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Louisiana Teachers’ hits Thomas H. Lee with up to $100 mln

  • Louisiana Teachers’ backs Thomas H. Lee for $100 mln
  • Firm targets $3 bln for first fund since 2006 vintage
  • Also backs TCV, Hamilton Lane separate account for venture

The Teachers’ Retirement System of Louisiana has committed up to $100 million for Thomas H. Lee Partners’ latest flagship fund, which is targeting $3 billion.

The pledge was part of $250 million the pension system committed to both private equity and venture capital at its board meeting last week, Deputy Chief Investment Officer Maurice Coleman told Buyouts in an email.

Boston-based Thomas H. Lee began marketing Fund VII in late 2013. The target is significantly less than the $8.1 billion the firm circled for its sixth fund, a 2006 vintage that had netted 9 percent through March 31, according to a Hamilton Lane report obtained from Louisiana Teachers’ through an open records request.

Thomas H. Lee participated in several large club deals in the mid-2000s, joining a consortium to acquire Aramark for $8.3 billion in 2006, and partnering with Bain Capital to buy Clear Channel Communications for $24 billion in 2008.

The firm moved further down market in recent years. The average enterprise value of its portfolio acquisitions fell from $3.2 billion prior to 2010 to just $1.2 billion over the last five years, according to the Hamilton Lane report.

Performance improved as Thomas H. Leee moved into smaller deals over the last five years, according to the report. Deals closed in 2010 and onward grossed 26.2 percent as of March 31.

Elsewhere, Louisiana Teachers’ committed up $50 million to Technology Crossover Ventures’ (TCV) latest growth equity fund. The firm set a $2.25 billion target for TCV IX, which it began marketing only a year after closing its previous fund on $2.23 billion.

Fund VII, the firm’s $3 billion 2007 vintage fund, netted a 22.2 percent IRR through June 30, according to the Hamilton Lane report.

Louisiana Teachers’ also re-upped $100 million to an existing separate account managed by Hamilton Lane for investments in venture capital funds. The separate account committed $82.5 million to new venture funds this year (as of November 16), including allocations to Institutional Venture Partners XV, Summit Partners Venture Capital Fund IV and Greycroft Partners IV.

Action Item: See Louisiana Teachers’ 2015 annual report here: http://bit.ly/1SKdklW