Demand for private investment in defence "unprecedented", says Barclays

Barclays bank is seeing “unprecedented” demand from defence companies for private investment to help grow their operations, as procurement organisations across Europe and North America prioritise scale. 

The company’s Global Co-Head of Investment Banking, Cathal Deasy, made the comment during a panel session at Farnborough International Airshow in the UK on 20 July. 

Deasy explained that, on the public spending side, “governments are responding, and political will is rising” to increase defence spending with industry. He highlighted the GBP289 billion allocated in the UK’s Defence Investment Plan, published in June, as evidence of this.  

In contrast, on the private sector side, Deasy added that there is a need to encourage more lending, to help build sovereign supply chains and new technologies. 

Is investor appetite growing for defence? 

Kevin Kraven, CEO of the ADS Group trade association, also on the panel at Farnborough, explained that “access to finance remains a significant barrier to growth” for the defence industry. 

However, there is some suggestion that the tide may be turning, with certain investors now seeking to meet the demand to finance defence. 

Isabelle Hudon, President and CEO of the Business Development Bank of Canada, told attendees at Farnborough that as a result of the Ukrainian conflict and trade tensions with the US, Canada has had to reckon with “a reality check”.  

“We decided that, as a development bank, we have a role to play in building and rebuilding the defence sector,” she said.  

Hudon’s organisation allocated CAD6 billion (GBP3.18 billion) in lending capacity directly to defence in March 2026, with provisions for SMEs in particular. 

Meanwhile, Tim Reid, CEO of UK Export Finance (UKEF) – the UK Government’s credit agency that provides support to exporters – said on the panel that “a few years ago we struggled to find banks willing to lend in the defence market. That’s not true anymore.” 

Reid argued that there is now “phenomenal competition” among investors looking to back defence. However, DSEI Gateway has spoken with industry representatives who suggest that this competition is largely around several high-profile companies, with wider downstream investment still lacking.  

Going forward, both defence companies and investors alike will look to the UK’s upcoming ‘Defence Finance and Investment Strategy’, for greater clarity around how they can collaborate further. DSEI Gateway understands that this is due to be released later this year.