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Private credit investments are increasing in Europe's defense industry, with notable deals from firms like Carlyle Group and Bridgepoint. These investments, including financing for companies like Comrod and Mecachrome, reflect a shift as private capital seeks opportunities in defense amid rising military budgets.

The European Commission's updated sustainable finance framework has further encouraged this trend, with BDC exposure to defense reaching $7.2 billion by September 2025. The UK and Germany are also exploring private funding options for defense investments.