SDR

Sovereign Defense & Resiliency Credit

Europe's defense-industrial scale-ups are raising record equity. Not one dedicated credit fund exists to serve them.

SDR is the structure built for that gap.

Structuring · Not Yet Raising

The Asset Class

European defense tech is the fastest-growing venture vertical on the continent. Between 2018 and 2025, total VC investment surged 45×. In the first nine months of 2025 alone, NATO-allied startups raised $9.1B - 1.4× the entirety of 2024. More than 21 specialist equity funds have launched since 2022.

Zero dedicated credit funds exist.

The entire asset class is equity-only. Defense tech companies - with multi-year government contract cashflows, IP portfolios, and hard assets - are the most lendable vertical in European VC. Yet no fund has been structured to lend to them. The non-dilutive growth capital that Series B and C defense companies need to bridge procurement cycles, fund equipment, and scale without further dilution is structurally absent.

European venture debt penetration stands at 12% of total capital invested - 3× below US levels. Series B and C rounds in Europe average 20% below US peers. AIFMD II, effective April 2026, activates the first cross-border lending passport enabling pan-European credit deployment at scale.

SDR enters a structurally vacant niche as Europe's first and only defense-specialized credit fund.

The Structure

• Vehicle: Luxembourg SCSp - closed-ended Loan-Originating AIF. Tax-transparent. Cross-border lending passport under AIFMD II
• Strategy: Senior secured venture lending - non-dilutive growth capital for defense tech scale-ups at Series B and C
• Geography: DACH and France - a unified cross-border collateral corridor unavailable in US venture debt markets
• Sub-verticals: Defense & dual-use technology (40%) · Autonomous systems & robotics (30%) · Cyber & digital sovereignty (30%)
• Collateral: All-asset lien + IP pledges + government contract receivables assignment
• Yield structure: 8–15% all-in · EURIBOR + 600–900 bps · Equity warrants (1–5% dilution) · Senior secured, amortizing after 6–12 month interest-only period
• Target gross IRR: 12–18%
• Target net IRR: 10–14%
• Securitization layer: French FCT - converts loan pools into tradable rated notes via ring-fenced compartments
• Optional share class: ELTIF 2.0 for semi-institutional and lower-minimum access
• SFDR: Target Article 8 classification

The Thesis

Defense tech borrowers carry quasi-sovereign credit quality.

Their primary customers are NATO member states with investment-grade credit ratings. Their contracts are legally binding, multi-year obligations not subject to discretionary budget cycles. The NATO Hague Summit in June 2025 raised the spending target from 2.0% to 3.5% of GDP - projecting European defense spending toward €800B annually by end of decade. Sovereign governments cannot defer this procurement pipeline without breaching alliance commitments.

The result is a lending environment with non-discretionary revenue, sovereign counterparty risk, and hard asset collateral - the ideal conditions for a senior secured credit strategy. Equity investors have recognised this. Credit investors have not yet arrived.

The DACH and France geography creates a structural advantage unavailable elsewhere. Germany's draft Fondsrisikobegrenzungsgesetz extends lending privilege to fund-controlled SPVs. France's FCT securitization vehicle enables direct loan origination and rated note issuance. French IP law (nantissement de brevet) and German IP collateralization (Sicherungsübereignung) provide a dual-jurisdiction collateral framework that US venture debt markets cannot replicate.

21+ funds compete for defense equity. None originate defense debt. SDR is first.

Downside Protection

• LTV: 20–35% of enterprise value
• Hard covenants: EV/Debt ratios, minimum revenue milestones, contract compliance triggers
• IP pledges: Dual-jurisdiction framework - French nantissement de brevet and German Sicherungsübereignung
• Government contract receivables assignment: Near-investment-grade collateral quality
• Sponsor backing priority: Tier-1 VC-backed borrowers only

Who SDR Is For

Institutional LPs and credit-mandate investors seeking senior secured exposure to Europe's fastest-growing sector, with quasi-sovereign collateral quality, predictable coupon income, and first-mover pricing in a structurally uncrowded market.

Pension funds and insurance mandates with private credit or infrastructure debt allocations seeking floating-rate, inflation-correlated income at durations compatible with defense procurement cycles.

Sovereign wealth funds and defense-aligned institutional capital with strategic interest in European defense-industrial sovereignty - where financial return and geopolitical mandate align structurally.

Family offices and qualified private capital seeking early access to a credit strategy - European defense venture lending - that does not yet exist as an institutional product category.

Access

SDR operates selective LP access. No open subscription. The process is structured, personal, and efficient.

01 - Expression of Interest

Submit below. Reviewed personally within five business days.

02 - Qualification & Fit

A short conversation to assess mandate alignment, investor qualification, and capital stack fit.

03 - Fund Documentation

Approved investors receive full documentation: financial model, legal structure, portfolio pipeline, and investment materials.

04 - Structuring Dialogue

For co-investment, ELTIF access, and institutional anchor discussions - a deeper conversation before any commitment is discussed.

Team

Sven Janssen - Managing Director, Germany & France (Berlin)

Defense tech and industrial AI underwriting. Tibi Initiative coordination. IP collateralization expertise. Deep integration with DACH and French procurement ecosystems.

Tobias Temmen - Partner, Switzerland (Zurich)

Fund structuring, capital formation, and blended finance architecture. Securitization and rated note issuance. 20+ years across investment management, PE, and strategy. Kellogg-WHU EMBA | MIT REAP Ambassador.

Offices: Berlin · Paris · Zurich

Legal

This page is directed exclusively at professional investors within the meaning of MiFID II Article 4(1)(10). It does not constitute investment advice, a prospectus, or an offer or solicitation in any jurisdiction. Past performance is not indicative of future results. All investments carry risk including possible loss of capital, credit risk, liquidity risk, and regulatory risk. Prospective investors should seek independent legal, tax, and financial advice before making any investment decision. SDR documentation includes full jurisdictional disclosures relevant to the Luxembourg SCSp structure, AIFMD II lending passport, and applicable regulatory frameworks.