Putnam Investments and Thomas H. Lee, the Boston-based private equity manager have announced a new venture designed to develop and manage alternative investments for institutions and the high-net-worth market.

The new partnership will be called TH Lee, Putnam Capital. Putnam will have a 25 percent interest in TH Lee, Putnam Capital, and Lee will have a 75 percent interest.

The bottom line is that Putnam gains a large, experienced private equity manager, and Thomas H. Lee gains access to one of the largest distribution networks in the industry.

TH Lee, Putnam Capital's first fund is expected to be offered by the end of the year and marketed to both Lee's limited partners and through Putnam to institutional investors and financial advisors for their high-net-worth clients.

In addition, the companies announced that Putnam has acquired an interest in the core private business of Thomas H. Lee Company, with the company's name changing to Thomas H. Lee Partners. Terms of the transactions were not disclosed.

"We are creating a long-term strategic partnership between two well-known names in investment management," said Thomas H. Lee, the Lee company founder, and Larry Lasser, president and ceo of Putnam Investments. "The structure assures that each partner maintains the independence and full focus on its existing core business." "Sophisticated investors - whether institutions or high-net-worth individuals - want access to a wide range of private capital options ranging from hedge funds to venture capital to European private equity. This new partnership gives it to them under one roof," they said.

Lee will act as chairman and ceo of the new venture while remaining in the same positions at Thomas H. Lee Partners. David V. Harkins, currently senior managing director of Thomas H. Lee Company, will be president of Thomas H. Lee Partners. Scott M. Sperling, currently managing director of Thomas H. Lee Company, will be president of TH Lee, Putnam Capital. 

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