US Private Credit-Focused Investment Firm Eyes Defense Opportunities, Europe

Tom Burroughes

13 November 2025

A New York-based investment firm that recently launched a fund with a focus on private credit in the North American government and defense ecosystem, is also looking at Europe for opportunities.

In September, Grays Peak Capital launched its second fund, Grays Peak Private Credit II . In its new fund, the firm said it intends to deploy up to $500 million annually in government and military middle-market companies, joint ventures, and value-add opportunities. GPPC Fund II will focus on short-duration, senior secured lending to government contractors and counterparties.

Governments of all political stripes are making a point about needing to boost defense and infrastructure spending – unsurprising amidst geopolitical uncertainties and conflicts. Earlier this year, Germany, Europe’s largest economy, said it intended to boost spending significantly on these areas. European countries are looking to spend up to $800 billion on defense and linked sectors.

Grays Peak Capital is paying attention to such shifts, Scott Stevens , founder and CEO of the firm, told Family Wealth Report in a recent call. GPC is likely opening a European office sometime next year, he said.

As a term, “defense” can cover areas as diverse as ports, airports, maritime security, cybersecurity and power grids, he said.

GPC provides “growth acceleration capital” – a form of “bridge capital” – so that government-led programs and initiatives can be driven along, Stevens continued.

Because of the team’s cluster of experts, including those with experience in government and the military, GPC’s skillsets cannot be easily replicated. It has been able to achieve unlevered net returns in the range of 15 to 17 per cent, Stevens said. “There are a lot of barriers to entry in what we are doing,” he said. “You have to build in infrastructure to work with government.”

“We are typically in a lead position in reviewing projects…our cost of capital is typically going down,” he said.

With defense technology and solutions, many of them have dual uses in commercial markets, he said, when asked about how investors view defense from an ethical point of view.

The firm makes use of machine learning and AI in crunching through data and making sense of what opportunities to review.

“Our firm is incorporating technology and AI to make better and faster,” Stevens added.

At the time of the Fund II launch, Stevens noted that it “aims to deliver portfolios that maximize current income and total return through direct-lending exposure to private fixed income investments.”