Today, the European Commission and the European Investment Fund (EIF) granted Sienna Hephaistos Private Investments S.C.A. SICAV-RAIF €30 million under the InvestEU Defence Equity Facility (DEF). Managed by Sienna Investment Managers France, this new fund becomes the first private credit fund in Europe to finance exclusively small and medium-sized enterprises (SMEs) and midcaps in the defence sector.
In response to the war in Ukraine and ongoing geopolitical instability, European security and defence needs have increased dramatically, highlighting supply chain vulnerabilities. Many specialised SMEs and small midcaps, often family-owned, provide critical components and technologies, but face limited access to bank financing.
This new fund will bridge the financing gap by providing tailor-made debt solutions that enable companies to expand production build up inventories, and support industry consolidation. By easing supply chain bottlenecks, the fund directly contributes to scaling up European defence production and reinforcing Europes strategic autonomy.
At first closing, the fund secured commitments from a strong base of institutional investors, with EIF acting as the cornerstone investor. This investment supports the EUs strategic priority of strengthening Europes security, sovereignty and defence capabilities by improving access to financing for critical suppliers in the European defence value chain.
Background
The European Investment Fund (EIF) is part of the European Investment Bank Group (EIBG). Its central mission is to support Europes micro, small and medium-sized businesses (SMEs) by helping them access finance. Under the InvestEU Programme, EIF implements several mandates on behalf of the European Commission, including the Defence Equity Facility, a EUR 175 million-instrument designed to support European private funds investing in defence technologies. The Defence Equity Facility is funded by the European Defence Fund (EDF), Commissions programme to strengthen the European defence technological and industrial base through the support to defence R&D. More information on the Defence Equity is available here.
Sienna Hephaistos Private Investments is structured as a Luxembourg SCA SICAV-RAIF. It provides private debt financing to SMEs and small midcaps across the European defence value chain, addressing critical supply chain bottlenecks and supporting industry growth in a context of rising European defence spending.
