The Luxembourg intergenerational sovereign fund (FSIL) is to invest €25m in the new national defence fund (FND). This was one of the key revelations in the response given on Friday 29 May by the minister for finance, 
Until now, the government had mainly highlighted the existence of a €150m fund designed to support companies active in strategic defence-related technologies. The parliamentary response provides the first insight into its financial structure. The FSIL will contribute €25m over five years, at a rate of €5m per year. The State will contribute €50m via the national budget, whilst the SNCI (Société nationale de crédit et d’investissement) will inject €75m in direct co-investment.
Another previously undisclosed detail: the investment has already passed through all the sovereign wealth fund’s internal approval stages. Gilles Roth states that the FSIL’s investment committee, comprising four members – three of whom are external experts from the financial sector – issued a favourable recommendation before the steering committee gave the go-ahead. This is a way of pre-empting criticism from those who might view this transaction as a political rather than a financial decision.
Changes to the sovereign wealth fund
The minister also provides further details on the nature of the projects being targeted. “The FND is not intended to finance traditional military equipment,” he writes. The fund will invest in dual-use technologies – both civilian and military – particularly in the fields of cybersecurity, space, advanced materials and automation. “The interests of future generations are therefore at the very heart of this initiative,” he states.
The response also sheds light on the underlying financial logic. According to Gilles Roth, the FND will operate on the basis of a traditional commercial approach with pari passu terms – that is, on an equal footing – guaranteeing the FSIL the same return prospects as other investors. The minister acknowledges, however, the risks inherent in private equity, an asset class that is less liquid and more exposed to uncertainty than listed markets. The gradual deployment of the investment over five years should help to limit this exposure.
Beyond the defence case alone, these details confirm the ongoing transformation of the Luxembourg sovereign wealth fund. At the end of May, the FSIL’s annual report revealed the fund’s first investments in US bitcoin ETFs. This development drew attention to the creation of a dedicated crypto-asset portfolio and to the government’s willingness to accept greater volatility in exchange for higher potential returns.
Bitcoin is not an isolated case
The parliamentary response shows that Bitcoin was not an isolated case. The FSIL is now actively implementing the strategy adopted in July 2025, which allows for up to 15% of the portfolio to be allocated to alternative assets, including 10% in private equity. Defence technologies are thus becoming one of the first concrete applications of this shift.
Gilles Roth finally highlights a figure that is rarely mentioned in public debate. Since its first investments, the sovereign wealth fund has posted a cumulative return of 38.3%, or an average of 3.43% per year. The minister believes that diversifying into alternative assets should enable this performance to improve further in the years to come.
A few weeks after the discovery of the government’s first bitcoins, the response to Mars Di Bartolomeo thus adds another piece to the puzzle. Behind investments that may appear very different lies a single ambition: to gradually transform the sovereign wealth fund into a more proactive investor, capable of investing in both crypto-assets and defence technologies to generate long-term returns.
