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Illustration: Eniola Odetunde/Axios

U.S. forces yesterday used tear gas on peaceful protesters outside the White House gates, prior to a declared curfew, clearing a path for President Trump to visit a riot-damaged church for a photo opportunity.

The state of play: Two of the largest U.S. producers of tear gas are owned by private equity firms, but those firms have no interest in discussing their ownership.

There is no federal tracking of tear gas usage by U.S. law enforcement, thus making it difficult to determine which company's products are used most regularly. But several outside research firms have determined that market leaders include:

Combined Systems of Jamestown, Pennsylvania.

  • The company was acquired in 2005 by Point Lookout Capital Partners, a New York-based private equity firm whose portfolio is dominated by law enforcement-related investments. Point Lookout didn't return interview requests.
  • The Carlyle Group also participated in that deal as a minority investor. It was made out of an old fund that's already closed with its assets sold, but Carlyle retains a residual equity piece in a trust that it's been unable to exit.
  • A source close to the firm says that Carlyle would not make such an investment today, because it would violate the firm's "responsible investing guidelines."

Safariland of Jacksonville, Florida.

  • The 56-year-old company was acquired in 2012 by a consortium, which includes Palm Beach Capital, from BAE Systems for $124 million.
  • Palm Beach Capital didn't return an interview request.
  • That deal also included Warren Kanders, a onetime investment banker who last summer stepped down as vice chairman of the Whitney Museum of American Art due to protests over his Safariland involvement.

Tear gas isn't really a gas. It's a pressurized powder that mists upon deployment and can cause choking and other symptoms beyond tears. It also lives in a legal gray zone, due to international treaties that allow it to be used in domestic law enforcement but not in war.

  • Many in law enforcement argue that tear gas ultimately saves lives of both police and protesters, as conflicts could otherwise turn deadly.
  • But, as we saw last night live on TV, it can also be abused with impunity.

The bottom line: Private equity firms typically take every opportunity to talk about their portfolio companies, proud of their products and management teams. In this case, they're silent.

Go deeper

Dan Primack, author of Pro Rata
Oct 2, 2020 - Economy & Business

Cerberus gets back on the SPAC horse

Illustration: Sarah Grillo/Axios

Cerberus Capital Management on Friday became the latest private equity firm to form a SPAC, a sort of blank-check company that goes public and then acquires a private company.

Why it matters: Cerberus first dipped its toe into SPACs well before the current boom, forming Iron Horse Acquisition in early 2018, but later decreased that SPAC's size and ultimately withdrew its IPO registration.

Updated 37 mins ago - World

Russia announces end to massive troop buildup near Ukraine

Russia's Defense Minister Sergei Shoigu (L) with President Vladimir Putin. Photo: Mikhail Svetlov/Getty Images

Russia's defense minister said Thursday that massive military exercises near the border with Ukraine had been completed, and that he had ordered troops to return to their permanent bases by May 1, according to state media.

Why it matters: Tens of thousands of troops and heavy military equipment had been moved to the border of eastern Ukraine and the annexed territory of Crimea over the last month, sparking fears of a potential Russian invasion.

Dan Primack, author of Pro Rata
56 mins ago - Economy & Business

Private equity's other tax fight

Illustration: Rae Cook/Axios

Private equity is carefully watching the D.C. debate on corporate taxes, in which Senate Democrats seem to be settling on a 25% rate.

Zoom in: Marginal rates obviously matter, but for PE it's just an appetizer before the weedier work begins on issues like corporate interest deductibility.