Insights from the ADM Defence Financing Summit

Last week’s ADM Defence Financing Summit saw key players from across Government, the investment community, Defence and Defence industry come together to discuss opportunities and scope for private capital investment in Australian military capability.   

CMDT Group CEO Brad Junk-Gibson was lucky enough to attend and hear firsthand the growing role of private capital investment into Australia’s national security sector. He shares his key takeaways below.  

Sovereign capability is crucial 

Backing businesses that are building sovereign capability. This was the talking point of the day.  What does this mean? With a growing appetite for private investment in the defence sector, those businesses with a strong domestic resilience will be central in the discussion. And as with any investment, a drive for growth is key to a successful partnership. For our growing sovereign market, this places small businesses in the box seat.   

A financial sector open to defence investment

When it comes to investment in defence, the financial sector are generally viewed as being cautious. But the message at the summit gave a different view. 

While there’s a focus on Environmental, Social and Governance (ESG) in defence investment, there are areas that fit within ESG considerations. This has led to the introduction of terms such as patriotic capital and mobilising private capital. Here’s how presenter Misha Zelinsky, Director, Australian Super described it.  

“Patriotic capital is a relatively new concept. Defence can be tiered; you have defence-enabling (ports, airports, infrastructure) – there is an easier case for that sort of investment and a high demand for those sorts of assets.”  

A focus on tech companies  

This places technology companies with sovereign capability in a strong position. Something reinforced by the Summit's keynote speaker, LT Graham ‘’Gray” Chynoweth, Director Global Investments, Office of Strategic Capital, US Department of Defense.

“Security is based on a range of broadly applicable technologies – not just things that go boom. We’re focused on developing technologies that have defence and security applications.” 

Final thoughts  

Overall, it was positive to hear options available for investment through channels across government, the private sector, venture capital and superannuation funds.   The future looks bright.

A thought shared by speaker Nick O’Brien, Managing Director and Head of Consumer and Industrials, Westpac Institutional Bank, who said:

"At the heart of our decision making is we’re looking to support the Australian and New Zealand defence forces and companies looking to do business with them.”