Raymond Frenken

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.

A fresh approach to investment research that Paris-based Amundi, Europe’s only asset manager ranked in the global Top 10, adopted two years ago appears to be paying off by effectively guiding Chief Investment Officers and clients in maintaining investment discipline. “Having a disciplined way to look at the market is helpful,” Monica Defend, the head of the Amundi Research Institute, told Investment Officer in this IO Talks podcast interview.

Luxembourg’s financial supervisor CSSF is ready to conditionally give its green light for new applications of Eltif 2.0 funds, even as the market still awaits a final adoption of the regulatory and technical standards, known as the RTS, by the European Commission.

As the clock ticks down to the much-anticipated launch of the revamped EU regime for European Long-Term Investment Funds (Eltifs), the private markets world is abuzz with anticipation and a dash of uncertainty.