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Private credit investment is growing in Europe's defense sector, evidenced by deals such as Carlyle Group's financing for Bridgepoint's acquisition of Comrod and debt support for France's Mecachrome. These investments, although under $1 billion, signal a significant influx of private capital in response to chronic underinvestment in defense.

The European Commission's revised sustainable finance framework has facilitated this shift, with BDC exposure to the sector increasing to $7.2 billion as of September 2025. The UK Ministry of Defence and Germany's DWS Group are also pursuing private funding options to bolster their defense capabilities, indicating a broader trend of private capital seeking opportunities in defense-related technology and infrastructure.