ELTIF 2.0: New era for Asset Managers to embrace opportunities for long-term investments
Each year, the Luxembourg financial center reasserts its leading position in the global financial market. Its particular reputation as a leading investment fund domicile has been built on expertise, innovation and high-quality customer service. As such, it comes as no surprise that it is also a leading domicile for European Long-Term Investment Funds (ELTIFs).
Introduction
Appetite for alternative investments among private individuals and their wealth managers has increased over the past few years, outpacing that of institutional investors. According to Invest Europe data, between 2018 and 2021, private clients and family offices boosted their share in global private equity fundraising by over 5%. Even in the face of 2022’s economic uncertainties and a reduced proportion of total private equity (PE) fundraising volume, these investors still poured in around €22 billion, matching the previous year’s figures.
High-net-worth individuals (HNWIs) are increasingly pursuing investments that offer long-term capital appreciation, preservation of capital for generations to come, and positive impacts on social and environmental issues. To meet these preferences, we have seen a rise in open-ended Alternative Investment Funds (AIFs) over the last few years, particularly with regulated funds in the form of ELTIFs and/or Luxembourg-based Undertakings for Collective Investment (UCI) Part II funds.
The revised European Long-Term Investment Fund regime, commonly referred to as ELTIF 2.0, offers a regulatory product regime designed to address some of the previous regulatory challenges. This plays a significant role, as these funds are specifically subject to higher regulatory scrutiny in an effort to protect non-institutional investors. Open-ended funds, just like traditional funds, are also subject to Alternative Investment Fund Manager (AIFM) supervision, however they require stricter compliance and oversight. With its EU distribution passport, ELTIF’s regulatory framework will give retail investors increased access to private capital funds.
In this brochure, we have outlined the main changes and consequences fund managers will face as they launch these products. With ELTIF 2.0, there are both challenges and opportunities. From start to finish, our team of specialists can support you throughout the fund lifecycle.
ELTIF 2.0 Key Changes
ELTIF 2.0 Impact
ELTIF 2.0 Services we offer
