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Illustration: Sarah Grillo/Axios

Private equity firm Pine Island Capital Partners just hit the revolving door lottery, for better or for worse.

Driving the news: President-elect Joe Biden plans to nominate retired Gen. Lloyd Austin as defense secretary, less than five months after he joined Pine Island as a partner. It also comes after fellow Pine Island partner became Biden's secretary of state pick.

Why it matters: It's common for someone to leverage public sector experience in the private sector, or vice versa, but fairly unusual to go from top-level public to private and then back into top-level public service. At least for non-lawyers.

  • One reason is that Biden is the first ex-VP since Nixon to return after an intermission.

As we previously reported, Pine Island was formed in 2018 by former CIT Group and Merrill Lynch CEO John Thain, former Goldman Sachs buyout big Phil Cooper, and ex-Coca-Cola exec Clyde Tuggle.

  • It focuses on mid-market companies in a variety of sectors, including aerospace and defense, and so far has bought two companies via a fundless sponsor model and raised $200 million for a SPAC.

Between the lines: Pine Island obviously knew it was adding partners with D.C. influence, and was pretty explicit about it in the SPAC prospectus, but couldn't have predicted that two of its hires would end up among the next administration's four most powerful Cabinet posts.

From a D.C. cynicism perspective, Pine Island hit it out of the park.

  • Sure a Sec. Austin would need to recuse himself from any related contracting or procurement decisions, but the historical relationship cannot be erased.
  • And having friends in the highest of places could indirectly help Pine Island raise money or add portfolio companies.

On the other hand, some potential targets and investors might fret about the appearance of conflict, or being tied to a private equity firm that's likely to become a GOP boogeyman.

  • The next Pine Island deal, if related to government, is almost certain to be on the N.Y. Times front page — the type of spotlight that many seek to avoid.
  • Pine Island also may be the subject of disclosure fights during Senate confirmation hearings, including requests for the identities of its limited partners (such agreements often include nondisclosure agreements).

The bottom line: Pine Island's days as an under-the-radar upstart are over.

Go deeper

SPAC avalanche does some good

Illustration: Aïda Amer/Axios

An avalanche of special purpose acquisition companies — better known as SPACs — raised capital this year to help startups bypass the lengthy and difficult IPO process.

Why it matters: Having more public companies is widely viewed as healthy for the markets and for the American economy, even if the SPAC path elicited skepticism and accusations of froth.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Health: CDC director defends agency's response to pandemic — CDC warns highly transmissible coronavirus variant could become dominant in U.S. in March.
  2. Politics: Biden readies massive shifts in policy for his first days in office.
  3. Vaccine: Fauci: 100 million doses in 100 days is "absolutely" doable.
  4. Economy: Unemployment filings explode again.
  5. Tech: Kids' screen time sees a big increase.
  6. World: WHO team arrives in China to investigate pandemic origins.
Dave Lawler, author of World
2 hours ago - World

Alexey Navalny detained after landing back in Moscow

Navalny and his wife shortly before he was detained. Photo: Kirill Kudryavtsev/AFP via Getty

Russian opposition leader Alexey Navalny was detained upon his return to Moscow on Sunday, which came five months after he was poisoned with the nerve agent Novichok. He returned despite being warned that he would be arrested.

The latest: Navalny was stopped at a customs checkpoint and led away alone by officers. He appeared to hug his wife goodbye, and his spokesman reports that his lawyer was not allowed to accompany him.