AQR Arbitrage LLC

Item 5 – Fees and Compensation
AQR Arbitrage is compensated through various fee structures, including asset-based fees and performance-based
fees.4 Asset-based fees are typically annual fixed fees based on AUM. A performance fee is based upon a
percentage of the net profits of the account being managed. Typically, when calculating net profits, performance
fees are based on absolute or benchmark-relative returns over an agreed upon time period, and are subject to high
water marks or loss carryforwards. As more fully described below, AQR Arbitrage either bills or deducts fees in
advance or in arrears, according to the terms of the pertinent investment management agreement or other
governing documentation. Under certain circumstances, fees are negotiable.
AQR Mutual Funds
The Advisory fee for the AQR Diversified Arbitrage Fund is 1.00% of AUM (generally including, but not limited to,
cash balances and cash invested in money market funds, closed end funds, and ETFs). Additional operating
expenses apply, as described more fully in the relevant offering materials. Pursuant to the sub-advisory agreements
between AQR Arbitrage, AQR and AQR Funds, AQR Arbitrage receives a portion of the fees paid to AQR when
acting as sub-advisor to AQR Diversified Arbitrage Fund. Detailed information concerning the AQR Mutual Funds
is contained in each Series Fund’s prospectus, which can be downloaded from https://funds.aqr.com. Each Series
Fund is distributed by ALPS Distributors, Inc.
AQR UCITS
Advisory fees for the AQR UCITS range up to 1.80% of AUM (generally including, but not limited to, cash balances
and cash invested in money market funds, closed end funds, and ETFs). AQR Arbitrage receives a portion of the
fees paid to AQR when acting as sub-advisor to AQR UCITS. Additional operating expenses apply, as described
more fully in the relevant offering materials. Certain AQR UCITS also include a performance fee of up to 20% of
net profits. AQR and its affiliates reserve the right to enter into written agreements with investors (“Side Letters”) in
AQR UCITS sub-funds to waive or modify the standard fee terms of such sub-fund in respect to a particular investor.
More information about the AQR UCITS can be found at https://ucits.aqr.com/.
Sponsored Funds
The basic fee schedule for Sponsored Funds includes an annual fixed fee (or, in certain cases, a tiered fee
schedule) of up to 2.50% of AUM (generally including, but not limited to, cash balances, and cash invested in money
market funds, closed end funds, and ETFs), typically payable either monthly or quarterly in advance. Certain fee
schedules also include a performance fee of up to 30% of net profits.5 AQR Arbitrage receives a portion of the fees
paid to AQR when acting as sub-advisor to AQR Sponsored Funds. Fees paid to AQR in respect of investments
made in AQR Sponsored Funds are set forth in each respective Sponsored Fund’s offering documents. Additional
operating expenses apply, as described more fully in the relevant offering materials. Investors in certain Sponsored
Funds may be subject to “lock-up” periods or gates with respect to withdrawals/redemptions and incur
withdrawal/redemption fees, in accordance with the provisions of the applicable fund documentation.
AQR Arbitrage and its affiliates enter into Side Letters with investors in Sponsored Funds (“Subscribers”) to waive
or modify the standard terms of such Sponsored Fund in respect of a particular Subscriber. Certain Subscribers
are not charged any management fees, are not charged any performance fees, are charged fees in arrears rather
than in advance, or have a differing fee structure because of their overall relationship with AQR Arbitrage or its
affiliates or their investment approach. In particular, certain Subscribers in a Private Fund that are employees
(including certain former employees), business associates and other “friends and family” of AQR Arbitrage, its
affiliates or their personnel will typically not pay management fees or performance fees in connection with their
investment in a Private Fund or may pay a reduced rate. Consequently, fees charged to certain Subscribers may
deviate from the standard fees disclosed in a Sponsored Fund’s offering documents.
For the AQR Arbitrage Sponsored Funds, AQR Arbitrage has the absolute discretion, subject to its fiduciary duty,
to agree with Subscribers, particularly with respect to those Subscribers who are large or strategic investors, to

    Throughout this Brochure, the term “performance fee” means performance fee or performance allocation, as applicable.

    For the avoidance of doubt, no Client is charged a combination of the highest advisory and performance fees set forth herein.

                                                                           AQR Arbitrage LLC | Part 2A of Form ADV: Firm Brochure   7

waive or modify the application of any provision of an AQR Arbitrage Sponsored Fund agreement (including, but
not limited to, those relating to liquidity, investment capacity, fees, and transparency). Moreover, with respect to
such Subscribers, AQR Arbitrage remains subject to its fiduciary obligations, its duties under the Investment
Advisers Act of 1940 (“Advisers Act”) and any terms negotiated through Side Letters. In some instances, Side
Letters grant such Subscribers materially favorable terms relating to, among other things, liquidity, investment
capacity, economic rights, fees, expenses, information and reporting rights, co-investment rights, certain rights or
terms necessary in light of particular legal, regulatory or policy requirements of a particular investor, veto rights,
transfer rights and transparency. In addition, AQR Arbitrage reserves the right to waive or rebate all or a portion of
its management fees and/or performance fees with respect to a Subscriber. Prospective Subscribers and existing
...

Item 7 – Types of Clients
AQR Arbitrage provides advisory and sub-advisory services to Sponsored Funds, Managed Accounts, AQR Mutual
Funds and UCITS Funds whose participants may include, but are not limited to, investment companies, pooled
investment vehicles, pension and profit sharing plans, charitable organizations, state or municipal government
entities, other investment advisers, insurance companies, sovereign wealth funds and foreign official institutions,
corporations or other business entities, as well as individuals and other investors.
AQR Arbitrage’s investment minimums may vary according to investment strategy and vehicle (i.e., Managed
Account versus investment in a Sponsored Fund), and AQR Arbitrage maintains the ability to waive such minimums
at its discretion, as applicable. Generally, AQR Arbitrage’s Managed Account minimums range from $50 million to
$100 million depending on the investment strategy. The standard minimum investment required to invest in a
Sponsored Fund is described in each Sponsored Fund’s offering memorandum. The minimum investment required
to invest in a Series Fund or in an AQR UCITS is described in each fund’s prospectus.

                                                               AQR Arbitrage LLC | Part 2A of Form ADV: Firm Brochure   12