- Warburg Pincus is sounding out investors on a first dedicated €1.000bn European defence, aerospace and security fund as rearmament spending accelerates.
- The vehicle would sit alongside Warburgs flagship PE funds and leverage partners Tobias Weidner and Dan Zamlong plus prior sector deals.
- Peers like Weinberg Capitals eirne (275m) and Tikehaus 150m defence fund show rising LP appetite and intensifying competition for assets.
- The strategy targets government-backed growth from plans such as the EUs 800bn ReArm push but carries political, regulatory and ESG sensitivities and sourcing challenges.
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Context and Timing
The reported plan by Warburg Pincus to establish a dedicated defence fund coincides with a broader political and strategic shift in Europe. Governments across the continent are increasing defence budgets and launching initiatives aimed at increasing industrial sovereignty in defence capability. The EU’s “ReArm Europe” plan, for example, targets €800 billion over the next four years, including €150 billion in EU-level borrowing to lift defence spending and secure equipment procurement and infrastructure projects. This macro‐environment strengthens the business case for specialised investment in defence and securities.
Warburg’s Plans: Size, Strategy, and Capabilities
Warburg Pincus is considering raising approximately €1.0–€1.5 billion for a first‐of‐its‐kind fund focused on defence, aerospace and security tied to European resilience. It would be a new vertical alongside its flagship funds. Internal resources include European industrials specialist Tobias Weidner and New York partner Dan Zamlong, who leads aerospace and defence investments. The firm has past exposure through investments in Consolidated Precision Products, Inrcore, Triumph Group, and Inmarsat.
Competitive Landscape
Other private equity firms are already active in this domain. Weinberg Capital’s Eiréné fund has closed at €275 million as of late 2025, up from €215 million earlier in 2025, targeting SMEs and mid‐caps in defence and security in France. Tikehau Capital launched a €150 million defense and security fund (Tikehau Défense et Sécurité) structured as a unit‐linked, ELTIF‐2.0 vehicle with backing from French insurers and government agencies; it has specialized teams in aerospace, cybersecurity, and dual use technologies. These funds show both modelling benchmarks and competition for Warburg’s proposed vehicle.
Strategic Implications
For Warburg Pincus:
- Opportunity to capture high growth in defence-related sectors supported by governments, while leveraging internal expertise.
- Potential to strengthen dealflow in a sector historically fragmented and undercapitalized in Europe.
- Risks include political/regulatory scrutiny, ethical/ESG concerns (especially for LPs focused on sustainability), and execution challenges in an industrial heavy, capital intensive area.
- The fund could enhance Warburg’s competitive positioning versus other sponsors building sector‐focused platforms, but may also require bespoke investment teams and governance aligned with national security concerns.
Open Questions
- LP demand and terms: How many institutional investors are ready to commit to a defence fund given risk and ESG positions?
- Fund structure and jurisdictional overlay: Will Warburg domicile the vehicle in a specific European country? How to handle export controls, dual use regulations, and governmental strategic partnerships?
- Targeted sub‐sector focus: Will the fund focus on SMEs/midcaps or larger industrial champions? Will dual‐use and cybersecurity take priority over traditional arms manufacturing?
- Exit environment: What will be the readiness of exit markets, especially for companies deeply embedded in national security / defence infrastructure?
Supporting Notes
- Warburg Pincus is considering a defence, aerospace, and security‐focused fund targeting between €1 billion and €1.5 billion, with talks already underway with potential investors.
- The prospective fund would draw on internal experts Tobias Weidner and Dan Zamlong; Rene Obermann is calling for strengthened military capability but isn’t directly managing the fund.
- Warburg’s prior sector investments include defence / aerospace names like Consolidated Precision Products, Inrcore, Triumph Group, and satellite operator Inmarsat.
- Weinberg Capital Partners’ Eiréné fund has recently closed at €275 million commitments, exceeding €215 million earlier, focused on mid-market French SMEs in security/defence.
- Tikehau Capital’s €150 million fund (Tikehau Défense et Sécurité) is a dedicated vehicle investing across aerospace, cybersecurity, with dual use, structured under ELTIF 2.0 and backed by French insurers and government defense bodies.
- Private equity dealflow in European defence rose to ~$790 million in 2025 so far, nearing the typical annual peak levels seen only in years of exceptional geopolitical stress.
- The EU has proposed mobilising up to €800 billion in combined spending and borrowing under its ReArm plan over four years, including state defence budget increases and EU financial instruments.