Private equity firm Pine Island Capital Partners simply hit the revolving door lottery, for higher or for worse.
Driving the information: President-elect Joe Biden plans to nominate retired Gen. Lloyd Austin as protection secretary, lower than 5 months after he joined Pine Island as a associate. It additionally comes after fellow Pine Island associate turned Biden’s secretary of state decide.
Why it issues: It’s frequent for somebody to leverage public sector expertise in the private sector, or vice versa, however pretty uncommon to go from top-level public to private after which again into top-level public service. At least for non-lawyers.
- One purpose is that Biden is the first ex-VP since Nixon to return after an intermission.
As we previously reported, Pine Island was fashioned in 2018 by former CIT Group and Merrill Lynch CEO John Thain, former Goldman Sachs buyout huge Phil Cooper, and ex-Coca-Cola exec Clyde Tuggle.
- It focuses on mid-market firms in quite a lot of sectors, together with aerospace and protection, and to this point has purchased two firms by way of a fundless sponsor mannequin and raised $200 million for a SPAC.
Between the strains: Pine Island clearly knew it was including companions with D.C. affect, and was fairly express about it in the SPAC prospectus, however could not have predicted that two of its hires would find yourself amongst the subsequent administration’s 4 strongest Cabinet posts.
From a D.C. cynicism perspective, Pine Island hit it out of the park.
- Sure a Sec. Austin would wish to recuse himself from any associated contracting or procurement selections, however the historic relationship can’t be erased.
- And having mates in the highest of locations may not directly assist Pine Island increase cash or add portfolio firms.
On the different hand, some potential targets and buyers may fret about the look of battle, or being tied to a private equity firm that is more likely to develop into a GOP boogeyman.
- The subsequent Pine Island deal, if associated to authorities, is sort of sure to be on the N.Y. Times entrance web page — the sort of spotlight that many search to keep away from.
- Pine Island additionally could also be the topic of disclosure fights throughout Senate affirmation hearings, together with requests for the identities of its restricted companions (such agreements usually embody nondisclosure agreements).
The backside line: Pine Island’s days as an under-the-radar upstart are over.