Guaranteed Rate sells ownership stake to Thomas H. Lee

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Guaranteed Rate is the latest mortgage industry investment for Boston-based private equity firm Thomas H. Lee Partners.

THL is making "a material capital and strategic investment" in the Chicago-based mortgage banker, but the exact amount was not disclosed other than it's a "meaningful minority stake," a press release said.

Guaranteed Rate, which is privately held, will use a portion of the new capital to repurchase some of its shares from its existing stockholders.

Victor Ciardelli will remain as Guaranteed Rate's chairman and CEO.

"THL has a long history of successfully collaborating with fast-growing companies like Guaranteed Rate, and they also bring the experience, capital and resources that will enhance our capabilities and help us move closer to achieving our ultimate goal of becoming the country's largest retail mortgage lender," said Ciardelli in the press release. "THL shares our core values of financial and operational discipline, combined with a culture of inventiveness, self-sufficiency and collaboration. We are very excited to begin this journey with them."

THL has invested in both mortgage lenders and vendors in the past. Its current investments include a stake in what is now Black Knight Inc. and Ten-X, announced earlier this year. THL also has an investment in ServiceLink with Fidelity National Financial, Black Knight's former parent company.

In 1999, THL invested in Conseco, whose Conseco Finance subsidiary was the leading manufactured housing lender. Conseco filed for bankruptcy in 2002. The finance unit resumed the Green Tree brand and was eventually acquired by Walter Investment Management Co.

Other lenders THL invested in included HomeSide Lending in 1996 and ResMae in 2003.

"When evaluating different opportunities in the mortgage space, it became clear to us that Guaranteed Rate is well-positioned to thrive and grow market share moving forward, and that it is a great company to partner with in the mortgage market," said THL Managing Director Ganesh Rao. "Guaranteed Rate's industry leading purchase origination mix, excellent track record of growth and experienced team make this a compelling opportunity for THL."

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Private equity funds Originations Real estate Purchase Thomas Lee Partners