Written by Naomi Rovnik, Ian Wathir and Simon Jessop
LONDON (Reuters) – European asset managers are reviewing their policies on investment in defense, under customer and some politicians to reduce restrictions and help finance the continent’s race to re -deport.
Under the rules of the European Union, it occupied a number of money as a sustainable need to ensure their investments “not hurting greatly.” Many have avoided the entire sector, even with the engine maker Rolls -Royce and Airbus, which owns a large commercial airline section, was sentenced to.
But since the European Union is now seeking to obtain about 800 billion euros (870 billion dollars) of investment to strengthen the defense after US President Donald Trump said that Europe should bear more responsibility for its security, the sector is very important to ignore it.
Reuters reported on Thursday that the largest investor in Britain & a general is among those planning to increase the defense, saying that the resumption of the sector was “increased significantly” amid deeper geopolitical tensions.
People said on Reuters that some of the largest boxes group in Europe began separately in reviewing their policies at the level of the board of directors.
UBS Asset Management in Switzerland has told Reuters that it is reviewing the exploits of the money defense sector while Mercer, a pioneering advisor in pension funds, investors said investors are asking asset managers to include defense in the portfolio, including sustainability goals.
The European Union’s spending batch has sent inventories for European space and defense including Rheinmetall in Germany and Leonardo in Italy to record heights with the sector index – and leave investors without exposing lost opportunities.
“Some (asset managers) say, we believe in reality it is important to be … Europe is able to defend itself. Therefore, we really want investments in this sector,” said Rich Nawzum, the chief global investment strategy in Mercer, who advises investors to manage $ 17.5 trillion assets.
Exceptions related to investment in controversial weapons – such as cluster munitions and biological weapons – are widely held and informed of international treaties. The European Union and UK rules do not prohibit investment in most other defense companies, but the investor focuses on the environment, social and governance (ESG) helped bend the adult assets managers to do so, as is the case with tobacco.
“We are reaching a point where the atmosphere is that if you exclude the defense, you are the person who must explain, not the other way around,” said Karl Haglong, CEO of the pension and insurance group at Veritas and former Minister of Defense in Finland.
Reuters called 10 of the largest asset managers in Europe to ask them whether they are reviewing their policies. In addition to UBS, Allianz Global Investors said it was declining its exceptions, but the timing was a coincidence.
France PARIBAS reiterated its defense’s commitment.
Amundi and Schrooders said their policies have not changed, while DWS, Asset Management and Insight Investment, refused to say whether their exceptions are under review.
The global head of the assets listed in Mirova, a smaller manager owned by Natixis, said that the increasing re -evaluation efforts and security threats in Europe forced the company to reconsider its “cautious position” of defense as it seeks to balance moral considerations with the need for strong defense capabilities.
But Herve Joys noticed the complexity of arms makers, highlighting the problems about the risks of some weapons in “controversial” countries.
Political pressure
Last week, British politicians urged investors to support the military sector and France have offered to remove ESG restrictions on defense loans. The Norwegian Central Bank President said that moral investment standards may need to be changed.
“The companies that started asking about defense because companies like Rolls Royce” said that they are completely excluded from our investments. ” Archer added that LGT is looking “closely” in what to do.
Some of the box managers are skeptical.
Lloyd McAelster, Carmignac Investment Chairman, said that it is a mistake to blame ESG money to frustrate investment in defense, with most traditional funds – which she holds much more in assets – including her capable of investing.
He said that the sustainable money was “where the positive interest is more brutal than a load of weapons that sat in a warehouse.”
Other investors benefit from an opportunity.
This week, Wisdomtree launched what was called the first European Defense trading box.
Tom Phil Jensen, deputy director of the Danish Trade and Pensions Authority, told Reuters that he is expected to decrease pension groups and pensions in the country from defensive investment.
There are signs of money thinking about sustainability wandering.
Mooringstar data showed that European asset managers retained 1.1 % of their portfolios in space and defense at the end of 2024, an increase of 0.7 % two years ago.
Esg Fund’s holdings rose to 0.5 % of 0.4 % in the previous year, as the data showed. Barclays analysts said this week that ESG’s weight loss has decreased significantly since last year.
“We will agree to a more positive (defense) position, it is imperative if you are thinking about the geopolitical situation,” said Cio Sonja Laud of Lalego & General said.
($ 1 = 0.9228 euros)
(This story was corrected to move the quotes in paragraph 17 and to fix a typo in the name in paragraph 19)
(Additional reports from Sinead Cruise and Chandini Monnappa; Edit by Tommy Regeyry Wilkes and Suzanne Fenton)
