Everything was set that spring day in 1987 except the name -- the new investment group's business plan was finished, its investors were lined up, the office space was leased. The lawyers just needed to know what name to type into the corporate documents.

"I still like 'the Carlyle Group' " as a name, said Stephen L. Norris, one of the group's founders, at its incorporation meeting. "I love the Carlyle Hotel," he told his partners. It had been the home of one of his heroes, Andre Mayer, once the head of the Lazard Freres & Co. investment banking firm.

Since then Carlyle, a merchant bank based in Washington, has made a fortune buying and selling other companies -- defense firms in particular. It also brought aboard as partners a former top executive at MCI Communications Corp., and such luminaries as former Defense secretary Frank Carlucci, former secretary of State James A. Baker III and Richard G. Darman, former budget director in the Bush White House.

Now Norris, 43, is leaving Carlyle to form his own boutique investment organization. He and Carlyle's other partners all said they had been moving in different directions in recent years.

While Carlyle raises funds from a relatively wide circle of investors to buy and run companies, Norris spent his time arranging one-shot, high-profile international business deals for a handful of wealthy Saudi investors, such as Prince Waleed Bin Talal Bin Abdulaziz Al Saud. He is not interested in the tedious work of managing firms, or looking after funds raised from pools of investors.

"It's more efficient for me to do what I do in a different company," Norris said. "I can't be out doing private placements when I'm managing money," as he'd had to do at Carlyle.

There also was some friction this summer between Carlyle and Norris, industry sources said, because of business disagreements about the prince's $360 million bailout of the Euro Disney theme park outside Paris. Norris had been one of the prince's main advisers in that complex transaction.

Norris will remain as a senior adviser to Carlyle and will continue to enjoy the reportedly healthy financial return from his holdings in Carlyle business partnerships. Carlyle does not make its earnings public.

"Steve is one of the most creative deal-doers in the country," said David Rubenstein, a former Carter White House official who co-founded Carlyle with Norris and who still is one of its partners. "He wants to do different types of deals from what we want to do."

Norris lives in McLean and was interviewed wearing workout clothes and a towel at his health club at the Four Seasons Hotel in Washington.

He is starting a limited partnership called Appian Equity Partners Ltd., to be based in the Netherland Antilles. It will invest the funds of a tight circle of investors -- at this point, Norris said, they include a European bank, some U.S. pension funds and a couple of wealthy Saudi families.

In a confident written summary of his investment goals, Norris has said that Appian is aiming for an annual return of 25 percent. It would seem to be hyperbole for most other financial advisers, but Norris has done it before.

After leaving Marriott Corp.'s mergers and acquisition operation, he joined with Rubenstein, who had been deputy domestic policy advisor in the Carter White House, to make what Norris said was a "huge windfall" off a remote federal income tax provision.

The pair zeroed in on an Internal Revenue Service provision that extended favorable tax treatment to corporations formed by native Alaskans. Norris and Rubinstein cornered the market in structuring transactions in which large U.S. companies lowered their tax bills by buying tax losses from the native Alaskans and allocating them to their profitable operations.

Once Carlyle was formed, with a loan from the T. Rowe Price Associates Inc. mutual fund house, the partners made another killing buying stock in other firms -- Norris's promotional literature says Carlyle has enjoyed an annual return of 30 percent.

Some of the Carlyle Group's most profitable deals include buying, and then selling, stock in Chantilly-based Fairchild Industries Inc., which made fasteners for aerospace equipment and buying a 51 percent stake in Vought Aircraft Co. In that last deal, Carlyle paid $38 million in August 1992, and sold it last year to Northrop Grumman Corp. for $130 million.

On the other hand, Carlyle's investments in radio stations and in Caterair, which makes in-flight meals for airlines, have not been successful.

Carlyle has attracted attention for supposedly practicing "access capitalism" because of the ability of executives Carlucci, Baker and Darman to get their telephone calls returned.

But Norris is perhaps the one best connected in the Persian Gulf.

He attracted Saudi Arabians' attention in 1991 by helping to arrange a $590 million investment in Citicorp by the sophisticated, Western-educated Prince Waleed. The investment, which helped in the bank holding company's restructuring, now is worth almost $2 billion. "If you can access a large amount of capital," Norris said, "and move quickly, you can get exceedingly good business deals."

CAPTION: Stephen L. Norris, a founder of the Carlyle Group, a District-based merchant bank, in his office.