European Long Term Investment Fund (ELTIF)

The European Long Term Investment Funds (ELTIFs) 2015/760 EU regulation provides a framework for Alternative Investment Funds, that specifically invest in long term investments such as social and infrastructure projects, as well as real estate, across the European Union. The objective of the regime is to promote investment by insurance and pension funds, by both professional and retail investors, as a non-banking source of finance. Since the launch of ELTIFs in 2015, there has been minimal growth in the market, with assets under management (AUM) less than €2 billion, and approximately 27 ELTIFs in total. The lack of uptake led the European Commission to launch a review of the regulation in 2021, to establish the causes of the failure and improve the activeness of ELTIFs. The outcome of the revitalisation efforts notably raised the leverage limit to 50% for retail investors and 100% for professionals, and greater flexibility regarding product design and eligible assets.

The changes introduced by the reviewed framework are in line with ISLA’s ambitions to broaden the scope of application of the regime, which encourages adoption more widely.