For defense dealmakers, one of the best training grounds is the end market in which many of them once actively served: the U.S. armed forces.

Military service may provide many disciplines, not to say skills, particularly with advanced electronic equipment and weapons systems, but it also provides a potentially rich network of friends and relationships. Classmates from West Point or foxhole buddies may well come in handy when, after active duty, you put your shingle out as a defense adviser, investor or financier.

Veterans know the inside of the military machine, and their contacts can be a real resource, says senior managing director Paul Weisbrich of McGladrey Capital Markets LLC, a defense banker himself, though he did not serve. "You can use them for door openers if you need access to current military officers. They can also help, particularly with private equity groups, to hone targets and give relative opinions, and [can tell] where investments are either going to be plugged up or otherwise become more active."

That's exactly the case with these three defense dealmakers. All had extensive military service careers. One is now an investor, after decades as an investment banker; another has set up his own shop to provide financing for defense-related companies; and the third is engaged in advisory work. All three operate mostly in the middle market.

Jon Kutler,
Admiralty Partners Inc.

Jon Kutler has been ubiquitous in defense advisory for decades now. Today, Kutler, 55, runs Los Angeles-based Admiralty Partners Inc., which primarily invests in aerospace, defense, space and federal information technology. He focuses on companies with an enterprise value between $25 million and $100 million, revenue over $25 million, Ebitda over $5 million and leverage between 3 and 3.5 times Ebitda.

A 10-year Navy veteran after graduating from the United States Naval Academy in 1978, Kutler went on to get a Harvard Business School M.B.A. and worked at a number of firms, including Goldman, Sachs & Co., First Boston Corp. and Wasserstein Perella & Co. (where he opened that firm's West Coast office). In 1992 he started Los Angeles-based Quarterdeck Investment Partners Inc., a boutique aerospace and defense advisory firm bought by Jefferies & Co. in 2002. Soon after, Kutler started Admiralty.

"The reason Wall Street tends to attract military people is because after serving, especially in situations like being deployed on a ship or in a battalion, the hours on Wall Street seem easy," says Kutler. "The Navy gave me my sense for hard work, lots of travel, difficult hours, lots of stress and being comfortable with all that."

Kutler held several posts while stationed in San Diego, Hawaii and Washington. The 1979 Iranian hostage crisis found him serving on a frigate in the Persian Gulf as a communications officer, and later as an anti-submarine and nuclear weapons officer. He also did stints as an admiral's aide at headquarters for the Pacific fleet and at the Pentagon.

By the time Jefferies acquired Quarterdeck, Kutler had become well known for defense advisory. But he was driven by a desire for independence when he founded Admiralty. "A large percentage [of current aerospace advisers] at one point worked for me at these different firms," he says. He enjoyed finding veterans familiar with the intricacies of defense work and training them as bankers. "It used to be a substantial number for my advisory practice. When it came to investing my own capital, however, I decided I could easily handle my goal of one deal a year by myself," he says.

"I take a different approach in that I use my own capital. This focuses me on looking at fewer deals. I can get 100% of the upside and preserve capital through using primarily equity instead of leveraging it up to get a 20% promoted return. It also permits me to do more unique transactions because institutional money comes with significant guidance about what you can and cannot do."

Admiralty's most recent deal: the June acquisition of vehicle cover, shelter and camouflage netting systems maker GMA Cover Corp., based in Guelph, Ontario. Kutler won't disclose the deal size, but he says it took less than six weeks to close. Done for the year.

Anthony Cappetta,
Essayons Capital Management LLC

Anthony Cappetta opted for finance after a tour of duty in Afghanistan with the Army Reserve. The hostile environment, he says, led him to reassess his career priorities.

When he returned from deployment, Cappetta, 45, went back to his job as a senior portfolio manager at Stone Tower Capital LLC, a $22 billion alternative investment management shop in New York. The economy, he says, "was still going sideways, and some of the things that I saw going on prompted me to say, 'Let's take a step back and look at what kind of value we're supposed to add for our investors, and who [I am] and things that are important to us.' What I came to was thinking about other individuals that shared my beliefs and values."

Cappetta, a Long Island, N.Y., native and lieutenant colonel with 23 years of Reserve service, founded middle-­market-debt-fund-management firm Essayons Capital Management LLC in 2010 with partner Zac Collins, whom Cappetta met in a credit-training program at Mellon Bank NA in 1998. The firm's name means "Let Us Try" in French and is the motto of the U.S. Army Corps of Engineers. Cappetta, Collins and three other managing partners, Joel Levesque, ­David Gault and Marc ­Gauval, have been working since January to raise a $150 million mezzanine debt fund to invest in privately held middle-market companies with sales ranging from $25 million to $100 million.

Cappetta says the firm is looking to invest $3 million to $4 million in companies with unique niches, notably in communications and data.

He agrees that veterans can tap an extensive defense network. Levesque and Gauval are both West Point grads with relationships with Army classmates. "The West Pointers who are in the organization have a very deep and strong relationship with other West Pointers who are either currently in the military or have moved on to bigger and better things."

Cappetta and his team, for example, are currently raising debt for a veteran-owned business that provides telecom and reconnaissance equipment for the military. The deal came from Levesque's West Point network, and the company is a candidate for a Defense Department contract.

"The military experience helps bring to bear [an] ability to understand organizations, people, because in the middle-market area in particular, that's very important," he says. Middle-market companies are run organizationally like military units, he says, adding, "A great analogy for a company that we're talking about is, you know, 50 to 100 people, and the management teams are the Army staffs. You have guys in charge of personnel, operations and logistics."

Mitchell Martin,
McLean Group LLC

Mitchell Martin knows what it means to lead by example. Martin, 35, is a principal and co-head of the defense and government contracting group at McLean, Va.-based middle-market investment bank McLean Group LLC. He joined the firm after McLean acquired Merrill Advisory Group LLC, a government services and aerospace defense boutique, in April 2010.

"Our DNA really is focused on government contractors," says Martin. McLean Group's prime transaction range is between $20 million and $100 million. "We'll do deals higher than that, but those aren't the norm," he says. "About 70% of our practice in terms of volume is government contractors."

He believes the camaraderie from his time at West Point and in active service in the Middle East and Thailand in 1999 and 2000 has served him well at McLean, a firm with about 80 employees. "These roads are pretty well traveled," he says. "A lot of times it really is perseverance and motivating folks to put in the long hours, the leadership and the teamwork aspect."

Martin's deal résumé includes the sale of Reston, Va.-based information systems and data management business Solutions Made Simple Inc. to Boeing Co. on July 21. Other transactions include Herndon, Va.-based Signature Government Solutions LLC's sale to defense tech company Sotera Defense Solutions Inc. of McLean, completed in December 2010, and Reston buyout shop FedCap Partners LLC's acquisition of Arlington, Va., cybersecurity planning and development company Point One LLC, announced in June 2011.

Martin honed his finance chops at Boston-based middle-market firm C.W. Downer & Co., where he specialized in cross-border M&A and the agencies that regulate it, such as the Committee on Foreign Investment in the United States. He then had a stint at Houlihan Lokey Inc. before founding Merrill Advisory in 2007 with some other servicemen.

"We did buy-side work for Harris Corp. and a number of others," Martin says, noting the strong interest in data analysis, cybersecurity and intelligence tech companies, which should elude the budget cutters. "We're still seeing premium valuations in those segments because people expect funding to be there. It's mission essential."

Martin grew up on a sailboat at the Marine Corps amphibious training base Camp Pendleton in California. "My father is career military," he says. "So growing up, it was always something I was going to do. In our family it was something pretty important."

Martin graduated from West Point with honors, entered active service, then received an M.B.A. from the Massachusetts Institute of Technology's Sloan School of Management and an M.P.A. from Harvard University's John F. Kennedy School of Government.

The military provided Martin many lessons, but a major one helps when he's hammering out a transaction. "Certainly, perseverance is a big one," he says.