Firm Description
Eastward Capital Partners, LLC, a Delaware limited liability company (“Eastward” or the
“Firm”) was founded in 2004. Eastward is the successor firm to CommVest, LLC which
was founded in 1998.
Eastward manages closed-end funds (“Funds”) and separately managed accounts (both
Funds and separately managed accounts shall be referred to as a “Client”) which invest in
private debt and equity financing to portfolio companies in the technology and
communications industries. Such investments have generally been sponsored by
institutional investors.
Principal Owners
Eastward is privately owned. Dennis P. Cameron indirectly owns 100% of Eastward.
Types of Advisory Services
As part of the services provided to each Client, the Firm seeks to generate and identify
attractive private debt investment opportunities through a variety of channels and sources
including:
• Active solicitation of opportunities from venture capital firms which Eastward has
had long standing relationships or those venture firms which have demonstrated
experience in target markets;
• Review of direct in-bound contact from potential portfolio companies;
• Referrals from banks which may be seeking to partner with Eastward to provide
private debt to Clients’ portfolio companies; and
• Evaluation of potential opportunities provided by professional service firms.
Investment opportunities which the Firm generates are reviewed to determine if they fit
within the investment profile of the Client which includes protection of principal balances
and the opportunity for equity appreciation. In addition to the identification of investment
opportunities, the Firm also provides the following services:
• Analysis of potential risk adjusted returns for each opportunity; and
• Negotiations of investments terms and due diligence on prospective investments.
Firm Brochure – Part 2A of Form ADV 6 3/21/2024
Subsequent to the investment, Eastward may provide the following services for each
Client:
• Collecting monthly payments due from each portfolio company under terms of the
debt financings and returning capital to investors;
• Monitoring each investment through quarterly interactions with the senior
management and review of packages prepared for the board of directors of the
portfolio company;
• Managing the sale of warrants and the equities associated with the investments;
• Evaluating opportunities to make equity investments through co-investment rights
earned in private debt financings;
• Maintaining books and records for each Client and preparing quarterly reporting
packages;
• Supervising annual audits for each Client which provide the valuation information
necessary for the calculation of the fair value; and
• Managing the preparation of tax filings and documents for each Client.
In general, the term of the private debt investments made in portfolio companies are 24 –
48 months which is comprised of a period of interest only payments before monthly
payments to amortize the full
principal balance. During the term the debt is outstanding,
the terms of the debt may be restructured which may lead to an increase in the overall term
or other changes. In general, the private debt may be classified into two broad categories:
SECURED DEBT - Debt instrument secured by assets of the portfolio company which
may include equipment, intellectual property or all the assets of the portfolio company.
SENIOR SECURED DEBT - Debt investments in companies where another lender may
hold senior interest in collateral. In general, the other lender is a bank or other institution
providing financing to the company based on their outstanding receivables or recurring
revenue.
The private debt investment will include a yield enhancement(s) designed to increase the
return of the investment in excess of the loan rate. These yield enhancements may include:
PREPAYMENT FEES - All portfolio companies’ debt will include fees which are due if
the company prepays the debt prior to the full term. The prepayment fees may significantly
enhance the return for Clients, especially early in the term of a loan.
Firm Brochure – Part 2A of Form ADV 7 3/21/2024
WARRANTS – As part of the private debt, each Client may receive a warrant. A warrant
provides the Client with the option to purchase securities of the portfolio company at a
predetermined price before the expiration of the warrant term. Warrants may be an
extremely attractive opportunity for the Client if the portfolio company is sold at an exit
value, which leads to a payment for the warrant shares in excess of the exercise price of
the warrant.
ADDITIONAL FINAL PAYMENT - Should Eastward believe that the portfolio
company’s exit value is unlikely to lead to value from a warrant, it may provide as part of
the private debt terms that the portfolio company make an additional payment to the Client
after full payment of the outstanding principal amount.
Tailored Relationships
Investors are advised of Eastward’s strategy for a Fund before they make their investment.
Subscriptions to investment vehicles are made after the review of a private placement
memorandum and a limited partnership agreement or a term sheet and limited liability
company agreement (the “Offering Documents”).
Eastward enters into management agreements with each of its closed-end funds and
managed pools. These agreements generally require that any investment that is made, be
allocated to any eligible Fund based on the relative uncommitted capital available for each
Fund or other defined formula which takes into account capital available to invest.
Wrap Free Programs
Eastward does not participate in, nor is it a sponsor of, any wrap fee programs.
Assets Under Discretionary and Non-Discretionary Management
As of December 31, 2023, Eastward was actively managing $166,132,360 in assets for
Clients. Of this amount, $139,589,497 was managed on a discretionary basis (Clients do
not have the ability to review transactions) and $26,542,863 was non-discretionary (Clients
had the ability to review and approve transactions).