On December 9th 2015 the European Long Term Investment Fund
("ELTIF") became directly applicable in each Member State
of the European Union on the path to a smart, sustainable and
inclusive economy. Private equity, infrastructure projects,
aircraft, real assets and other illiquid assets investments will be
facilitated for professional and retail investors. The ELTIF
regulation complements the European Venture Capital Funds (EuVECA)
and the European Social Entrepreneurship Funds (EuSEF) regulations,
which have been applicable in all EU member states since July 2013.
With this new regulation, the commission wants to stimulate growth
and create jobs in these sectors.
What are the key features?
✓ a min. of 70% of the capital has to be invested in
"eligible investment assets" meaning equity and debt
instruments issued by, or loans granted to, nonfinancial, unlisted
companies of lasting duration, and also real assets with a value of
at least €10 million;
✓ an ELTIF is not allowed to invest
more than 10% of its capital in units or shares of one or
several other ELTIFS,
European Venture Capital Funds (EuVECAs) and
European Social Entrepreneurship Funds (EuSEFs),
EuVECAs and EuSEFs are not allowed to invest more than 10% of
their capital in ELTIFs;
✓ the investments have to be made in accordance with
certain specific diversification rules. The amounts that are
invested in the capital of individual eligible undertaking or real
assets have to be restricted.
✓ ELTIFs may not borrow more than 30% of their
✓ investors have limited redemption rights
no redemption may occur before 5 years from the date of
subscription and half the life of the ELTIF
the amount of redemptions granted within a given period are
restricted to a percentage of the ELTIF's more liquid,
UCITS-eligible assets (if any);
side letter agreements are not permitted
all investors must benefit from equal treatment
no preferential treatment or specific economic benefits may be
granted to investors
✓ ELTIFs are subject to various product and transparency
requirements, mainly the compliance of their AIFM with the
Alternative Investment Fund Managers Directive, including
publication of a prospectus.
How can we help?
We are an experienced provider of administration services to
both regulated and unregulated structures.
With the ELTIF being a hybrid investment vehicle we have the
proven capabilities to guide our clients in launching this new
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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