The Stockholm International Peace Research Institute warns of transparency concerns as private equity firms acquire a larger share of the US defense sector amid record-high global demand for American weapons.
Private equity firms have become significant players in the US defense sector, with global demand for American weapons hitting record highs. Private equity funds invested $15 billion in nearly 140 defense-related deals in 2021 alone. Private equity acquisitions have raised concerns about transparency, as firms are not required to share information about their portfolio companies, leading to worries about the maintenance of widely-cited lists of the world’s largest defense firms. The approach taken by private equity firms increases the chances that contractors could default on their loans, while defense industry consolidation could lead to increased costs for taxpayers. President Biden recently requested $842 billion for next year’s defense budget, over half of which will go to contractors.