All financial stakeholders must mobilize
To cope with the increase in their order books, these DTIB companies must find new sources of financing. Although many regulatory obstacles have been removed, their specific characteristics or sometimes fragile balance sheet structure may give rise to reservations, including from an ESG point of view.
The unprecedented increase in production capacity expected from SMEs and mid-caps in the DTIB will require the mobilization of all the players involved in their financing! The banks are already very present, but the scale of the needs will further justify the mobilization of additional resources for significant amounts. Thus, alternative lenders and investors are called upon to play a crucial role in this vital industrial fabric and to work in harmony with conventional banks.
Private debt funds, which offer a lower return than private equity, meet the need for working capital and investment financing without changing the capital structure. Institutional investors, such as insurers and pension funds, will support fund managers, as will the designers and distributors of savings products. There is no need to change the legal or political framework to deploy innovative financing. Asset managers now have the tools to deploy the capital that institutional investors will be willing to entrust to them.
The security and peace of Europe depend on a massive effort in favor of defense industries to ensure that Europe, far from any warmongering approach, is heard when it speaks and is respected by nations that would seek to impose their will on it. The SMEs and mid-caps of the DTIB cannot be the blind spot of defense industry financing. It is up to us, institutional investors and asset managers, to rise to this challenge together.
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