Ireland has marked a significant milestone by registering its first three European Long-Term Investment Funds (Eltifs) under the revamped European framework during April, according to the Dublin-based national financial supervisor.
The details of these funds and their issuers are set to be revealed later in the month. Amidst these developments, the private asset community in Luxembourg views Ireland’s ambitions with a degree of scepticism.
The Central Bank of Ireland (CBI), which also serves as the national financial supervisor, has confirmed to Investment Officer that the first three Irish Eltifs have been registered as sub-funds to existing alternative investment funds.
«The first three Irish authorised Eltifs were approved in early April,» stated Úna Quinn, a spokesperson for CBI, in response to emailed questions. «These three sub-funds are the only Eltif applications approved to date.»
The names of the funds will be published on the Alternative Investment Funds register when it is updated around mid-May, she added. The CBI declined to comment on individual applications but noted, «We have received a number of expressions of interest in the Eltif product following the implementation of the revised regulatory regime, and we remain open to engaging with potential applicants.»
Ireland aims to establish itself as a key hub for Eltifs, alongside Luxembourg, and has informed the industry of its capability to provide a swift, 24-hour approval process for these funds. Approvals in Luxembourg, which is Europe’s main hub for these funds, typically take several days to weeks.
Scepticism in Luxembourg
However, in Luxembourg, there is some scepticism about Ireland’s Eltif plans. At a funds conference in March, Luxembourg experts noted that the Irish fast-track approval process is only applicable to closed-end funds offered to professional investors, not to the semi-liquid retail version of the Eltif2 funds.
«The Luxembourg position and that of the CSSF has always been that proper quality of supervision and investor protection should be ensured,» said Silke Bernard, a partner at Linklaters and chair of the Alfi Eltif Working Group, during the conference. She added that the CSSF, Luxembourg’s supervisor, has significantly improved its application process in the last year.
This Irish ambitions were reiterated during a webinar hosted last month by the Irish Funds asset management association, which explored the implications of the CBI›s integration of Eltifs into an update of its rulebook for alternative investment funds.
Ireland keen to attract private assets
«This is a really significant development for our industry, improving Ireland’s ability to attract private asset investment strategies,» said Geraldine Brehony, a senior policy manager at Irish Funds, during the webinar.
Jonathan Dent, head of function for funds policy at the CBI, emphasised the collaborative approach of the supervisor with the industry. «We are aware that Ireland, as a leading global jurisdiction for fund domiciliation, did not have any domicile Eltifs, which raised questions,» Dent said, highlighting the bank’s determination to streamline the authorisation and supervision process for Eltifs.
Luxembourg is understood to have more than 40 new Eltif funds in the pipeline, according to people familiar with the fund pipeline. That would bring the total number of these funds domiciled here to above 100. Ireland serves as a domicile for about 13 such funds, created under the original EU legal framework that was established in 2015.
New Eltifs by Axa IM and Pictet
During April, Axa Investment Management stepped closer to the launch of its first Eltif fund in France. According to a registration filing, Axa is set to launch its FPS Eltif 2 Axa Financement Enterprises Eltif fund in the French market.
Pictet’s alternative asset management division last month launched an Eltif dedicated to «innovative environmental technology investments across private markets.»
The new fund, named Pictet Private Assets Sicav Environment Co-Investment Fund I Eltif, is domiciled in Luxembourg and managed by Pictet Alternative Advisors. It plans to hold between 20 and 25 investments, leveraging the firm’s extensive network of over 90 relationships with private equity managers. The fund has a fundraising objective of $400 million, a spokesperson has said.
Further reading on Investment Officer Luxembourg:
- Eltif 2.0: Esma wants its table to be reinstated into RTS
- Another 40 Eltif funds in the pipeline, say experts
- Eltif2 discussions cause slowdowns in new launches