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Tully Friedman

Tully Friedman (born c. 1942) is an American businessman and investor with over four decades of experience in leveraged buyouts and . He co-founded the firm Hellman & Friedman in 1984 alongside , where he served as a until 1997, focusing on control investments in established companies. In 1997, Friedman established Friedman Fleischer & Lowe (now FFL Partners), serving as its chairman and chief executive, emphasizing operational improvements in middle-market firms across sectors like consumer products and healthcare. A graduate of with an A.B. degree earned with great distinction and with a J.D., Friedman previously worked as a managing director at Salomon Brothers. He has held board positions at companies including Clorox and serves on the board of trustees of the American Enterprise Institute, a think tank advocating free-market policies. Friedman is also involved in philanthropy through the Tully and Elise Friedman Fund, supporting educational and cultural initiatives.

Early life and education

Family background and upbringing

Tully M. Friedman was born circa 1942. Of Jewish heritage, limited public information exists regarding his parents, siblings, or specific details of his childhood environment and influences. Friedman later established his own in , including his wife Elise and twin children, Alexander L. "Alex" Friedman and Allegra W. Friedman, both of whom graduated from St. Paul's School in 2017.

Academic and early influences

Tully Friedman graduated with an A.B. degree, with great distinction, from in 1963. This undergraduate education emphasized rigorous analytical training, aligning with the quantitative and economic foundations that later supported his finance career. Following Stanford, Friedman attended , earning a J.D. degree. His legal studies focused on core principles of contracts, , and regulatory frameworks, providing essential tools for navigating complex transactions in and . Admitted to the Bar in 1967, Friedman's early post-academic path transitioned from law into , where exposure to high-stakes deal-making at honed his investment acumen.

Professional career

Entry into finance

Prior to entering , Friedman practiced law after earning his J.D. from . Around 1970, he transitioned into by joining as a junior banker, having initially explored opportunities at firms like . At , Friedman rose to managing director, where he founded the firm's department and served on its national administrative committee. His work during the , a period of the firm's prominence in high-stakes deals, provided hands-on experience in despite lacking formal training. This role positioned him to advise on significant transactions, including restructurings that facilitated early collaborations leading toward . Friedman departed in 1984 to co-found .

Co-founding Hellman & Friedman

In 1984, Tully Friedman and established , a San Francisco-based private equity firm specializing in leveraged buyouts of mature companies. Friedman, who had previously served as a managing director at and founded its corporate finance department, partnered with Hellman, a former partner who had become the firm's youngest partner at age 26. The founders met through their overlapping careers in and aimed to capitalize on emerging opportunities in private equity during the mid-1980s wave. As one of two managing general partners, Friedman played a central role in the firm's operations from inception through early 1997, overseeing the establishment of private equity partnerships that raised more than $2.5 billion in capital. These funds supported investments in approximately 40 companies, including early stakes in Levi Strauss & Co. and Mattel Inc., focusing on operational improvements and long-term value creation rather than short-term financial engineering. The firm's initial strategy targeted large-scale transactions in established industries, exemplified by its participation in the 1985 leveraged buyout that ranked as the nation's largest private buyout at the time. Hellman & Friedman's approach emphasized partnership with management teams and disciplined capital deployment, distinguishing it from more speculative practices of the era. Over the subsequent decade, the firm grew its significantly, laying the groundwork for its evolution into a multi-billion-dollar in sectors such as goods and healthcare.

Leadership at Friedman Fleischer & Lowe

Tully Friedman co-founded Friedman Fleischer & Lowe (later rebranded as FFL Partners) in 1997 after departing from Hellman & Friedman, establishing the San Francisco-based firm as a middle-market private equity investor with an emphasis on operational improvements in portfolio companies. As co-founder, chairman, and chief executive officer, Friedman shaped the firm's strategy, prioritizing control investments in business services, healthcare, and consumer sectors where hands-on management could drive value creation. Under Friedman's leadership, FFL Partners built a track record of fundraisings that reflected growing investor confidence in its approach. The firm closed its third fund at $1.5 billion in and achieved its largest-ever raise with $2 billion for Fund IV in , enabling investments typically ranging from $50 million to $250 million per deal. This operational focus distinguished FFL from peers, with emphasizing partnerships with strong management teams to execute growth initiatives and enhance efficiency. By 2020, as Friedman approached his mid-70s, the firm announced promotions of managing partners to share oversight of investments, operations, and , while he transitioned to senior advisor and founder role, continuing to provide strategic guidance. This succession ensured continuity in FFL's niche-focused model, which later narrowed to healthcare and tech-enabled services following the $917 million close of Fund V in 2022.

Key investments and business philosophy

Friedman co-founded in 1984, focusing on large-scale equity investments in established companies across select sectors such as , , and consumer products. Early deals under his involvement emphasized control-oriented buyouts with a emphasis on operational enhancements rather than heavy debt financing, distinguishing the firm from leveraged buyout peers of the era. Notable early investments included acquisitions in and , aligning with the firm's strategy of targeting mature businesses with strong cash flows for long-term value creation. In 1997, Friedman established Friedman Fleischer & Lowe (now FFL Partners), shifting to middle-market with investments typically ranging from $50 million to $200 million in healthcare, business services, and tech-enabled sectors. Key deals under his leadership included the 2012 acquisition of a majority stake in Strategic Investment Group, an investment outsourcing firm managing over $100 billion in assets, and investments in behavioral health training provider Crisis Prevention Institute, which was sold in generating a reported 2.7x multiple on invested capital. FFL's portfolio also featured exits like , a and consulting firm, reflecting a pattern of backing service-oriented companies with recurring revenue models. Friedman's business philosophy prioritizes post-acquisition operational involvement to drive and strategic add-ons over , stating that "our work really just begins when we make an " and avoiding heavy to focus on expanding enterprise value. This approach stems from his experience at investment banks like , favoring concentrated portfolios in familiar industries to deep sector expertise for sustainable returns rather than short-term . He has critiqued market excesses, warning in 2017 that valuations exceeding 10x-12x EBITDA for companies warranting 7x-8x signal impending downturns, underscoring a disciplined, fundamentals-driven strategy amid industry cycles.

Philanthropy and civic involvement

Charitable foundations and giving

The Tully and Elise Friedman Fund, a 501(c)(3) based in , , was established by Tully Friedman and his wife, Elise, to support charitable initiatives focused on , , youth development, and arts and culture, with a primary emphasis on the . The fund operates as a grantmaking entity, directing resources to nonprofit organizations aligned with these priorities. Among its grantees, the foundation has provided support to , reflecting contributions to . In 2011, the fund's largest documented grants included $655,000 to the , a advocating free-market policies, and $400,000 each to —a facilitating anonymous contributions to conservative causes—and , an promoting and . These allocations indicate a pattern of funding center-right organizations alongside broader philanthropic efforts. Friedman and his wife have also contributed to national initiatives, appearing as donors to the Better Angels Society in 2023, which promotes and on polarizing issues through educational programs. The foundation's activities underscore Friedman's approach to , prioritizing targeted giving over broad institutional affiliations.

Board memberships and advisory roles

Friedman serves as founder and senior advisor at FFL Partners, the San Francisco-based he established in 1997 following his departure from . Throughout his career, he has held directorships at multiple public corporations, including CapitalSource, , Mattel Inc., , and The Clorox Company. In the non-profit sector, Friedman is a trustee of the , a , having previously chaired its board. He also serves as vice chairman of the Telluride Foundation, which supports community initiatives in . Friedman joined the board of trustees at St. Paul's School, a preparatory institution in , in 2020.

Political contributions and engagements

Tully Friedman has primarily supported candidates and organizations through personal and -based contributions. His revocable donated $100,000 to Citizens Against Spending and , a conservative nonprofit that funded advertisements critical of Barack Obama's economic policies during the 2012 presidential election. He has also given directly to the , with recorded contributions totaling $60,000 across multiple instances. In June of an unspecified recent year, Friedman contributed the maximum individual limit of $5,800 to U.S. Senator Cotton's (R-AR) campaign committee. Friedman's political engagements center on conservative policy advocacy. He previously served as chairman of the (AEI), a promoting , , and priorities, and remains a trustee on its board. In this capacity, he has participated in AEI's research and public discourse, including commentary on private equity's role in during the 2012 Republican primaries. His affiliation aligns with Party identification, as documented in biographical profiles.

Controversies and criticisms

Departure from Hellman & Friedman

In January 1997, Tully Friedman, co-founder of , announced his intention to depart the firm after 13 years to establish his own venture. His official exit occurred on March 31, 1997, motivated by a desire for greater autonomy in leading an investment firm at age 55, as the collegial structure at positioned as the senior authority. The split was described as amicable, with no reported disputes between Friedman and Hellman, who had maintained a close personal relationship—Hellman served as best man at Friedman's wedding the previous year. emphasized their strong rapport, stating, "We get along extremely well; that's not the issue." A at , John Pasquesi, attributed the move to Friedman's aspiration to helm his own operation independently. Following his departure, Friedman co-founded Friedman Fleischer & Lowe later that year, targeting a fund of $500 million to $700 million, which ultimately closed at $350 million. He did not recruit partners from but anticipated collaborating with some existing clients on new deals. The firm, later rebranded as FFL Partners, raised a second fund of $750 million by 2004 and continued operations successfully.

Private equity practices and industry scrutiny

Private equity firms, including those co-founded by Tully Friedman, have employed leveraged buyouts (LBOs) involving substantial debt financing to acquire companies, a practice that has drawn criticism for increasing to portfolio entities and prioritizing short-term returns over long-term stability. Critics argue that high leverage ratios—often exceeding 6x EBITDA in deals—can lead to distress or if cash flows falter, as seen in broader industry cases where debt service burdens contributed to over 20% of U.S. bankruptcies between 2015 and 2020 being tied to PE-owned firms. In response to such scrutiny, Friedman has maintained that 's focus on operational improvements and value creation, rather than debt alone, drives success, dismissing notions of unique social obligations as incompatible with free-market principles. Specific investments by Friedman's firms have faced allegations related to aggressive cost management and . For instance, Friedman Fleischer & Lowe (later FFL Partners), where Friedman served as chairman and co-founder, owned dental chain Kool Smiles (rebranded Benevis), which settled a $24 million lawsuit in 2019 for allegedly submitting fraudulent billings for unnecessary pediatric procedures to boost revenues. A related malpractice suit arose after a 5-year-old patient died following extractions at a Kool Smiles clinic in , with the family claiming the PE-backed firm incentivized through performance-based bonuses tied to procedure volumes. Similarly, Hellman & Friedman's Caliber Collision Centers paid $5.8 million in 2004 to resolve violations under California's Unfair Competition Law, stemming from deceptive repair practices. Industry-wide examinations have highlighted PE's role in job reductions as part of efficiency drives, with studies estimating that LBOs result in net declines of 1-2% annually in the first two years post-acquisition due to . Friedman has countered this by rejecting any "higher good" justification for PE activities, arguing at a 2007 American Enterprise Institute conference that firms like his add value through better without a special duty to preserve jobs beyond what market dynamics demand. Hellman & 's approach to holding assets longer—such as for over a decade—has bucked quick-flip norms but invited limited partner concerns over liquidity and returns during the period, though the firm defends it as enabling deeper operational transformations. Fee structures and dividend recaps have also fueled debate, with PE firms extracting fees (typically 1-2% of assets) and incentives amid scrutiny that these can incentivize riskier debt loading. In 's case, FFL's investments in leveraged sectors like payday lending (e.g., a in Curo Financial) overlapped with regulatory actions against predatory practices, though the firm divested prior to major settlements. Proponents, including Friedman in industry forums, emphasize empirical outperformance—PE returns averaging 15-20% IRR historically—over isolated failures, attributing criticisms to envy of profitability rather than systemic flaws. In November 2020, Elise Friedman filed for legal separation from Tully Friedman in San Francisco County Superior Court, marking the initiation of divorce proceedings for the couple married since 1995. The filing involved family law matters typical of high-net-worth separations, though no public details on asset division, alimony, or custody disputes have emerged. The couple, parents to two children, had previously collaborated on philanthropic efforts, including the Tully and Elise Friedman Fund supporting Bay Area causes. Earlier, in April 2004, Friedman petitioned in regarding the estate of Abigail Fay Friedman and related parties, a family probate matter with limited public disclosure. No criminal charges, civil suits unrelated to , or professional disciplinary actions against Friedman have been documented in .

Personal life

Marriages and family

Friedman was previously married to Ann Fay Barry, with whom he is associated through public records and the naming of the Ann and Tully Friedman Foundation, a charitable entity. In June 1995, he married Elise Dorsey in an Episcopal ceremony at St. Andrew's Church in Sonoma, California. Friedman and Dorsey have two children, Alexander and Allegra. Dorsey filed for legal separation or divorce from Friedman on November 12, 2020, in San Francisco County Superior Court.

Residences and lifestyle

Friedman owned a neoclassical-style at 360 Mountain Home Road in , on a nine-acre hilltop site featuring a 9,000-square-foot main residence, a 1,117-square-foot colonnaded pool house, and extensive grounds, until selling it on November 27, 2012, for $117.5 million—a California residential sales record at the time and the second-highest in U.S. history then. As a Francisco-based executive, Friedman has resided in the Bay Area, aligning with his professional operations centered in the city.

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