RPT-DEALTALK-Snowden fallout comes at bad time for private equity

Snowden fallout comes at bad time for private equity

The Edward Snowden saga may be a headache for his former employer Booz Allen Hamilton Corp and its 67 percent owner, the private equity firm Carlyle Group LP, but it could turn out to be a bigger problem for some of Carlyle’s rivals.

Like Carlyle, a whole host of other private equity firms piled into the defense and intelligence sector between 2007 and 2011, snapping up various contractors and consultants. Unlike Carlyle, though, most have not recouped their original investments and some of them may be staring at losses if they sold the assets today.

The industry is under growing pressure because of a series of apparent security problems that allowed Snowden to leak details of secret U.S. surveillance programs and, according to government officials, badly compromise U.S. national security.

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