Carlyle Group Inc. plans to launch a fund focused on the defense sector amid growing demand by governments to upgrade their military forces, according to people with knowledge of the matter.The Washington, DC-based firm has reached out to investors to discuss the fund, pitching it as a way to invest in so-called reindustrialization, the people said, who asked not to be identified discussing confidential information.
This entails expanding the US’s industrial base and manufacturing. US President Donald Trump has prioritized weapons development, seeking a 50% boost in the annual defense budget next year to $1.5 trillion.
Carlyle has its roots in the defense industry, having recruited former Defense Secretary Frank Carlucci in its early days. He brokered acquisitions of defense firms at low prices as the US Department of Defense cut spending in the 1990s, scoring big profits for the alternative asset manager.
Carlyle was granted exclusivity to negotiate with the US Army to construct a data center across 1,384 acres at Fort Bliss in El Paso, Texas. Carlyle invests in the data center ecosystem and has more than 20 gigawatts of data center capacity under development across the portfolio, including Copia Power.
The Army is seeking public, private partnerships for energy, industrials, supply chains, manufacturing and critical materials. Everybody wants in, the Trump boys, private equity underwriters (PEU), TechGods, etc.
Army Secretary Dan Driscoll, a former PEU with Flex Capital, has been meeting with private equity firms to fund a $150 billion infrastructure investment.