Capital, regulation and capability in a new era

On 22 September 2026, Linklaters welcomed international clients, investors, policymakers and industry leaders to 20 Ropemaker for our inaugural Defence & Security Symposium.

The symposium signalled how the sector is shifting from a niche allocation to a strategic priority at the intersection of national security, public policy and industrial strategy. 

A new chapter

The Rt Hon Lord William Hague opened our symposium by placing today's environment in historical context and describing it as "Chapter Three" of post-1945 history. It is an era defined by danger and excitement, with several forces converging at once, including geopolitical realignment, demographic change, climate pressure and the fastest technological revolution in history. 

Mobilising capital

The finance and investment panel highlighted a significant shift across the sector: the "S" in ESG is increasingly being interpreted as security as well as social, with ratings agencies already repositioning defence. Funding is available, but projects require clear, long-term government commitments to attract investment and unlock financing. The discussion also highlighted growing public-sector support, with an additional £50 billion of UK Export Finance capacity earmarked for defence. Around a fifth has already been deployed, with the remainder expected to be allocated over the next five years through the UK's Defence Investment Plan ⁽¹⁾.

Regulatory reality

FDI, export controls, sanctions and procurement no longer sit at the end of a transaction: they shape timing, valuation and transactability from day one. More and more foreign acquirers are now fielding substantive questions on ITAR, IP protection and supply assurance, a notable shift from even twelve months ago. In the last twelve months, nearly 60% of UK NSIA notifications related to defence, with a further 23% in military and dual use ⁽²⁾.

AI, cyber and adoption

Not surprising, the AI frontier, and adversary adoption of it, is moving faster than defence ministries can absorb. Legacy data, fragmented security estates and cultural resistance, not the technology itself, are the real barriers to deployment. The Five Eyes agencies' June statement ⁽³⁾, giving industry and government "months, not years" to prepare for a new sophistication of cyber threats, underlined the urgency.

Key considerations for primes and investors

• Government demand signals are strengthening, but certainty, not headline budgets, is what unlocks capital. Build financing cases around visible, long-dated offtake and credible counterparties.
• Treat FDI, export controls, sanctions and procurement as deal-shaping issues from the outset. Early, substantive engagement with regulators is now a core determinant of deal certainty and value.
• The investable universe is wider than the primes. Dual-use capability, critical supply chains and defence-adjacent infrastructure are where much of the growth, and the competition for capital, now sits.
• Supply chain resilience, UK and NATO capability building, and skilled jobs are the narratives that resonate with policymakers across jurisdictions.
• Technology risk is converging on AI, cyber and critical inputs. Diligence, structuring and integration planning should assume faster-moving threats, tighter regulatory scrutiny and a premium on companies that can actually deploy, not just demonstrate, their capability.

Linklaters’ has been advising clients in the aerospace, defence and security sector for over 30 years and is supporting the new era of innovation and financing. For more information, please visit our sector insight hub here. 

^{Sources:
(1) The UK's £298bn Defence Investment Plan 
(2) National Security and Investment Act 2021: Annual Report 2024-25 (HTML) - GOV.UK
(3) Five Eyes Cyber Security Agencies Statement | CISA}