Defence spending continues to be a focus for governments around the world, as they grapple with ongoing geopolitical uncertainty and a rapidly shifting threat landscape.
With the need for immediate solutions, the sector is evolving beyond traditional contractors and investment is needed more rapidly than ever. This creates space for private capital to do what it does best: fill the gaps that government spending and institutional capital struggle to meet in a timely fashion.
International finance centres that support innovation and speedy deployment of capital are facilitating the shift into this developing area of investment.
Guernsey is building a track record as a specialist centre for defence investment, with several defence-focused funds choosing to domicile on the island over the past year.
Part of the attraction for these fund managers is Guernsey’s established expertise in applying private asset funds to a developing area of the investment market. This is especially relevant as the investable universe expands into dual-use technologies including AI, cybersecurity, drones and advanced manufacturing.
In July Lakestar, a European venture capital investment adviser, established its $300 million Resilience I Fund in Guernsey. The fund focuses on dual-use and defence technology companies across European and NATO-allied markets.
This follows Spitfire Strategic Capital Fund I, a defence-focused private equity fund established within Guernsey’s flexible funds framework after its managers considered a number of jurisdictions.
Co-Managing Partner Tony Bienstock previously highlighted Guernsey’s flexibility and early engagement during the establishment process. This was particularly valuable for a first-time fund operating in a developing area of private capital. Spitfire also featured prominently in discussions at the Guernsey Finance Funds Forum earlier this year.
Going further back, Hedosophia established its Defence Technologies fund in Guernsey in 2025. Hedosophia’s Managing Director in Guernsey, Kate Solway, said that governments across NATO are being asked to increase spending at a challenging time, and private capital can bridge the gap.
Kate also said that they were impressed with how quickly they could respond to what is an emerging area and set up a fund in Guernsey.
These three examples demonstrate how Guernsey has built on its established private capital expertise in a developing sector to provide managers, administrators and investors with the frameworks they need to harness the growing opportunities around defence.
Guernsey has the structures, regulatory approach and specialist practitioners to support managers in this space, and there is a clear opportunity for the island to play a meaningful role as the sector continues to develop.
William Mason, Director General of the Guernsey Financial Services Commission said: "Guernsey's regulatory framework is designed to be robust, proportionate and internationally credible. Over the past year the Commission has authorised three defence funds which plan to contribute to rebuilding NATO capabilities through their investment in defence tech. In an uncertain world Guernsey is pleased to welcome proposals for high quality and responsible defence investment platforms which help Europe and the NATO alliance enhance defences against emerging threats."
Indeed Guernsey’s Finance Sector Growth Strategy 2035 identifies defence as an emerging area of opportunity for the island, so it is a strategic priority for the sector.
The recent launches provide early evidence of that opportunity translating into business and reinforce Guernsey’s potential to support private capital as European and NATO-allied markets seek investment in defence, and investor appetite in resilience and dual-use technologies continues to grow.
