The European Long-Term Investment Funds (ELTIF) Regulation aims to give impetus to economic recovery. It entered into force on 9 December 2015.
Like the funds subject to the Alternative Investment Fund Manager Directive (AIFMD) legislation, ELTIF must have an authorised alternative investment fund manager, but similar to UCITS, their pan-European marketing ‘passport’ allows them (under certain conditions) to be sold to individual investors who may not necessarily be classified as professional or sophisticated. The regulator (CSSF) published a dedicated application form on its website for those seeking authorisation as a European Long-Term Investment Fund and authorisation to manage the ELTIF.
ELTIFs are an initiative of the European Commission under its Capital Markets Union plan. They are a pan-European regime for Alternative Investment Funds (AIF) which channel the capital they raise into European long-term investments in the real economy in order to achieve growth and create jobs.
The ELTIF represents a milestone in the development of the cross-border European long-term funds business. Their long-term focus distinguishes them from most existing investment vehicles and they are therefore particularly suitable for institutions such as pension schemes and insurance companies with long investment horizons, as well as complementing and diversifying individuals’ savings portfolios.