Invest Europe launches new template for investors, fund managers to facilitate private capital defence investments

• New model Limited Partnership Agreement language for defence, dual-use investment

• Aims to unlock more private capital for Europe’s growing defence, security needs

Brussels, Belgium, Friday 26 June 1030 CET - With European governments calling for significantly greater defence capabilities and strategic autonomy, Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today launched its model Limited Partnership Agreement (LPA) language between investors and fund managers to further support private capital investment in Europe’s defence and dual‑use sectors, alongside a call for a shift in how these activities are treated in fund documentation.

Invest Europe proposes a clear starting point for contractual discussions between General Partners (GPs) and Limited Partners (LPs): everything should be permitted unless it is prohibited under international treaties. This represents a shift away from legacy industry approaches in which defence investment was often treated as restricted by default.

By providing a clear and practical baseline, Invest Europe aims to support more consistent and informed discussions between investors and fund managers, and remove unnecessary barriers to investment in areas of growing strategic importance for Europe.

The model LPA language reflects this principle by establishing a strict exclusion for weapons prohibited under international law, while confirming that other defence and dual‑use activities should not be excluded solely because of their nature.

Eric de Montgolfier, CEO of Invest Europe, commented:

“Europe cannot strengthen its defence capabilities while treating defence investment as taboo. Private capital is ready to invest further, and fund documentation must evolve to reflect today’s geopolitical reality.”

This approach is consistent with the current EU legal and policy framework, which does not impose sector‑wide prohibitions on conventional defence activities and supports a case‑by‑case assessment of investments.

At the same time, Invest Europe recognises that investor policies and regulatory constraints vary. This guidance does not prevent further negotiations between LPs and GPs, including through governance provisions, side letters or other strategy‑specific arrangements, where appropriate.

The model LPA language reflects extensive engagement with Invest Europe members, bringing together the perspectives of both LPs and GPs active in defence and dual‑use investment. It is supported by a broad group of members as a practical and workable baseline for fund documentation in this area.

Click here to read the model Limited Partnership Agreement (LPA) language.

-ENDS-

Invest Europe is the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors. We have 626 members, split roughly equally between private equity, venture capital and limited partners – with 104 associate members representing advisers to our ecosystem. Those members are based in 57 countries, including 42 in Europe, and manage 60% of the European private equity and venture capital industry’s €1.247 trillion of assets under management. Businesses with private capital investment employ 11.4 million people across Europe, 5% of the region’s workforce.