Singapore’s government-owned investment giant Temasek is setting its sights on defence sector opportunities, driven by the surge in military budgets across Europe following the ongoing conflict in Ukraine, according to a senior company official.
The move is part of a larger effort by Temasek to grow its footprint across Europe, the Middle East and Africa — a region that currently makes up only 12% of its S$518 billion (roughly $401 billion) investment portfolio.
Nagi Hamiyeh, Temasek’s president of global investments and head of Europe, Middle East and Africa, told Reuters the fund has deployed significant capital in the region recently. “We have so far in the last two years invested something like €13 billion ($14.8 billion) (into EMEA),” he said. The fund previously announced in 2024 a goal of investing up to approximately €17 billion in the region by 2029.
Hamiyeh pointed to growing government defence budgets as the key driver behind the fund’s new interest in the sector. “We have one company in Singapore, ST Engineering, which mainly serves the needs of the Singapore Armed Forces. But besides that, we never really looked at defence,” he said. “But now when you look at deterrence, when you look at sovereignty, we’re starting to make an exception.”
Temasek ranks among the world’s largest state-backed investors, holding stakes in major global companies including Alphabet and Ping An, as well as private firms Anthropic and OpenAI.
Rather than investing directly in traditional weapons makers, Temasek plans to focus primarily on dual-use technologies — products and services that have applications for both civilian and military purposes — while staying within its environmental, social and governance standards.
“We have very, very clear guidelines when it comes to ESG in terms of responsible management, in terms of nothing to do with biological and chemical warfare,” Hamiyeh said.
Beyond defence, Hamiyeh identified energy transition, infrastructure, luxury goods, industrial technology and life sciences as additional European sectors where the fund sees strong potential — areas he described as having a “right to win.”
The fund is also targeting larger deals in Europe, with a minimum investment of €200 million and a preferred range of €500 million to €1 billion. Hamiyeh said this approach allows the fund’s European team of around 30 investment professionals to play an active role following each investment.
According to Temasek’s website, about 73% of its holdings are outside Singapore, with 26% in the Americas and 17% in China. Roughly half of the portfolio consists of unlisted assets. Past European investments have spanned fintech, healthcare and energy, including stakes in Dutch payments company Adyen and French artificial intelligence startup Mistral AI.
