Abu Dhabi-Based BlueFive Capital Is Reportedly Eyeing A US$3 Billion Aerospace And Defense Fund

BlueFive Capital, an Abu Dhabi-based private equity firm, is preparing to launch a fund focused on aerospace and defense investments with a target size of US$3 billion.

According to a report by Bloomberg, the firm is aiming for an initial raise of approximately $1 billion at a first close expected in the third quarter. The fund is expected to back companies whose technologies align with North Atlantic Treaty Organization (NATO) standards.  

The planned vehicle comes as defense spending across the Middle East is projected to rise, driven by heightened geopolitical tensions and growing demand for advanced military systems. According to Bloomberg, former UK Secretary of State for Defense Michael Fallon, who currently serves as a senior adviser to BlueFive Capital, has been engaging with prospective investors and target companies on behalf of the firm. 

There has been a surge in global demand for defense systems after the ongoing war in Iran triggered increased procurement activity for air-defense capabilities. Last month, the US accelerated the sale of up to $16.5 billion worth of air defense systems, radars, and missiles to Middle Eastern allies, including the UAE and Kuwait. 

Founded by former Investcorp executive Hazem Ben-Gacem in 2024, BlueFive Capital has seen impressive growth in the region. The firm sold a stake to Bahrain’s sovereign wealth fund in 2025, and its website had listed $4.4 billion in assets under management as of November the same year.