December 14, 2014 | by Thomas Heath
Take a well-connected defense business guru. Add a former Wall Street aerospace analyst and one-time member of the Center for Strategic and International Studies. Throw in some former generals and Defense Department civilian bigwigs.
You have Enlightenment Capital, the Chevy Chase-based firm that has made several investments in the past few days, including one in Diplomat Group, an Annapolis provider of aviation transport and base operations.
Enlightenment is an $80 million fund, founded by Devin Talbott and Pierre Chao. The money comes from a range of institutional and high-net-worth investors, including respected Washington real estate mogul Ben Jacobs, who is the J in the JBG Cos. and a business mentor to Talbott.
Two-year-old Enlightenment has made a dozen investments in industries such as cybersecurity, aviation logistics, big data and satellites. Enlightenment provides debt and equity investments of between $5 million and $20 million to help companies grow and broaden their business at a time when federal spending is slowing.
Talbott, 38, grew up in Washington, attended Amherst College and earned law and MBA degrees from Georgetown University. Talbott started his career at Lazard. He later became a vice president at investment firm D.E. Shaw, where his speciality was investing in mid-size government contracting firms. Talbott is the son of former deputy secretary of state and Time magazine journalist Strobe Talbott. Chao had advised Talbott at Shaw.
"We saw a lot of investors getting out of the defense and government sector, and we recognized that was a great opportunity to get in," Talbott said. "Our combined network, industry expertise and investment background gave us a competitive edge."
Prior to Shaw, Talbott worked for the Cohen Group, a merchant bank founded by former defense secretary William Cohen.
Chao, 48, has a long business career, including a decade as a prominent aerospace and defense analyst at Credit Suisse First Boston, Morgan Stanley and Smith Barney. He was a senior fellow at the Center for Strategic and International Studies. He co-founded Renaissance Strategic Advisors.
Enlightenment's advisers include retired Marine Corps Gen. James Cartwright, a former vice chairman of the Joint Chiefs of Staff; Brett Lambert, former deputy assistant secretary of defense for manufacturing and industrial base policy; and Ken Krieg, former undersecretary of defense for acquisition, technology and logistics.
In addition to Jacobs, D.C. United Head Coach Ben Olsen is also an investor.
"I've known Devin, and have been close to him, for a number of years," Jacobs said. "When he got Pierre and formed Enlightenment, we had some conversations about it, and he was gracious enough to invite me to be an adviser.
"Historically, my investments have been real estate-related. These were solid individuals who were investing into a different market segment," he said.