Lee Equity nears final close of debut fund

Lee Equity, the buyout fund Tom Lee launched in 2006, has raised more than $1 billion in commitments, according to a source familiar with the situation. The fund plans to close with at least $1.5 billion in the coming months. The firm’s strategy is to invest in middle-market media, financial services and retail companies.

Limited partners include Teachers Retirements System of Texas, according to a regulatory filing. Bluff View Capital, Credit Suisse Securities, DAV/Weatherly Financial and Cambridge Financial Services provided advisory services.

Beyond its namesake, Lee Equity is entirely separate from Tom Lee’s two ailing hedge fund of funds. last week, the Wall Street Journal reported that Thomas H. Lee Capital Management, and its two funds had lost about 40% this year and Lee is considering shrinking or shuttering them.

Further confusing the situation is the firm Thomas H. Lee Partners, the private equity fund Lee founded in 1974 and made a name for himself with on such deals as Snapple. He left to form Lee Equity in 2006, but THL Partners still exists, having no connection to Tom Lee, Lee Equity or Thomas H. Lee Capital Management.

Among Lee Equity’s professionals are Bob Wright, former chairman of NBC Universal. Deals the firm has done include the buyout of teen apparel store Debs Shops, and it backed health insurer Universal American Financial Corp.

The firm also recently joined forces with Genstar Capital to form a health care specialty finance company called MidCap Financial. It seeks to invest in companies valued between $500 million and $3 billion. —Erin Griffith