European Long-Term Investment Funds (ELTIFs) | Framework
Launched in 2015, European Long-Term Investment Funds (“ELTIFs”) were created as part of the Capital Markets Union (“CMU”) to boost European long-term investments in the real economy. They are key vehicles in the EU’s drive to increase capital flows into investments such as social and infrastructure projects, real estate and SMEs. ELTIFs have the potential to become an important tool in supporting both the EU’s ambitious Green Deal agenda and the digital single market.
ELTIF Regulation | Update
On 10 January 2024, ELTIF 2.0 entered into application. This new regime introduces:
- relaxed regulations for ELTIFs distributed solely to professional investors;
- lighter requirements for retail investors while maintaining safeguards;
- a broader scope of eligible investments; and
- fund-of-funds structures.
On 19 July 2024, the European Commission adopted the Commission Delegated Regulation supplementing the ELTIF Regulation (the “ELTIF CDR“), thereby finalizing the long-awaited regulatory technical standards for European long-term investment funds (ELTIFs) under the revamped ELTIF 2.0 framework. Despite some delays and what could be described as a legislative thriller, the outcomes are perceived as a successful reconciliation of the needs for flexibility given the large variety of conceivable ELTIF strategies and the key principles of retail investor protection that are central to the ELTIF label.
