Participation from 500 euros, profitability rate of 5%… Bpifrance launches its “defense” fund reserved for individuals

Since Tuesday, in France, individuals can invest in a new fund intended for defense.

The public investment bank Bpifrance launched, on Tuesday October 14, a fund intended for defense and reserved for individual savings, a banking product unprecedented on the French market. Titled “Bpifrance Defense”it aims to raise 450 million euros, with individual participations ranging from 500 to 500,000 euros, to finance companies in the defense industrial and technological base (BITD), according to a press release.

“This fund marks a decisive step in the democratization of investment in unlisted companies,” assures Nicolas Dufourcq, the general director of Bpifrance. Nearly half of its resources will be managed by other branches of Bpifrance, such as the defense innovation fund. This structure finances the equity of innovative defense start-ups with the assistance of the General Directorate of Armaments.

The rest of the envelope will be invested in funds, specialized in defense or general, as well as in listed assets, in particular to diversify the portfolio. This initiative is a continuation of the funds intended for individuals, created by Bpifrance since 2020 with the particularity of being the first fund dedicated to a theme. Except in exceptional cases, investments made can only be recovered after five years. Bpifrance targets an annual internal rate of return of 5%. However, this is an investment that involves risks, where partial or total loss of the investment is not excluded.

The creation of the fund, inspired by the proposal formulated at the end of 2024 by the Prime Minister at the time Michel Barnier, of a “industry booklet”, was announced on March 20 during a joint event between the Ministries of Finance and the Armed Forces.

Since then, NATO member countries, including France, have raised their military spending target to 3.5% of gross domestic product (GDP) in 2035. To achieve this target, France must increase its production and finance the BITD to the tune of 15 billion euros. according to a study by Bpifrance Le Lab, published at the end of September. The fund could be offered in other European Union countries, where it would attract “strong interest”, according to Bpifrance.

The bank said that around 30% of the companies financed by the fund would be European. Export, which represents between 40 and 50% of BITD’s turnover, “is the doctrine of the General Directorate of Armaments”recalled Pascal Lagarde, executive director of Bpifrance.