---
title: "Mobilising Private Capital for Europe’s Defence Renaissance: Why Investors Can’t Ignore the UK’s Strategic Defence Review"
description: Private capital is crucial for Europe's defence. Learn why the UK's Strategic Defence Review highlights investment opportunities and responsibilities in modern warfare.
---

[Universal Defence & Security Solutions - Revamp 2023 ](https://www.universal-defence.com/blog)

# [Mobilising Private Capital for Europe’s Defence Renaissance: Why Investors Can’t Ignore the UK’s Strategic Defence Review](https://www.universal-defence.com/blog/mobilising-private-capital-for-europes-defence-renaissance-why-investors-cant-ignore-the-uks-strategic-defence-review)

 Written by [Admin](https://www.universal-defence.com/blog/author/admin) | Dec 08, 2025

In a recent online event hosted by Private Equity International – *“Mobilising Private Capital for Europe’s Defence Renaissance”* – UDSS Co-Chair **Peter Hewitt** set out a compelling case for why defence is no longer a niche concern for governments and generals, but a *whole-of-society* challenge that demands serious engagement from private capital.

Speaking alongside institutional investors and fund managers, Hewitt drew on his work with **Universal Defence and Security Solutions (UDSS)** and UDSS member roles in the **UK Strategic Defence Review (SDR)** to explain what the new security environment means for European investors – and where the real opportunities and responsibilities lie.

[WATCH THE WEBINAR](https://meet37038302.adobeconnect.com/p8e24ylk63gx/)

**From distant wars to whole-of-society defence**

Hewitt’s starting point was blunt: Europe no longer has the luxury of treating defence as something that happens “somewhere else”.

The [**UK Strategic Defence Review**](https://www.universal-defence.com/download-a-copy-of-the-uk-strategic-defence-review-2025), he explained, is the first external review of its kind in **75 years**, and arguably the most significant since the **Cardwell Reforms of the 1870s**. It contains **62 recommendations**, but one idea runs through all of them:

Modern warfare is now a *whole-of-society effort*.

That means:

• Protecting **critical national infrastructure** – energy grids, ports, telecoms, transport, finance.

• Defending against **cyber attacks** on major companies – the kind of incidents we’ve seen against household-name UK brands.

• Accepting that attacks on commercial entities are often **“probing missions”**: tests of how far hostile actors can go in disrupting daily life.

For investors, the message is clear: if modern conflict touches whole economies and societies, **capital markets are already part of the battlespace** – whether they realise it or not.

 

**The funding gap: public budgets can’t do this alone**

Hewitt pointed out a stark mismatch between ambition and resources:

• The UK has committed to raise defence spending to **2.5% of GDP** from around **2.3%**,

• **But there is effectively no “new money” for defence for the next two years.**

At the same time, the SDR calls for faster re-armament, more resilient supply chains, and greater readiness for high-intensity conflict.

That leaves a simple question: **where does the money come from?**

Hewitt’s answer: **private capital must become part of the solution** – not by replacing government, but by complementing it through structured, predictable investment in:

• Critical infrastructure and logistics

• Defence-related industrial capacity

• Dual-use technologies (cyber, space, AI, autonomy, advanced manufacturing)

• Long-term platforms where service models and leasing structures make sense

He also highlighted a cultural challenge in financial regulation:

• In the UK, *“we regulate for risk”* – often slowing innovation.

• In the US, regulators more often *“regulate for growth”* – accepting measured risk to unlock capability and scale.

As public budgets tighten, Hewitt argued, defence is starting to look like **“the new green energy”** – a politically driven, long-horizon theme where policy, technology and capital flows are aligning. The difference is that in defence, the stakes are existential.

 

**Defence is still “taboo” – but that’s changing**

Despite the strategic need, Hewitt acknowledged that **defence investment still carries a stigma** for many institutions, particularly in Europe:

• ESG frameworks have often treated defence as morally equivalent to vice industries.

• Internal policies, rather than law, have excluded defence from portfolios.

• Many boards and investment committees lack the expertise to distinguish between *responsible* defence exposure and reputationally toxic positions.

However, he sees this changing quickly. As NATO states re-arm and Russia’s war in Ukraine drags on, more asset owners are **“culturally moving towards acceptance”** of defence as a legitimate – even necessary – area of investment.

The risk, he warned, is **“tourist capital”**:

• Funds piling into the **“crest of the wave”** – for example, one-way kinetic or attritable drone systems linked to the Ukraine conflict –

• Without the expertise to understand where sustainable demand will exist **after** a specific war ends.

Many managers “may not have the expertise to do so”, Hewitt suggested. The responsible path is for investors to recognise their own limits and **bring in specialist advisers** who understand both the military domain and the capital markets.

That, he stressed, is exactly where **UDSS** sits.

 

**Bridging two worlds: government, military and financial markets**

Hewitt described a deep **“language and expectations gap”** between governments and private finance:

• **Accounting differences**: public-sector accounting and concepts like sunk cost look very different to private-equity style financials.

• **Language differences**: military and civil-service communities often communicate in acronyms and assumptions that are opaque to investors – and vice versa.

• **Expectation differences**: governments sometimes use terms like “private equity” and “venture capital” as shorthand for “money that will arrive on government bond-like terms” – which is simply not how those asset classes operate.

At present, he noted, various forums exist – but they often bring together **only one community at a time**: officials with officials, investors with investors, military with military.

What’s missing are **structured, repeated conversations that mix all three**.

That is where UDSS’s network is uniquely valuable:

• Around **800 associates** from across the **Army, Navy, Air Force and wider defence community**,

• Senior experience in **capability development, procurement, strategy and operations**,

• And growing engagement with **financial institutions** seeking to understand the new defence investment landscape.

UDSS, in Hewitt’s framing, acts as a **translator and convener** – helping government understand how capital really works, and helping investors understand what defence really needs.

 

**Innovative models: what Voyager tells us about future defence finance**

Hewitt highlighted existing examples where the UK has already used **innovative financing** to deliver core defence capability – particularly in the air domain.

He pointed to the **A330 Voyager air-to-air refuelling fleet**, acquired via a long-term **private finance / leasing model**:

• A **27-year contract** starting in 2008

• **Regulated, long-term income** for the consortium providing the aircraft

• Guaranteed availability for the Armed Forces while avoiding a large upfront capital hit to the Treasury

By contrast, other airframes like the **C-17** and **A400M** were bought more conventionally, with services contracted out but **full capital cost borne by government** from the outset.

For Hewitt, the Voyager example shows how the Ministry of Defence – which he described as **“pretty much under-geared”** – could explore **more structured, asset-backed, long-term finance** for appropriate capabilities.

This isn’t about financial engineering for its own sake. It’s about:

• Getting key capabilities into service **faster**

• Spreading cost over time in a way that fits fiscal constraints

• Creating **predictable, investable cashflows** that appeal to long-term capital (pension funds, infrastructure investors, specialist credit)

If done correctly, Hewitt suggested, this creates a **win–win**: greater resilience and readiness for governments, and high-quality, real-asset exposure for investors.

 

**Beyond Western Europe: regulation, CEE and where capital is most needed**

Responding to questions on Central and Eastern Europe (CEE), Hewitt noted that:

• France, Germany and the UK have been relatively innovative with **PFI-type approaches** in defence.

• Many **CEE countries** have not yet followed suit – even though, from a strategic perspective, investments there could be **most impactful**.

For private capital, CEE clearly offers opportunities. But Hewitt cautioned that **regulatory regimes are critical**:

• Investor-friendly financial regulation – the equivalent of the UK’s Financial Conduct Authority – is essential for structuring PFI/PPP-style defence deals.

• Where that framework is immature or restrictive, even strong strategic logic may be hard to convert into real projects.

His conclusion: **conceptually, yes – CEE should be on investors’ radar** for defence-related opportunities. But there is a lot of groundwork still to be done on regulation, governance and market structure.

 

**Can Europe still rely on the US security umbrella?**

The discussion inevitably turned to **transatlantic burden sharing**.

Hewitt’s view was measured but clear:

• Europe **cannot simply rely** on the US in the way it has for decades.

• Successive US administrations have signalled – in different ways – that Europe must **“spend more on defending Europe”** and take greater responsibility for its own security.

He argued that Europe needs:

• More honest debate about **what self-reliance looks like**,

• Deeper **practical cooperation** between the UK and EU states, regardless of Brexit,

• And a realistic appreciation that **private capital will be essential** if Europe is to bridge the gap between today’s force posture and the demands of a long war.

 

**Where UDSS fits: helping investors engage with defence responsibly**

Throughout the session, Hewitt returned to one consistent theme: **expertise and translation**.

Defence is complex. It involves:

• Highly technical capability programmes

• Sensitive data and operational realities

• Ethical and legal constraints that vary by country

• Long timelines, intricate supply chains, and geopolitical risk

Investors who want to contribute to Europe’s defence renaissance – and access the opportunity it represents – need **trusted partners** who:

• Understand defence from the inside,

• Speak the language of **government, industry and capital**, and

• Can help design investment approaches that are **strategically useful, ethically robust and commercially sound**.

That, in essence, is the role UDSS plays.

With a deep bench of former senior officers, officials and defence industry leaders, **Universal Defence and Security Solutions** is working with governments, primes and financial institutions to turn the ideas discussed in this webinar into **practical pathways for investment and capability**.

If you’re a **financial institution, asset owner or fund manager** looking to understand how your capital can support European and UK defence – responsibly and effectively – **UDSS can help you navigate the policy, capability and risk landscape**.

To discuss how we can work together on mobilising private capital for Europe’s defence renaissance, please email** [info@universal-defence.com](mailto:info@universal-defence.com)**

[View full post](https://www.universal-defence.com/blog/mobilising-private-capital-for-europes-defence-renaissance-why-investors-cant-ignore-the-uks-strategic-defence-review)

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