Defense Supply Gap Seen Driving Investment as US Focus Shifts

The shifting focus of US defense spending is providing new investment opportunities as the transformation moves down the supply chain.

Carlyle Group Inc.’s Ian Fujiyama, speaking Wednesday on Bloomberg TV’s weekly Deals show, noted that the $1 trillion a year spent by the US on defense is still only 3.5% of GDP.

“Now as we’re pivoting from counterterrorism to great power competition, the need to do things better, cheaper and faster has never been more urgent,” said Fujiyama, Carlyle’s head of aerospace, defense and government.

The challenges include ramping up the industrial base to produce weapons and materials ...