Schroders Capital on Wednesday said it has launched its first European Long-Term Investment Fund, or Eltif. The fund is called the Schroders Capital Private Equity Eltif 2023 and is classified as a ‘green’ Article 8 under the EU Sustainable Finance Disclosure Regulation.
Schroders Capital Private Equity Eltif 2023 will focus on lower and mid-market private equity buyout and growth investments primarily in Europe but with the flexibility to allocate to non-European companies with high operating exposure to Europe, the firm said.
The Article 8 classification, assigned by the manager itself, reflects its environmental and/or social characteristics. Several other major asset managers, including BlackRock, are understood to be close to launching similar Article 8 Eltifs, suggesting that these funds will become a competitive space in wealth management after EU rules were recently made more flexible.
Eltifs are closed-ended investment vehicles designed to enable individual investors to better access private investment opportunities in need of long-term capital, such as infrastructure and real estate, as well as small and medium-sized companies.
Diversification benefits
“We believe that a wider range of investors should be able to benefit from the robust returns and diversification benefits that investing in private assets can deliver,” Karine Szenberg, head of Europe at Schroders said in a statement. “Schroders Capital’s first Eltif will support the long-term flow of pools of patient capital into key investment opportunities which, in turn, will support long-term savers in Europe.”
The companies in which these funds invest are typically high quality family-owned or entrepreneur-led businesses looking for a partner for their next phase of growth, Schroders said. It will invest across industrial, business services, consumer, technology and healthcare sectors with a medium to long-term investment time horizon, ranging from three to seven years.
Schroders Capital has over 20 years experience investing in private assets, although, until now, it has been mainly offered to institutional investors. The Eltif opens the strategy up to a broader universe of investors in a fund designed to meet the needs of individual investors, said Schroders.
”Schroders Capital already offers a wide range of semi-liquid solutions for a broader range of investors but we firmly believe that it is important to continue to expand individual investors’ access and ELITFs are an excellent vehicle to support these objectives,” said Georg Wunderlin, Schroders’ global head of private assets.