European defence firms seek private capital as public funding falls short

Finance executives at the Farnborough Airshow warned that government defence budgets in Europe are insufficient and called for large‑scale private investment. “Public spending will not be enough, and we do need to mobilise private capital at scale,” said Cathal Deasy, global co‑head of investment banking at Barclays.

More than 600 finance delegates, including representatives from Goldman Sachs, JPMorgan, Qatar’s sovereign wealth fund and ING, attended the event – roughly three times the number in 2025 – reflecting growing investor interest amid heightened geopolitical tensions. At the same time, sentiment has cooled, with defence‑related stock prices falling and the Franco‑German group KNDS postponing its planned stock‑market listing.

Executives noted that defence company valuations have undergone a “reckoning” over the past year but are now stabilising, making the sector more attractive to investors. However, many smaller contractors still face financing bottlenecks due to complex procurement processes. “It’s getting the capital into the supply chain which is challenging and which does create bottlenecks,” said Ephraim Rudman of Apollo.