Singapore's state investment firm Temasek is increasing its focus on defence sector investments amid heightened military spending by European governments in response to the war in Ukraine, according to a senior company executive.

Nagi Hamiyieh, Temasek’s president of global investments and head of Europe, Middle East and Africa (EMEA), said the firm plans to incorporate defence-related opportunities into its broader strategy to expand investments across the EMEA region. Currently, Temasek’s portfolio in EMEA represents only 12 percent of its total assets under management, which are valued at approximately S$18 billion.

Over the past two years, Temasek has invested roughly £13 billion (S$19.2 billion) in EMEA markets and aims to commit up to €17 billion in the region by 2029. The firm is particularly interested in dual-use technologies—products that serve both civilian and military applications—rather than purely defence manufacturing. This direction aligns with Temasek’s ongoing adherence to its environmental, social, and governance (ESG) standards, which explicitly exclude involvement with biological and chemical warfare.

Hamiyieh emphasized the evolving outlook on defence within the company, noting that historically Temasek’s exposure to military-related businesses was limited primarily to Singapore-based ST Engineering, which mainly serves the Singapore Armed Forces. However, the current geopolitical climate and considerations around deterrence and sovereignty are driving a more active stance toward defence investments.

Alongside defence, Temasek identifies sectors such as energy transition, infrastructure, luxury goods, industrial technology, and life sciences as areas where European companies maintain a competitive advantage. In line with this thematic focus, the firm is pursuing larger deals in Europe, targeting minimum investments of €200 million and preferring transactions in the range of €500 million to €1 billion, which enables its 30-person Europe investment team to engage more actively in portfolio companies.

Temasek’s global portfolio is widely diversified, with approximately 73 percent of underlying assets located outside Singapore, including 26 percent in the Americas and 17 percent in China. Roughly half of its assets are in unlisted companies. In Europe, the firm has made investments in sectors spanning fintech and healthcare to energy, including stakes in Dutch payments company Adyen and French artificial intelligence start-up Mistral AI.