Item 5: Fees and Compensation
In consideration for the investment advisory services provided by Farallon Europe pursuant to
the Sub-Adviser Agreement, Farallon pays to Farallon Europe a quarterly fee in advance based
upon Farallon Europe’s forecasted costs for the relevant quarter. In addition, Farallon pays to
Farallon Europe annual performance-based compensation.
Farallon, and not the Farallon Funds, is responsible for all payment of Farallon Europe’s cost-
based fees and performance-based compensation. Farallon’s payment obligations to Farallon
Europe do not affect the rights of investors in the Farallon Funds to terminate their investment
advisory relationships with Farallon or recover any unearned management fees from Farallon.
Please see Farallon’s Form ADV for management fees and performance compensation payable
by the Farallon Funds and allocable to Farallon.
Additional Fees and Expenses
To the extent permitted under the Farallon Funds’ constituent documents, the Farallon Funds
are obligated to pay for all legal, auditing and accounting fees and expenses, tax preparation
and tax compliance expenses, investment expenses and all other expenses of each respective
Farallon Fund, including, as applicable and without limitation, custodian fees, taxes on
securities transactions, interest on borrowed moneys, brokerage or counterparty fees and
commissions and any other similar fees, research services, consulting expenses and third- party
research-related and advisory-related expenses, risk reporting, clearing and collateral and cash
management expenses, government registration fees, fees and expenses of any third-party
administrator and similar service providers, expenses related to the offering and sale of
interests, entity-level taxes and any other taxes, fees and other governmental charges levied in
respect of the relevant Farallon Fund, organizational expenses and other similar or related
expenses related to the operation of the respective Farallon Fund including the costs of
negotiation of, disclosure of and compliance with side letters or other similar agreements and
the “most favored nations” opt-in process, if applicable, and extraordinary expenses. The
foregoing categories of expenses include, but are not limited to, transaction sourcing fees, tax
compliance and filing expenses, testing of control procedures, anti-money laundering compliance
expenses, asset verification, valuation and pricing services, jurisdiction-specific regulatory and
filing expenses, and insurance (including cybersecurity and liability (e.g., directors and officers
liability) insurance. These expenses also include costs associated with engaging professional
service providers and/or purchasing services, products or technology specifically related to the
foregoing categories of expenses. For example, Farallon Europe may outsource certain services
(e.g., engaging law firm secondees or other advisors to assist with structuring and negotiating
investments or hiring a consultant to assist with tax preparation), fees or expenses for which
may be borne by the Farallon Funds. In relation to how Farallon Europe pays for investment
research please see Item 12. FCM LLC and Farallon Europe maintain policies and procedures
for allocating expenses (i) as between FCM LLC, the Farallon Advisers and the Farallon Funds
and (ii) amongst the Farallon Funds. See Item 12 for further discussion with respect to fees
associated with brokerage practices. Pursuant to these policies and procedures, the allocation of
certain expenses involves Farallon and/or Farallon Europe’s subjective determinations, and, in
certain circumstances, each may face conflicts of interests in making such determinations.