Let’s start with the obvious: the world is on fire. Not metaphorically. Quite literally, in several corners of the globe, there are bombs, sirens, and suspiciously timed ceasefires. And if you are a family office trying to work out what’s investable, ethical, or even remotely future proof, the past two years have been a sort of prolonged migraine of geopolitics, ESG, and asset allocation. 

War, as you may have noticed, is back in fashion – grim as that may sound. Or perhaps it never left, and we simply stopped noticing in between SPACs, NFTs, and the different phases of the pandemic. Whatever the cause, the effect is clear: defence spending is up, weapons are in demand, and technology is now as crucial to conflict as boots and uniforms ever were. 

For family offices – those mysterious pots of capital, legacy, and succession planning – this raises an uncomfortable question: should we be investing in defence? 

Historically, many family offices have preferred to keep their portfolios clean and quiet. Consumer goods. Renewable energy. The odd biotech moonshot. Maybe a vineyard in Provence for good measure. But defence? That’s a different kettle of missiles. The moral fog is dense. The optics are poor. And one’s next family gathering might be slightly more awkward if your returns are courtesy of something that can, well, vaporise things. 

And yet. The numbers. Oh, the numbers. 

NATO countries are “queuing up” to hit the 5% of GDP on military spend. Sweden’s long-time neutrality is now more historical curiosity than policy. The money is moving, and it’s moving with purpose. This seismic shift in defence budgets has triggered a surge of capital into defence technology – everything from advanced radar systems to AI-powered surveillance platforms to materials that can self-heal after impact (no, seriously). The distinction between offensive and defensive is becoming blurrier than a satellite image of a missile silo. Many of these technologies are dual-use – meaning they have civilian applications too. Think GPS. Drones. Cybersecurity protocols. The things that start in a bunker and end up in your smartphone. 

For venture capital, this is fertile terrain. And like any self-respecting custodian of chaos, venture has embraced the dual mandate of cheerleading innovation while quietly praying its portfolio companies aren’t regulated into irrelevance. In defencetech, VC plays a curious role: part mentor, part mediator, part moral philosopher with a Term Sheet. It connects researchers with operators, founders with funding, and sometimes, when the stars align, it even connects good intentions with actual results. 

Now, family offices are often seen as too slow, too conservative, or too reputation-sensitive to join this particular party. But that reputation is beginning to crack – and rightly so. As stewards of long-term capital, family offices are arguably better positioned than most to navigate defencetech investing. They can hold for the long-term. They can bet on dual-use technologies that may take a decade to mature. They can underwrite complexity. And, if needed, they can do it quietly. 

But the tension is real. Some family offices are built on legacies that demand a form of moral stewardship. A founder who lived through war and pledged “never again” doesn’t look kindly upon a grandchild investing in remote missile guidance systems – even if those same systems end up powering agricultural drones in Sub-Saharan Africa. There’s a psychological minefield here. Navigating it requires more than returns – it requires narrative. Deep understanding. And lawyers. 

It also requires clarity on what “defence” really means in 2025. This isn’t your grandfather’s arms race. Sure, some companies still make things that go bang, but most innovation is software-led. Sensor networks. Autonomous navigation. Threat detection. These are tools that are as likely to prevent escalation as to enable it. Technologies designed to reduce friendly fire, increase precision, and save lives. In the murky world of moral calculus, that must surely count for something. 

So how do family offices access the space? 

For starters, the public markets offer increasing exposure to listed companies pivoting aggressively into defencetech – many of which also straddle commercial aerospace, cyber, and energy resilience. But the juicier stuff lies in the private markets, particularly early-stage venture. Here, the landscape is populated by startups with military-academic crossover, often spinning out of sponsored research labs or working closely with defence ministries.  

Partnerships with venture funds are an advantage for structure, process and navigation, thus could reduce the inherent risk associated with such a move. Although, the barriers to entry are high (read: regulation, opacity, and acronyms), but the upside is non-trivial – not just financially, but in terms of genuine impact. 

Still, this is not a space for tourists. If you’re a family office thinking of dipping a toe into defencetech, you will need more than capital. You will need real conviction. You will need partners who understand the terrain. You will need internal consensus (good luck at the next family board meeting). And most of all, you will need a time horizon that matches the pace of innovation and procurement in the military-industrial complex – which is to say: glacial, until suddenly not. 

Will this trend last? 

Short answer: yes. The geopolitical shifts are structural, not cyclical. The world is re-arming. Alliances are being redrawn. Cyber threats are becoming kinetic. And defence is no longer a backwater for grey suits and lobbyists – it has become one of the most dynamic frontiers in applied tech. As long as democracies care about deterrence, and autocracies care about dominance, defencetech will be on the table. 

So, to defend or not to defend? 

That is the question. And like all good questions in the family office world, it will eventually be answered – not with a binary yes or no, but with nuance, sub-committees, and a well-cushioned bet on dual-use drones that deliver both precision strike capabilities and Amazon parcels. 

Somewhere between doing good and doing well, a new asset class is emerging. And family offices – slow to move, but hard to stop once they do – are waking up to its peculiar logic. Whether they can stomach the scrutiny and the moral acrobatics is another matter entirely. 

After all, nothing tests a family constitution like investing in things that explode.  

Simple article.