CAXTON-ISEMAN CAPITAL

SNAPSHOT:
Established in 1993 by Frederick Iseman and Caxton Corporation, Caxton-Iseman Capital won the plaudits of its peers when it announced in December 2005 an expected 23x return on equity from the $2.2 billion (€1.8 billion) sale of its government IT platform Anteon International.

Caxton-Iseman is not a typical private equity fund, as it does not operate under the standard fund structure. The $2 billion managed by Caxton-Iseman's investment vehicles have been, to date, entirely funded by Caxton, Bruce Kovner's New ([A-z]+)-based investment management firm with over $13 billion in funds under management.

With this financial muscle backing it up, Caxton-Iseman has invested in a plethora of industries and now boasts a portfolio with combined sales exceeding $4 billion and aggregate EBITDA over $350 million. The firm invests as much as $400 million of equity per deal, all the way down to $10 million or less if the firm believes opportunities exist for further acquisitions and industry consolidation.

Given its single-LP structure, Caxton-Iseman has the luxury of being able to hold its portfolio companies for as long as necessary until a peak opportunity arises for an exit. For example, the firm held Anteon for ten years, riding out the migration of interest towards the commercial IT space until the market swung back in favour of government IT, which allowed the sale of the company to defence industry contractor General Dynamics.

Prior to creating Caxton-Iseman, the firm's chairman Frederick Iseman served as a member of Hambros International Equity Partners from 1988 to 1990, then founded and became head of merchant banking group Hambros-Iseman Capital Partners. While at Hambros, Iseman was involved with investments in the healthcare, environmental services, publishing and banking sectors.

Managing directors Steven Lefkowitz and Robert Ferris joined the firm in 1993 and 1998, respectively. Before joining Caxton-Iseman, Lefkowitz had specialised in the acquisition of consumer product companies while serving as a vice president and limited partner at New York-based merchant banking firm Mancuso & Company. Ferris was previously a founding general partner of San Francisco-based buyout firm Sequoia Associates, as well as a member of the senior management team of commercial printing company Arcata Corporation.

Iseman, Lefkowitz, and Ferris are all on the boards of directors of Caxton-Iseman portfolio companies Ply Gem Industries, Buffets Inc, Anteon International, Electrograph Systems and North American Health Plans.

STRATEGY:
Caxton-Iseman Capital makes equity investments of between $10 million and $400 million in deals with purchase prices between $50 million and $2 billion. The firm aims to achieve significant capital appreciation by making long-term equity investments in a variety of industries. It targets companies with strong M&A and growth opportunities, as well as quality management teams.

KEY EXECUTIVES:
Frederick Iseman, chairman and managing partner

Steven Lefkowitz, managing director

Robert Ferris, managing director

FOCUS GEOGRAPHIES:
North America and Europe

RECENT INVESTMENT:
Electrograph Systems, Inc. (US): display technology distributor, $56m, 2005

Meritain Health (US): third-party health care plan administrator, 2004

Ply Gem Industries (US): residential exterior building products manufacturer, $560m, 2004

Buffets, Inc. (US): owner and operator of buffet-style restaurants, $645m, 2000

Anteon International Corp. (US): government IT platform, $47.5m, 1996

EXITS:
Anteon International Corp. (US): IPO (2002), agreed acquisition by General Dynamics for $2.2bn (2006)

Leisure Link Group (UK): sold to Henderson Private Capital for £230m (2001)

Cremascoli Ortho (Italy): sold to Wright Medical Group for $35m (1999)

Glass's Guides (UK): sold to Hicks, Muse, Tate & Furst for $205m (1998)

Magnavox Electronic Systems Corporation (US): sold to Hughes Electronics for $370m (1995)