Esma and the European Commission have clarified how Eltif managers must apply the “look-through” principle when investing via intermediary vehicles, settling cross-border divergences and endorsing Luxembourg’s supervisory approach. The clarification provides significant comfort to Eltif managers active in private equity, infrastructure, real assets, and private credit, where multi-layered holding structures and aggregator vehicles are common, according to Sebastiaan Hooghiemstra and Gabriël Storm of Loyens & Loeff.
On 5 December 2025, the European Securities and Markets Authority (Esma) published a series of Q&As on European Long-Term Investment Funds (Eltifs), incorporating interpretative guidance from the European Commission (EC). Among these, a particularly significant clarification addresses how Eltif managers should apply portfolio composition and risk-spreading requirements where investments are structured through intermediary entities, such as special purpose vehicles (SPVs), securitization vehicles, aggregator vehicles, or holding companies. This guidance provides long-awaited clarity on the application of the so-called “look-through” principle. Given its relevance for Eltifs we examine the EC’s position and its implications for Eltif managers.
Background: unlocking indirect investment strategies through intermediary entities
Recital (12) of Regulation (EU) 2023/606 expressly confirms that Eltifs may invest through intermediary entities, including SPVs, securitization or aggregator vehicles, and holding companies. This recital reflects market reality. Indirect investment structures are often indispensable for deploying capital efficiently into infrastructure, private equity, real assets, or private credit strategies.
By allowing investments via intermediary entities, Recital (12) aims to provide Eltifs with greater structuring flexibility, an essential feature for implementing indirect investment strategies and, ultimately, for attracting a broader range of project sponsors and investment opportunities.
Despite this clarification, uncertainty persisted as to whether intermediary entities could themselves fall within the scope of Article 10(1)(a)(iii) of the Eltif Regulation. That provision refers to equity or quasi-equity instruments issued by an undertaking in which a qualifying portfolio undertaking (QPU) holds a capital participation.
Supervisory interpretations diverged across Member States. In France, intermediary entities were generally treated as falling within Article 10(1)(a)(iii). By contrast, Luxembourg applied a “look-through” approach, assessing eligibility at the level of the underlying assets rather than at the level of the intermediary vehicle.
The Commission’s clarification: look-through prevails
The EC’s Q&A resolves this divergence decisively in favour of the look-through principle.
The EC clarified that Recital (12) does not correspond to, nor expand, Article 10(1)(a)(iii). Article 10(1)(a)(iii) concerns undertakings in which a QPU holds a capital participation, i.e. substantive target investments that must independently meet the eligibility requirements of the Eltif Regulation. Recital (12), by contrast, relates to pass-through vehicles that hold such investments on behalf of the Eltif.
In short, eligibility under Article 10 must be assessed at the level of the underlying assets or operating undertakings, not at the level of intermediary entities such as SPVs or holding companies.
Implications for portfolio composition and risk-spreading requirements
Consistent with its position on eligible investments, the EC further clarified that Eltif portfolio composition and diversification rules must likewise be applied on a look-through basis where intermediary entities are used.
Intermediary vehicles within the meaning of Recital (12) are not themselves investments. Rather, they serve as structuring tools to hold, facilitate, or channel the Eltif’s exposure to eligible investment assets. As a result, Eltif asset composition and risk-spreading requirements should not, as such, be applied at the level of these intermediary vehicles.
Practically, this means that Eltif managers may execute investment decisions through SPVs, securitization or aggregator vehicles, or holding companies, without those entities themselves being subject to the Eltif diversification rules, provided that the underlying assets comply with the Regulation.
Intermediary entities and their status as AIFs
The EC also addressed whether intermediary entities used under Recital (12) should be treated as AIFs within the meaning of Article 10(1)(d) of the Eltif Regulation.
The EC clarified that intermediary entities and Eltif-eligible target AIFs are distinct concepts. Intermediary vehicles used for structuring purposes do not automatically qualify as AIFs, nor are they required to do so.
Whether an entity qualifies as an AIF must be assessed on a case-by-case basis by reference to the criteria set out in Article 4(1)(a) of the AIFMD, as further clarified by the Esma Guidelines on key concepts of the AIFMD (Esma/2013/611). Accordingly, intermediary entities should not automatically be treated as AIFs, just as AIFs should not automatically be regarded as intermediary or aggregator vehicles.
Intermediary entities and the definition of qualifying portfolio undertakings
The EC further clarified that intermediary entities recognized under Recital (12) may be used for structuring, optimization, cost-efficiency, or other legitimate operational purposes. However, such entities are not themselves target investments and should not be confused with qualifying portfolio undertakings.
As set out in Article 11 of the Eltif Regulation, the concept of a QPU defines the characteristics of the target investment. These conditions must be assessed at the level of the underlying investment, not at the level of the intermediary vehicle.
Implications for Eltifs
With its Q&A, the EC has formally confirmed the long-standing Luxembourg interpretation that intermediary entities, such as SPVs, holding companies, and similar vehicles do not need to qualify as eligible investments in their own right under the Eltif Regulation. Nor are such entities required to qualify as AIFs or as QPUs.
Instead, intermediary entities function as conduits through which an Eltif holds its underlying investments. The eligibility of those investments must be assessed on a look-through basis by reference to the applicable Eltif criteria, including portfolio composition and diversification requirements.
This clarification provides significant comfort to Eltif managers active in private equity, infrastructure, real assets, and private credit, where multi-layered holding structures and aggregator vehicles are common. An entity-level assessment of intermediary vehicles would have rendered the Eltif framework impractical for many such strategies. The EC’s confirmation ensures that Eltif 2.0 remains workable while preserving its policy focus on substantive, long-term investments.
Dr. Sebastiaan Hooghiemstra is a senior associate in the investment management practice group of Loyens & Loeff Luxembourg. Gabriël Storm is an associate in the investment management practice group of Loyens & Loeff Netherlands. The law firm is a knowledge partner of Investment Officer.