A. Describe your advisory firm, including how long you have been in business. Identify
your principal owner(s).
Edgewater Capital Management, LLC (“ECM” or the “Firm”), an Ohio limited liability company, is a
private equity firm based in Cleveland, Ohio. Founded in 1998, ECM focuses on acquiring
performance products companies in the lower middle market. The Firm has extensive experience and
expertise with niche manufacturers of specialty chemicals, pharmaceuticals and engineered substances.
ECM serves as the investment adviser for, and currently provides discretionary investment advisory
services to, the following private funds: Edgewater Capital Partners II, LP (“Fund II”); Edgewater
Capital Partners III, LP (“Fund III”); Edgewater Capital Partners IV, LP (“Fund IV”); and Edgewater
Capital Partners V, LP (each, a “Fund” and collectively, the “Funds”). In addition, as described more
fully in Item 7 below, the Firm permits certain investors and third parties to co-invest alongside a
Fund directly into a portfolio company. Such direct co-investments are not considered Funds or
clients of ECM.
Each Fund is affiliated with a general partner (each a “General Partner,” or collectively the “General
Partners”) with authority to make investment decisions on behalf of the Funds. Edgewater Group II,
LLC is the General Partner of Fund II; Edgewater Group III, LLC is the General Partner of Fund
III; Edgewater Group IV, LLC is the General Partner of Fund IV; and Edgewater Group V, LLC is
the General Partner of Fund V. These General Partners are deemed registered under the Investment
Advisers Act of 1940, as amended, and the rules and regulations promulgated thereunder (“Advisers
Act”) pursuant to ECM’s registration in accordance with SEC guidance. The applicable General
Partner of each Fund retains investment discretion and investors in the Funds do not participate in
the control or management of the Funds. While the General Partners maintain ultimate authority
over the respective Funds, ECM has been designated the role of investment adviser. References to
ECM throughout this Brochure also references the General Partner entities, unless the context
otherwise requires. For more information about the Funds and General Partners, please see ECM’s
Form ADV Part 1, Schedule D, Section 7.A.(1) and Section 7.B.(1).
Principal Owners/Ownership Structure
ECM is owned by Ryan Meany, Christopher Childres, Robert Girton, Peter Ostergard and Brian
Leonard. For more information about ECM’s owners and executive officers, see ECM’s Form ADV
Part 1, Schedule A.
B. Describe the types of advisory services you offer. If you hold yourself out as
specializing in a particular type of advisory service, such as financial planning, quantitative
analysis, or market timing, explain the nature of that service in greater detail. If you provide
investment advice only with respect to limited types of investments, explain the type of
investment advice you offer, and disclose that your advice is limited to those types of
investments.
ECM provides investment advisory services as a manager to its Funds. The Funds invest through
privately negotiated transactions in operating companies in the performance products industry
(generally referred to as “portfolio companies”), with a focus on companies in the lower middle
market. Each portfolio company has its own independent management team responsible for
managing its day-to-day operations, although the senior principals or other personnel and/or third
parties appointed by ECM will generally serve on such portfolio companies’ respective boards of
directors or otherwise act to influence control over management of portfolio companies held by the
Funds. In addition, in some cases, ECM will more directly influence the day-to-day management of a
portfolio company by recruiting and installing certain individuals in various leadership roles, such as
chief executive officer, chief operating
officer, chief financial officer or in other roles. ECM’s
investment advisory services to the Funds consist of identifying and evaluating investment
opportunities, negotiating the terms of investments, managing and monitoring investments and
achieving dispositions of such investments. Investments are made predominantly in nonpublic
companies.
C. Explain whether (and, if so, how) you tailor your advisory services to the individual
needs of clients. Explain whether clients may impose restrictions on investing in certain
securities or types of securities.
The Firm’s investment advice and authority for each Fund is tailored to the investment objectives of
that Fund; ECM does not tailor its advisory services to the individual needs of investors in its Funds.
These objectives are described in and governed by, as applicable, the private placement memorandum,
limited partnership agreement, investment advisory agreements, subscription agreements, side letter
agreements and other governing documents of the relevant Fund (collectively, “Governing
Documents”) and investors determine the suitability of an investment in a Fund based on, among
other things, the Governing Documents. The Firm does not seek or require investor approval
regarding each investment decision.
Fund investors generally cannot impose restrictions on investing in certain securities or types of
securities, other than through side letter agreements. Investors in the Funds participate in the overall
investment program for the applicable Fund and generally cannot be excused from a particular
investment except pursuant to the terms of the applicable Governing Documents. In accordance with
industry common practice, ECM has entered into side letters or similar agreements with certain
investors including those who make substantial commitments of capital or were early-stage investors
in the Funds, or for other reasons in the sole discretion of ECM, in each case that have the effect of
establishing rights under, or altering or supplementing, a Fund’s Governing Documents. Examples
of side letter rights entered into include certain notification provisions, disclosure of confidential
information, transfer rights, indemnification provisions, provisions whereby investors have expressed
an interest in participating in co-investment opportunities, advisory board representation, reporting
requirements, tax matters and most favored nations provisions, among others. These rights, benefits
or privileges are not always made available to all investors, consistent with the Governing Documents
and general market practice. Commencing in March 2025, ECM will make required disclosure of
certain side letters to all investors (and in certain cases, to prospective investors) in accordance with
the new Private Fund Rule. Side letters are negotiated at the time of the relevant investor’s capital
commitment, and once invested in a Fund, investors generally cannot impose additional investment
guidelines or restrictions on such Fund. There can be no assurance that the side letter rights granted
to one or more investors will not in certain cases disadvantage other investors.
D. If you participate in wrap fee programs by providing portfolio management services,
(1) describe the differences, if any, between how you manage wrap fee accounts and how
you manage other accounts, and (2) explain that you receive a portion of the wrap fee for
your services.
ECM does not participate in wrap fee programs.
E. If you manage client assets, disclose the amount of client assets you manage on a
discretionary basis and the amount of client assets you manage on a non-discretionary basis.
Disclose the date “as of” which you calculated the amounts.
As of December 31, 2023, ECM managed approximately $572,097,621 in Fund regulatory assets, all
managed on a discretionary basis. ECM does not manage any investments on a non-discretionary
basis.