When Tom Lee left his erstwhile firm Thomas H. Lee Partners last year, there was some speculation that yet another industry forebear would be exiting the market he helped build. However, based on the team Lee has put together for his new firm Lee Equity Partners, it’s clear he has no intention of stepping away from private equity just yet.
Lee recruited Mark Gormley, who was a founding partner at Capital Z Partners; David Morrison, who previously served as the CEO of Mercer Management Consulting; and retail veteran Allen Questrom, who has headed J.C. Penney, Barneys New York, Federated Department Stores and Neiman Marcus as CEO. Lee rounded out the staff by poaching two principals from Bain Capital—Yoo Jin Kim and Benjamin Hochberg, and in a public statement the firm promised additional new hires would be coming.
Since the start of last year, a number of private equity’s pioneers have stepped back from the industry. With that said, many of the departed continue to stay active investing in the space. Tom Hicks left his eponymous firm in early 2005, although he has since continued to invest out of his family office. Ted Forstmann, meanwhile, has slowly been winding down Forstmann Little & Co., but continues to pursue deals such as tradeshow organizer ENK International and the sports agency IMG. Bill Price, a Texas Pacific Group co-foudner, is another pioneer that scaled back his presence at the firm, although he remains involved in its current portfolio companies. Meanwhile, Alan Patricof, the founder of Apax Partners, also left his former firm to launch Greycroft Partners and a $50 million fund that is pursuing venture deals in the digital media sector.
Published reports indicate that Lee does not anticipate raising a fund. In the press release, however, the firm indicated it has “arranged interim equity financing” and can begin making investments “immediately.” The firm will have a U.S. focus and will target growth equity deals sized between $100 million and $500 million.
Like Patricof and Hicks, Lee’s new endeavor is noticeably smaller than what his former firm is currently aiming for. Thomas H. Lee Partners, which is retaining its name in the post Tom Lee era, is seeking $8 billion for its latest fund, the firm’s sixth private equity vehicle. —Ken MacFadeyn