By Naomi Rovnick and Iain Withers
LONDON (Reuters) – UBS’s asset management arm has become the latest European money manager to ditch some exclusions on investments in defence companies as private investors race to enable their funds to finance the region’s rearmament drive.
UBS Asset Management, which runs $1.8 trillion of assets, has scrapped a block on some sustainability funds backing manufacturers of conventional weapons, according to its latest exclusion policy report published last month.
Germany’s Allianz Global Investors has also decided to drop some exclusions on defence investments, Reuters reported on Monday, amid a broader drive by European investors to reconsider their policies as geopolitical tensions intensify.
Defence stocks have soared in value this year as European countries, under pressure from U.S. President Donald Trump, have vowed to increase military expenditure.
UBS’s sustainable investing focus and impact funds had previously been prohibited from investing in companies that generated more than 10% of their revenues from producing conventional military weapons.
Exclusions still apply to controversial weapons such as cluster munitions and biological weapons.
The Swiss money manager did not give a reason for dropping the exclusion, after removing it from the latest exclusion policy document.
Danske Bank also lifted some restrictions on its asset management arm investing in defence assets, the company said in a statement on Tuesday.
(Reporting by Naomi Rovnick and Iain Withers, Editing by Tommy Reggiori Wilkes and Marguerita Choy)
