Thomas H Lee’s Fund VII nearly one-third of way toward $3 bln goal

The Boston firm lists seven executives on its filing for Thomas H. Lee Equity Fund VII LP: Anthony DiNovi, Scott Sperling, Todd Abbrecht, Thomas Hagerty, Seth Lawry, Soren Oberg and Kent Weldon, with a listed date of first sale as Sept 26.  DiNovi and Sperling are co-presidents; the others are managing directors, according to the firm’s website.

Thomas H. Lee declined to comment.

The fund size of $3 billion reflects Thomas H Lee’s investment pace in recent years of $750 million to $1 billion per year, with a targeted deployment period of three to four years, according to a source.

Thomas H Lee has lined up about $3.2 billion in realizations for its LPs in less than 12 months, based on estimates from public documents:

• The firm inked one of the largest sponsored deals of the year with the sale in July of Acosta, a sales and and marketing company, to Carlyle Group for a reported price of $4.8 billion.
• In August, Ceridian, a portfolio company of Thomas H Lee and Fidelity National Financial Inc, agreed to sell its Comdata unit to FleetCor Technologies Inc for about $3.5 billion.
• In December, Thomas H Lee was one of several sponsors to back an IPO for Aramark Holdings. The firm sold 1.44 million shares in the deal for gross proceeds of  $28.8 million and retained nearly 40 million shares. The stock debuted at $20 a share and was trading just under $26 at press time (Oct. 14).
• Thomas H Lee also owns shares in GrubHub Holdings Inc, which went public in April at $26 a share. The stock was trading above $36 a share at press time. Thomas H Lee holds about 6.3 million shares of the local restaurant search service with a value of about $227 million, according to a filing.

On the acquisition front, Thomas H Lee is baring down on three core segments: business and financial services, consumer and health care, and media and information services.This year it purchased Black Knight Financial Services, ServiceLink and Prime Risk Partners for its business portfolio; also 1-800-Contacts and Phillips Pet Food & Supplies for consumer and health care. It did not list any deals this year for its media and information services silo.

Fund VII marks the second pool to be raised after the 2006 departure of Thomas H Lee, who founded the firm in 1974. DiNovi and Sperling took over leadership of the firm, while Lee launched Lee Equity Partners.

The vintage 2006 Thomas H Lee Equity Fund VI rang up an IRR of 6.8 percent and an investment multiple of 1.3x for the Connecticut State Employees Retirement System as of Dec 31, according to pension fund data compiled by Buyouts. The vintage 2000 Thomas H Lee Equity Fund V logged an IRR of 13.5 percent and an investment multiple of 1.6x for the Public Employees’ Retirement System of Nevada. For the most part, these results don’t reflect any boosts from the firm’s recent string of exits.

In a positive development for the firm in 2013, Thomas H Lee persuaded a federal judge to dismiss the case against it in a private equity collusion lawsuit stemming from club deals between 2003 and 2007. Carlyle Group paid a settlement of $115 million as the last firm to wrap up the lawsuit this year.

(Correction: This story has been updated to reflect that Thomas H Lee Equity Fund VII is the second fund raised after the departure of Thomas H Lee, not the first. Information about a placement agent was removed because it only handled a piece of the business.)