By Isla Binnie

NEW YORK, May 27 (Reuters) – Investment firm Carlyle sees limitless opportunity to invest in ‌the defense sector as governments globally hike ‌military spending, Chief Executive Harvey Schwartz said on Wednesday.

The total addressable ​market for a new dedicated unit that the firm set up to invest in that sector “is unlimited, because everywhere you go everybody’s increasing their defense budgets by ‌1%, 2%, 5%,” Schwartz ⁠said.

“I think this is a global phenomenon,” Schwartz told the Bernstein Strategic Decisions Conference ⁠in New York.

The unit will invest in aerospace and industrials businesses as well as defense, Carlyle said in ​a statement.

Schwartz ​has touted Carlyle’s roots ​in Washington, D.C., as ‌an advantage compared to its New York-based private capital peers as he worked on steering the firm out of an internal struggle and through an industry-wide slowdown.

Global military expenditure reached $2.89 trillion in 2025, taking spending ‌as a share of global ​gross domestic product to its highest ​since 2009, according ​to the Stockholm International Peace Research Institute.

There ‌are so many potential deals ​to be ​done in the sector that “we’re saying ‘no’ to a lot of transactions of the smaller ticket size,” ​Schwartz said.

The new ‌unit could allow it to do deals worth $200 ​million or $300 million, Schwartz added.

(Reporting by Isla ​Binnie; Editing by Will Dunham)