At the time of the restart in Europe, French investors analyze the defense. Since 2021 and in particular the beginning of the war in Ukraine in 2022, the defense expenses of European states have increased by 30 %, reaching 326 billion euros in 2024, or around 1.9 % of the EU GDP.
More and more companies are creating and providing war material to states, seeking sources of financing. It is in this context that some investors intervene. France also intends to get out of the game, since the second country exports weapons worldwide after the United States.
Investing in the field of defense has certain advantages. It is a “long -term and structurally resistant industry with great visibility,” explains Virginie Robert, president of Constance Associés, in the “is your money” program.
“Very configured in the stock market”
Today, there are several ways to invest in defense. First, investors can directly bet on companies that are quoted in the stock market, such as Nugget Exail French technologies or even Thales mastodon (on this topic, see our article on the recommendations of experts of “This is their money)”.
It is also investing through capital funds (private capital) or debt. In 2023, Weinberg Capital Partners (WCP) launched the Eirréné background (called by the goddess of peace), which made it possible to finance the SMEs and ETI specialized in this area. The fund is intended for public and private institutionalists, as well as the family office.
For their part, debt funds lend money to companies, as well as banks. “Our fund is intended for institutional, but we work to launch an eligible version in life insurance contracts,” explains Laurent Dubois, managing director of Private Debt of Sienna IM.
Produce hope
Here, the promises of the yields vary, which range from 5 to 6% per year for Sienna, up to 20% net on WCP. “We have a performance equivalent to that searched for conventional LBO funds. The next growth and cash flow released by these companies allow us to think about hopes of significant yields,” said Lionel Mestre.
Finally, BPIFRANCE announced the launch of its “BPIFRANCE” defense of 450 million euros. This fundraising, which will be launched in a few months, will allow the French to invest at least 500 euros in the defense sector through life insurance contracts. This is the fourth time that Bpifrance has launched a background for the general public, this time with a lower entrance ticket.
Despite these various ways of investing, many investors continue to stretch this area for the reasons for ESG (environmental, social and governance)). “There are ethical questions: Is there corruption or not? I respect that some say they do not want to participate in this field because the objective is not adequate. But it cannot be said that companies cannot be ESG,” says Virigine Robert.
Source: BFM TV
