Eltif 2.0

Martin Groos unpacks the journey of the European Long-Term Investment Fund (Eltif) since its promising launch in 2015, and explores whether recent reforms under “Eltif 2.0” will finally deliver success.

With the European Commission confirming on Tuesday that the Level 2 Regulatory Technical Standards (RTS) for the revised European Long-Term Investment Funds (Eltifs) regime are on track, the alternatives industry is shifting its focus towards overcoming operation challenges such as on co-investments, liquidity management and handling different tax regimes across the EU market.

The Luxembourg Stock Exchange is exploring ways to create public listings of European Long-Term Investment Funds, private market vehicles that for now are the exclusive domain of high-net worth individuals. A senior official said the bourse, also known as LuxSE, sees a particular role for itself when it comes to enhancing the exit opportunities.

Euroclear, the Brussels-based securities custodian and settlement giant, has taken a significant step forward in the private markets space by securing a partnership with BlackRock, the world’s largest asset manager.

The revamped Eltif 2.0 framework, effective since January, is breathing new life into the sector, with Luxembourg playing a central role in this expansion of the market for European Long-Term Investment Funds.

Marc Meyers and Sebastiaan Hooghiemstra at Loyens & Loeff highlight the key changes in the draft regulatory technical standards for Eltifs, and see the latest proposal by the European Commission as a “reasonably workable” match for Luxembourg’s market practice.

Creating European Long-Term Investment Funds (Eltifs) as sub-funds under existing alternative investment funds has become a bit easier in Luxembourg. Firms no longer need to fill out a separate CSSF approval form for a new sub-fund when adding an Eltif-class to an existing fund.

Moonfare is offering a golden ticket for the masses with its new app, making private equity investing as simple as ordering a pizza.

Six months after the rollout of Eltif 2.0, the BlackRock private markets team believes this updated wrapper has the potential to become the vehicle of choice for private market investment.

Luxembourg’s financial regulator CSSF plans to make public an online register of European long-term investment funds (Eltifs) later in in July. The register will be updated every month with new registrations.