TH Lee Partners Closes Sixth Fund At $10.1B

Thomas H. Lee Partners has closed its sixth fund, the first without founder Thomas H. Lee at the helm, gathering $10.1 billion worth of support from limited partners in a fundraising that lasted more than two years.

The Boston-based buyout shop closed Thomas H. Lee Partners Fund VI last month, with $8.1 billion committed to its core fund and an additional $2 billion in a co-investment vehicle. The prior fund, closed in 2001, secured $6.1 billion in commitments.

The fundraise stretched out more than two years due to two main factors. First, portfolio company Refco Inc., a futures trading company, filed for Chapter 11 in 2005, which tainted returns and absorbed the attention of the LBO shop’s team. Second, though it had been years in the planning, founder Thomas H. Lee, now raising a fund under a new guise, Lee Equity Partners, left the firm in March 2006, passing the reins to the trio of Scott Sperling, Scott Schoen and Anthony DiNovi. The three have been leading the firm’s investments for a decade.

Despite not closing the fund until last month, Thomas H. Lee Partners has been busy doing deals out of the sixth fund for some time, including some blockbusters. Deals over the past year include the pending buyout of Clear Channel Communications and the purchase of Univision Inc. Shareholders of radio giant Clear Channel have voted in favor of that $19.5 billion deal, done in conjunction with Bain Capital Partners. It still awaits regulatory approval. On Univision, Thomas H. Lee Partners teamed with Madison Dearborn Partners, Providence Equity Partners, Saban Capital Group and TPG. The firm’s most recent deal: the purchase of human resources services provider Ceridian Corp., which it bought alongside Fidelity National Financial for $5.3 billion.

This fall, Thomas H. Lee Partners announced the formation of a credit fund, THL Credit Group, earmarked for leveraged finance, structured credit and minority equity transactions. The fund has raised at least $500 million. The division is led by CEO James Hunt. Over time, Thomas H. Lee Partners has raised over $22 billion and spent more than $125 billion on companies. The firm invests mostly in North America.—M.C.