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Stephen Norris & Co. Capital Partners, L.P.


Right Team, Right Time, Right Model. 2006 Stephen Norris & Co. Capital Partners, L.P. Confidential These Confidential Materials are for information purposes only and ... – PowerPoint PPT presentation

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Title: Stephen Norris & Co. Capital Partners, L.P.

Stephen Norris Co. Capital Partners, L.P.
  • Right Team, Right Time, Right Model.
  • 2006

Preliminary Materials
  • These Confidential Materials are for
    information purposes only and do not constitute
    an offer to invest, or acquire securities.
    Interests in Stephen Norris Co. Capital
    Partners, L.P. (the Partnership) can only be
    acquired through a Private Placement Memorandum
    (PPM) and Subscription Agreement. Potential
    investors are urged to consult their professional
    advisors regarding the possible economic, tax,
    legal or other consequences of acquiring
    Interests. There will be no public market for the
    Interests. These Materials are not to be
    distributed without the prior consent of the

  • Stephen Norris Co. Capital Partners,
    L.P. is a private equity investment partnership
    formed to (i)co-invest along side well
    established and successful private equity and
    leveraged buyout firms, (ii) take advantage of
    the business experience and relationships of its
    Investment Committee, including Steve Norris
    long-standing relationships and substantial
    private equity experience as co-founder of The
    Carlyle Group and Steve Paperins experience as
    Senior Advisor to Soros Fund Management, and
    (iii) create the opportunity to realize
    substantial long term capital appreciation with
    less risk than typically associated with private
    equity investments.

Market Opportunity / Strategy
  • It has been reported that larger private equity
    and buyout firms have on average provided an
    annualized return on investment of 22.5 over the
    last 3 years and 13.2 over the last 5 years and,
    as compared to the SP 500, which has provided a
    14.4 and 0.5 return over the same periods.
  • Buyouts are larger and private equity and buyout
    firms are actively seeking co-investors to allow
    them to take advantage of large opportunities
    which they are unable to do on their own because
    of deal size commitment and/or diversification
    limitations. Very few firms want to invest 1B
    or more of their funds in any one transaction,
    irrespective of the size of their funds.
  • Well established private equity firms
    increasingly are seeking an equally well
    capitalized Co-Investment Partner of Choice that
    can invest significant capital and whose
    principals are known to them - a Dependable
    Partner of Choice. This is in addition to any
    co-investment rights offered by the sponsors to
    their own investors, which are derived from the
    sponsors share after allocation to institutional
    investors or co-investors such as the
  • The Partnership will be able to timely commit
    substantial capital (50 million and more) to
    each identified and selected opportunity.

Market Opportunity / Strategy
  • The Partnership will invest in deals on an
    opportunistic basis using the substantial private
    equity experience of its Investment Committee
    (which collectively has over 75 years of
    experience in sourcing, analyzing, structuring,
    buying and selling companies), and independent
    due diligence to pick the best among available
    investment opportunities. Because of the network
    and access of Mr. Norris and Mr. Paperin and the
    other members of the Investment Committee to most
    of the private equity and buyout firms throughout
    the world, the Investment Committee will be able
    to cherry-pick the very best deals of top-tier
    private equity and buyout firms.
  • In the current environment there are few
    non-competing investors able to exercise
    co-investment opportunities and invest 50M or
    more in a timely manner.
  • The Partnership will not originate investments
    and accordingly will not compete with
    sponsoring private equity and buyout firms and
    thus will be more attractive as the Co-Investment
    Partner of Choice of those firms.
  • In addition to the Investment Committees own
    due diligence the Partnership will have access
    to the comprehensive due diligence already
    performed by the sponsoring private equity or
    buyout firm. Therefore, on every investment made
    by the Partnership, two extensive analyses will
    have been done, (I) reducing risk, and (ii)
    enhancing the likelihood of investment success
    and substantial returns.

Trend of Participation in Larger Deals
  • On Dec. 21, 2005, Ford Motor Company announced it
    had completed the sale of The Hertz Corporation
    to an investor group composed of Clayton Dubilier
    Rice, The Carlyle Group and Merrill Lynch
    Global Private Equity in a transaction valued at
    approximately 15 billion including debt.
  • On December 12, 2005, a consortium of Bain
    Capital, The Carlyle Group and Thomas H. Lee
    Partners said they reached a deal to buy fast
    food franchiser Dunkin' Brands, Inc. from French
    beverage company Pernod Ricard S.A. for 2.43
    billion in cash.
  • On December 1, 2005, a trio of private-equity
    firms consisting of the Blackstone Group,
    Providence Equity Partners Inc. and Kohlberg
    Kravis Roberts Co. announced it has formed an
    alliance to examine purchasing newspaper
    publisher Knight Ridder Inc., which owns the
    Miami Herald, the Philadelphia Inquirer and 30
    other daily newspapers.
  • General Motors Corp. reached a definitive
    agreement to sell its Electro-Motive Division
    (EMD) to an investor group led by Greenbriar
    Equity Group LLC and Berkshire Partners LLC in a
    deal expected to close in late 2005.
  • Hicks Muse, TD Capital, and CIBC Capital Partners
    acquired Canadian cable company, Persona, the
    countrys 6th largest, for 406 million in July
    of 2004.
  • Texas Pacific Group and Warburg Pincus LLC
    acquired Neiman Marcus Group, Inc. for 5.1
    billion in May of 2005.
  • KKR, Five Mile Capital Partners, and Goldman
    Sachs Capital Partners announced in August 2005
    that they had reached a definitive agreement with
    General Motors Acceptance Corporation (GMAC),
    the financial services subsidiary of General
    Motors Corporation, to acquire a 60 percent
    equity interest in its commercial mortgage
    subsidiary, GMAC Commercial Holding Corp.

Uniqueness and Comparative Advantages
  • The Investment Committee (led by its Chairman
    Steve Norris, Co-Founder of The Carlyle Group,
    and the Partnerships Chief Operating Officer,
    Stewart Paperin, Senior Advisor to Soros Fund
    Management), has well established relationships
    and personal access to executives of major
    investment and buyout firms internationally,
    built over their more than 75 years of collective
    experience in analyzing, structuring, negotiating
    and closing mergers, acquisitions, and
  • In addition to the Investment Committee, the
    Partnership will have two Business Development
    Directors with substantial contacts to premier
    private equity and leveraged buyout firms. The
    Partnership will create an Advisory Board that
    will help widen the network of relationships
    available to the Partnership better helping the
    Partnership leverage the international networks
    and personal relationships of its members.
  • Mr. Norris is well known, highly regarded and
    has an extensive track record of success in
    private equity and buyout investments having
    achieved at the Carlyle Group an IRR in excess of
    40 on investments he originated, negotiated or
    materially participated. The Carlyle Groups
    first fund was a 105 million fund that arranged
    investments of approximately four times its
    capital by working extensively with co-investors
    and strategic partners.
  • Co-investors are only attractive to sponsors when
    they can act in a timely fashion and commit
    significant capital. There are few investors that
    are able to co-invest significant amounts of
    capital (50 and more) in a timely manner.

Uniqueness and Comparative Advantages
  • By pooling the participations of investors, the
    Partnership can commit large sums of capital,
    with no single investor having to commit the
    entire amount, thereby permitting the Partnership
    to co-invest in the Big deals.
  • By not originating investments, the Partnership
    will not compete with any sponsoring buyout or
    investment firm in potential investments.
  • As opposed to a fund of funds, the Partnership
    intends to choose from among numerous specific
    investment opportunities presented by leading
    buyout firms and will not invest blindly in any
    fund or investment. It will invest directly in
    deals, avoiding the doubling of fees and carry.
  • The Partnership will have the benefit of an
    established network of relationships attractive
    to portfolio companies, including significant
    contacts in the Middle East, China and Europe,
    and from its unique understanding of and access
    to government that will give it a competitive
    advantage as a co-investor.

Due Diligence Process
  • The investment process will be managed by an
    Investment Committee chaired by Mr. Norris.
  • As Chief Operating Officer, Stewart Paperin,
    Senior Advisor to Soros Fund Management, who will
    after the First Closing work substantially
    full-time for the Partnership, will have personal
    responsibility for managing the due diligence
    process and the financial analysis of investments
    performed by the Partnerships senior analysts.
  • In addition to Mr. Paperin, the Partnership will
    employ two full-time seasoned Senior Analysts who
    will report to Mr. Paperin and have at least 20
    years of combined experience. One of the Senior
    Analysts will be a CPA with strategic planning
    experience and the other will have an advanced
    business degree and substantial senior-level
    private equity fund experience which will include
    analyzing, structuring and negotiating deals that
    will be well known to Mr. Paperin or Mr. Norris.
  • The due diligence reviews themselves will be
    out-sourced to veteran industry experts known
    to and selected by Mr. Norris, Mr. Paperin and
    the other members of the Investment Committee,
    who will build their independent analysis on the
    substantial due diligence efforts of the deal
    sponsors and their advisors. This analysis will
    be overseen and reviewed by Mr. Paperin.
  • The process will allow the Partnership to
    efficiently cherry-pick the best deals
    available from premier equity and buyout funds,
    reducing risk and greatly enhancing the
    likelihood of substantial returns to the

Due Diligence Process
  • The Investment Committees review will focus on
  • Competitors and barriers to entry and assessment
    of industry.
  • Business strategy product development,
    marketing, sales and distribution, intellectual
    property, etc.
  • Managements background and experience within
    their industry sector, ability to attract and
    retain top talent, ability to manage growth and
    execute to plan including an assessment of the
    opinions of customers and suppliers regarding the
  • Financial history and scrutiny of Sponsors
    projections of revenues, margins, cash flow, etc.
  • Review and confirm the reasonableness of
    Sponsors exit strategies.
  • Evaluating and comparing each co-investment
    opportunity to achieve the maximum value for the

Organizational Structure
Investment Committee
Stewart J. Paperin Chief Operating Officer
Stephen L. Norris Chairman
Joachim Gfoeller, Jr.
Pamela J. Newman
Gen. Wesley K. Clark
Due Diligence, Finance and Operations
Business Development and Investment Sourcing
Senior Analyst
Senior Analyst
Business Dev. Director
Business Dev. Director
Value Proposition
Summary of Terms
  • The Target Capitalization of the Partnership is
    1 Billion, with the General Partner having the
    right, in its sole discretion to increase the
    amount and with a First Closing taking place upon
    attaining Capital Commitments for 250 million,
    in addition to the Capital Commitment of the
    Partnerships Special Limited Partner.
  • The Minimum Capital Commitment is 25 million,
    subject to the right of the General Partner to
    accept lesser amounts in its sole discretion.
  • The Capital Commitment of the General Partner and
    its Affiliates will be 5 million at the First
  • The Draw Down period will be five (5) years.
  • As a Co-Investor, the Partnerships exit from
    investments will be on a side-by-side basis with
    the lead investor or sponsor on a negotiated

Summary of Terms continued
  • The Limited Partners will have a cumulative
    non-compounded priority return (the Priority
    Return) of 10 per annum on Contributed Capital
    (including draw downs for Organizational and
    other expenses, including Management Fees, with
    standard General Partners catch-up provisions,
    and Monitoring Fees).
  • The General Partner will have a carried
    interest of 20 of Cumulative Net Profits,
    subject to a limited Clawback provision to
    ensure that the Partners receive a return of
    Contributed Capital and the Priority Return. Any
    General Partner carried interest allocated to
    Sponsors not subject to clawback.
  • The Limited Partners will pay an annual
    Management Fee, pro rata, quarterly in advance,
    to the General Partner of 1.5 of aggregate
    Capital Commitments until the Partnership is
    fully invested. Thereafter the Limited Partners
    will pay an annual Monitoring Fee of .75 of
    Capital Commitments.
  • Payment of Management Fees or Monitoring Fees
    does not reduce the amount of a Partners
    remaining Capital Commitment.

Investment Committee
The General Partner has assembled an
Investment Committee that collectively has over
75 years of experience in sourcing, analyzing,
structuring, managing and exiting investments.
The Investment Committee consists of Stephen L.
Norris, Chairman Stewart J. Paperin, Chief
Operating Officer Gen. Wesley K. Clark Pamela
J. Newman and Joachim Gfoeller, Jr.   The
Investment Committee will be actively involved in
the operation and management of the Partnership,
aggressively targeting and analyzing potential
co-investment opportunities. Until the
Partnership are fully invested, it will hold at
least one face-to-face meeting per month, which
will be augmented by weekly telephonic meetings.
The Investment Committee will utilize a consensus
process, acting by majority vote.   Each member
of the Investment Committee will, in addition to
receiving base cash compensation from the General
Partner, share in the General Partners carried
interest in the Partnership, further assuring
that the Partnership will receive the full
attention and commitment of the Investment
Committees members. Accounting and
administrative services will be provided by Mr.
Gfoellers company, GMG Capital Partners, under
arrangements, that include provision of initial
funding, between GMG Capital Partners and the
General Partner
Investment Committee
Stephen L. Norris Chairman Steve Norris
was one of the co-founders of The Carlyle Group
in Washington, D.C. serving as President of its
management company from inception in 1987 to
1996. He will be Chairman of Stephen Norris
Co. Capital Partners Investment Committee and
will principally focus on sourcing of investment
opportunities and investment strategy, as well as
structuring and negotiating investments and exits
from investments. Mr. Norris was involved in the
decision-making process in essentially every
major Carlyle investment decision from its
beginning as a 105 million fund that made
investments of more than four times that amount
through extensive use of co-investors and
strategic partners. Those investments yielded an
annual return on investment in excess of 40. He
also served on the boards of directors of major
Carlyle portfolio companies. He was actively
involved in recruiting all of Carlyles current
senior partners and played a major role in
recruiting President George W. Bush to serve as a
director of one of its portfolio companies and in
enlisting former Secretary of State James Baker
III and former Secretary of Defense Frank C.
Carlucci to be senior partners of Carlyle. Mr.
Norris acted as a principal financial advisor to
Prince Al-Waleed bin Talal Al Saud of Kingdom
Holding Company, in structuring and negotiating
the re-capitalization of Citibank, which returned
over 15 billion in profits on about 590 million
of equity invested. He also advised or played a
key role in other Kingdom Holding Company
investments. He was appointed by former president
George H.W. Bush and confirmed by the U.S. Senate
to serve as one of five governing members of the
100 billion Federal Retirement System Thrift
Investment Board. (continued next slide.)
Investment Committee
  • Stephen L. Norris Chairman (continued)
  • Since 1997, Mr. Norris, and certain members of
    his team, have worked on a number of investments
    including real estate investments in Europe and
    the United States. They were involved in amongst
    others the privatization of Thompson CSF, the
    recapitalization of Suez, the acquisition of
    portions of Credit Fonciers real estate
    portfolio in Paris by the German firm of IVG, the
    formation of Nomuras (London) bid for a Dutch
    mortgage bank, the offer by a major Saudia
    Arabian investment firm for Lamborgini in Italy,
    and the formation of a bid by Leucadia
    Internationals for the Labouchere Bank in
    Holland. He also negotiated and structured
    investments in Synxis Corporation, which was
    backed by George Soros and Mr. Norris, and MARC
    Global Holdings. Mr. Norris served as a law clerk
    on the U.S. Tax Court and earned a B.S. and J.D
    from the University of Alabama, was a fellow at
    Yale Law School and earned a L.L.M. in Taxation
    from New York University.

Investment Committee
  • Stewart J. Paperin Chief Operating Officer
  • Stewart J. Paperin, who has agreed to work
    substantially full time for the Partnership as
    its Chief Operating Officer after the Initial
    Closing, has been the Senior Advisor of Soros
    Fund Management since 1997 and has been and will
    continue to be a senior executive at its related
    worldwide philanthropic organization. Mr. Paperin
    and Mr. Norris have worked together for over 5
    years and have served together on the board of a
    portfolio company. Mr. Paperin has created 600
    million of incremental value for the fund by
    managing its turnaround and liquidation of a
    portfolio of distressed investments in securities
    and private equity in Russia, as well as managing
    for the fund U.S. and Western European private
    equity investments in numerous industries. He
    also has managed and served on associated public
    and private boards of directors. As Vice
    President of the related worldwide philanthropic
    organization, he has directed financial,
    administrative and economic operations in 40
    European, Latin American, Central Asian and
    African countries, created and managed a
    development investment fund for small business
    and microfinance investments in 11 countries and
    founded three successful commercial banks
    dedicated to small business finance. Prior to
    his current positions, Mr. Paperin was President
    of Lion Rock Partners/Capital Resource East,
    Ltd., providing investment and consulting
    services in the United States and Central America
    to clients such as Weirton Steel, David Joseph
    Company and Topps Corp served as Senior Vice
    President and Chief Financial Officer of Western
    Union Corporation and President and Managing
    Director of Brooke International, successfully
    restructuring Western Union Corporation and
    leading Brooke Groups development of timber
    processing, chemicals trading and energy trading
    businesses in Russia. Mr. Paperin holds a B.A.
    in Economics and Management and an M.S. in
    Management from the State University of New York,

Investment Committee
  • General Wesley K. Clark, U.S. Army (Retired)
  • Wesley K. Clark is one of the nation's most
    distinguished retired military officers. During
    thirty-four years of service in the United States
    Army he rose to the rank of four-star general and
    in his last position was NATO's Supreme Allied
    Commander and the Commander-in-Chief of the US
    European Command. In 2004 he won the Oklahoma
    Democratic presidential primary and placed second
    in three other state primaries. Since returning
    to the private sector, he has resumed activities
    at Wesley K. Clark Associates, the private
    consulting firm he founded in 2003, working with
    a numerous clients in the areas of command and
    control communications, leadership, and
    technology development. He is also Vice Chairman
    of James Lee Witt Associates, a leading
    consulting firm in the field of homeland
    security, business continuity and disaster
    mitigation, a general partner in Four Seasons
    Ventures, an investment fund dedicated to
    commercializing military technology and an
    advisor to Goldman Sachs. Prior to his run for
    the presidency, General Clark was Managing
    Director of Merchant Banking for Stephens Group,
    Inc, a large private investment bank, where he
    brought in numerous companies in the security and
    high-technology field for possible investment
    opportunities. He has been and is a member of
    numerous corporate and non-profit boards of
    directors. General Clark graduated first in his
    class from the United States Military Academy
    (B.S.) and completed degrees in Philosophy,
    Politics and Economics at Oxford University (B.A.
    and M.A.) as a Rhodes Scholar.

Investment Committee
  • Pamela J. Newman
  • Pamela J. Newman is Executive Vice President of
    AON Corporation and in that capacity is an
    international insurance broker specializing in
    Fortune 500 clients worldwide. Ms. Newman and
    Mr. Norris have worked together on a number of
    transactions for over 5 years, including
    transactions with Berkshire Hathaway and other
    major funds. Ms. Newman has extensive experience
    in working with major private equity groups,
    including The Blackstone Group, Veronis Suhler
    Stevenson, Heartland Industrial Partners, Easton
    Capital, Hermes, The Carlyle Group, Highfields
    Capital Management, Columbia Partners, Atlantic
    Capital Partners LLC, and Westwood Capital, LLC.
    She serves on the Board of RKO Pictures, as well
    as on its Executive Committee. She also serves
    on the Board of Interactive Metronome, Ivivi
    Technologies, Inc. and Chipwich Chippoppitty.
    She is a Trustee of The American University of
    Paris is on the Corporate Board of Carnegie
    Hall is a Fellow of the Foreign Policy
    Association and a member of the Associate
    Committee of The Julliard School a Vice Chairman
    of the Business Committee of the Metropolitan
    Museum of Art a member of the Medical Center
    Advisory Board of the New York Hospital-Cornell
    Medical Center a past President of the Financial
    Womens Association and is on the Board of the
    McGowan Transplant Center, the Brain Trauma
    Foundation and American ORT. Dr. Newman earned a
    B.A., M.A. and Ph.D. from The University of
    Michigan. She has co-authored two books
    Organizational Communications and Behind Closed
    Doors A Guide to Effective Meetings.

Investment Committee
  • Joachim Gfoeller, Jr.
  • Mr. Gfoeller co-founded GMG Capital Partners in
    1997 and has served as its Managing General
    Partner since then. Since 2004, Mr. Norris has
    been actively involved on the Board of Directors
    of a number of GMG portfolio companies. Prior to
    joining the General Partner, Mr. Gfoeller was one
    of the founding partners of Stolberg Partners, a
    New York based 70 million buyout fund
    established in 1993. At Stolberg Partners, Mr.
    Gfoeller had extensive experience investing in
    the private equity market, particularly in the
    manufacturing and distribution industries. Prior
    to establishing Stolberg Partners, Mr. Gfoeller
    served as a vice president of the money
    management firm Weiss, Peck Greer (1988-1993)
    and as a partner of its buyout group (1992-1993).
    While at Stolberg Partners and Weiss, Peck
    Greer, Mr. Gfoeller was responsible for
    generating private equity deal flow through his
    extensive network in the Midwest, the South and
    the East Coast and was involved in all phases of
    the private equity investment process from
    finding investment opportunities, conducting due
    diligence, making investments to creating exit
    strategies. Mr. Gfoeller is a Director or Board
    advisor to Forum Systems, Lancope and OpenPeak.
    He also sat on the Board of Directors of Phobos
    and StorageApps prior to their acquisitions by,
    respectively, SonicWALL for approximately 270
    million and Hewlett-Packard for approximately
    350 million. Mr. Gfoeller holds a B.A., magna
    cum laude, Phi Beta Kappa, in International
    Studies from The Ohio State University (1981), a
    M.A., with honors, Economics/Latin American
    Studies from The Johns Hopkins School of Advanced
    International Studies (1983) and an M.B.A.,
    Finance from the Wharton School at The University
    of Pennsylvania (1988).

Senior Analysts
  • The Partnership will hire two full-time Senior
    Analysts who will be responsible for due
    diligence, including direct daily supervision of
    the outside teams of experts hired to conduct due
    diligence. They will report directly to Mr.
  • The Senior Analysts will have over 20 years of
    combined senior-level experience in mergers and
    acquisitions. Each will be well known to Mr.
    Norris or Mr. Paperin.
  • It is anticipated that one Senior Analyst will be
    a certified public accountant with at least ten
    years of experience, including at least five
    years of chief financial officer or other
    strategic planning or similar senior management
    experience that involved significant experience
    with mergers and acquisitions and initial public
  • It is anticipated that the other Senior Analyst
    will have an advanced business degree, such as an
    MBA, and at least 7 years of experience in the
    private equity investment markets.
  • The Senior Analysts will have a dotted line
    reporting relationship to the Investment
    Committee, in addition to reporting directly to
    the Chief Operating Officer.

Select Stephen Norris Co. Capital Partners,
L.P. Relationships

Kissinger McLarty Associates
Prince Alwaleed Bin Talal Alsaud
Contact Information
  • Stephen L. Norris
  • 399 Park Avenue
  • 36th Floor
  • New York, New York
  • P 212-832-4013
  • F 212-980-1695
  • M 202-468-6793

Jeffrey Gilfix 399 Park Avenue 36th Floor New
York, New York P 212-832-4013 F 602-912-3881 M
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