The initiative aims to mobilise some €500 million in support of European companies

The European Commission (EC) and the European Investment Fund (EIF) jointly launched the Defence Equity Facility on 12 January, an initiative aimed to step up Brussels’ support to EU defence and security industry, the EC has said in a statement.

The initiative, funded through €100 million from the European Defence Fund (EDF) and an additional €75 million from the EIF, will significantly expand the latter’s investment capacity to support private equity and venture capital funds with strategies covering technologies relevant to defence in the next four years. This €175 million initiative is expected to attract additional private investments in the funds it supports, thereby mobilising, in total, some €500 million in support of European companies.

The Defence Equity Facility aims to stimulate the development of an ecosystem of private funds investing in defence innovation. In particular, with the Defence Equity Facility, the European Investment Fund (EIF) will invest, as a Limited Partner, into private funds (venture capital or private equity funds) with strategies targeting European companies developing innovative defence technologies with dual-use potential.

As for funds concerned, The Defence Equity Facility is targeted at independently managed funds, including first-time management teams established in the European Union or Norway. Funds receiving investment under the Facility can invest in SMEs (including start-ups), mid-caps, special purpose vehicles, joint ventures, spin-offs, spin-outs, technology transfer projects or technology rights.

Capacity-building activities will accompany this new funding opportunity to support managers in developing and managing their funds.