Raymond Frenken

Protracted discussions over the EU’s new regime for European Long Term Investment Funds, known as Eltifs, are delaying the launch of new funds for these private asset investments.

Switzerland is preparing to step up competition with Luxembourg as a fund domicile for alternative investment funds. The industry, however, is not convinced that the Swiss alternative can fully match the international success of Luxembourg Raifs.

From next month, the Swiss will allow management companies to create a new type of fund known as L-QIF that will compete with the successful regime for Reserved Alternative Investment Funds, or Raifs, first made possible in the Grand Duchy in 2016.

Berlin-based Moonfare said it plans to create a dedicated secondary liquidity mechanism that enables retail investors in Eltif 2.0 funds to unwind their holdings before the fund matures.

As the global investment community grapples with a fluctuating market and evolving attitudes towards ESG (Environmental, Social, and Governance) funds, a nuanced story is emerging from Europe. This narrative, against the backdrop of Amundi’s “Responsible Investment Views 2024” report and innovative steps by Mirova and Robeco, is further illuminated by Morningstar’s latest findings on global sustainable fund flows.

The European Commission is contemplating an alternative route towards a swift adoption the EU’s regulatory and technical standards for the forthcoming generation of European Long-Term Investment Funds under the new Eltif 2.0 regulation.

Europe’s biggest asset manager Amundi calls on its peers in financial sector to better serve clients by stepping up efforts to bring greater clarity on the use of standards and regulations that govern responsible and sustainable investing. 

A data analysis by Investment Officer makes clear that alternative investment fund managers in Luxembourg increasingly prioritise launching new sub-funds or compartments under established Reserved Alternative Investment Funds, known as Raifs, instead of launching new primary structures.

The European Commission expects to provide more clarity on the proposed supervisory standards for Eltifs, Europe’s new long-term investment funds, in the coming weeks, an EU official said on Tuesday.

In response to questions by Investment Officer, the official confirmed the Commission is currently considering the draft regulatory and technical standards under the updated regime for Eltif funds. The standards, known as ‘RTS’, were proposed a month ago by the European Securities and Markets Authority, Esma.

Fixed income portfolios are likely to face a more complex and volatile environment, as the rate cycle’s turning point varies across different central banks. Market consensus suggests that while easing may begin, it will not be as rapid or deep as previously anticipated, leading to greater dispersion of returns across sovereign bond markets.

The trade association representing Europe’s fund and asset management sector has urged the executive body of the European Union to ensure that the correct technical standards are introduced. These standards are regarded as vital for the success of the new regime for European Long Term Investment Funds, known as Eltif 2.0.