GLOBAL DEFENSE AND SECURITY

The Contribution to Peace

 

 

 

INVESTMENT CASE
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GLOBAL DEFENSE AND SECURITY

 

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The best way to maintain peace is to have a strong defense. The global geopolitical instability and Donald Trump’s presidency are major positives for defense spending.

While Trump’s initiatives will spark +10-15% growth on US defense spending, Trump’s election is also having some knock-on effects on US allies, specifically on NATO members.

Even if the US defense budget and most budgets across the world are well balanced between air, sea and land, most of the big dollars over the next few years will be spent on submarines and ships, next-generation aircrafts and unmanned vehicles.

As new projects come online, contractors should benefit from significant revenue upside.

Developments in the civil field from space exploration to biometrics or cyber security are of utter importance given their close links with defense.

 

No investments are made in companies manufacturing anti-personnel mines and cluster bombs.

 

FACTSHEET

PRESENTATION

TERMSHEET

 

KIDs (Defense And Security)      

 

PRICE
149.97 14.08.2018
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WHAT IS IT ABOUT?
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DEFENSE AND INNOVATION SHARE A COMMON HISTORY

 

Many civilian technologies and innovations find their roots in military missions.
The CIA has its own venture capital company that invests in Silicon Valley start-ups (Q-Tel).

 

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A MAJOR TECH UPGRADE CYCLE IS ON ITS WAY 

 

 

 

 

 

WHAT IS HAPPENING NOW?
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THIS TECH UPGRADE CYCLE WILL FUEL AN ALREADY STRONG MOMENTUM​

 

 

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An unstable and volatile geopolitical situation: external and internal threats.

Donald Trump’s FY18 budget points to a massive acceleration in defense spending. Supplemental budget requests will feed the momentum.

NATO countries meeting the 2% of GDP target points to $100bn spending upside.

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CATALYSTS ALL AROUND THE WORLD:
THE GLOBAL GEOPOLITICAL INSTABILITY

 

 

 

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USA

  • Modernization budget growth
  • Senate Increase military spending 
  • Tax reform

EUROPE

  • NATO: Pressure by US on EUR defense spending 2% GDP

  • European defense fund in 2025

UK

  • Brexit:
    US influence Europe?
  • Defense budget
    Reallocation in EU army?

ASIA

  • Growth of Chinese
    influence in the
    Chinese Sea
  • End of Asian Pivot?
  • North Korea nuclear rally

AFRICA & MIDDLE EAST

  • Political instability
  • Terrorist groups
                          

 

Source: AtonRâ Partners;  Heidelberg Institute - Conflicts in 2016

 

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SPACE EXPLORATION ENTERS INTO ITS NEXT CHAPTER 


 

 

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During the Cold War, the US and the Soviet Union used space exploration
to demonstrate ballistic missile technology and develop other military applications


The return to the Moon and the potential first journey to Mars planned by the US are intended to.

 

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SPACE EXPLORATION – A MAJOR SOURCE OF REVENUE
FOR PRIVATE COMPANIES

 

The NASA budget is expected to balloon over the years to fund these new space missions.
Importantly, the NASA is expected to develop public-private partnerships with the likes of:

 

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COMMERCIAL SPACE TO DEVELOP IN THE MEDIUM TERM:
SPACE TOURISM FIRST

 

Space is not only important for the future of transportation,
it’s important for the future of imagination…


Georges Whitesides, CEO Virgin Galactic

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ASTEROID MINING WILL FUEL TRAVEL WITHIN SPACE:
A MODERN DAY GOLD RUSH

 

Link to the full-size image ->

 

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SATELLITES MAKE THE LINK BETWEEN SPACE AND EARTH

 

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Space exploration is a source of innovations in the fields of healthcare, materials, robotics and transportation systems but also remains important in defense-related fields such as aeronautics and IT & Telecoms (satellites).

 

Satellites appear as a major actor in the global security value chain, creating the fundamentals for telecommunication technologies.

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SATELLITES HAVE FOUR MAJOR ROLES

 

 

 

 

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THE RISE OF SMART AND SAFE CITIES

 

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Thanks to the Internet of Things and Artificial Intelligence, smart cities are about to become reality.
 Traffic and parking space management, safety and law enforcement and smart grids will be in the spotlight.

 

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BIOMETRICS TO IDENTIFY, TARGET AND PROTECT

 

 

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Biometrics uses facial image, fingerprint, iris, DNA or voice pattern to identify individuals.
The US Department of Defense is working with multi-modal biometrics
(ABIS - Automated Biometric Identification System), a combination
of above mentioned technologies.

 

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THE INTERNET OF THINGS OPENS THE WAY TO NEW CYBER ATTACKS

 

All connected devices and systems will be exposed to security threats. Attacks on the IoT
will hit healthcare, financial services, manufacturing. 50% of new business processes
and systems will include an IoT component by 2020
(source: Gartner).

 

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CYBER SECURITY: A MAJOR ACTION FIELD FOR BOTH STATES AND CORPORATIONS

 

The cyber security market is expected to grow from USD 122 bn in 2016 to USD 202 bn
by 2021, a 10.6% CAGR (Source: Research and Markets). 


How to protect against cyber attacks?

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CYBERSECURITY SPENDING TO GET A BOOST FROM REGULATIONS

 

All companies involved in the digital transformation will have to reach a standard of protection. 
Two directives will boost the level of cybersecurity in the European Union.

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PERSPECTIVES
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A HUGE $1.74BN DEFENSE SPENDING BILL GLOBALLY,
WITH SIGNIFICANT UPSIDE IN NATO

 

 

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TOP 5 SPENDERS ACCOUNT FOR 61% OF GLOBAL MILITARY SPENDING IN 2017

 

 

Source: AtonRâ Partners & www.sipri.org

 

 

GEOGRAPHICAL BREAKDOWN OF GLOBAL DEFENSE SPENDING IN 2017
 

 

 

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NATO Meeting The 2% Of GDP Target Points To $100bn Spending Upside.

DEFENSE EXPENDITURE IN 2017 AS A % OF GDP IN NATO

 

 

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THE LENGTH OF DEFENSE CYCLES OFFERS STRONG VISIBILITY FOR INVESTORS

 

Since WWII, each defense cycle has lasted between 5 and 10 years on average,
suggesting that the current upcycle could run until 2020 at least.

 

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A TOPLINE OF US DEFENSE BUDGET HISTORY

 

 

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FOCUSING ON MILITARY AIRCRAFTS, NAVAL SHIPS AND DRONES

 

Even if the US defense budget and mosts budgets across the world are well balanced. We believe that the focus will be on: next generation aircrafts, submarines and ships.

 

 

ESTIMATED GLOBAL AND US PROCUREMENT BUDGET FOR UAVS (DRONES)

 

Drones also a top priority given:

  • surveillance needs
  • precision weapon functions

Source: Comptroller.defense.gov; AmericanProgress.org

Source: AtonRa Partners, Sipri, Statista

PLAYERS

 

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CONCLUSION: INNOVATION AT THE HEART OF BOTH
CIVIL AND MILITARY SECURITY

 

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Innovation at the service of security and public safety:

  • Satellites & telecommunications
  • Real time surveillance & smart cities
  • Cybersecurity & biometrics
  • Security of IoT devices
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Technology as a driver of defense capabilities:

  • Land: Unmanned vehicles / Drones
  • Sea: Submarines / Carrier / Destroyers
  • Air: Fighters / Bombers / Transport planes
  • Space: Ballistic missiles / Military spacecraft

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ETHICAL STANDARDS

 

AtonRâ Defense & Security certificate does not invest into companies which manufacture anti-personnel mines and cluster bombs. We also avoid companies manufacturing chemical weapons.