ACC publishes guide to ELTIF 2.0

Published: 21 March 2023

The Alternative Credit Council (ACC), the private credit affiliate of AIMA, has published a paper outlining the key features of the new European Long Term Investment Fund (ELTIF).  The paper, produced in partnership with EY, provides a comprehensive summary of the new regime and highlights the key changes that have been introduced into ELTIF framework including:

  • Greater differentiation between the rules for ELTIFs marketed to professional and retail investors.
  • Improved retail distribution possibilities for ELTIF managers.
  • Improved flexibility for ELTIF managers through:
    • Increased cash borrowing limits (100% for professional, 50% for retail);
    • Reduction in the minimum assets thresholds to 55% (down from 70%) and expansion of eligible assets criteria;
    • Less restrictive approaches to ELTIF form, liquidity profile and redemption policy (with ESMA tasked with developing RTS to provide further guidance on this point);
    • More proportionate conflict of interest provisions;
    • Less prescriptive approaches towards portfolio diversification and concentration limits;
    • More opportunities for ELTIFs to participate in fund of fund structures; and
    • Clarification around the use of ELTIFs in master-feeder structures.

The ELTIF 2.0 reform has now been published in the EU Official Journal and will apply from 10 January 2024 onwards. The European Securities and Markets Authority (ESMA) will submit draft Regulatory Technical Standards on areas relating to liquidity management to the European Commission by 9 January 2024.  A consultation is expected to take place in Q2 2023.

For more information, please contact Guillermo Pérez Molina.