Item 5: Fees and Compensation
BFAM US receives payment from BFAM Cayman for providing sub-advisory services to the
Funds. The sub-advisory fees payable to BFAM US by BFAM Cayman represent a portion of
the fees received by BFAM Cayman from the Funds. The fees, compensation, and expenses
applicable to the Funds are set forth in detail in their respective governing agreements.
Management Fee
Investors in the Funds managed by BFAM Cayman are charged a fee for investment
management services based on assets under management (the “Management Fee”), which is
set forth in the Funds’ offering documents. BFAM Cayman generally receives an annual
Management Fee ranging between 1 and 2% per annum in respect of the net asset value
(“NAV”) of the relevant class of shares or interests. A particular class of shares or interests
available to employees is not subject to a Management Fee. The Management Fee is payable
monthly in arrears as soon as practicable after the end of each calendar month. With respect to
certain Investors, BFAM Cayman has waived, rebated or decreased the Management Fee that
is payable in whole or in part and may, in its sole discretion, do so in the future. The Funds
from time to time enter into Side Letters providing for changes in Management Fees.
Performance Based Compensation
In addition to Management Fees, BFAM Cayman (or one of its affiliates) receives performance-
based compensation in the form of a performance fee or performance allocation (the
“Performance Fee”) which is set forth in the Funds’ offering documents. The Performance Fee
will accrue monthly as at the close of business on each valuation day and generally will be paid
annually in arrears. Investors redeeming as of a date that is not the fiscal year end for a Fund
will be assessed a Performance Fee calculated on a “crystallized” basis.
With respect to certain Investors, BFAM Cayman has reduced, waived, rebated, or modified
the Performance Fee with respect to certain Investors and may, in its sole discretion, do so in
the future. The Funds from time to time enter into Side Letters providing for changes in
Performance Fees.
Other Costs and Expenses
The Funds bear all costs and expenses related to their investments and operations, including,
without limitation, brokerage and other transaction costs, clearing and settlement charges,
interest and commitment fees on debit balances or borrowings, borrowing charges on securities
sold short, costs of any liability insurance obtained on behalf of the Funds or the Board of
Directors, custody fees, costs of any litigation or investigation involving the Funds activities,
indemnification expenses, research and investment consultancy expenses, the Management
Fee, remuneration of independent directors of the Funds, out of pocket expenses incurred by
directors of the Funds, the Performance Fee, the fees and expenses of professionals providing
services to the Funds (excluding all fees payable by BFAM Cayman to BFAM US or BFAM
Hong Kong and BFAM Hong Kong to BFAM Shanghai in connection with the provision of
investment management or similar services to the Funds), including legal, audit, accounting,
tax, administration, fees and expenses of the members of the Board of Directors, regulatory
costs, any issue or transfer taxes chargeable in connection with any securities transactions, any
entity level taxes, corporate fees payable to governments or agencies, regulatory filing and
license fees, all fees payable to third party service providers in connection with trade
confirmation, holdings and order reconciliation, communication or information expenses with
respect to Investor services, expenses of meetings of Investors and of preparing, printing and
distributing financial and other reports, proxy forms, offering memoranda and similar
documents, the cost of obtaining and maintaining any future listing of the Funds’ shares or
BFAM Partners (North America) LLC. Form ADV Part 2A
interests on any stock exchange and any extraordinary fees and expenses incurred by BFAM
on behalf of the Funds. Such expenses are generally shared by all of the Investors; provided,
however, that certain expenses related to a particular series or class of shares or interests will
only be applied to such series or class.
If, in the future, BFAM manages multiple client accounts, a portion of the Funds’ operating
expenses may be shared with other investment entities or accounts managed by BFAM on an
equitable basis.
Sales Compensation
BFAM and its supervised persons do not receive (directly or indirectly) any compensation from
the purchase or sale of securities or investments for the Funds. BFAM and its supervised
persons do not receive (directly or indirectly) sales commissions in connection with sales of
interests in the Funds.
BFAM employs “cap intro” and similar introduction services offered by brokers and other
services providers, and has adopted appropriate policies and procedures governing those
relationships.
BFAM Partners (North America) LLC. Form ADV Part 2A