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Capitol Meridian Partners raises $1.2bn for defence and aerospace investments 

Capitol Meridian Partners, a Washington-based investment firm founded by former Partners at Carlyle, has raised more than $1bn to back US government contractors, aerospace and defence companies, according to a report by Bloomberg. 

The report cites people familiar with the matter in confirming that Capitol Meridian Partners raised about $900m for its first fund, exceeding a $650m target, with investors providing an additional $300m for dealmaking.

Capitol Meridian Partners was launched in 2021 by Adam Palmer and Brooke Coburn, both former Partners at Carlyle who left after the private equity giant’s decision not to raise new funds dedicated to middle-market buyouts.

Palmer led Carlyle’s global aerospace, defence and government services investment team and its 2019 investment in industrial shipping repair company Titan Acquisition Holdings. Coburn was, among other roles, Deputy Chief Investment Officer for Carlyle’s real assets division, for which he reported to Glenn Youngkin.

According to the report, Capitol Meridian has benefited from investor interest in US companies that are too small for multinational asset managers, with high borrowing costs prompting investors to seek out managers that pursue smaller deals, which can require less debt.

In an interview, Coburn said: “We are not focused on elephant hunting.”

Capitol Meridian targets investments between $50m and $150m. Additions to its portfolio include LMI, a provider of customised technology for the government, a company that provides data analytics for government agencies and a business that builds speed-detection cameras and software for law enforcement services. The firm did not invest in foreign sovereign wealth funds — described by Coburn as “thoughtful curation” of its investor base, instead focusing on “Five Eyes” investors from Australia, Canada, New Zealand, the UK and the US.

The report cites data from Dealogic in revealing that US private equity firms spent roughly $8.5bn to acquire US defence companies from 2021 to 2023 — almost triple the amount deployed in the preceding seven-year period.

Palmer said: “With the rise and re-emergence of the nation-state adversary, there’s a need for the acceleration of technology development”, adding that the federal government is behind in adopting technology, which has created a role for private capital to bolster it.

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