Thoughts on Thomas H Lee Partners?
Anyone have any insight on culture / performance? I know fund size went down post crisis but has been trending upwards
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Definitely one of the best PE options in Boston imo, along with Bain Cap, Audax, HarbourVest, Cove Hill.
I’ve heard culture is great, and being in Boston definitely helps on that front inherently versus New York.
reputation is strong, and other than a couple strange situations with Refco and a furniture company, they seem to have success raising funds in the 2-3bn range the last few years. Business, consumer, and media focus on their portfolio companies. overall very solid shop.
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yes - that’s the one. Went bankrupt almost immediately after the acquisition. Don’t know a lot about it but it THL definitely took a hit because of it.
Very old name in the private equity industry. If you want to work in Boston MM/UMM PE, this is probably about as good as it gets outside of Berkshire. There are a bunch of other great funds in Boston (Advent / Bain for large cap, TA / Summit for large growth, Audax / Charlesbank / Abry / Great Hill / Cove Hill for other solid MM and UMM funds).
As mentioned above, they’ve had a couple of duds over the years (retail is a very hard place to play, just ask Bain), but performance has generally been pretty strong (second quartile or higher across last several funds, with first quartile performance on multiple). Had a stronger recent fundraise (~$4B), which as you mentioned, was larger than their prior fund. They had that massive fund in 2006 - my guess is that the fund didn’t perform amazingly well but they either downsized because Thomas H. Lee himself left (which may have made fundraising harder) or they thought they were better suited for MM space (think MDP similarly decided not to upsize several years ago).
Boston PE culture is definitely a lot less cutthroat when compared to that of NYC. The one notable exception is Audax, which I have yet to hear good things about with respect to culture / lifestyle. Still a well-respected firm in the industry.
THL seems to have strong business school placement, even relative to larger funds (this may have to do with Boston location to some extent). They take fairly large associate classes but seem to pursue a lot of deals (from standard MM deals to massive, $5B+ ones like D&B, in which they partner with LPs).
Bump!
https://www.buyoutsinsider.com/gp-profile-thomas-h-lee-nears-finish-lin…
Article above is from 2016 so obviously a bit dated but has some good info: 26% IRR on deals completed between 2010 and 2015, 21% IRR on Fund V realized investments (2001 vintage so likely represents bulk of fund). 13% on realized investments on their big fund (I’d guess that figure ended up a bit under 10%). Successful fundraise above $3B target for last fund within a few years of prior fundraise would suggest that recent fund performance has probably been good.
Pretty large healthcare / tech portfolio but looks like they do consumer and financial services deals as well. These guys also have a large operations team.
Pedigree of senior investment professionals is impressive. Almost every MD who works there went to HBS. Most of them started working there as associates or right out of business school, which usually is a good sign. Couple of senior associates were associate promotes so looks like they promote internally, which I don’t recall being the case earlier. Associates are all from banking backgrounds (good number from Evercore and Lazard, also see PJT, GS, JPM, etc.), although they’ve been known to hire consultants from time to time. Looks like they hired 1-2 VPs out of Wharton but probably less applicable to you.
They say they’re growth-oriented but they strike me as more of a hybrid of growth and value. Definitely not deep value investors like Sycamore or HIG.
All in all, Thomas H. Lee sort of flies under the radar but they’re a solid shop that has basically been around since the inception of private equity. I don’t know if it helps but I would view them in same tier/category as Welsh Carson / Madison Dearborn based on fund size / history and reputation.
Thank you that’s very helpful.
Bump
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