19th Aug 2026 19:21
(Alliance News) - Defence Holdings PLC on Wednesday doubled down on its GBP2.0 million commitment to a new UK Defence Fund amid investor concerns, sending shares higher.
On Monday, Defence Holdings said it had committed GBP2.0 million as a cornerstone investor in a new UK Defence Fund focused on early-stage defence technology companies.
Shares in the company had plummeted 16% to 0.86 pence in London following the announcement.
The defence technology group said the fund will bring together third-party capital alongside its investment, providing a capital-efficient way to gain exposure to a broader range of defence technology opportunities while maintaining its focus on sovereign software.
The UK Defence Fund will invest between GBP250,000 and GBP1.0 million in minority stakes in private defence companies at the pre-seed and seed stages. Areas of focus include artificial intelligence, autonomous systems, cyber resilience, secure infrastructure and information dominance.
Defence Holdings expects to fund its commitment around the end of September, with the fund targeting deployment of initial capital by the end of March 2027.
The investment is a related-party transaction because Chief Executive Roughan, Finance Director Brian Stockbridge, Chief Technology Officer Andrew McCartney and Vice President Richard Bassett are founding principals of the fund.
In a letter published Wednesday, CEO Roughan said the investment marks "the activation" of the Investment Pillar of its Defence Holdings Playbook, first outlined in May.
Roughan said the investment is consistent with its long-term strategy and capital allocation framework and is fully funded from its June fundraising.
"A dedicated investment vehicle allows us to attract institutional and private capital alongside our own, supporting more companies, participating in larger rounds, and building a stronger portfolio than we could alone," Roughan told shareholders in response to queries regarding why the company will not manage the fund itself.
Additionally, Roughan noted direct investments could "inadvertently trigger a reverse takeover process, introducing cost, complexity, and distraction precisely when we need to execute the operating plan."
"A dedicated vehicle lets us stay focused on what we do best: building products, winning contracts, and supporting customers while participating economically in a structure capable of attracting substantially larger pools of capital," he added.
What's more, the CEO said Defence Holdings has negotiated a performance fee exemption.
First Sentinel Corporate Finance Ltd is serving as investment adviser and is responsible for the fund's service provider costs, including those of the fund manager, custodian and administrator, under the fund's 2% annual management fee arrangement, Roughan said.
In response, Defence Holdings shares climbed 20% to 0.90 pence in London on Wednesday, giving it a market value of GBP21.52 million. Shares are up 80% over the last 12 months, but have tumbled 54% year-to-date.
Roughan will hold a longer-form interview later this week to discuss the Fund and "related strategic themes".
"I appreciate this decision will not be universally supported today. But leadership isn't about making the easiest decision, it's about making the decision you believe creates the greatest long-term value. My standard is this: building the strongest sovereign defence technology business possible over the next three to five years. That's the standard against which I hope you'll judge me," Roughan wrote.
"We look forward to sharing further details on the timing and publication of that interview later this week," the CEO added.
By Aidan Lane, Alliance News reporter
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