(Bloomberg) -- A defense-investment firm founded by Carlyle Group Inc. alumni is expanding in a bet that private equity will play a more prominent role in shaping technology critical for US security.
Capitol Meridian Partners hired Michael Puopolo, a Blackstone Inc. principal who previously worked for Carlyle’s aerospace, defense and government-services team, as a managing director. It also tapped Curtis Uehlein, who led Carlyle portfolio companies, as an operating executive.
Washington-based Capitol Meridian raised more than $1 billion this year in its first fundraising campaign. The 14-person shop is part of a wave of private equity and investment firms channeling clout and money into bolstering US defense, aerospace companies and government contractors.
“The world is a more dangerous place than a year ago,” Brooke Coburn, a Capitol Meridian founding partner, said in an interview. War in Ukraine has underscored the efficacy of drones as killing machines, while a new cold war with China and upheaval in the Middle East are creating new geopolitical threats for the US.
“That is necessitating a new wave of investment akin to the 1980s,” he said, referring to a period when defense expenditures and an arms race accelerated under then-President Ronald Reagan.
The focus on slashing government bureaucracy by the incoming Trump administration could also create a bigger role for technology — and the private equity firms behind them — to play in supporting the defense-industrial base.
“The government is in a position of doing more with less,” Coburn said. “Commercial technologies are finding their way on the battlefield in a bigger way than ever before.”
Carlyle Ties
The ties between Capitol Meridian and Washington-based Carlyle run deep. Coburn worked in various positions at Carlyle, including head of the middle-market buyout team and deputy chief investment officer for real assets. Eight of Capitol Meridian’s most senior professionals have a shared history of working at Carlyle.
Puopolo played a role in Carlyle investments in defense contractor Booz Allen Hamilton, aerospace company Sequa and analytics business Novetta. As an associate, he worked under Adam Palmer, another Capitol Meridian founding partner who ran Carlyle’s aerospace, defense and government-services investment team. Most recently, Puopolo focused on technology deals at Blackstone’s private equity arm, serving on boards including event-planning software company Cvent.
Capitol Meridian’s founders regularly walk into junior employees’ offices to discuss deals, differentiating it from the large investment complexes he worked at previously, Puopolo said.
The firm’s deals include Parry Labs, which creates operating software for drones and helps systems across the military talk with one another. It has also invested in LMI, which is working with the US Department of Defense to sift through its vast troves of data and tap them for new uses.
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