Geopolitical tensions have frequently unsettled global energy markets, exposing an uncomfortable truth about Europe’s strategic vulnerability. While Europe often sits far from the flashpoints, such as the recent disruption in the Strait of Hormuz, the consequences are quickly felt across the continent as energy prices spike.
However, energy dependence is only part of a much broader challenge facing Europe today. Similar vulnerabilities exist across supply chains, industrial production, critical technologies, and security infrastructure. Europe’s reliance on external providers for everything from raw materials and semiconductors to defence capabilities is increasingly apparent.
For decades, Europe’s prosperity rested on assumptions that are no longer valid – reliable energy supplies, resilient global supply chains, and outsourced security. However, Europe is finally confronting a reality it can no longer ignore and is rapidly rewriting these assumptions.
Over the past year of managing a strategy designed to capitalise on Europe’s reawakening, we have seen meaningful progress as ambition increasingly translates into action. Across energy, industrial production, and defence, capital is flowing toward projects and companies that help reduce Europe’s strategic dependencies and strengthen its resilience.
While this transition will take time, the mobilisation of substantial public and private capital to address Europe’s vulnerabilities is driving a multi-year investment cycle spanning multiple sectors. As investors, we continue to see compelling opportunities across three core themes aligned to energy resilience, reshoring and defence/cybersecurity.
Reducing the reliance on external energy
Rather than derailing Europe’s strategic ambitions, the recent Middle East conflict reinforced the need for continued investment in domestic energy systems, critical infrastructure and electrification.
For example, building a robust, interconnected energy grid is essential to achieving energy security and supporting economic growth in an increasingly electrified digital economy. This involves upgrading ageing networks and expanding interconnectors, as well as deploying advanced cables, transformers, and power-management technologies to meet rising electricity demand from industry, transportation, and data centres.
One company positioned well is the Italian group Prysmian, which offers exposure to critical electrification and digital infrastructure themes through its global leadership in high-voltage and subsea cable systems. The company is supported by significant barriers to entry, strong pricing power, and a structurally growing order backlog.
Accelerating industrial renewal and reshoring
Alongside energy resilience, Europe is rebuilding its industrial base with a renewed focus on competitiveness, automation, and technological independence. The recent disruptions exposed the risks of excessive reliance on foreign manufacturing and global supply chains, prompting policymakers and businesses to reassess long-term priorities. Substantial European resources have already been committed to support industrial renewal and reshoring efforts through the end of the decade. This includes investment in strategic sectors, incentives for domestic production, and support for innovation across critical industries. Companies enabling this transformation stand to benefit from a durable source of demand as Europe seeks to strengthen its industrial sovereignty.
One company at the forefront of Europe’s ambition to strengthen strategic technologies and advanced manufacturing is Dutch giant ASML, a leading global semiconductor supplier. As supply chains become more regionalised and technological autonomy gains importance, semiconductor equipment is becoming a key part of the continent’s industrial renewal.
A new era for defence and cybersecurity
Perhaps nowhere is Europe’s strategic awakening more visible than in defence and cybersecurity, where risks once viewed as occasional or event-driven are increasingly being recognised as structural challenges. With Europe continuing to face evolving pressures on both its physical borders and digital networks, authorities are responding with urgently needed investment. The scale is significant, with hundreds of billions of euros set to be mobilised over the coming years.
Encouragingly, greater cooperation across the continent is supporting the development of European suppliers, scaling critical technologies, and building stronger local ecosystems. This is about anchoring defence and cybersecurity capabilities within Europe while reducing dependence on less-trusted partners. As a result, demand is emerging across a broad range of businesses operating within the defence ecosystem.
German group Rheinmetall illustrates how Europe’s security priorities are becoming increasingly structural. As governments commit to higher defence spending and broader capability upgrades, demand for advanced military systems, munitions, and defence technologies is becoming a more durable part of the region’s investment landscape.
