ELTIFs

Current review

The 2024 revision of the ELTIF framework introduced important changes to the framework at the request of the industry:

• Broadening of eligible assets and of eligible investors

• Amendments making it easier for ELTIF Fund-of-funds to be set up

• Eased diversification and concentration requirements (and removal of some of these requirements for professional-only ELTIFs)

• Increased borrowing limits (and exclusion of borrowings backed by uncalled commitments from the calculation)

• New rules on conflicts of interest favorable to co-investments

• New redemption facilities at managers’ discretion

Since 2024, Invest Europe has engaged with the European Commission, ESMA and Member States to ensure the spirit of the law is not impacted by technical provisions.

How does it affect private equity?

The Regulation provides opportunities for private equity managers to establish a new product under the ELTIF label. While this involves complying with both the AIFMD and the ELTIF Regulation, it may be attractive for some AIFMs to use the strength of the ELTIF brand to attract a wider pool of backers, particularly retail investors. "Semi-liquid" funds should find the ELTIF of particular relevance.