Morning all, Craig Mc Glashan here with the Europe Wire from the London newsroom. This morning we hear from Boka Capital’s John James about how defense investment is changing in the face of European governments’ increased spending – particularly as companies in the industry win contracts faster than before. Next, we look at a big deal involving a household name in the UK. Sycamore Partners and the Pessina family have signed a definitive agreement to sell pharmacy chain Boots to Wittington Investments.\n\nCompressed timeline Defense and technology specialist Boka Capital is aiming to hold the final close for its third dual-use deep tech and defense fund on $300 million by Q1 2027, chief executive and founder John James told my colleague Joe Marsh at affiliate publication Private Equity International. Investing in European defense has been a big topic here on PE Hub, and I was particularly interested to read about how James saw that market adapting as governments ramp up – or at least plan to ramp up – their defense spending. Founded in 2022, London-headquartered Boka closed its second strategy on $200 million in the fourth quarter of last year. Set up with the aim of strengthening resilience amid rapid technological change and rising geopolitical threats, the manager backs growth-stage deep tech companies with a view to accelerating tech with dual-use potential, according to the firm’s website. Dual-use refers to assets that have both civilian and military applications, such as satellite components. Asked what sort of returns Boka is targeting, James gave an example of a deal it has done: he cited its investment in quantum tech company Infleqtion, which was made through its second fund. The firm was valued at more than 5x gross multiple on invested capital when it listed in New York via a SPAC merger in February 2026, he said. With regard to potential distributions, James said Boka started paying out within two years of investing its second fund, ahead of the expected time frame."This is a fast-moving market," he added. "European and allied governments are spending more on defense and security than at any point in a generation, and the companies we back are winning real contracts earlier than they would have done a few years ago. That compresses the timeline from investment to scale."Growth III will hold around 10 companies at growth stage, typically with government customers already in place, he said. "That focus is what lets us deploy with conviction when the right deal appears."
On liquidity, we’ve seen portfolio companies such as ALL.SPACE and Infleqtion reach the public markets sooner than a traditional venture timeline would suggest,” James said. Competition for these assets is certainly increasing, despite the challenges posed by the sector. Germany’s DTCP said in late September it had held the first close for its first defense fund at €455 million against a target of €500 million. The Hamburg-headquartered GP hired Georgia Watson in London as a new partner from rival manager Lakestar in August, according to her Linked In page, to accompany Ole Aguirre as co-lead on the strategy. DTCP’s defense strategy focuses on early-growth and growth-stage tech companies developing capabilities critical to European defense, security and resilience, the firm said in a statement. It has already made investments in Six Robotics and Kraken Technology, with a third investment underway. The fund will invest primarily in Europe, while also selectively backing ...
Source: PE Hub · Summarized by HeadlinesBriefing