Paris-based Weinberg Capital Partners is readying a new fund to invest in defense companies as it bets on renewed interest in the industry in light of the war in Ukraine, people familiar with the matter said.
(Bloomberg) — Paris-based Weinberg Capital Partners is readying a new fund to invest in defense companies as it bets on renewed interest in the industry in light of the war in Ukraine, people familiar with the matter said.
The private equity firm, which has €1.3 billion ($1.4 billion) of assets under management and focuses on small to intermediate-sized businesses, plans to unveil the fund this month, the people said on condition of anonymity. A spokesperson for Weinberg declined to comment.
Russia’s invasion of Ukraine has put the financing of defense capabilities back in the spotlight and prompted European governments to boost spending on weapons and equipment. French President Emmanuel Macron has insisted on the need to develop the industry within the bloc to reduce its dependence on the US.
France counts around 4,000 companies in the sector, though it still spends slightly less than the NATO guideline of 2% of gross domestic product on defense, according to estimates for the last two years. A large share of this goes to maintaining the country’s nuclear threat.
Read more: France Lifts Defense Budget as High-Intensity War Risk Grows
The government is trying to promote the creation of specialized funds that would encourage smaller defense companies to combine, according to a Defense Ministry official. It’s also working on mechanisms to create incentives for citizens to invest their savings in the industry, the official said, without elaborating.
Some banks are reluctant to lend money to small and medium-sized defense suppliers, according to Jean-Louis Thiériot, a member of the French parliament and vice-chairman of the National Assembly’s defense and armed forces committee. A 2021 report by Xerfi showed a growing focus on environmentally and socially responsible factors had weighed on investment in the sector in recent years.
Weinberg’s decision to create the new fund may signal a shift in attitudes among investors almost a year into Russia’s war.
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