Private equity will be essential to financing Europe’s projected €14tn defence and infrastructure buildout over the next decade, according to a report by Bloomberg citing new report from Carlyle Group, released ahead of the NATO summit in The Hague.
The buyout firm estimates defence-related investments could more than triple from current projections of €4tn if NATO members adopt proposed targets of spending 5% of GDP – 3.5% on core defence and 1.5% on strategic areas like cybersecurity.
“There’s going to be a big increase in the demand for capital to start getting these projects up and going,” said Jeff Currie, Carlyle’s Chief Strategy Officer for Energy Pathways. “There’s going to be a lot of investment opportunities.”
The report frames Europe’s massive rearmament push as a generational moment for private capital, drawing parallels to how US military investment helped catalyse Silicon Valley’s rise. Carlyle argues that private equity and venture capital can serve as critical intermediaries – accelerating innovation, improving efficiency, and scaling defence supply chains without the burden of public market or bureaucratic constraints.
Challenges remain, including fragmented national defence platforms and competing industrial programs. Carlyle proposes a modular, “Lego brick” approach to system components, alongside coordinated cross-border financing and bond issuance, to foster interoperability and drive productivity.
The European Commission has echoed similar sentiments, recently calling for €800bn in mobilised private funding as part of its security strategy.
