Private equity firms including Tikehau Capital, CVC Capital Partners, and Weinberg Capital Partners, are ramping up investments in Europe’s defence sector amid a historic rearmament drive across the continent, according to a report by Bloomberg.
The three firms are among those raising dedicated funds or assembling specialist teams to invest in defence and security assets, while others, including Advent International, are preparing to exit holdings due to strong demand.
The renewed interest marks a dramatic shift in sentiment. Historically seen as too cyclical, capital-intensive, and ethically fraught, defence assets are now viewed as critical investments, buoyed by a surge in government spending and shifting geopolitical priorities.
Private equity dealmaking in the sector has already hit $790m in 2025, Bloomberg data shows — close to matching the $1bn threshold reached only sporadically over the past two decades.
“The defence sector looks set to buck the wider downturn in M&A,” said Frank Bretag, Head of Industrials Advisory at UniCredit. “European government budgets are only heading upwards.”
Tikehau is in the market for €800m for its new aerospace and defence fund, with Airbus, Safran and Thales among its backers. Weinberg Capital closed its €215m Eiréné fund above target, while Veritas Capital and KKR are actively expanding their defence portfolios.
“Investor demand for defence exposure is growing, as barriers linked to ESG concerns continue to fall,” said Lionel Mestre, Partner at Weinberg Capital.
The European Commission’s recent €800bn “ReArm Europe” plan aims to further encourage private sector involvement, acknowledging that state financing alone will not be enough to meet rising defence needs.
“There’s only so much governments can do,” said Ian Fujiyama, head of aerospace, defence and government services at Carlyle Group. “Private equity brings essential capital and expertise.”
The pivot is also creating exit opportunities. Advent has sold Cobham Satcom and is weighing options for Ultra Precision Control Systems, while Searchlight Capital is exploring a sale of Survitec’s aerospace and defence arm.
However, heightened scrutiny of ownership of strategic assets — particularly in sensitive sectors — could create hurdles, with Bain Capital’s reported interest in Chemring Group having already drawn political attention.
