Item 5: Fees and Compensation
A. Description
Bedford Funding charges the private equity funds that it manages an annual
management fee between 1.5% and 1.75% of each respective fund's invested capital or
such other amounts as may be agreed by the partners. Clients also pay an affiliate of
Bedford Funding carried interest in each private equity fund. Because this Brochure
will only be delivered to qualified purchasers as defined in section 2(a)(51)(A) of the
Investment Company Act of 1940, as amended (the "Investment Company Act"), this
Brochure does not include a fee schedule.
B. Fee Billing
Management fees are deducted from client's assets and are calculated semi-annually
and paid in advance as close as possible to the first business day of each semi-annual
period.
C. Other Fees and Expenses
All fees charged by Bedford Funding are negotiable in Bedford Funding's sole and
absolute discretion. Private equity funds managed by Bedford Funding pay all expenses
attributable to the formation and operation of such private equity fund, including, but
not limited to, (i) expenses incurred in the actual or proposed acquisition or disposition
of securities, whether or not consummated, including, without limitation, accounting
fees, consulting fees, due diligence expenses, brokerage commissions and fees and
other investment costs incurred by or on behalf of a fund, legal fees, travel, transfer
taxes, costs related to the registration or qualification for sale of securities and other
out-of-pocket expenses, in each case to the extent not paid for by the issuer of such
securities; (ii) expenses incurred in connection with out of pocket expenses related to
monitoring investments by a fund, including, without limitation, legal, travel,
insurance, accounting, custodial and safekeeping, consulting and auditing expenses;
(iii) administrative, legal, custodial, accounting, auditing, banking, professional,
consulting and appraisal expenses of a fund, including expenses associated with the
preparation of the fund's financial statements, tax returns and Schedule K-1s; (iv) taxes
and other governmental charges, fees and duties payable by a fund to U.S. federal, state,
local and other governmental agencies, and all expenses incurred in connection with
any tax audit, investigation, settlement or review of a fund; (v) interest on and fees and
expenses arising out of all permitted borrowings made by a fund and (vi) costs and
expenses incurred in connection with winding up and liquidating a fund.
Additionally, it is Bedford Funding's practice from time to time to retain certain
advisors and/or consultants to provide services to (or with respect to) one or more
private equity funds or certain current or prospective portfolio companies in which one
or more private equity funds invest. Such advisors and/or consultants may generally
provide services in relation to the identification, acquisition, holding, improvement and
disposition of portfolio companies, including operational aspects of such companies.
These services may also include serving on the Board of Directors or in management
or policy-making positions for portfolio companies. Such advisors and/or consultants
may receive compensation, including, but not limited to an equity interest in a portfolio
company or other compensation, which typically are determined according to one or
more methods, including the value of the time of such advisor and/or consultant, and/or
amounts charged by other providers for comparable services. No such compensation
will offset the Management Fee.
D. Fees in Advance
Private equity funds managed by Bedford Funding must pay management fees in
advance. Management fees are computed semi-annually and paid in advance as close
as possible to the first business day of each semi-annual period. The management fee
computed for the first and last semi-annual periods of each private equity fund will
be proportionately adjusted based upon the ratio the number of days in each such period
bears to one hundred eighty (180) days. There are no refunds of any management fees
paid in advance. However, if a client pays Bedford Funding a fee for any period that
is determined by the firm to be more than the amount the client should have paid for
the period, Bedford Funding will refund the excess payment or offset subsequent fees
by the amount of the excess payment, depending on the specific agreement with the
client.
E. Securities Compensation
Not applicable.