Prospectus (4.96 Mb) - BlackRock International

Company and Other Clients. However, there are likely to be circumstances where the Company is unable to participate, in
whole or in part, in certain investments to the extent it would participate absent allocation of an investment opportunity
among the Company and Other Clients. In addition, it is likely that the Company’s portfolio and those of Other Clients will
have differences in the specific Fund Investments held in their portfolios even when their investment objectives are the
same or similar. These distinctions will result in differences in portfolio performance between the Company and Other
Clients.
POTENTIAL CONFLICTS OF INTEREST INVOLVING EXTERNAL INVESTMENT ADVISORS
Certain of the External Investment Advisors may engage in other forms of related and unrelated activities in addition to
advising a Fund Investment. They may also make investments in securities for their own account. Activities such as these
could detract from the time an External Investment Advisor devotes to the affairs of a Fund Investment. In addition, certain
of the External Investment Advisors may engage affiliated entities to furnish brokerage services to Fund Investments and
may themselves provide market making services, including those of counterparty in stock and OTC transactions. As a
result, in such instances the choice of broker, market maker or counterparty and the level of commissions or other fees
paid for such services (including the size of any mark-up imposed by a counterparty) may not have been made at arm’s
length.
INVESTMENT IN EXTERNAL INVESTMENT ADVISORS
Other Clients, including those in which the Investment Manager, its affiliates and their employees may have invested, may
acquire an ownership or other financial interest in certain of the External Investment Advisors of Fund Investments
(a “Financial Interest”). The terms of any Financial Interest may include direct or indirect receipt of a portion of any
management or performance-based fees paid by such Fund Investment to its External Investment Advisor. The
Investment Manager or its affiliates will endeavour to negotiate such Financial Interest so as to permit a return to the
Company of a share of management or performance-based fees paid by the Company with respect to such Fund
Investment, but no assurances can be given that it will be able to do so. The Investment Manager expects to negotiate any
such benefit within the parameters it generally uses in connection with negotiating agreements with such External
Investment Advisors, and not based on the size or other terms related to the Financial Interest, with the proviso that any
negotiated reduction in management or performance-based fees and allocation will be limited in terms of a stated
maximum US Dollar amount in investments or a percentage of the capital base of a Fund Investment held by the Company
and Other Clients, in the aggregate. To the extent Other Client investments in such a Fund Investment exceed this
limitation, it is generally expected that the most recent investments by Other Clients would not participate in the fee
reduction, unless the Investment Manager determines that a different allocation of the fee reduction is more reasonable
or practicable. The Company generally would not participate in other aspects of any Financial Interest held in an External
Investment Advisor. However, this relationship created by a Financial Interest could produce conflicts of interest as
between the Company and the Investment Manager or Other Client that holds the Financial Interest. For example,
withdrawing funds from a Fund Investment in which the Investment Manager, an affiliate or Other Clients hold a Financial
Interest could adversely affect the value of such Financial Interest. The Investment Manager will endeavour to manage
such conflicts equitably, subject to legal, regulatory, contractual or other applicable considerations.
FEES PAID TO THE INVESTMENT MANAGER
Fees paid to the Investment Manager at the Company level have not been established on the basis of an arm’s-length
negotiation between the Company and the Investment Manager. Performance fees may create an incentive for the
Investment Manager to approve and cause the Company to make more speculative investments than it would otherwise
make in the absence of such performance-based compensation.
ALLOCATION OF EXPENSES
The Investment Manager and its affiliates may from time-to-time incur expenses on behalf of the Company and one or
more Other Clients. Although the Investment Manager and its affiliates will attempt to allocate such expenses on a basis
that they consider equitable, there can be no assurance that such expenses will in all cases be allocated appropriately.
TRANSACTIONS BETWEEN THE COMPANY AND OTHER CLIENTS
The Investment Manager may cause the Company to purchase securities from, or sell securities to, Other Clients when
the Investment Manager believes such transactions are appropriate based on each party’s investment objective. Such
transactions are expected to occur at the net asset value of such securities.
SERVICES PROVIDED BY AFFILIATES
Subject to the US Advisers Act, other applicable regulatory frameworks and the terms of the Company’s governing
documents, services may be provided by entities related to the Investment Manager as described in this paragraph or
otherwise. For example, the Investment Manager may utilise the personnel or services of one or more affiliates for
investment advice, portfolio execution and trading and client servicing in their local or regional markets or their area of
special expertise. Such services may include the affiliates acting as agent for the Company’s currency hedging
transactions or derivative transactions, if any, and it may take a variety of forms, including dual employee or delegation
arrangements or formal subadvisory or servicing agreements. In addition, affiliates of the Investment Manager may
provide lines of credit or other forms of borrowings to the Company. It is possible that conflicts may arise in connection
with the provision of any of these services. Where these services are provided, such affiliates may benefit from substantial
commissions or markups from transactions with the Company and thus become subject to conflicts of interest.
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