Privately Speaking: Norwest Equity Partners

Ask anyone to name the world’s major private equity hotspots, and you’re likely to get answers like New York or London – but probably not Minneapolis. Yet one firm – Norwest Equity Partners – has been in the private equity game longer than the Carlyles and the Blackstones of this world. In fact, Norwest has a 20 year head start on both of them, and Tim DeVries, the current managing general partner at Norwest, has a career that spans the entire length of time that these big name firms have been in business. For all the LPs tracking the firms with the highest profiles and biggest funds, it might be worthwhile to shift focus away from Midtown Manhattan and take a look at what’s happening in the Twin Cities. Perhaps the real oracles of the future might well hail from places like Omaha and Minneapolis.


In 1958, the US passed the Small Business Investment Act, allowing for the creation of professionally managed investment companies, or SBICs as they were called. Three years after that law was passed, Norwest Growth Fund launched, acting as the first version of what has now grown over a half century into Norwest Equity Partners. Since its launch in 1961, Norwest and its principals have been key drivers in the development of SBICs and the private equity industry. Norwest Growth Fund was one of the founding members of the National Venture Capital Association (NVCA) and the National Association of Small Business Investment Companies (NASBIC).

Norwest’s first president, Thomas M. Crosby, came from the family which founded arguably Minneapolis’s most famous export outside of Prince, General Mills, the creator of the Pillsbury doughboy. In 1961, Norwest’s first capital raise launched the firm with $2.5 million worth of equity. Early investments from that fund included EMC Corp and Dairy Queen. Standing in stark contrast to the buy-and-flip mentality of a number of private equity firms today, Norwest invested in EMC Corp in 1961 and held it for 35 years before divesting. Similarly Dairy Queen was acquired in 1963, and held until it went public. International Dairy Queen, as it became known, was later acquired by Warren Buffet’s Berkshire Hathaway.


As one of the first venture capital firms, Norwest was very actively involved in the early years of the computing industry, making an investment in National Computer Systems in 1965. Most US school children will know National Computer Systems for the optical scan forms that are used by the SAT, ACT, and range of other standardised tests created throughout their school years. But the company was also a strong performer in Norwest’s early portfolio. Cray Research, another pioneer of supercomputing, also saw an investment from Norwest in 1974 while two years later the firm invested in Network Systems, the company that developed high-speed data transmission, the backbone of today’s internet.

In the 1980s, Norwest established one of the first buyout teams, which began making its own investments in addition to the small business and venture deals through which the company had made its name. In 1989, Norwest raised a $200 million fund – at the time the largest ever in Minnesota – and a strong showing even by today’s standards for small-ticket deals.