Cohen on Defense with New Firm –

William Cohen, former Secretary of Defense in President Clinton’s administration, is launching a merchant banking group. The firm – named TCG Financial Partners – plans to raise $300 million to invest in defense companies.

Joining Cohen is Edward Carter, former head of U.S. investment banking with Bank of America Corp. Cohen plans to assemble a team from his consulting firm, The Cohen Group, including retired U.S. General Joseph Ralston and George Robertson, a former NATO secretary-general.

Cohen and Carter are betting on a wave of acquisitions among military contractors. They say that constraints on the U.S. defense budget and the Pentagon’s demand for new technologies will drive contractors to sell business units and buy smaller technology firms.

Cohen, 64, and Carter, 51, say they contributed their own capital to the venture, but declined to specify how much. They also plan to raise the $300 million from institutional investors, though fund-raising hasn’t started yet.