INVESTMENT SOLUTIONS
Investing in the defence industry has consistently proven to be a lucrative and strategic move for many investors. However, in light of the rapid advancements in technology and the evolving geopolitical landscape, the defence industry is entering a new era of structurations. It is vital for investors in this industry to stay abreast of developments and to give careful consideration to the factors that will shape the future of defence investments.
We are firmly committed to upholding the highest standards of trust, transparency, and integrity in all aspects of our work. Our extensive sector experience, cross-disciplinary functional knowledge, and hands-on approach reflect our unwavering dedication to these values.​
As a partner for sustainable growth, we support SME’s from the Defence & Aviation industry primarily in Europe. Together we create value - for companies, investors and society. We focus on ambition, people and potential. We support entrepreneurial teams with passion.
"It's a very robust market right now. The macro in defence is as robust as it's been in a long time“
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Peter Manos, Arlington Capital
The Market Environment
World military expenditure increased in 2023 for the ninth consecutive year, reaching a total of US$ 2’443 billion. The 6.8% increase in 2023 was the steepest year-on-year rise since 2009 and pushed global spending to the highest level SIPRI has ever recorded.
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In total, US$ 23.1 billion were spent on research and development (R&D) within aerospace and defence by the 2,500 largest spenders worldwide in 2022. Of these, US$ 10.1 billion were spent in the United States, and € 8.7 billion in the European Union.
Defence spending will increase significantly through 2026 in response to events in Ukraine market growth
Despite the continuing growth trend in the industry and the fact that the majority of defence companies' customers are state-owned, private equity financing for European SMEs in the D&A industry is still difficult for those in need for funding.
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An EU study shows an equity financing gap of € 2 billion. The 3 most cited reasons among 143 companies surveyed are:
Lack of market understanding by investors (16.3%)​​
Limited investor pool (14.1%)​
Lack of technical understanding by investors (12.8%)​
Investment Focus
We offer investors access to high quality investment opportunities in businesses in the less competitive, lower mid-market Private Equity segment.
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​Through careful selection of portfolio companies and active support during the investment period, we can create the best possible conditions for a successful investment.​
​Medium-sized buy-outs with revenues between US$ 50 million to US$ 250 million.
​​Major investment criteria:​
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Further conditions for the assessment of potential portfolio companies are:​
​Sustained positive cash flows ​
Low debt
​Ideally own their technology (IPR)​
​Be headquartered primarily in Europe
Grow potential in new geographical market
Ideally have dual-use products to play the non-defence market as well
​Develop, produce and market products that cater to an end-consumer (final products and major components)
