Private Equity Firms Target Defense Assets Once Seen as Toxic

Firms including Tikehau Capital and CVC Capital Partners person either been raising funds oregon putting unneurotic teams dedicated to investing successful companies that assistance underpin nationalist security. Others, Advent for instance, are preparing to store defence assets to instrumentality vantage of the rising purchaser demand.

The moves bespeak what starring defence executives telephone a paradigm displacement arsenic Europe earmarks hundreds of billions of euros to rearm itself and trim a dependence connected the US. They besides people a alteration successful cognition toward a assemblage that’s been unpopular with investors, owing to its capital-intensive and cyclical quality and the ethical risks associated with the concern of war.

Private equity spending connected defence has reached $1 cardinal successful lone 5 of the past 20 years, information compiled by Bloomberg show. In 2025, backstage investors person already forked retired astir $790 cardinal successful the industry, the information show, with the imaginable for large transactions to come. Bain Capital and KPS Capital are funny successful Iveco Group NV’s defence unit, which could fetch arsenic overmuch arsenic €1.5 cardinal ($1.7 billion), Bloomberg News reported past week.

“The defence assemblage looks similar it volition beryllium to beryllium an objection to the broader downturn we are experiencing successful dealmaking,” said Frank Bretag, caput of industrials advisory astatine UniCredit SpA. “They are reliant connected European authorities spending, which is lone apt to tick upwards.”

Among those looking for deals is Paris-based Tikehau, which is raising an €800 cardinal aerospace and defence money and has already collected much than fractional the people amount. Backers see the steadfast itself, arsenic good arsenic French aerospace giants Airbus SE, Safran SA and Thales SA.

“There’s a batch of capitalist request for defence and aerospace vulnerability close now, fixed the monolithic manufacture backlog some successful commercialized aviation and defence industries,” Roberto Quagliuolo, Tikehau’s lawman caput of backstage equity, said successful an interview.

Tikehau isn’t alone. Weinberg Capital Partners, the French buyout steadfast with investors including BNP Paribas SA and Crédit Agricole SA, precocious raised €215 cardinal for its Eiréné money dedicated to strategical information and defense. The institution was founded by Serge Weinberg, the one-time president of French drugmaker Sanofi and edifice concatenation Accor SA.