Investment Overview

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US Capital Investment Management

US CAPITAL / NOBLE CAPITAL TEXAS REAL ESTATE INCOME FUND, LP


US Capital Investment Management

INVESTMENT OPPORTUNITY


US Capital Investment Management, LLC (“USCIM”) and Noble Capital Group have created the US Capital / Noble Capital Texas Real Estate Income Fund, LP (the “Fund”). USCIM affiliate US Capital Global Securities, LLC (“USCGS”) will act as the placement agent for the Fund to raise up to $250,000,000. The Fund will, directly and indirectly, lend a high interest, real-estate secured debt strategy and will invest its capital in the form of loans made to developers and construction companies operating in Texas. The Fund will leverage Noble Capital’s existing platform of integrated real estate companies to originate, and service investment opportunities.


OVERVIEW


US Capital Investment Management (“USCIM”) is a private investment management firm based in San Francisco, California. USCIM was founded by Jeffrey Sweeney as an alternative asset manager that leverages a verified track record of successful fund management of investments in small and medium sized businesses.

Noble Capital Group (the “Company”) is a vertically integrated cohort of real estate companies operating in Texas. The Group is set up to handle all aspects of the small balance real estate lending business including originations, structuring, servicing, disposition, work-out, and fund management. Noble Capital commenced operations in Austin in 2002 and since has grown to become a leading private money lender in the Texas single family real-estate market.


FUND STRUCTURE


The General Partner of the Fund will be USCIM; the General Partner’s aim in creating the Fund is to preserve principal, provide current income, and achieve consistent returns through senior secured first lien mortgages on Texas based residential real-estate. The GP and Noble Capital Group have formed the investment committee as a service to the GP. Noble Capital will leverage its track record in the Texas market to originate transactions that fit the Fund’s investment criteria and provide on-going originations, structuring, and servicing capabilities through its subsidiaries.


INVESTMENT STRATEGY


The Fund’s investment objective is to preserve investor’s capital while providing consistent current income through the origination and servicing of credit-worthy loans backed by Texas real estate. The Fund will focus on making debt investments, directly and indirectly, in the form of business purpose loans to single family residential (SFR) real estate developers to acquire, renovate, and sell or refinance one or more homes. Each loan is secured by a lien against the subject property at minimum, and may also encumber additional real estate as determined by the Manager and Investment Committee.

The Fund intends to execute an asset based lending strategy whereby the primary source of security and ultimate repayment of principal and interest is the subject property securing the loan. Factors such as low credit, and even lack of track record can be mitigated by structuring the deal with lower LTV and/or LTC to give the Fund added security in the event of default.

The Fund will focus on making short-term senior secured loans against Texas real estate. Debt investments made by the Fund will usually carry a fixed rate of interest and the borrowers will make interest only payments at monthly intervals. Upon the sale or refinance of the subject property, a balloon payment accounting for the entire principal amount plus any accrued interest, is collected.


MARKET


The fund will invest in the Texas market, focusing on major cities such as Austin, Houston, San Antonio and Dallas/Fort Worth. A number of leading indicators make Texas an attractive to the Fund’s strategy. Texas has led the nation in job growth for the past four years. According to the Bureau of Labor Statistics, Texas unemployment rate has been at or below the national average for 92 consecutive months. Texas has seen year-over-year growth in new business filings for the past five years and presents a new opportunity for lending. In addition to positive macro-economic growth, an important advantage identified by the Company is the “non-judicial” foreclosure process in place in Texas. A lender is able to foreclose on a defaulted borrower with an administrative process, as opposed to a judicial order. Noble Capital has an established track record in Texas, having lent in the state for the past 11 years.


TEAM


US Capital Investment Management and Noble Capital Group are led by industry veterans with deep investment banking, financial advisory, operational, and direct lending experience. Importantly, this includes a strong specialization in due diligence and collateral management. The team is supported by analysts, bankers, and financing specialists with significant expertise in SMB and real estate lending.


Jeffrey Sweeney – Founder and Co-Managing Partner, USCIM


Jeffrey Sweeney is Founder and Co-Managing Partner of US Capital Investment Management, LLC, and Chairman of its Investment Committee. A seasoned industry veteran with deep experience in structured debt finance, Mr. Sweeney is Chairman and CEO at US Capital Partners Inc., a leading private investment bank for SMBs. Headquartered in San Francisco, US Capital Partners is a private investment bank that makes direct debt and equity investments between $500,000 and $100 million, participates in debt facilities, and has very wide distribution for debt and equity private placements. Until September 2014, Mr. Sweeney served as a Managing Partner at Breakwater Investment Management, LLC and as a member of the firm’s Investment Committee. Breakwater Investment Management is a Los Angeles-based private investment firm that specializes in direct growth-capital investments into promising lower middle market companies, especially businesses with expanding global operations. Mr. Sweeney was seminal in architecting the firm’s inaugural $250 million credit fund, Breakwater Structured Growth Opportunities Fund, LP. As a member of Breakwater’s Investment Committee, Mr. Sweeney played a key role in structuring the firm’s debt investments and also brought in a majority of its investors.


Jadon Newman – Chief Executive Officer, Noble Capital Group


Jadon Newman is the Founder and Chief Executive Officer of Noble Capital Group, LLC and its subsidiary entities. A seasoned finance professional with expertise in real estate investment, retirement planning and asset management, Mr. Newman founded Streamline Funding Group, LLC, in 2002, Emerge Real Estate Group, LLC in 2007 and Acute Financial Group, LLC, in 2010. Since 2002 Mr. Newman and the Noble family of companies have successfully placed over $400 million in various investment and financial services in to thousands of Texans. In 2002, Newman established a private real estate lending company called Streamline Funding which led to the formation of Noble Capital, a real estate investment and management firm based out of Austin Texas. The company has grown to over 40 employees and currently manages a real estate loan portfolio of more than $125 million.


Charles Towle – Co-Managing Partner, USCIM


Charles Towle is Co-Managing Partner at US Capital Investment Management, LLC and a member of its Investment Committee. He also serves as the Division Head and licensed principal of US Capital Global Securities, LLC, a broker-dealer that serves as distributor for the Fund and other investment vehicles structured by US Capital Investment Management, LLC. In addition, Mr. Towle is Managing Partner at US Capital Partners Inc. Since joining in 2006, Mr. Towle has helped grow the firm into a leading private investment bank for small and medium-sized businesses in the United States. As Managing Partner, Mr. Towle oversees US Capital Partners’ banking professionals, in addition to the firm’s established affiliates and institutional investors.


Chris Ragland – Chief Operating Officer, Noble Capital Group


A seasoned real estate professional, Chris has spent over a decade working in firms that specialize in Full Service Brokerage, Property Management, Property Maintenance and Rehabilitation, Servicing, Loss Mitigation, and REO Management. His specializations include navigating rapid business change, mapping processes during periods of ambiguity, forming and developing teams, and driving creativity for product and process development. In addition to real estate, Chris has a broad base of industry experience including high tech, construction, telecom, mobility, the arts, insurance, film, and retail. Chris holds a BA in Entrepreneurship as well as an MBA in Global Entrepreneurship from St. Edward’s University, and is a licensed Realtor in the State of Texas.


Grady Collins – Chief Financial Officer


Grady Collins is the Chief Financial Officer of Noble Capital. Grady manages all financial aspects of the firm including Loan Servicing, Loss Mitigations, and REO Management. Additionally, Grady actively manages the fund strategies, objectives, and performance goals to ensure the optimization of the deployment of funds. Grady has over 22 years of experience in the mortgage and real estate industry. Prior to joining Noble Capital, Grady was an analyst with a major Wall Street firm and successfully ran a private real estate hedge fund with average annualized returns of over 18.00%. Grady hold a Bachelor’s Degree in International Trade and Finance from Louisiana State University and an MBA from Temple University. Grady is a licensed Texas Real Estate Broker.


INVESTMENT OPPORTUNITY


US Capital Investment Management

RISK FACTORS


You should be aware that an investment in LP Units of the Partnership involves considerable risks, including the possible loss of all or a material portion of your investment. The abbreviated risks set forth below, as well as the detailed risk factors set forth in the Confidential Offering Memorandum and Supplement, are not the only risks facing investors.

The abbreviated risks set forth below, as well as the detailed risk factors set forth in the Confidential Offering Memorandum and Supplement, are not the only risks facing investors.


  • The Fund may suffer losses in its portfolio
  • Poor economic conditions may cause the Fund to suffer higher default rates on its loans and decreased value of the assets it holds as collateral
  • Investments are generally risky and offer no guarantee of success
  • The Fund’s performance is dependent on key personnel and the loss of one or more of those key personnel may materially and adversely affect the Fund’s performance and prospects
  • The Fund may lack diversification which could increase the negative impact of the performance of a small number of investments
  • Leverage by the fund could result in fund losses
  • The Fund will make unspecified investments so Limited Partners must rely solely on the General Partner
  • The Fund’s portfolio will lack liquidity
  • The Fund has no operating history
  • The Fund may seek leverage
  • The Fund’s due diligence may not reveal all factors affecting an investment and may not reveal weaknesses in such investments
  • Portfolio investment selection may not fulfill investment objective
  • Projections may have no relation to actual events
  • Partnership investments are subject to general credit and interest rate risk
  • Leverage at borrowing company level increases Partnership’s exposure
  • Lender liability and equitable subordination may impede the Fund’s performance
  • Risks Relating to Real Estate Investment
  • The Fund is subject to general risks of real estate ownership
  • The Fund may be subject to development risks
  • The Fund’s underwriting standards and procedures are more lenient than conventional lenders
  • Risk of default on mortgage loans / Non-performing mortgage loans
  • The Fund may have difficulty protecting its rights as a secured lender
  • Risk of lack of knowledge in distant geographic markets
  • Risks of real estate ownership
  • Risks of participation or fractional interests in mortgage loans
  • Risks of investing in subordinated (or second lien position) loans
  • Other risks related to real estate
  • Usury risk
  • Investment in real estate can lead to substantial losses
  • The Fund may be subject to counterparty risk
  • Investment in real estate entails valuation risk
  • The Fund may invest in other funds, asset managers, and SPVs in which the Fund holds only a minority share
  • The markets in which we operate are subject to the risk of natural disasters
  • The Fund and General Partner are subject to government regulation
  • Substantial competition in the market could adversely affect the Fund
  • The Fund is subject to systems, accounting and internal control risks
  • Our information systems may experience an interruption or breach in security
  • Our controls and procedures may fail or be circumvented
  • There is no participation by limited partner investors in the management of the Fund
  • The General Partner and its members enjoy limited liability
  • No negotiation of terms or independent legal representation
  • Valuations and appraisals at discretion of General Partner
  • Risk that the stated value of individual fund assets is incorrectly determined by the Manager
  • Incentive Allocation may lead to increased risk-taking by the General Partner
  • Risk if Manager withdraws or is terminated
  • Digital operations risk

CONFLICTS OF INTEREST


The Manager and USCGS are affiliated entities. Charles Towle is Co-Managing Partner of the Manager, the Division Head and licensed principal of USCGS, and an indirect stockholder and Co-Managing of an affiliate company of the Manager and USCGS. Jeffrey Sweeney is Co-Managing Partner of the Manager and an indirect controlling stockholder of the Manager and USCGS. Conflicts of interest may arise in connection with Mr. Towle’s and Mr. Sweeney’s indirect control of both the Manager and USCGS. Investors should be aware that these conflicts of interest, and a number of other conflicts of interest relating to the Manager and its affiliates, are permitted under the terms of the Fund’s offering documents. You should not invest in the Fund unless you are willing to accept these conflicts of interest and the associated risk.


DISCLOSURES


This presentation does not constitute an offer to sell or a solicitation of an offer to buy any security and may not be relied upon in connection with the purchase or sale of any security. Any offer would only be made by means of a formal offering memorandum. No offer or solicitation will be made prior to delivery of a confidential information memorandum, private placement memorandum, or similar offering documents (“Offering Documents”). Offers and sales will be made only in accordance with applicable security laws and pursuant to the Offering Documents, operating agreement, subscription agreement, and other definitive documentation.

This presentation does not purport to be all-inclusive or to contain all of the information that the recipient may require and is qualified in its entirety by reference to the Offering Documents. This presentation is not a part of or supplemental to the Offering Documents or such definitive documentation. The Offering Documents and any supplements will supersede this presentation in its entirety. Projections and other forward-looking information as to events that may occur in the future (including projections of revenue, expense, net income and stock performance) are based on information provided by the Fund and other publicly available information as of the date of this presentation. There is no guarantee that any of these estimates or projections will be achieved. The recipient should not rely on any information contained herein. No investment, divestment or other financial decisions or actions should be based solely on the information in this presentation. Actual results will vary from any projections in this presentation, and such variations may be material, including the possibility that an investor may lose some or all of its invested capital.

This presentation is confidential. By acceptance hereof, you agree that (i) the information must not be used, reproduced, or distributed to others without prior written consent; (ii) you will maintain the confidentiality of all information herein that is not already in the public domain; and (iii) you will use the information contained herein solely for preliminary informational purposes.

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Securities offered through US Capital Global Securities, LLC, member FINRA, SIPC.

IMPORTANT: All investing is risky, and no investor should decide to commit funds without first consulting with a competent professional adviser. Some or all invested funds can be lost. The past performance of any investment, investment strategy or investment style is not indicative of future performance. Future results may vary, and are not guaranteed. The value of investments and their income may increase or decrease, and a loss of principal – including all principal – may occur.

For more investor information or support please call 415-889-1010 or email support@uscgs.com