Romanian fund managers’ association argues for pension funds allowed to invest in defence

The Association of Fund Administrators of Romania (AAF) has proposed a legislative amendment that would allow domestic pension funds to expand investments in companies operating in the defence, security, and dual-use technologies sectors listed on the Bucharest Stock Exchange (BVB), according to a press release quoted by Bursa.ro.

AAF representatives say the initiative aims to facilitate investments in companies considered strategic for national defence, while also generating financial returns that protect the long-term interests of pension fund participants.

The association stressed that any such investments would comply with strict prudential rules and would exclude financing of prohibited or controversial weapons, in line with international norms.

The proposal comes amid a tense international environment marked by rising defence budgets and increased capital needs in the military industry. AAF noted that in December 2025, the European Commission clarified that the defence sector is to be treated similarly to other industries in terms of eligibility for sustainable financing, in line with the Green Deal framework.

According to AAF, the amendment would represent a pragmatic adjustment in line with Romania’s National Defence Strategy 2025–2030 and the Capital Market Development Strategy, as well as with the country’s OECD accession process.

Pension funds have become the main institutional investors on the BVB, generating and absorbing more than a third of market liquidity. In this context, fund managers are seeking new solid sectors for long-term allocation, and the defence industry - backed by national and European funding programmes - could offer both portfolio diversification and potentially superior long-term returns, the association argued.

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