The bet was at least risky. In 2023, Weinberg Capital Partners, the management company founded 20 years ago by the former chairman of the board of directors of Sanofi, Serge Weinberg, launched a fund dedicated to SMEs and ETI of Defense. An in full change sector, but which struggled to convince investors, mainly because of its incompatibility with the ESG – environmental, social and governance objectives.
A year and a half later, Weinberg Capital Partners managed to raise 215 million euros, revealed Les Echos. An amount greater than expectations and which could convince other actors hitherto chilly. For L’Express, Serge Weinberg analyzes the scope of this operation given the needs of French and European companies. He calls in particular to continue the dynamic started, at a time when industry on the old continent must be structured to gain independence from the United States.
L’Express: Do you think your recent fundraising could unlock investments in the defense sector? Banks have been quite chilly in recent years …
Serge Weinberg: There has been an evolution since the outbreak of the Russian offensive in Ukraine in February 2022. Before this date, defense and security were perceived as fairly distant themes, sometimes disconnected from immediate concerns. But this conflict has materialized the issues and risks.
We felt this change during our fundraising. Since this period, there have been a little more ripe reflections on the side of institutional investors, especially on the ESG. The French association of institutional investors has notably published a doctrine document which sought to reconcile these criteria with the sector. Some investors began to consider that security and defense were prerequisites for a sustainable company, not obstacles.
However, this development is not general. There are hesitations, especially due to the reputation risks associated with it. There is therefore still a work of conviction to be carried out. In addition, the defense includes specificities with in particular very technological products, challenges of sovereignty and an ecosystem where the State and the major industrialists play a central role. This asks investors to accept these particularities and to fully immerse themselves in complex issues, such as those related to drones or Cybersecuritywhich evolve very quickly.
The fragmentation of the European Defense market is often cited as an obstacle to efficiency and competitiveness. What strategy do you recommend to overcome this and encourage better cooperation between European players?
We mainly address companies of modest size, and one of the first objectives is to strengthen them. This involves the development of their industrial capacities and a diversification of their commercial activities. One of the major challenges for European defense industry will be a form of consolidation. It is not only a question of creating alliances between large European groups, but also of strengthening SMEs, which are numerous – we often speak of around 4,000 companies in France in this sector. They must become more robust, be able to support significant volumes, finance research and development, and innovate. Often, they already have very good skills, but they lack the scale necessary to go to a higher level.
What is they missing today to change their dimensions?
First of all, you have to work on their organic growth. Many companies encounter problems related to their production capacity or their supply chain. It is essential to strengthen these aspects to prevent them from being too dependent on a limited number of suppliers. Then, they must be expanded their outlets, both in the defense and in other sectors. The more a company develops a dual activity, that is to say both civil and military, the more it gains in stability. Finally, external consolidation is an important lever to diversify their activities and give them access to new markets.
How do you see this ecosystem evolving?
SMEs in the defense sector have considerable potential, but they are facing significant challenges, particularly in terms of investment, succession and consolidation. Our role is to provide them with financing solutions and to help them strengthen their positioning on a French and European scale.
Do they collaborate enough together?
There are many exchanges. But we must understand that we are talking about SMEs, with their own identity and that of their boss. Consolidation between these companies is limited, because managers are often proud to have built their company. They hesitate to be redeemed, whether by a client or a competitor.
The recent geopolitical tensions have highlighted the importance of resilience of the supply chains in the defense. How do you assess the ability of French industry to quickly meet the growing needs of military equipment?
The resilience of supply chains depends on several aspects: improving internal processes, the diversification of suppliers to avoid excessive dependence, and the acceleration of production rhythms. It takes time. With current tensions, everyone is under pressure. It would be a shame not to be up to the challenges, especially for lack of funding.
The defense sector has historically been slower to innovate than other industries. How to speed up the integration of new technologies in this field?
Current circumstances play a key role. In peacetime, the speed of delivery or the urgency of innovating are not absolute priorities. But in times of crisis, like today, manufacturers are mobilized to improve their productivity. A good example is that of the Canon Caesar, whose production pace tripled between 2022 and 2024 in response to urgent needs. This shows that with good incentives, we can reach significant productivity gains by drawing inspiration from the techniques used in other industrial sectors.
With current budgetary tensions, especially in France, do you fear pressure on public funding allocated to La Défense?
Budgetary stability is essential. In the defense sector, investments are planned in the long term. All instability, like sudden budgetary reductions, would have disastrous consequences, not only for industry, but also for the relationship of trust between the State and the industrialists. The military programming law is a crucial tool to give visibility to players in the sector. It is imperative that it is respected, even in the period of budgetary constraints. It would be extremely dangerous to stop-and-go or in any case not to be able to support the effort over time.
Does Donald Trump’s return to the White House campaign for greater independence from the United States?
It is clear that Europe can no longer afford to depend entirely on external protection. The priority displayed by the United States to focus above all on its own interests shows that the time when they ensured total coverage for Europe is over. This calls for collective awareness of European countries to organize. This also involves reviewing our industrial structures, promoting rapprochements and economies of scale to optimize the costs linked to this effort.
What are the main blockages today?
The problem lies in the multiplicity of players and competing projects. In addition, many European countries continue to place significant orders in the United States. We find ourselves in a paradoxical situation where the Americans say in a way: “Buy our weapons and we will protect you.” When I speak of defense, I do not refer to a common defense policy, which is a complex subject because of historical and national differences. But at least, it would be necessary to have a solid and sovereign European industrial base, capable of proposing defense equipment at a competitive cost for the Member States. You have to be able to meet needs quickly.
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