Thomas H. Lee legacy firms see big value in insurance marketing

Thomas H. Lee and his legacy companies picked a lot of winners in nearly 50 years as one of the earliest private equity takeover kings – including backing a pair of major insurance marketing giants.

Lee, 78, died Thursday, according to a statement released by his family. The statement included few details, such as a cause of death or where Lee died. Primarily headquartered in Boston throughout his long career, Lee also had offices and a home in New York City.

One of the pioneers of the now-familiar "leveraged buyout" technique, Lee enjoyed spectacular successes through two eponymous firms, Thomas H. Lee Partners from 1974 until 2006, and later, the New York-based Lee Equity Partners.

"Tom was a pioneering investor who helped create the private equity and leveraged buyout industry as we know it," Lee Equity Partners said in a statement.

Most notably, he led the 1992 purchase of Snapple Beverage Corp. for $135 million, investing just $28 million of his firm's money. Lee boosted revenue from $95 million annually to $750 million in two years and sold it to Quaker Oats Co. for $1.7 billion.

Lee attraction to IMOs

Lee, and his legacy companies, also had unique foresight into where insurance distribution was heading as well.

In January 2020, THL acquired a majority stake in AmeriLife from J.C. Flowers & Co. Along with fellow big players Integrity Marketing Group in Dallas, Texas and Simplicity Group in Summit, N.J., AmeriLife is among the new breed of independent market organizations (IMOs) firms who are seizing control of life and health insurance and annuity distribution via an army of agents and agencies coast to coast.

"THL’s deep industry expertise and financial and operational resources will enhance AmeriLife’s capabilities and provide financial flexibility to accelerate our growth," CEO Scott Perry said at the time.

Lee himself was long gone from THL by that point and AmeriLife declined comment on his passing. But he was still somewhat involved in his Lee Equity firm, which became majority owner of Simplicity in an October 2020 deal. Lee Equity replaced Aquiline Capital Partners as majority owner of Simplicity.

Lee served as chairman of Lee Equity Partners at the time of his death. Day-to-day operations were handled by an impressive roster of partners Lee attracted when he formed the company in 2006. Several of the partners came from Bain Capital, Lee's main competition for deals during the early days.

Bruce Donaldson, president and CEO of Simplicity, met Lee once last year.

"He was a genteel, thoughtful and charming person whose charitable endeavors and professional successes have been inspirational for many," Donaldson said.

Significant legacy

Lee attended Belmont Hill School and graduated from Harvard College in 1965 with a degree in economics, The Boston Globe reported.

“I basically worked like a dog to make it into Harvard," he wrote in his 25th anniversary class report. “I started my company . . . to advise growing companies but quickly got directly into buying companies, some 85 to date."

Lee donated $22 million to Harvard University in 1996.

“I’ve been lucky to make some money," he said at the time, according to a death notice the family prepared. “I’m more than happy to give some of it back."

Over the past 46 years, Lee invested over $15 billion of capital in hundreds of transactions, his company said. Prior to founding THLP, Lee was with the First National Bank of Boston, where he was a vice president and led the high technology lending group. Previously, Lee was a securities analyst in the institutional research department of L.F. Rothschild & Company in New York.

Forbes estimated Lee's net worth at $2 billion. But he was not the ruthless takeover businessman popularized in shows like "Succession" and the "Wall Street" movies.

“He’s that rare thing on Wall Street – a genuinely nice guy,” Forbes said in a 1997 profile. “He is also a real innovator in the deal business.”

InsuranceNewsNet Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.