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Thomas H. Lee Partners secures new fund commitments

June 23, 2014, 3:58 PM UTC
Courtesy: Thomas H. Lee Partners

Thomas H. Lee Partners is finally be on the verge of formally restarting its fundraising activity, after nearly a year of expectations.

The Boston-based private equity firm has quietly secured limited partner commitments from The Government of Singapore Investment Corp. (GIC) and the Abu Dhabi Investment Authority (ADIA), as so-called “anchors” before sending out documentation to its broader investor base. A formal first close could come within the next two months, according to a source familiar with the situation.

Prior reports have suggested that THL will seek between $3 billion and $4 billion for the new effort, compared to the $8.1 billion it raised for its sixth fund in late 2007 (plus a $2 billion co-investment sidecar). That fund is entirely committed, but THL has between $700 million and $800 million in available capital via recycling provisions. Last month, the firm committed to invest $200 million in equity to launch Prime Risk Partners, an Atlanta-based acquisition platform focused on U.S. property, casualty and employee benefits insurance agencies.

THL’s sixth fund had a 5% internal rate of return (IRR) and 1.2x investment multiple through the end of Q2 2013, according to the California Public Employees’ Retirement System. Since then it has experienced several liquidity events, including the IPO for GrubHub (GRUB), an IPO and secondary public offering for Aramark (ARMK) and the sale of Ono to Vodafone.

The firm’s fifth fund (2001) featured a 13.3% IRR and 1.6x investment multiple.

A THL spokesman declined comment.

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