Foreword by the editor

The German govern­men­t’s infra­struc­ture package has attrac­ted a lot of atten­tion. More importantly, howe­ver, inves­tors now believe that progress is being made with its imple­men­ta­tion. The economy has also drawn its own conclu­si­ons and laun­ched its own invest­ment programs. Confi­dence in poli­tics has impro­ved again in the board­rooms. Germany’s equity story is slowly picking up speed. 

You can’t expect the money to start flowing six months after the program was announ­ced by poli­ti­ci­ans. Howe­ver, the stock market has alre­ady anti­ci­pa­ted this and is moving steadily upwards. It is virtually giving Germany a confi­dence boost. — Three sectors are parti­cu­larly in focus: tech­no­logy, infra­struc­ture and defense. These are likely to bene­fit the most from rising govern­ment spen­ding. Not only are high levels of invest­ment to be expec­ted in these sectors, but also strong M&A activity. 

Defense is once again a top prio­rity in Europe, with tech­no­logy taking center stage. This allows inves­tors to bene­fit from incre­asing budgets and poli­ti­cal support. Those who are aligned with Euro­pe’s stra­te­gic goals and are fami­liar with the new rules can achieve long-term returns. Russia’s war in Ukraine has shaken Europe out of deca­des of compla­cency on defense issues and trig­ge­red a surge in mili­tary spen­ding and inno­va­tion. Euro­pean defense budgets rose by around 17% last year to around USD 690 billion, and NATO allies have set a target of spen­ding as much as 5% of GDP on defense by 2035. 

War-indu­­ced urgency and EU ‘stra­te­gic auto­nomy’ goals mean high funding requi­re­ments for next-gene­ra­­tion systems and a new open­ness to private capi­tal. Defense stocks reach new highs, with venture capi­tal (VC) funding to the sector up 24% in 2024 despite a decline in over­all VC funding VC funding for Euro­pean defense tech­no­logy reached a record $5.2 billion in 2024, repre­sen­ting around 10% of total VC funding on the conti­nent Defense M&A acti­vity in Europe increased by appro­xi­m­ately 35% in early 2025. 

The war in Ukraine has expo­sed criti­cal gaps in air defense and ammu­ni­tion after deca­des of under­in­vest­ment. Now Europe is rear­ming, with Germany, Poland, the Nordic count­ries and others shar­ply incre­asing their budgets (Germany +28% in 2024) and seeking joint procurements. 

To support this, many state-spon­­so­­red orga­niza­ti­ons have recei­ved signi­fi­cant funding. NATO’s DIANA Acce­le­ra­tor has a new fund of 1 billion euros. With the EU’s “ReArm Europe” plan, EU Commis­sion Presi­dent Ursula von der Leyen unvei­led an initia­tive to mobi­lize up to €800 billion for the expan­sion and moder­niza­tion of Euro­pean defence.¹ Count­ries across Europe are setting up new incu­ba­tors and funds, and even Switz­er­land is now inves­t­ing over 7% of its venture capi­tal funding in defence start-ups.

Poli­cy­ma­kers are also chan­ging the rules to encou­rage and incen­ti­vize invest­ment. Brussels now considers “defense readi­ness” as a plus point when conside­ring mergers and acqui­si­ti­ons and has made it clear that ESG crite­ria do not exclude defense investments. 

For private equity inves­tors, whose invest­ment models and struc­tures are gene­rally desi­gned for an invest­ment hori­zon of five to ten years, this predic­ta­bi­lity of govern­ment spen­ding crea­tes an excep­tio­nally stable invest­ment environment.

In the maga­zine section of our 23rd issue, you can once again expect promi­nent authors with exci­ting and new topics from the finan­cing and corpo­rate finance indus­try. — Quirin Herz (Corpo­rate Venture, Hensoldt AG) explains how the defense tech sector in Europe is deve­lo­ping from a niche charac­te­ri­zed by ethi­cal concerns and regu­la­tory hurd­les into a stra­te­gic core asset class for private equity and venture capi­tal. Plus, who the play­ers are: Turning point for inves­tors — The Euro­pean defense-tech ecosys­tem as a new asset class for private equity. 

Marko Maschek (Marondo Capi­tal) and reti­red Gene­ral Chris­tian Badia (NATO Trans­for­ma­tion Command) explain the emer­gence of a new ecosys­tem and its finan­cing, Defense, in the areas of dual use and KRITIS: The impact of the secu­rity and defense indus­try (“SVI”) on the German economy — To what extent can private capi­tal contri­bute to deterrence?

Global chan­ges and the rise of AI have chan­ged the rules of the cyber­se­cu­rity game. The risks are more criti­cal than ever, while at the same time new oppor­tu­ni­ties are opening up to increase secu­rity. Arwid Carlo Zang (greenhats) gives deep insights into Cyber­se­cu­rity — The Art of Prevention. 

Carl-Jan von der Goltz (Maturus Finance) explains how the turn­around 2026 can succeed in terms of finan­cing when company crises are beco­ming more frequent, liqui­dity is scarce and banks are trea­ting loan requests very criti­cally and cautiously. — Whether succes­sion, trans­for­ma­tion or expan­sion, your plans will only become reality with the right finan­cing. But which instru­ments are curr­ently available and are suita­ble for which project? In an over­view, Chris­tian Futter­lieb (VR Equity Part­ner) descri­bes which finan­cing can help SMEs now. 

The ques­tion of how shares in private equity funds should be valued in the event of inhe­ri­tance or gifts is beco­ming incre­asingly important. Dr. Chris­toph Ludwig and Dr. Maxi­mi­lian Mayer (both BLL Braun Leber­fin­ger Ludwig Unger) show the current, prac­ti­cal solu­ti­ons for inves­tors: Inhe­ri­tance tax aspects in the valua­tion of private equity funds. 

A year ago, Dr. Jürgen Michels (Bayern LB) presen­ted his basic scena­rio of a second Trump admi­nis­tra­tion here and discus­sed the possi­ble conse­quen­ces. Many of his assump­ti­ons at the time regar­ding tariffs, immi­gra­tion policy, the war in Ukraine and US fiscal policy have since become reality. This year, his econo­mic outlook is as follows: It remains uncom­for­ta­ble. — He predicts that there will be no “norma­liza­tion” in the USA, that the geopo­li­ti­cal conflicts will conti­nue, but that Europe can emerge stron­ger from the crisis. 

The FYB 2026, in its 23rd edition, conti­nues to enjoy great popu­la­rity. You will also find entries from foreign PE compa­nies that want to be present in the FYB Finan­cial Year­book and on the German market. We offer you an over­view of PE and VC firms, private debt and mezza­nine provi­ders, fund of funds, compe­tent law firms, as well as corpo­rate finance specia­lists, corpo­rate and HR consul­tants and networks, etc. — FYB 2026 remains the leading refe­rence work for alter­na­tive finan­cing in Germany. Read inte­res­t­ing news regu­larly at www.fyb.de.

Since­rely, Yours

Tatjana Ande­rer

1) https://www.europarl.europa.eu/RegData/etudes/BRIE/2025/769566/EPRS_BRI(2025)769566_EN.pdf