Thomas H. Lee Partners

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Thomas H. Lee Partners
Founded 1974
Headquarters Boston, Mass.
Products Private equity
Website http://thl.com/

Thomas H. Lee Partners, based in Boston, is one of the oldest and most successful private equity firms in the United States. The firm focuses on identifying and obtaining substantial ownership positions in large growth-oriented companies. THL has raised approximately $22 billion of equity capital and invested in more than 100 businesses with an aggregate purchase price of more than $125 billion.[1]

The industries it focuses on include: Business and Information Services, Consumer Products/Retail, Financial Services, Health Care, Industrial, and Media/Communications.

History

Thomas H. Lee Partners was an investor in Refco when it went bankrupt in 2005. Three Thomas H. Lee funds had paid $453 million paid to buy 57 percent of Refco in 2004. Lee had spent $10 million on due diligence before buying into Refco, prior to its going ublic.[2] Refco's share surged 25 percent on the first day of trading.[3]

After the IPO, Lee's interest in Refco was valued at $1.38 billion as of Sept. 30, 2006 SEC filing from November 10, 2006. Lee would write down 99% of that value in a 2007.[4]

Lee had accounting firm KPMG and the law firm Weil, Gotshal & Manges evaluate Refco before it invested. Additionally, Lee hired consulting firm McKinsey & Company conduct customer surveys and assess growth in the futures business.

Over more than 10 months, Lee executives spent more than $10 million employing a number of firms -- including the accounting firm KPMG and the law firm Weil, Gotshal & Manges to evaluate Refco before it invested. Lee also had insurance broker Marsh & McLennan study risk management and the adequacy of insurance. Lastly, Mercer Human Resource Consulting looked at human resource issues Lee hired a private investigator to do background checks on Refco CEO Phillip Bennett and some of the company's other top officials.[5] Thomas H. Lee Partners would sue auditor Grant Thornton in Federal Court, claiming the firm aided and abetted Refco's fraud.[6]

Lees sued three former Refco executives in a suit filed in federal court in Manhattan against former Chief Executive Phillip R. Bennett, former Chief Executive and President Santo C. Maggio and former President Tone Grant.[7]

Thomas H. Lee Partners and some of its executives would be sued by the Refco Litigation Trust, which claimed Lee and its executives knew more about Refco's problems than it disclosed.[8]

The trustee for the Refco bankruptcy sued Lee in Federal District Court in Manhattan.[9]

Products and Services

Key People

  • Anthony J. DiNovi - Co-President
  • Scott M. Sperling - Co-President


References

  1. About THL. Thomas H. Lee Partners.
  2. Thomas H. Lee Partners sues auditor over Refco. Reuters.
  3. Mystery at Refco: How Could Such a Huge Debt Stay Hidden?. New York Times.
  4. Thomas H Lee takes 99% loss on Refco. Financial News.
  5. Thomas H. Lee Partners Files Suit Against Former Refco Executives. New York Times.
  6. Thomas H. Lee Partners sues auditor over Refco. Reuters.
  7. Former Refco Officers Are Sued. Wall Street Journal.
  8. Refco Litigation Trusts File Lawsuit Against Thomas H. Lee Partners and Related Entities for Role in Refco Fraud. Globenewswire.com.
  9. Thomas H. Lee Partners Sued Over Refco Debacle. New York Times.