European Long‑Term Investment Funds

The ELTIF is a pan‑European regime for AIFs allowing investors to put money into companies and projects that need long‑term capital. An ELTIF must be managed by an authorised AIFM, which benefits from a passport enabling it to offer its management services and market its AIFs (including its ELTIFs) throughout the EU.

On 15 February 2023, the European Parliament voted in favour of a major update to the ELTIF Regulation, also known as ‘ELTIF 2’ Regulation, which entered into force on 10 April 2023 and applies from 10 January 2024. ​​The key changes introduced by the ‘ELTIF 2’ Regulation are briefly summarized below:

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  Extended scope of eligible assets. Investments in UCITS or EU AIFs managed by EU AIFMs and invested in ELTIF-eligible assets are allowed. Investments in STS securitisations, Green Bonds and minority co‑investments are permitted as well. Real assets are defined broadly as “any asset that has an intrinsic value due to its substance and properties”, and the minimum investment threshold is removed.
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  Extended scope of qualifying portfolio undertakings. The maximum market capitalisation of qualifying portfolio undertakings is increased to EUR 1.5 billion.
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  More flexible portfolio composition. The minimum investment in eligible assets (i.e. long‑term illiquid assets) is lowered to 55%.
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  More flexible rules for ‘professional’ ELTIFs. ELTIFs marketed solely to professional investors can disapply portfolio composition, diversification and concentration limits. Also, the cash borrowing limit is increased to 100% of net assets for ‘professional’ ELTIFs (and to 50% of net assets for ‘retail’ ELTIFs).
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  Possibility of redemptions. In principle, investors in an ELTIF are not able to request the redemption of their units or shares before the end of the life of the ELTIF. However, ELTIFs may provide for the possibility of redemptions under specific conditions (including a minimum holding period).
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  Lighter requirements for retail investors. For retail investors, the minimum investment holding of EUR 10k and the 10% exposure cap for total portfolios below EUR 500k are removed. Furthermore, the distribution regime for retail investors is aligned to the MiFID II requirements.

We can help you to meet all regulatory requirements with efficient, flexible and cost‑effective solutions.