ETNA and Danish Pension Funds: A New Signal in Europe’s Defence Capital Markets

For decades, European pension funds tended to treat defence in a manner similar to tobacco: a sector formally investable in legal terms, but effectively excluded on ethical and ESG grounds. Self-imposed bans, negative screening and strict responsible-investment charters kept most institutional long-term capital away from defence manufacturers and related supply chains, even as national governments continued to procure weapons systems. This framework is now being revised at speed: leading asset managers and pension funds across Europe are reassessing exclusions in light of the war in Ukraine, NATO rearmament and the European Union’s push to mobilise around €800 billion for defence by 2030, with ESG-focused funds slowly increasing their exposure to defence stocks. The decision by Denmark’s AkademikerPension in June 2025 to lift its ban on investing in several major European arms manufacturers explicitly linked a deteriorating security environment with a responsibility to support European defence while maintaining ethical safeguards. Finnish provider Varma, in the same period, updated its Principles for Responsible Investment to enable “productive and secure” investments in defence-related opportunities, signalling that responsible investing and defence are no longer seen as mutually exclusive categories but as domains to be reconciled under stricter governance and screening. Against this backdrop, the emergence of ETNA as a dedicated defence-focused private-equity fund anchored by major Danish pension funds marks a concrete step in the repositioning of European long-term capital vis-à-vis the defence-industrial base.