Security & sovereignty
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Built by innovation capital
Across Europe, security and sovereignty have become practical, everyday questions about who controls strategic assets, how resilient companies and infrastructure are under stress, and whether Europe can keep essential systems running when geopolitics shift.
Innovation capital has been helping to build Europe's answers - from digital infrastructure to defence platforms, from pharmaceutical capability to energy independence.
Europe's digital backbone
Private capital built the digital infrastructure Europe depends on - high-speed fibre networks, secure financial systems and open-source platforms. European-built payment infrastructure unified cross-border transactions. Control of the underlying infrastructure proves to be the foundation of digital sovereignty. Innovation capital was there from the start.
Energy on our terms
Following geopolitical shock, Europe accelerated its shift away from imported energy. Innovation capital backed alternative energy sources including bioenergy and deep geothermal systems, that reduced dependence on imported supply. Renewable generation expands at pace. Energy security shifted from long-term ambition to operational priority.
Defending a united Europe
The most strategically significant European defence and aerospace platforms were built across borders - combining engineering, manufacturing and supply chain capability from multiple nations into systems no single country could have produced alone. Private capital reinforced that integration, scaling production capacity across the continent. What Europe built together, it could defend together.
Precision made in Europe
Europe retained advanced manufacturing expertise across automation, industrial systems and smart production. Innovation capital modernised and expanded this base, moving innovation into production at scale. The capability to build, automate and digitise existed. Private capital provided the conviction and the continuity to deploy it at the scale sovereignty requires.
Resilient pharma supply chains
Europe's pharmaceutical sector became a strategic asset. Innovation capital sustained the long research cycles behind drug development and continuous innovation in treatments and therapies. When crisis hit, European science mobilised at speed, demonstrating that domestic research capacity is critical to health security. Production at scale remained the challenge.
Know-how stayed in Europe
Europe developed deep pools of specialised talent across defence, pharmaceuticals, advanced manufacturing and digital systems. This knowledge compounds, and Europe's investment in research, engineering and entrepreneurship created a base of human capability that private capital could build on. The expertise that drove one breakthrough became the foundation for the next.
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The systemic friction holding us back
"We outsource our security to the United States. We outsource our energy to Russia. And we outsource production of anything we need to China."
We heard this in the room and it resonated. Because the capability to own these things at home exists: in defence, in digital infrastructure, in energy, in advanced manufacturing. Europe is not starting from scratch. What it has not yet done is scale that capability in all areas to the point where alliances become a choice rather than a necessity.
Scale is a function of continuous capital, cross-border integration and catalytic regulation. Where those three aligned, European champions emerged. Where they did not, capability remained fragmented and insufficient at system level.
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Necessary shifts: how GPs see it
"Scale is the new word in security and defence - and more essential than ever.”
Getting there requires operating across the full capital stack, enabling cross-border approaches and ensuring long-term investors, policymakers and regulators align behind the same strategic objectives. This is how we, as investors in this space, see what needs to shift.
Europe first
The default in this vertical is national. National funds. National champions. National thinking. Security feels sovereign, and sovereignty feels local. But the scale that European security capability requires cannot be built one country at a time.
"We need to educate our stakeholders to think not only at the national level, but at the EU level.”
The perception shift is straightforward: European security is a European question. The capital, the platforms and the industrial capability that answer it need to be built and owned at European scale. That thinking has to come first - before the structures, before the regulation, before the funds.
“We are much stronger together.”
Match the mandate to the mission
We see it clearly in this vertical. Security and sovereignty are not nice-to-haves. They are must-haves. Must-haves require a different level of coordination between capital and policy than the market has delivered so far.
If we can identify the priorities and align behind them, innovation capital can deliver for Europe.
"Create ten European founded and funded "cocoons" and then change every single policy to get that done."
Recalibrate for today's realities
The regulatory frameworks that govern institutional investment were designed before security and sovereignty became the strategic priorities they are today. We see the consequences across our portfolios: institutional capital that wants to participate but operates within frameworks that were not built for this moment.
"Overregulation... was ranked highest in this vertical."
We are not saying deregulate. We are saying calibrate, specifically frameworks that reflect the strategic importance of what we are building and give institutional investors the confidence to act on it.
"Solvency II… bring more insurance capital into private markets."
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Future outcomes if the shifts hold
If we think Europe first, match mandates to the mission and recalibrate the frameworks for the world as it is, we believe Europe's strategic position would be fundamentally reshaped. These are the outcomes that sustained coordination could rebuild over the coming years.
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