ELTIF 2.0 – Challenges & Opportunities

Regulation (EU) 2023/606 (ELTIF 2.0), amending Regulation (EU) 2015/760 (ELTIF 1.0) on European long-term investment funds (ELTIFs), was published in the EU’s Official Journal on 20 March 2023. ELTIF 2.0, amongst others, revises the rules applicable to eligible assets and investments, liquidity management and the distribution to retail investors. This contribution provides an overview of ELTIF 2.0 with a particular focus on its challenges and opportunities.

1. Background: “ELTIF 1.0” – A Failed “All-Purpose” Alternative Investment Fund Vehicle

ELTIF 1.0 entered into force on 19 May 2015 with the Europe 2020 strategy in mind that saw long-term finance as a crucial enabling tool for putting the European economy on a path of smart, sustainable and inclusive growth with high employment, and competitiveness for building tomorrow’s economy in a way that is less prone to systemic risks and is more resilient.[2...

Verder in dit artikel:

1. Background: “ELTIF 1.0” – A Failed “All-Purpose” Alternative Investment Fund Vehicle

2. ELTIF 2.0 – Gateway to Heaven?

2.1. Broader Scope of Eligible Investment Assets

2.1.1. Abolishment “EU” Location Requirement Eligible Assets

2.1.2. Revised “Real Asset” Definition

2.1.3. STS Securitizations & EU Green Bonds

2.1.4. Fund-of-Funds & Master-Feeder Structures

2.2. Qualifying Portfolio Undertakings

2.3. Co-investments

2.4. Portfolio Composition & Diversification

2.5. Concentration Rules

2.6. Borrowing of cash

2.7. Liquidity options: Open-end ELTIFs, “Liquidity Windows” & Listings

2.8. Removal of barriers for Retail ELTIFs

2.9. Application and Transitional Phase

3. ELTIF 2.0  - Storm in a Teacup?

3.1. ELTIFs – Primarily a Retail Vehicle

3.2. ELTIF 2.0 is not perfect…after all

3.2.1. European Obstacles Ahead: AIFMD 2, the RISD & ESMA RTS

3.2.2. EuVECA as “Competing Product” & Dutch Goldplating

4. Outlook – ELTIFs as pan-European Retail Product