THL Partners Closes 10th Flagship Fund at $6.35 Billion

The Wall Street Journal Pro Private Equity
Chris Cumming
May 4, 2026

THL Partners, a pioneer of leveraged buyouts founded over five decades ago, has closed its 10th flagship fund to invest in high-growth midmarket companies.

The fund

The vehicle, THL Equity Fund X, closed at $6.35 billion, above its $6.25 billion fundraising target, the Boston firm said Monday.

The sum also exceeds the $5.6 billion THL Partners raised for its ninth flagship vehicle, which closed in 2021.

The firm benefited from recent asset sales that helped it stand out at a time when many investors are hamstrung by a lack of cash distributions, said Todd Abbrecht, THL’s co-chief executive. The fund had a 92% re-up rate, or proportion of investor commitments to the ninth fund that the firm’s limited partners pledged to the new one.

Numerous U.S. public pensions backed the fund, including the Teachers’ Retirement System of the State of Illinois, the Minnesota State Board of Investment and the Teachers’ Retirement System of Louisiana, according to publicly available documents.

The strategy

THL Partners traces its origins to 1974, when it was formed by Thomas H. Lee, one of the early practitioners of the private-equity buyout. The firm transitioned to new leadership when Lee left in 2006. Abbrecht and fellow co-CEO Scott Sperling have both been with THL for more than three decades, and became co-CEOs in 2020.

THL Partners’ investment approach aims to combine deep investing expertise in specific business niches—what the firm internally calls its Identified Sector Opportunity strategy—with teams of operational specialists, which it calls its Strategic Resource Groups.

The approach came about after years of effort to become more specialized and operationally focused, two traits private-equity investors look for in an increasingly tough market.

“It’s been a multi-decade journey, and we’ve continued to invest incredibly heavily to get to the point where we have significant scale in both investing and operating expertise,” Sperling said.

The result is THL Partners’ returns depend more on improving its businesses and less on simple price appreciation over time, said Abbrecht. The combination of a focused investment approach and operational improvements “drives advantages in sourcing, value creation and exiting,” he said.

The firm invests in three broad sectors: financial technology, healthcare and technology and business services.

In April, for example, it announced it would take a majority stake in Celerion, a pharmaceutical-services company the firm is backing through its ninth main buyout fund. And last year, the firm acquired clinical-trial company Headlands Research from fellow private-equity investor KKR.

On the exit front, THL agreed to sell insurance-software company Hexure to iCapital earlier this year.

The context

Private-equity dealmaking and asset sales started to recover last year from a lean period that began in early 2022, when the Federal Reserve started raising interest rates. This year, however, private-credit turmoil, concerns about AI’s threat to the software sector and economic blowback from the war against Iran have blunted activity.

U.S. private-equity firms invested about $260 billion and sold assets worth about $144 billion in the first quarter of this year, both undershooting the respective figures for the first quarter of 2025, according to data-tracking company PitchBook.

Fundraising in private equity has been even grimmer. U.S. firms raised about $54 billion in the first quarter, on pace for the lowest full-year total since 2018, PitchBook said.

In this context, investors are looking for firms “that can be successful through specialization and operational value-add in an increasingly challenging market,” Abbrecht said.