Each year, the Luxembourg financial center reasserts its leading position in the global financial market. Luxembourg’s reputation as a leading investment fund domicile backed by quality service among clients is built on the expertise, innovation and know-how which is clearly evident as a leading domicile for ELTIFs in Europe.
The growth in appetite for alternative investments among private individuals and their wealth managers over the past few years has outpaced that of institutional investors in relative numbers. Specifically, between 2018 and 2021, private clients and family offices boosted their share in global private equity fund raising by over 5%. Even in the face of 2022’s economic uncertainties, and a dip in their share of the total PE fundraising volume, these investors still poured in around €22 billion, matching the previous year’s figures as per Invest Europe data.$
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. As such we have seen a rise in open ended Alternative Investment Funds (AIF) to meet these needs. There has been a noticeable uptick in the launch of regulated funds in the form of ELTIFs and/or Luxembourg based UCI Part II funds over the last few years. The revised ELTIF regime or as commonly referred to as ELTIF 2.0, offers a regulatory product regime which aims to address some Regulatory challenges also play a heavily significant role, as these funds are especially subject to higher scrutiny from regulators to protect non-institutional investors. Open-ended funds, just like traditional funds, are also subject to AIFM supervision, however necessitate stricter compliance and oversight. ELTIF offers a regulatory framework (EU distribution passport) which will allow more access to Private Capital funds retail investors. In this brochure, we have outlined the main changes and consequences for fund managers as they are about to launch such products. At Deloitte, we understand your challenges and the opportunities with ELTIF 2.0. Our team of experts are able to assist you through the fund lifecycle to make an impact where it matters. We hope you enjoy the read.