Defense and European sovereignty, savings challenges according to Tikehau Capital
According to Henry Marcoux, deputy general manager of Tikehau Capital, defending and enhancing European sovereignty represent top strategic challenges for French savings. This opens up a new era of investment.
Europe is bolstering its armaments and reshaping its industrial strategy. According to Henri Marcoux, deputy general manager of Tikehau Capital, this “paradigm shift” heralds a new era of investment in defense and security. “A major transformation,” he emphasized, which the group had anticipated since 2018 and now offers investment opportunities to individual investors.
The environment has evolved. “We have moved away from a form of stability built around bilateralism, NATO support, and the United States,” observed Henri Marcoux. While the beginning of this rupture dates back to 2022 with the Russo-Ukrainian conflict, it would be reductionist to focus solely on that. We are facing tensions with Russia, the Middle East, China, and now the United States, since Donald Trump’s return to the presidency,” he noted.
Structural Change
All this has brought to light a central question: Does Europe still have a genuine “real” deterrent capability? While France established its own nuclear deterrence in 1964, today’s challenge goes far beyond the borders of France. It is, in fact, the collective sovereignty of the European Union that is at stake. An awareness that American attitudes have amplified over the past 15 months. “This is above all a structural change,” emphasized the Tikehau Capital official.
Introduced a year ago, the ReArm Europe Plan /Readiness 2030 stands out as the new Commission’s most emblematic spending program. “It plans to unlock 800 billion euros for defense by 2029,” said Henri Marcoux. This is accompanied by national initiatives. For example, Germany announced a modernization plan for its army in 2022 and relaxed budgetary discipline rules. NATO countries have increased their defense spending ambitions. In 2018, they allocated 1.5% of their GDP, or 268 billion euros, peaking below the organization’s 2% target. They now aim for 3% by 2030, totaling 600 billion euros.
For an investor, the defense sector is “attractive”: it not only benefits from “massive” budgets but also offers great visibility. This is confirmed by the importance of order books. There is also an industrialization challenge in the Old Continent, offering new opportunities for investors. “Historically,” the executive continued, “the sector has depended on public budgets, which can be perceived as a risk. However, much of the technologies, skills, and industrial chains serve both military and civilian markets. This duality secures the economic model and diversifies revenue sources.”
Three Investment Solutions
Tikehau Capital has assembled a thirty-person investment team specializing in aviation and defense and brought together around twenty “operating partners.” “We have established structural partnerships,” noted Henri Marcoux, “with companies such as Airbus, Safran, Thales, and Dassault Aviation, and built an ecosystem with sector stakeholders like the Directorate General of Armaments or the National Agency for Information System Security. We have over 2.5 billion euros in assets under management in defense-related strategies, funding around thirty companies representing 20,000 employees and over 3 billion euros in revenue.”
Initially, Tikehau Capital launched products targeting institutional investors. More recently, the offering has expanded to individual clients. Three initiatives have been introduced: Tikehau Aero Partners II Feeder, FPS (Specialized Professional Fund) available directly through the Opale Capital platform dedicated to private asset distribution (100,000 euros for initial subscription, 30,000 euros for subsequent ones), Tikehau European Sovereignty Fund, a PEA-eligible solution, and Tikehau Defense & Security, a unit account accessible with a few thousand euros, with the threshold set by the insurer: Société Générale Assurances, CNP Assurances, or Carac. Tikehau Defense & Security invests in European companies specializing in aviation, defense, and cybersecurity. The portfolio aims to achieve an annual net return of over 8% on average over at least five years, consisting of 70% private equity, 20% private debt, and 10% liquidity.
ML
