Firm Plans To Invest in Security

GlobalSecNine, an Arlington, Virginia-based private equity firm specializing in the defense industry, will reportedly close a $250 million fund at the end of September. The outfit intends to use the fund to purchase Washington, D.C.-area companies (or companies willing to relocate to the region) with at least $35 million in revenue, according to the Washington Business Journal.

Representatives from the firm could not be reached for comment to discuss their fund-raising plans or to say who will be the potential LPs.

But GlobeSecNine isn’t entirely new to the investing scene, and its partners are certainly no strangers to Inside the Beltway. GlobalSecNine was co-founded by CEO Anthony Padgett, a lawyer who most recently headed Monsanto Corp.’s international seed business; David Miller, a former ambassador and counterterrorism member of the National Security Council under the first President Bush; and Gregory Newbold, a retired Marine lieutenant general.

The three launched a much smaller fund of $20 million from their own coffers in May. That fund, which is expected to be fully invested by the end of year, has made one disclosed investment. The firm invested in Sunnyvale, Calif.-based Savi Technology, which partly sells its RFID technology to the U.S. Department of Defense. The firm participated in Savi’s sixth, $52 million, round of financing, which closed in April. Its only co-investor was Hutchinson Port Holdings. Savi had previously raised $103 million, including investments from Accel Partners, Vector Capital, and Mohr Davidow Ventures.

GlobeSecNine also partnered with Bear Stearns Merchant Banking last year as part of the bank’s plan to invest several hundred million dollars in homeland security deals.

GlobeSecNine is one of the latest entrants in private equity that is attempting to capitalize on the fragmented security market. In November, Paladin Capital Group closed on a $235 second fund to invest in startups with technology that has potentially broad applicability for the government.

Also, William Cohen, the former defense secretary, launched TCG Financial Partners with former Bank of America investment banking chief Edward Carter. Cohen was quoted in several papers late last year as saying that the firm hopes to raise $300 million. TCG has yet to hold a fund close.