US Army, call to private equity for 150 billion infrastructure plan
The Pentagon leadership has initiated a series of talks with some of the major industry groups, including Apollo, Carlyle, KKR and Cerberus
by R.Fi.
Key points
The US military is calling on large private equity funds to come together. The goal is to explore 'robust' strategic projects that can support a $150 billion infrastructure modernisation plan. A series of talks have already begun with some of the industry's leading groups, including Apollo, Carlyle, KKR, and Cerberus. The initiative, promoted by Army Secretary Daniel Driscoll and Treasury Secretary Scott Bessent, took shape last Monday with a confidential forum in New York attended by some 15 of the most influential US buyout firms.
Driscoll, in an interview with the Financial Times, said that he had summoned investors to present them with a series of unused assets in arsenals and military depots, asking for ideas for public-private partnerships: "We told them, 'Here are all the underutilised assets we have. What kind of operations can we involve you in?' The attempt is to attract private capital through 'ingenious financial models' that will bridge the gap between the currently available budget of only 15 billion over ten years and the real investment needs of ten times that amount.
"We are interested in concrete projects, not theoretical exercises," emphasised Driscoll, the US military's top civilian officer, who was a university classmate at Yale and a lifelong friend of Vice President JD Vance.
Intervention strategies
Among the proposals under consideration are the construction of data centres on military bases, facilities for processing rare earths, and the possibility for the federal government to cede land in exchange for computing power or production output. "Instead of paying us cash for land, you pay us in computing capacity," Driscoll explained.
According to some participants, the ideas discussed also included leaseback formulas (sells an owned asset by entering into a lease agreement to continue using it) between public and private, to speed up construction time and lower capital costs. The forum, according to one investor present, was 'very serious and broad', covering a wide range of financial solutions for supply chain and capital expenditure (capex), reports the FT.
