Europe Enters New Era as Defense, Finance Reset | Apollo EMEA Outlook

What's New

Robert Seminara, Partner and Head of Europe at Apollo Global Management, writes in the firm's 2026 EMEA Outlook that Europe stands at a fundamental inflection point defined not by a single macro cycle but by a comprehensive rewiring of the region's financial and industrial architecture—where partnership has re-emerged as the ultimate competitive advantage and private capital is becoming central to unlocking the next chapter of continental growth.

Why It Matters

The simultaneous transformation of Europe's capital markets, defense posture, and technological ambitions is creating a multi-decade investment supercycle that requires investors to not just react to market conditions but actively help shape the region's strategic direction through patient, flexible, and scaled capital deployment.

Big Picture Drivers

• Securitization revival: Policymakers are advancing reforms to revitalize securitization markets after a decade of underutilization, opening pipelines of high-quality opportunities backed by real economy assets

• Defense reckoning: Geopolitical instability and years of underinvestment have forced Europe to confront defense readiness gaps, triggering NATO commitment fulfillment and procurement scaling

• Technological sovereignty: Determination to reduce dependence on US and Chinese technology ecosystems is accelerating investment in homegrown AI, clean energy, biotech, and semiconductor capacity

• Bank balance sheet restructuring: Evolving capital requirements are creating demand for private investors as long-term partners providing funding, warehousing solutions, and bespoke structures

• Origination strength: Europe demonstrated itself as one of the most robust origination engines globally, spanning direct lending, asset-backed finance, and opportunistic credit

By The Numbers

• €150B: SAFE-backed loans and EIB capital flowing into defense and security infrastructure

• 10+ years: Duration of securitization market underutilization now being reversed

• 3 pillars: Core transformation themes—capital markets, industrial base, strategic priorities

• Multi-decade: Expected duration of defense and security investment supercycle

Key Trends to Watch

• Securitization resurgence: Regulatory reforms are helping banks free up balance sheet capacity to lend more efficiently into the economy while creating new investment pipelines.

• Defense supply chain expansion: Opportunities now span component manufacturing, production capacity, dual-use technologies, logistics, surveillance, and cyber defense platforms.

• Innovation infrastructure financing: Investment is shifting beyond startups to the physical infrastructure behind innovation—data centers, fiber networks, battery storage, and industrial automation.

• Private capital centrality: The region is entering an era where private investors are essential partners in unlocking growth across energy transition, digital renaissance, and demographic-driven demand.

The Wrap

Apollo frames 2026 as a moment requiring clarity, commitment, and collaboration—where Europe's transformation across defense, financial architecture, and technological self-reliance creates deep and diversified entry points for investors who can build the right platforms and capabilities to navigate structural change rather than simply chase cyclical opportunities.