Report: Tom Lee to quit firm

Thomas H. Lee is reportedly leaving the Boston-based LBO firm he founded with plans to raise a rival buyout fund.

Thomas Lee has reportedly given notice that he is leaving Thomas H. Lee Partners (TH Lee), the Boston-based buyout firm that bears his name.

A spokesperson from TH Lee declined comment.

The move comes whilst the firm is marketing a new LBO vehicle, but Lee’s exit is not expected to unhinge the fundraising plans. Sources say the new fund could take in between $8 billion and $10 billion in limited partner commitments.

TH Lee had made initial steps in dealing with its succession plans when it named Scott Sperling, Scott Schoen and Anthony DiNovi as co-presidents two years back, and Lee’s role at the firm appears to have diminished in recent years. Last month, The Boston Globe reported that Lee’s name was noticeably absent from a recent letter to the firm’s investors.

For TH Lee, 2005 has been a year rife with highs and one notable low. The firm notched some wins when it exited the likes of credit card issuer Metris Companies and plumbing fixture distributor National Waterworks, but its high-profile bet on Refco, the now bankrupt commodities trader, exploded in its face when it was uncovered that Refco’s CEO had committed fraud.

Lately, the firm has thrown itself into making new investments. Earlier this month, TH Lee was part of a group that acquired coffee and doughnut franchisor Dunkin’ Donuts, and at the end of October, the firm participated in the buyout of Susquehanna Radio.

The Wall Street Journal, which first reported on Lee’s departure today, quoted a source as saying that Lee turned down a severance package because it contained language that may have prevented him from raising a competitive fund.