 months		-		N/A		6,558,335
Event-Driven		-		12,979,656		12 months		-		N/A		12,979,656
Multi-Category		558,576		4,792,331		24 months		-		N/A		4,792,331

^{Category (A)} Investments in Investee Funds cannot be redeemed and the maximum remaining redemption restriction period is disclosed. The maximum remaining redemption restriction period is based on the restriction period for Investee Funds as defined in each respective Investee Fund’s governing legal agreements without consideration of the length of time elapsed from the date of investments in the Investee Funds. The Consolidated Master Fund’s investment in a particular Investee Fund classified within the strategies above may be comprised of investments with differing liquidity terms or investments which were made at differing points in time.

^{Category (B)} Investments in Investee Funds cannot be redeemed and the remaining redemption restriction period is not known. The date the redemption restriction commenced is disclosed.

Purchases and sales of investments for the year ended March 31, 2013 were $183,330,919 and $9,638,626, respectively.

5. FUND TERMS

Issuance of Shares

The Master Fund is authorized to issue an unlimited number of shares of beneficial interest (“Shares”). The Master Fund will issue Shares as of the first business day of the month or at such other times as determined by the Board upon receipt of an initial or additional application for Shares. The Shares are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under the Master Fund’s Declaration of Trust.

Repurchase of Shares

Repurchases will be made only at such times and on such terms as may be determined by the Board, in its sole discretion.

14

Blackstone Alternative Alpha Master Fund and Subsidiary

Notes to Consolidated Financial Statements, (continued)

March 31, 2013

6. RELATED PARTY TRANSACTIONS

Management Fee

The Master Fund pays the Investment Manager a management fee (the “Management Fee”) quarterly in arrears (accrued on a monthly basis), equal to 1.25% (annualized) of the Master Fund’s net asset value. The Management Fee for any period less than a full quarter is pro-rated.

Expense Payments

The Investment Manager pays expenses on behalf of the Consolidated Master Fund and is subsequently reimbursed for such payments. The Feeder Fund allocated to the Consolidated Master Fund, through an investment in the Master Fund, $1,031,090 of the repayment amount under the Feeder Fund’s Expense Limitation and Reimbursement Agreement. This allocation reduced the amount payable by the Consolidated Master Fund to the Investment Manager. As of March 31, 2013, the Consolidated Master Fund had $63,869 payable to the Investment Manager recorded in the Consolidated Statement of Assets and Liabilities.

7. FINANCIAL INSTRUMENTS AND OFF-BALANCE SHEET RISK

In the normal course of business, the Investee Funds may enter into certain financial instrument transactions which may result in off-balance sheet market risk and credit risk. The Investee Funds invest in these instruments for trading and hedging purposes. The Consolidated Master Fund is indirectly subject to certain risks arising from investments made by the Investee Funds.

Market Risk

Market risk is the risk of potential adverse changes to the value of financial instruments because of changes in market conditions such as interest and currency rate movements. The Consolidated Master Fund is exposed to market risk indirectly as a result of the types of investments that the Investee Funds make. The Consolidated Master Fund actively monitors its exposure to market risk.

Investee Funds may invest in entities that trade or may invest directly in interest rate swaps, credit default swaps, exchange-traded and over-the-counter options, futures transactions, forward transactions, and securities sold, not yet purchased.

Credit Risk

Credit risk arises from the potential inability of counterparties to perform their obligations under the terms of a contract. The Consolidated Master Fund is indirectly exposed to credit risk related to the amount of accounting loss that the Investee Funds would incur if a counterparty failed to perform its obligations under contractual terms and if the Investee Funds fail to perform under their respective agreements.

8. INCOME TAXES

The primary difference between the book and tax appreciation/depreciation of Investee Funds is attributable to adjustments to the tax basis of Investee Funds based on allocation of income and distributions from Investee Funds and the realization for tax purposes of financial statement unrealized gain/loss. In addition, the cost of Investee Funds for federal income tax purposes is adjusted for items of taxable income allocated to the Master Fund from the Investee Funds. The allocated taxable income is reported annually by each Investee Fund to the Master Fund. The aggregate cost of Investee Funds for federal income tax purposes is

15

Blackstone Alternative Alpha Master Fund and Subsidiary

Notes to Consolidated Financial Statements, (continued)

March 31, 2013

therefore calculated and presented annually as of March 31. The aggregate cost of Investee Funds and the composition of unrealized appreciation and depreciation on Investee Funds for federal income tax purposes are noted below.

Federal tax cost of investments in Investee Funds	$	174,491,059
Gross unrealized appreciation	$	15,786,862
Gross unrealized depreciation		(118,452	)
Net unrealized appreciation	$	15,668,410

The tax character of dividends paid to shareholders during the period April 1, 2012 (commencement of operations) to December 31, 2012 was as follows:

Ordinary Income	Net Long Term Capital Gains		Total Taxable Distributions		Tax Return of Capital		Total Distributions Paid
$ 196,951	$	85,716	$	282,667	$	-	$	282,667

As of the tax year ended October 31, 2012, the components of accumulated earnings (deficit) on a tax basis were as follows:

Undistributed Ordinary Income	Undistributed Long-Term Captial Gains		Accumulated Capital and Other Losses		Unrealized Appreciation (Depreciation)		Total Accumulated Earnings (Deficit)
$149,785	$	-	$	-	$	1,459,652	$	1,609,437

The amounts of net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains may differ from the ultimate characterization for federal income tax purposes. The timing of dividends from net investment income and distributions from net realized gains distributed during the fiscal year may also differ from the year that the income or realized gain was recorded by the Master Fund. To the extent these differences are permanent, adjustments are made to the appropriate equity accounts in the period the differences arise.

Accordingly, the following permanent differences, primarily due to nondeductible stock issuance costs, have been reclassified to increase (decrease) such accounts during the tax year ended October 31, 2012:

Accumulated Net Investment Income (Loss)	Accumulated Net Realized Gain (Loss)		Paid-in Capital
$56,804	$	-	$	(56,804	)

9. SUBSEQUENT EVENTS

The Consolidated Master Fund has evaluated the impact of subsequent events through the date of financial statement issuance, and determined there were no subsequent events outside of the normal course of business requiring adjustment to or disclosure in the financial statements.

16

Blackstone Alternative Alpha Master Fund and Subsidiary

Supplemental Information (Unaudited)

March 31, 2013

Management of the Fund

The Consolidated Master Fund’s operations are managed under the direction and oversight of the Board of Trustees. A majority of the Trustees are not “interested persons” (as defined in the 1940 Act) of the Consolidated Master Fund, (the “Independent Trustees”). The Consolidated Master Fund’s Trustees and officers are subject to removal or replacement in accordance with Massachusetts law and the Master Fund’s Declaration of Trust. The initial Trustees serving on the Board of Trustees have been elected by the organizational shareholder of the Master Fund. The Consolidated Master Fund’s Board of Trustees also serves as the board of trustees of the Feeder Fund.

Compensation for Trustees

The Master Fund and the Feeder Fund pay no compensation to any of its officers or to the Trustees who are not Independent Trustees. The Independent Trustees are each paid by the Master Fund and the Feeder Fund $20,000 per fiscal year in aggregate for their services to the Master Fund and the Feeder Fund and the chair of the Audit Committee receives an additional $2,000 per fiscal year. The Trustees are reimbursed by the Master Fund and the Feeder Fund for their travel expenses related to Board meetings.

INDEPENDENT TRUSTEES
Name and Year of Birth	Positions Held with the Trust	Term of Office(1)/ Length  of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios Overseen in Fund Complex		Other Trusteeships Held During Past 5 Years
John M. Brown (1959)	Trustee	Since 1/2012	Retired (2012 to present) Independent Consultant (2010 to 2012) Principal, Acquiline Holdings (Private Equity) (2006 to 2010)		2	None
Frank J. Coates(2) (1964)	Trustee	Since 1/2012	CEO, Wheelhouse Analytics, LLC (2010 to present) CEO, Coates Analytics, LP (PNC Bank) (2005 to 2010)		2	Member of Board of Managers of Evermore Global Advisors, LLC
Paul J. Lawler(2) (1948)	Trustee	Since 1/2012	Private Investor (2010 to present) VP Investments & Chief Investment Officer, W.K. Kellogg Foundation (1997 to 2009)		2	Custody Advisory Committee Member, The Bank of New York; Trustee, First Eagle Variable Funds (1 portfolio); Trustee, First Eagle Funds (8 portfolios); Trustee (Audit Committee and Finance Committee Member), American University in Cairo
Kristen M. Leopold(2) (1967)	Trustee	Since 1/2012	Managing Member, KL Associates LLC (CFO Consulting) (2005 to present) Member and CFO, WFL Real Estate Services, LLC (2005 to present)		2	Trustee, CPG JP Morgan Alternative Strategies Fund, LLC; Trustee, CPG Carlyle Private Equity Fund, LLC and CPG Carlyle Private Equity Master Fund, LLC

17

Blackstone Alternative Alpha Master Fund and Subsidiary

Supplemental Information (Unaudited), (continued)

March 31, 2013

INDEPENDENT TRUSTEES(3)
Name and Year of Birth of Interested Trustees	Positions Held with the Trust	Term of Office(1)/ Length  of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios Overseen in Fund Complex		Other Trusteeships Held During Past 5 Years
Peter Koffler (3) (1958)	Trustee	Since 12/2012	Senior Managing Director, Blackstone Alternative Asset Management L.P. (2012 to present) General Counsel, Blackstone Alternative Asset Management L.P. (2010 to present) Chief Compliance Officer, The Blackstone Group L.P. (2012 to present) Managing Director, Blackstone Alternative Asset Management L.P. (2006 to 2012) Chief Compliance Officer, Blackstone Alternative Asset Management L.P. (2008 to 2012)		2	None

OFFICERS
Name and Year of Birth	Positions Held with the Trust	Term of Office(1)/ Length of Time Served	Principal Occupation(s) During Past 5 Years
Stephen Buehler (1977)	Secretary	Since 11/2011	Vice President, Blackstone Alternative Asset Management L.P. (2011 to present) Associate, Blackstone Alternative Asset Management L.P. (2010 to 2011) Associate, Merrill Lynch and Bank of America Merrill Lynch (2008 to 2010)
Brian F. Gavin (1969)	President (Principal Executive Officer)	Since 11/2011	Chief Operating Officer & Senior Managing Director, Blackstone Alternative Asset Management L.P. (2007 to present)
Hayley Stein (1977)	Chief Compliance Officer	Since 12/2012	Managing Director, Blackstone Alternative Asset Management L.P. (2011 to present) Chief Compliance Officer, Blackstone Alternative Asset Management L.P. (2012 to present) Vice President, Blackstone Alternative Asset Management L.P. (2006 to 2011)
Arthur Liao (1972)	Treasurer (Principal Financial and Accounting Officer)	Since 11/2011	Chief Financial Officer & Managing Director, Blackstone Alternative Asset Management L.P. (2007 to present)
Scott Sherman (1975)	Chief Legal Officer	Since 11/2011	Managing Director, Blackstone Alternative Asset Management L.P. (2009 to present) Vice President, Blackstone Alternative Asset Management L.P. (2007 to 2009)

⁽¹⁾  Indefinite.

⁽²⁾  Member of the Audit Committee.

⁽³⁾  Is an “interested person”, as defined by the 1940 Act, due to employment by Blackstone Alternative Asset Management L.P.

18

Blackstone Alternative Alpha Master Fund and Subsidiary

Supplemental Information (Unaudited), (continued)

March 31, 2013

Allocation of Investments

The following chart indicates the allocation of investments among the asset classes in the Consolidated Master Fund as of March 31, 2013.

Asset Class(1)	Fair Value		%
Equity	$	139,524,853		73.37	%
Credit-Driven		14,256,794		7.49	%
Global Macro		14,215,235		7.48	%
Event-Driven		12,979,656		6.83	%
Multi-Category		4,792,331		2.52	%
Managed Futures		4,390,600		2.31	%
Total Investments	$	190,159,469		100.00	%

⁽¹⁾ The complete list of investments included in the following asset class categories is included in the Consolidated Schedule of Investments of the Consolidated Master Fund.

Form N-Q Filings

The Master Fund files a complete schedule of investments with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The Master Fund’s Form N-Q is available on the SEC website at http://www.sec.gov. The Master Fund’s Form N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, DC and information regarding operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Proxy Voting Policies

The Master Fund and the Feeder Fund have delegated proxy voting responsibilities to the Investment Manager, subject to the Board’s general oversight. Information regarding how the Master Fund and the Feeder Fund voted proxies relating to investments during the period ended June 30, 2012 is available (1) without charge, upon request, by calling toll free, 1-888-386-9490 and (2) on the SEC website at http://www.sec.gov.

Board Consideration of the Investment Management Agreement

At a meeting of the Board of the Fund held in person on March 12, 2013, the Board, including all of the Independent Trustees considered the ratification of the Investment Management Agreement (the “Intermediate Fund Agreement”) between Blackstone Alternative Alpha Sub Fund I Ltd. (the “Intermediate Fund”), a Cayman Islands subsidiary of the Master Fund, and BAAM.

The Independent Trustees were assisted in their review of the Intermediate Fund Agreement by independent legal counsel. Prior to the meeting, the Board received (a) materials prepared by independent legal counsel regarding the relevant factors to consider, (b) materials prepared by BAAM relating to, among other things, BAAM’s qualifications to serve as investment manager; analysis of the fees and expenses of the Feeder Fund (on a combined basis with the fees and expenses of the Master Fund and Intermediate Fund) as compared with a peer group of funds; and analysis of BAAM’s profitability from providing services to the Feeder Fund, Master Fund and Intermediate Fund and (c) materials prepared by an outside firm, unaffiliated with the Feeder Fund or BAAM, that is in the business of regularly preparing reports for use by fund boards in considering investment

19

Blackstone Alternative Alpha Master Fund and Subsidiary

Supplemental Information (Unaudited), (continued)

March 31, 2013

advisory agreement approvals (the “Service Provider”) comparing the management fee rate and total operating expenses of the Feeder Fund (on a combined basis with the fees and expenses of the Master Fund and Intermediate Fund) to those of a peer group of funds determined by the Service Provider. At the meeting, a discussion ensued regarding the materials that had been provided to the Board, the terms of the Intermediate Fund Agreement, the operations of the Intermediate Fund and other relevant considerations. In evaluating the Intermediate Fund Agreement, the Board considered that the Intermediate Fund had been established to facilitate the Master Fund’s investment program, and that the Intermediate Fund did not pay a management fee under the Intermediate Fund Agreement. The Board also took into account the “master feeder” structure and the fact that BAAM serves as investment adviser to the Feeder Fund and Master Fund but receives a management fee only from the Master Fund. Following this discussion, the Board, including all of the Independent Trustees, determined to ratify the Intermediate Fund Agreement for an initial term of two years on the basis of the following considerations, among others:

Nature, Extent and Quality of the Services

The Board discussed BAAM’s personnel, operations and financial condition, including the following: the background and experience of key investment personnel and BAAM’s ability to retain them; BAAM’s focus on analysis of complex asset categories; BAAM’s disciplined investment approach and commitment to investment principles; BAAM’s significant investment in and commitment to personnel, including additional hiring and extensive training and infrastructure including research, risk and portfolio management analytics; BAAM’s significant compliance efforts, and oversight of and plan for sales; and, BAAM’s oversight of and interaction with service providers. The Board concluded that the nature, extent and quality of the management and advisory service to be provided were appropriate and thus support a decision to approve the Intermediate Fund Agreement.

Costs of Services and Profitability

It was noted that BAAM receives compensation for performing investment advisory services for the Master Fund pursuant to a separate investment management agreement (the “Master Fund Agreement”) with the Master Fund and that no additional compensation is received for rendering services under the Intermediate Fund Agreement or under BAAM’s separate investment management agreement with the Feeder Fund. In analyzing the cost of services and profitability of BAAM, the Board considered BAAM’s resources devoted to the Intermediate Fund (as well as to the Feeder Fund and Master Fund) as well as the assessment of estimated costs and profitability provided by BAAM.

The Board reviewed the Feeder Fund’s management fee rate and the total expense ratio (on a combined basis with the fees and expenses of the Master Fund and Intermediate Fund) compared to those of a peer group of funds determined by the Service Provider. The funds within the peer group were selected by the Service Provider, which is not affiliated with BAAM.

The peer group selected by the Service Provider for the Feeder Fund contained fourteen funds, including the Feeder Fund. Within this peer group, the Feeder Fund ranked (a) in the third quintile (and below the median) for actual total expenses excluding investment related expenses and taxes and (b) in the fourth quintile for management fee rate. The Board noted that BAAM has agreed to cap certain operating and other expenses of the Feeder Fund (excluding the management fee, underlying fund expenses, distribution fee and other expenses described in the Feeder Fund’s prospectus as being excluded) in order to maintain certain expenses below 0.35%.

The Board took into account the significant investment by, and cost to, BAAM regarding service infrastructure to support the Funds and the Feeder Fund’s investors. On the basis of the Board’s review of the fees to be charged

20

Blackstone Alternative Alpha Master Fund and Subsidiary

Supplemental Information (Unaudited), (continued)

March 31, 2013

by BAAM for investment advisory and related services, the relatively unique, and highly specialized structuring, launching and nature of the Funds’ investment program, BAAM’s financial information, and the estimated costs associated with managing the Funds, the Board concluded that the level of investment management fees payable under the Intermediate Fund Agreement is appropriate in light of the services to be provided, the management fees and estimated overall expense ratios of comparable investment companies, and the cap on current expenses established by an expense limitation agreement, and the fees paid under the Master Fund Agreement.

Economies of Scale

While noting that the management fees will not decrease as the level of Fund assets increase, the Board concluded that the management fees payable under the Master Fund Agreement are reasonable and reflect the Fund’s complex operations. The Board also was advised that the Fund is expected to be modest in size for the foreseeable future. The Board noted that it will have the opportunity to periodically re-examine whether the Funds have achieved economies of scale, as well as the appropriateness of management fees payable to BAAM, in the future.

Other Benefits

The Board noted that BAAM said it does not expect to receive significant ancillary benefits as a result of its relationship with the Funds and BAAM does not realize “soft dollar” benefits from its relationship with the Funds. The Board concluded that other benefits derived by BAAM from its relationship with the Funds, to the extent such benefits are identifiable or determinable, are reasonable and fair, result from the provision of appropriate services to the Funds and investors therein, and are consistent with industry practice and the best interests of the Funds and its shareholders.

Other considerations

The Board evaluated the comparative information provided by BAAM regarding the performance of other similar investment funds managed by BAAM, including the Funds, compared with the performance of various indices, including the relevance of various indices. On the basis of the Board’s assessment, the Board concluded that BAAM was capable of generating a level of investment performance that is appropriate in light of the Funds’ investment objective, policies and strategies and fully competitive with comparable funds.

Conclusion

The Board, including all of the Independent Trustees, concluded that the fees payable under the Intermediate Fund Agreement were fair and reasonable with respect to the services that BAAM provides to the Intermediate Fund and in light of the other factors described above that the Board deemed relevant. The Board based its decision on an evaluation of all these factors as a whole and did not consider any one factor as all-important or controlling. The Board was also assisted by the advice of independent counsel in making this determination.

Additional Information

The Master Fund’s registration statement includes additional information about the Trustees of the Master Fund. The registration statement is available, without charge, upon request by calling 1-800-725-9456.

21

Privacy Policy

This privacy policy sets forth BAAM’s policies with respect to nonpublic personal information of individual investors, shareholders, prospective investors and former investors of investment funds managed by BAAM. These policies apply to individuals only and are subject to change.

BAAM collects nonpublic personal information about Investors from the information it receives in subscription agreements and information relating to an Investor’s transactions with BAAM.

BAAM does not disclose any nonpublic personal information about the Investors to anyone other than (i) fund administrators and other service providers as necessary in order to service each BAAM Investor’s investment with BAAM, (ii) The Blackstone Group L.P. and its affiliates (collectively, “TBG”) in order to determine the Investor’s eligibility for services offered by TBG, and (iii) as permitted by law.

An Investor may limit the extent to which BAAM shares the Investor’s personal information with TBG by calling 1-888-386-9490. BAAM is required to share the Investor’s personal information with TBG in order to determine the Investor’s eligibility for investment services offered by TBG. However, BAAM still may share such personal information with TBG as necessary to service such Investor’s investment with BAAM or under other circumstances permitted by law. TBG also may market investment services to Investors where TBG has its own relationship with an Investor. Once an Investor has informed BAAM about his or her privacy preferences, they will remain in effect until the Investor notifies BAAM otherwise.

It also may be necessary under anti-money laundering and similar laws to disclose information about Investors in order to accept subscriptions from them. BAAM also will release information about Investors if compelled to do so by law in connection with any government request or investigation, or if any Investors direct BAAM to do so.

22

Blackstone Alternative Alpha Fund

Blackstone Alternative Alpha Master Fund

Trustees

John M. Brown, Chairman

Frank J. Coates

Paul J. Lawler

Kristen M. Leopold

Peter Koffler

Investment Manager

Blackstone Alternative Asset Management L.P.

345 Park Avenue

New York, New York 10154

Administrator, Custodian, Fund

Accounting Agent and Transfer Agent

Citi Fund Services Ohio, Inc.

3435 Stelzer Road

Columbus, Ohio 43219

Officers

Brian F. Gavin, President and Principal Executive Officer

Arthur Liao, Treasurer and Principal Financial and Accounting Officer

Hayley Stein, Chief Compliance Officer

Scott Sherman, Chief Legal Officer

Stephen Buehler, Secretary

Independent Registered Public

Accounting Firm

Deloitte & Touche LLP

Two World Financial Center

New York, New York 10281

Legal Counsel

Ropes & Gray LLP

Prudential Tower

800 Boylston Street

Boston, Massachusetts 02199-3600

This report, including the financial information herein, is transmitted to the shareholders of Blackstone Alternative Alpha Fund for their information. It is not a prospectus or representation intended for use in the purchase of shares of the Fund or any securities mentioned in this report.

You can request a copy of the Fund’s prospectus and statement of additional information without charge by calling the Fund’s transfer agent at 1-888-386-9490.

Item 2. Code of Ethics.

(a) The registrant, as of the end of the period covered by the report, has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. This code of ethics is included as Exhibit 12(a)(1).

(b) During the period covered by the report, with respect to the registrant’s code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions; there have been no amendments to, nor any waivers granted from, a provision that relates to any element of the code of ethics definition enumerated in paragraph (b) of this Item 2.

Item 3. Audit Committee Financial Expert.

3(a)(1) The registrant’s board of trustees has determined that the registrant has at least one audit committee financial expert serving on its audit committee.

3(a)(2) The audit committee financial expert is Kristen M. Leopold, who is “independent” for purposes of this Item 3 of Form N-CSR.

Item 4. Principal Accountant Fees and Services.

		Current Year		Previous Year
(a)	Audit Fees	$	64,500	$	N/A
(b)	Audit-Related Fees	$	0	$	N/A
(c)	Tax Fees(1)	$	29,540	$	N/A
(d)	All Other Fees	$	0	$	N/A

⁽¹⁾  The nature of the services includes tax compliance, tax advice and tax planning.

(e)(1) Disclose the audit committee’s pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.

The charter for the audit committee (the “Committee”) of the board of trustees of the registrant requires that the Committee pre-approve (i) all audit and non-audit services that the registrant’s independent auditors provide to the registrant, and (ii) all non-audit services that the registrant’s independent auditors provide to Blackstone Alternative Asset Management L.P., the investment manager of the registrant (“BAAM”), and any entity controlling, controlled by, or under common control with BAAM that provides ongoing services to the registrant, if the engagement relates directly to the operations and financial reporting of the registrant; provided that the Committee may implement policies and procedures by which such services are approved other than by the full Committee prior to their ratification by the Committee.

(2) Disclose the percentage of services described in each of paragraphs (b) through (d) of this item that were approved by the audit committee pursuant to paragraph (c) (7)(i)(c) of Rule 2-01 of Regulation S-X.

Current Year	Previous Year
100%	N/A

(f) Not applicable.

(g) Disclose the aggregate non-audit fees billed by the registrant’s accountant for services rendered to registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant.

Current Year	Previous Year
$0	N/A

(h) Not applicable.

Item 5. Audit Committee of Listed Registrants.

Not applicable.

Item 6. Investments.

(a) The registrant’s Consolidated Schedule of Investments as of the close of the reporting period is included in the Report to Shareholders filed under item 1 of this Form.

(b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

These policies are included as Exhibit 12(a)(4).

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

(a)(1) Identification of Portfolio Managers and Description of Role of Portfolio Managers – as of March 31, 2013

Alberto Santulin (since inception) and John (JT) Shields (since January 2013) are the portfolio managers of the registrant and the Feeder Fund and as such have day-to-day management responsibilities for the registrant and the Feeder Fund. BAAM’s Investment Committee reviews and approves investments made by the registrant and the Feeder Fund but is not primarily responsible for the day-to-day management of the registrant’s and the Feeder Fund’s portfolios.

Alberto Santulin has been a Managing Director of BAAM since 2005. In this role, Mr. Santulin has been involved in portfolio management, primarily focusing on arbitrage, credit and event strategies. In addition, he is involved in hedge fund manager evaluation, selection and monitoring. From 2006-2008, Mr. Santulin focused on European hedge fund managers while maintaining the aforementioned responsibilities.

JT Shields has been a Vice President of BAAM. Since joining BAAM, Mr. Shields has been involved in manager evaluation, selection and monitoring, primarily focused on hedged equity managers. In addition, he has been involved in portfolio management of BAAM’s equity strategies. Before joining BAAM in 2010, Mr. Shields was a Vice President at UBP Asset Management, a fund of hedge funds, where he focused on equity strategies.

(a)(2) Other Accounts Managed by Portfolio Managers

The table below identifies, for each named portfolio manager of the registrant (a “Portfolio Manager”), the number of accounts (other than the registrant or Blackstone Alternative Alpha Fund (a feeder fund that invests substantially all of its assets in the registrant, the “Feeder Fund”)) for which the Portfolio Manager has day-to-day management responsibilities and the total assets in such accounts, within each of the following categories: registered investment companies, other pooled investment funds and other accounts.

Name of Portfolio Manager

Registered Investment Companies Managed by Portfolio Manager

Other Pooled Investment Vehicles Managed by Portfolio Manager

Other Accounts Managed by Portfolio Manager

Number

Total Assets

Number

Total Assets

Number

Total Assets

Alberto Santulin

0

N/A

0

N/A

0

N/A

JT Shields

0

N/A

0

N/A

0

N/A

Potential Conflicts of Interest

Not applicable.

(a)(3) Compensation of Portfolio Managers

The Portfolio Managers’ compensation is comprised primarily of a fixed salary and a discretionary bonus paid by BAAM or its affiliates and not by the registrant or the Feeder Fund. A portion of the discretionary bonus may be paid in shares of stock or stock options of The Blackstone Group L.P., the parent company of BAAM (“Blackstone”), which stock options may be subject to certain vesting periods. The amount of the Portfolio Managers’ discretionary bonus, and the portion to be paid in shares or stock options of Blackstone, is determined by senior officers of BAAM and/or Blackstone. In general, the amount of the bonus will be based on a combination of factors, none of which is necessarily weighted more than any other factor. These factors may include: the overall performance of BAAM; the overall performance of Blackstone and its affiliates and subsidiaries; the profitability to BAAM derived from the management of the registrant, the Feeder Fund and the other accounts managed by BAAM; the absolute performance of the registrant, the Feeder Fund and such other accounts for the preceding year; contributions by the Portfolio Manager in assisting with managing the assets of BAAM; and execution of managerial responsibilities, client interactions and support of colleagues. The bonus is not based on a precise formula, benchmark or other metric.

(a)(4) Securities Ownership of Portfolio Managers

The table below shows the dollar range of the interests of the registrant and the Feeder Fund beneficially owned as of March 31, 2013 by each Portfolio Manager.

Portfolio Manager	Registrant	Feeder Fund
Alberto Santulin	None	None
JT Shields	None	None

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 procedures by which the shareholders may recommend nominees to the registrant’s Board of Trustees.

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”) are effective as of the date within 90 days of the filing date of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended.

(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 that occurred during the second fiscal quarter of the period covered by this report that have materially affected or are reasonably likely to materially affect the registrant’s internal control over financial reporting.

Item 12. Exhibits.

(a)(1) Code of ethics, or any amendment thereto, that is the subject of disclosure require by Item 2 is attached hereto.

  Exhibit 99.CODE

(a)(2) Certifications pursuant to Rule 30a-2(a) are attached hereto.

  Exhibit 99.CERT

(a)(3) Not applicable.

(a)(4) Proxy voting policies and procedures pursuant to Item 7 are attached hereto.

  Exhibit 99.PROXY

(b) Certifications pursuant to Rule 30a-2(b) are attached hereto.

  Exhibit 99.906CERT

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) Blackstone Alternative Alpha Master Fund                            

By (Signature and Title)         /s/ Brian F. Gavin                                                     

Brian F. Gavin, President (Principal Executive Officer)

Date:       June 10, 2013                                             

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/ Brian F. Gavin                                                     

Brian F. Gavin, President (Principal Executive Officer)

Date:       June 10, 2013                                                 

By (Signature and Title)         /s/ Arthur Liao                                                                             

Arthur Liao, Treasurer (Principal Financial and Accounting Officer)

Date:       June 10, 2013                                                 

EX-99.CODE ETH

CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS ADOPTED PURSUANT

TO RULES PROMULGATED UNDER SECTION 406 OF THE SARBANES-OXLEY ACT OF 2002

I. Covered Officers/Purpose of the Code

This code of ethics (the “Code”) of Blackstone Alternative Alpha Fund, Blackstone Alternative Alpha Fund II, and Blackstone Alternative Alpha Master Fund (each, the “Fund”), applies to the Fund’s principal executive officer and principal financial officer (the “Covered Officers”) for the purpose of promoting:

• honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

• full, fair, accurate, timely and understandable disclosure in reports and documents that each Fund files with, or submits to, the Securities and Exchange Commission (“SEC”) and in other public communications made by the Fund;

• compliance with applicable laws and governmental rules and regulations;

• the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and

• accountability for adherence to the Code.

Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest.

II. Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest

Overview. A “conflict of interest” occurs when a Covered Officer’s private interest interferes with the interests of, or the Covered Officer’s service to, the Funds. For example, a conflict of interest would arise if a Covered Officer, or a member of the Covered Officer’s family, receives improper personal benefits as a result of the Covered Officer’s position with a Fund.

Certain conflicts of interest arise out of the relationships between Covered Officers and the Funds and already are subject to conflict of interest provisions in the 1940 Act, and the Advisers Act. For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Funds because of their status as “affiliated persons” of the Funds. The Funds’ and their investment adviser’s compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code. Although typically not presenting an opportunity for improper personal benefit, conflicts may also arise from, or as a result of, the contractual relationship between the Funds and their investment adviser or a third party service provider of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Funds or for the Adviser or a third party service provider, or for one or more of them), be involved in establishing policies and implementing decisions that will have different effects on the Adviser, third party service provider and the Funds. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Funds and the Adviser or third party service provider and is consistent with the performance by the Covered Officers of their

duties as officers of the Funds. Thus, if performed in conformity with the provisions of the 1940 Act and the Advisers Act, such activities will be deemed to have been handled ethically. In addition, it is recognized by the Board that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes.

Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the 1940 Act and the Advisers Act.

III. Disclosure and Compliance

• Each Covered Officer of the Funds should become familiar with the disclosure requirements generally applicable to the Funds;

• each Covered Officer of the Funds should not knowingly misrepresent, or cause others to misrepresent, facts about the Funds to others, whether within or outside the Funds, including to the Funds’ Trustees and auditors, and to governmental regulators and self-regulatory organizations;

• each Covered Officer of the Funds should, to the extent appropriate within the Covered Officer’s area of responsibility, consult with other officers and employees of the Funds and its investment adviser with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents each Fund files with, or submits to, the SEC and in other public communications made by the Fund; and

• it is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations.

IV. Reporting and Accountability

Each Covered Officer of the Funds must:

• upon adoption of the Code (or thereafter as applicable, upon becoming a Covered Officer), affirm in writing to the Board that the Covered Officer has received, read and understands the Code;

• annually thereafter affirm to the Board that the Covered Officer has complied with the requirements of the Code;

• not retaliate against any other Covered Officer or any employee of the Funds or its affiliated persons for reports of potential violations that are made in good faith; and

• notify the Chief Compliance Officer of the Funds promptly if the Covered Officer knows of any violation of this Code. Failure to do so is itself a violation of this Code.

The Chief Compliance Officer of the Funds is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. The Chief Compliance Officer of the Funds is authorized to consult, as appropriate, with counsel to the Funds and counsel to the Trustees of the Funds who are not “interested persons,” as defined by Section 2(a)(19) of the 1940 Act, of the Funds (the “Independent Trustees”), and is encouraged to do so. However, any approvals or waivers¹ will be considered by Independent Trustees.

¹  For this purpose, the term “waiver” includes the approval by the Fund of a material departure from a provision of the Code or the Fund’s failure to take action within a reasonable period of time regarding a material departure from a provision of the Code that has been made known to Fund management.

The Funds will follow these procedures in investigating and enforcing this Code:

• the Chief Compliance Officer will take all appropriate action to investigate any reported potential violations;

• if, after such investigation, the Chief Compliance Officer believes that no violation has occurred, the Chief Compliance Officer is not required to take any further action;

• any matter that the Chief Compliance Officer believes is a violation will be reported to the Independent Trustees;

• if the Independent Trustees concur that a violation has occurred, it will inform and make a recommendation to the Board, which will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel Adviser or Board; or a recommendation to dismiss the Covered Officer; and

• any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules.

V. Other Policies and Procedures

This Code shall be the sole code of ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Funds, the Adviser, principal underwriter (if applicable), or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The codes of ethics under Rule 17j-1 under the 1940 Act of the Funds, the Adviser and principal underwriter are separate requirements applying to the Covered Officers and others, and are not part of this Code.

VI. Amendments

Any amendments to this Code must be approved or ratified by a majority vote of the Board, including a majority of the Independent Trustees.

VII. Confidentiality

All reports and records relating to the Funds prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Adviser or Board, counsel to the Funds and counsel to the Independent Trustees.

VIII. Internal Use

The Code is intended solely for the internal use by the Funds and does not constitute an admission, by or on behalf of any Fund, as to any fact, circumstance, or legal conclusion.

EX-99.12(A)(4)

Exhibit 12(A)(4)

PROXY VOTING POLICIES AND PROCEDURES

Blackstone Alternative Alpha Master Fund (the “Master Fund”) has delegated the voting of proxies for securities to Blackstone Alternative Asset Management L.P., its investment adviser (the “Adviser” or “BAAM”), pursuant to the Adviser’s proxy voting guidelines, which Blackstone Alternative Alpha Fund, a feeder fund that invests substantially all of its assets into the Master Fund (the “Fund”), has adopted. Under these guidelines, the Adviser will vote proxies related to Fund securities in the best interests of the Fund and its shareholders. Set forth below is a copy of the Adviser’s proxy voting policy.

Whenever the Fund as an investor in the Master Fund is requested to vote on matters pertaining to the Master Fund, the Fund will seek voting instructions from its investors and will vote its interest in the Master Fund for or against such matters proportionately to the instructions to vote for or against such matters received from its investors. The Fund shall vote shares of the Master Fund for which it receives no voting instructions in the same proportion as the shares of the Master Fund for which it receives voting instructions.

As a note, the requirements and procedures described herein are applicable to the extent the Fund holds securities directly. Underlying investment managers are typically responsible for and vote on behalf of limited partners or shareholders for securities that are held at that level. Voting performed at this level does not have to be included in reporting on Form N-PX.

Information on how the Fund voted proxies (if any) relating to portfolio securities during the most recent 12-month period ended June 30 will be reported on Form N-PX.

Adviser Proxy Voting Policies and Procedures

By virtue of the Adviser’s relationship as general partner or investment manager of the clients of the Adviser, the Adviser has proxy voting authority with respect to client securities. When voting proxies on behalf of clients (including the Fund), the Adviser’s overall objective is to vote proxies in the best interest of the clients and, in so doing, to maximize the value of the investments made by the clients taking into consideration the clients’ investment horizons and other relevant factors.

This document sets forth the Adviser’s policies and procedures that are designed to meet these overall objectives. As described below, these policies and procedures address the following areas:

• The personnel responsible for monitoring corporate actions, deciding how to vote proxies and ensuring that proxies are submitted in a timely manner;

• The basis on which decisions are made regarding whether and how to vote proxies depending on the nature of the matter at issue;

• The approach to addressing material conflicts of interest that may arise between us and our clients when voting proxies and how we resolve those conflicts in the best interest of our clients;

• The means by which the clients and their investors may obtain information about proxy voting; and

• The books and records that we retain in connection with our proxy voting.

While the Adviser endeavors to follow these policies and procedures in all situations, special circumstances may arise from time to time that warrant a deviation. Such deviations will be reported to the Board, in advance of taking such action, if practicable. In addition, the Adviser will apply our proxy voting policies and procedures to votes cast with respect to publicly traded companies and, to the extent applicable, to analogous actions taken with respect to investments made in private companies.

A. General Procedures

1. Monitoring Corporate Actions

The clients of the Adviser generally make a limited number of investments in equity securities. When the Adviser receives proxy voting materials (or similar voting/solicitation notices), they are initially transmitted by the company’s corporate secretary or transfer agent to the BAAM employee who is designated to receive notices in the definitive documentation governing the client’s investment (the “Proxy Recipient”). The Proxy Recipient must inform the Head Trader and the Head of Middle Office and Operations of such receipt and review the materials, determine which client(s) hold the securities and confirm the number of securities with Head Trader and the Head of Middle Office and Operations. The Proxy Recipient will consult with a member of the Investment Committee. The Proxy Recipient will monitor the voting deadline, together with the IC Designee (defined below), to ensure that the deadline for the response is met.

2. Determination of Voting Decisions

Decisions on how to vote a proxy generally are made by the Adviser’s Investment Committee. The Investment Committee and the members of the investment team covering the applicable security often have the most intimate knowledge of both a company’s operations and the potential impact of a proxy vote’s outcome. A member of the Investment Committee may designate a member of the investment team (the “IC Designee”) to consult with the CCO, the members of the Investment Committee and other members of the investment team covering the applicable security regarding decisions and completion of the proxy material. Decisions are based on a number of factors which may vary depending on a proxy’s subject matter, but are guided by the general policies described in this document. In addition, BAAM may determine not to vote a proxy after consideration of the vote’s expected benefit to clients and the cost of voting the proxy.¹ The IC Designee will report the outcome and the basis of such outcome to the Investment Committee for approval.

3. Communication of Decision

After making a decision to vote a proxy and determining how to vote the proxy, the Investment Committee or their designee will then submit the vote. The IC Designee will send completed copies of the proxy materials to the Proxy Recipient, the Head of Middle Office and Operations and the CCO. The physical procedures for voting proxies may vary, and can include electronic voting, forwarding voting instructions to the custodian or voting proxies forwarded by the custodian.

¹  In determining whether the cost of voting a proxy outweighs its expected benefit to clients, the Investment Committee may consider factors such as (1) the subject matter of the vote; (2) the additional length of time that BAAM anticipates holding the investment; and (3) logistical issues associated with voting proxies for foreign companies.

B. Subject Matter Considerations

Determinations on how to vote proxies will depend largely on the subject matter at issue. When determining how to vote proxies, the Investment Committee will be guided by the general policies set forth below. These general policies are intended to promote a consistent approach to proxy voting. We will, however, periodically review these policies and procedures and they may be updated as a result.

The Adviser views proxy subject matters as falling within the general categories described below.

1. Company Management and Auditors

Proxy votes on company management include matters relating to the election of a company’s board of directors and the appointment of its independent auditors. BAAM generally will vote in support of management’s slated board of directors. The Adviser may choose not to support such directors, however, when special circumstances necessitate otherwise, including for example when management compensation appears inconsistent with a company’s performance or when the board has failed to take corrective action to address persistent problems that impact the company’s performance. When asked to vote on the appointment of a company’s auditors, BAAM will support the recommendation of a company’s board, unless auditors have changed frequently or there is reasonable concern as to the independence of the auditors.

2. Executive and Director Compensation

BAAM believes that executive compensation plans should be in line with the interests of company shareholders. The Adviser’s general policy is to consider, on a case-by-case basis, new and amended executive compensation plans and to support those executive compensation plans that provide management with the ability to administer fair, competitive compensation packages to executives, so long as those plans do not provide for unmerited preferential treatment or result in excessive dilution of existing shareholders’ ownership interests. The Adviser also has observed that shareholder proposals on executive compensation typically call for specific limits. The Adviser believes that executive compensation generally should be determined by a company’s compensation committee composed primarily of independent directors and thus the Adviser usually will not support compensation-related shareholder proposals. With respect to director compensation, BAAM believes that it is important to consider each director’s total compensation package, including any annual retainer, meeting fees, stock options or grants and the level of pension benefits.

3. Corporate Structure and Shareholder Rights

The Adviser views proxy votes on matters relating to changes in a company’s bylaws as falling within the category of “corporate structure and shareholders rights.” These matters may be proposed by either management or shareholders and typically address issues such as cumulative voting, preemptive rights, confidential voting, supermajority voting and similar matters. BAAM will review these matters on a case-by-cases basis and will generally vote in favor of those measures that provide management with the most operational flexibility without compromising the ownership rights of shareholders as such rights are set forth in the company’s organizational documents and any agreements with the Funds we manage.

4. Corporate and Social Policy Issues

The Adviser views corporate and social policy issues primarily as “ordinary business matters.”² In addition, we view those ordinary business matters that have a direct or indirect impact on a company’s profitability as primarily the responsibility of management which should be approved solely by the company’s board of directors. Accordingly, the Adviser generally abstains or votes against proxy votes on corporate and social policy issues proposed by shareholders. Exceptions may be made when an issue may have significant economic consequences.

5. Deviations from the General Policies

In the course of determining how to vote a particular proxy, the Adviser may encounter situations where strict adherence to the general policies described above could result in a decision that is not in a client’s best interest. In those situations, the Investment Committee may decide to vote in another manner, but will generally consult with the CCO before doing so.

C. Conflicts of Interest

A conflict of interest may occur where BAAM or any of its employees or affiliates has a direct or indirect economic stake in the outcome of a proxy vote. Potential conflicts could arise in a number of situations. The following non-exclusive examples illustrate conflicts of interest that could arise:

• A failure to vote in favor of management may harm the relationship of the Adviser, of another client has, or an affiliate, with the company.

• A failure to vote in favor of a particular proposal may harm the relationship of the Adviser, of another client, or an affiliate, with the proponent of the proposal.

• A failure to vote for or against a particular proposal may adversely affect a business or personal relationship, such as where an officer of BAAM has a spouse or other relative who serves as a director of the company, is employed by the company or otherwise has an economic interest therein.

Due to the close monitoring of company activities by BAAM, the Adviser expects to be aware of any potential conflicts of interest that may arise. The Adviser also requires the members of the Investment Committee to disclose any personal conflicts of interest they may have with respect to overseeing a fund’s investment in a particular company.

When a potential conflict arises between BAAM, on the one hand, and one or more of clients of BAAM, on the other, the CCO, in consultation with the Investment Committee, will evaluate the matter to determine whether an actual conflict exists. Where an actual conflict exists, BAAM will take necessary and appropriate steps to eliminate the conflict, which may include removing a particular member of the Investment Committee from the voting process or taking similar actions. In addition, the Adviser may consider the following as potential methods for resolving conflicts: (i) disclosing the matter to the board of directors, if any, of the client and obtaining such board’s consent or direction, or (ii) suggesting to the board of directors, if any, that such board hire a third party to make a determination on how to vote a particular proxy.

²  Social policy issues may relate to a wide range of matters, including for example environmental issues, bank lending practices, corporate political contributions and activities, alcohol and tobacco advertising, conducting business in specified countries, involvement in nuclear defense systems and similar matters.

Finally, situations may arise in which more than one client invests in the same company or another entity of BAAM invests in the same company. In these situations, two or more clients may have different investment objectives, client-specific voting policies or ultimate economic interests. In these situations, clients may cast opposing votes, although the Investment Committee will generally consult with the CCO before doing so.

D. Providing Proxy Voting Information to Clients

We acknowledge that limited partners and shareholders have a right to information about how we vote client proxies and we will make information available on request. We also will make a copy of these policies and procedures available on request. When a limited partner makes a request about a particular vote, we usually will provide the following information: (1) the date of the vote; (2) a brief description of the matter voted on; (3) how (or whether) we cast the vote on the matter and (4) any other reasonable information a limited partner might request. Proxy voting information and the procedure for obtaining such information will be included in BAAM’s Form ADV which is available to each limited partner, and on Form N-PX, which contains the Funds’ proxy voting records for the most recent twelve-month period ended June 30 and is publicly-available through the SEC’s EDGAR database.

E. Books and Records

BAAM must maintain the following additional records relating to proxy voting, which must be maintained by the CCO in an easily accessible place for five years, the first two years in BAAM’s offices.

A copy of these proxy voting policies and procedures;

A copy of each proxy statement received by BAAM regarding client securities;

A record of each vote cast by BAAM on behalf of a client;

A copy of all memoranda or similar documents created by BAAM that were material to making a decision on the voting of client securities or that memorialize the basis for that decision; and

A copy of each written request by a limited partner for information on how BAAM voted proxies on behalf of a client, and a copy of any written response by BAAM to any request (written or oral) by a limited partner for information on how BAAM voted proxies on behalf of the client.

BAAM may satisfy the requirements to maintain copies of proxy statements received and a record of votes cast on behalf of the clients by relying on third parties to make and retain, on behalf of BAAM, a copy of such proxy statements and voting records (provided that if BAAM is relying on this method, it has obtained an undertaking from the third party to provide a copy of the proxy statements and voting records promptly upon request). BAAM also may satisfy the requirement to maintain copies of proxy statements by relying on obtaining a copy of a proxy statement from the SEC’s EDGAR system (to the extent that such proxy statements are available through the EDGAR system).

EX-99.CERT

CERTIFICATIONS

I, Brian F. Gavin, certify that:

1. I have reviewed this report on Form N-CSR of Blackstone Alternative Alpha Master Fund (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations, changes in net assets and cash flows of the registrant as of, and for, the period presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

June 10, 2013	/s/ Brian F. Gavin
Date	Brian F. Gavin, President (Principal Executive Officer)

CERTIFICATIONS

I, Arthur Liao, certify that:

1. I have reviewed this report on Form N-CSR of Blackstone Alternative Alpha Master Fund (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations, changes in net assets and cash flows of the registrant as of, and for, the period presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

June 10, 2013	/s/ Arthur Liao
Date	Arthur Liao, Treasurer (Principal Financial and Accounting Officer)

EX-99.906CERT

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1350, and accompanies the report on Form N-CSR for the period ended March 31, 2013 of Blackstone Alternative Alpha Master Fund (the “registrant”).

I, Brian F. Gavin, the President of the registrant, certify that, to the best of my knowledge:

1. the Form N-CSR fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78m(a) or 78o(d)); and

2. the information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

June 10, 2013

Date

/s/ Brian F. Gavin

Brian F. Gavin

President (Principal Executive Officer)

This certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of Form N-CSR or as a separate disclosure document. A signed original of this written statement required by Section 906 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1350, and accompanies the report on Form N-CSR for the period ended March 31, 2013 of Blackstone Alternative Alpha Master Fund (the “registrant”).

I, Arthur Liao, the Treasurer of the registrant, certify that, to the best of my knowledge:

1 the Form N-CSR fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78m(a) or 78o(d)); and

2 the information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

June 10, 2013

Date

/s/ Arthur Liao

Arthur Liao

Treasurer (Principal Financial and Accounting Officer)

This certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of Form N-CSR or as a separate disclosure document. A signed original of this written statement required by Section 906 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.