Press release: ELTIF reform critical to boost finance options for EU SMEs

Published: 21 December 2021

AIMA and the ACC strongly support the reform of the European Long Term Investment Fund (ELTIF) regime introduced in November by the European Commission and have published their position paper that details further refinements of the proposals.

ELTIFs are funds that invest in unlisted companies and projects, focusing on parts of the economy that often lacks access to traditional finance. As banks continue to retrench, ELTIFs can mobilise the growing levels of private capital to address the financing gap felt by SMEs and mid-market companies throughout the EU.

The ELTIF is now ready to become a key pillar of the Capital Markets Union and support greater investment in the real economy across the EU. Maximising ELTIFs’ potential will be vital for SMEs and mid-market businesses as they respond to the twin challenges of COVID-19 and the sustainability transition.

AIMA and the ACC welcome the proposals to expand the eligible assets that ELTIFs are permitted to invest in and the operational flexibility that has been introduced for ELTIF managers. Combined with the more efficient distribution of ELTIFs to retail investors, these reforms will ensure that ELTIFs are aligned to the needs of their investors while also offering them attractive returns.

Jiří Król, Global Head of the Alternative Credit Council, commented: “Now that we’ve had some time to digest the detail of the legislative proposals and gather feedback from the industry, we can confidently state that, if accepted by the co-legislators, these reforms could result in a significant new pool of capital being available to the EU economy. Our estimate is that ELTIF assets could reach more than US$100 billion within five years of the reforms passing and become the most successful financial services product since UCITS. While we have today published suggestions for further improvements, it is essential for co-legislators maintain the core of the EC’s proposals.

To request a copy of the ACC’s position paper please contact [email protected].


Media Contacts:

Drew Nicol, Associate Director, Research and Communications AIMA ([email protected])

About ACC

The Alternative Credit Council (ACC) is a global body that represents asset management firms in the private credit and direct lending space. It currently represents 200 members that manage over US$450bn of private credit assets.

The ACC is an affiliate of AIMA and is governed by its own board which ultimately reports to the AIMA Council.

ACC members provide an important source of funding to the economy. They provide finance to mid-market corporates, SMEs, commercial and residential real estate developments, infrastructure as well the trade and receivables business.

The ACC’s core objectives are to provide guidance on policy and regulatory matters, support wider advocacy and educational efforts and generate industry research with the view to strengthening the sector's sustainability and wider economic and financial benefits. Alternative credit, private debt or direct lending funds have grown substantially in recent years and are becoming a key segment of the asset management industry. The ACC seeks to explain the value of private credit by highlighting the sector's wider economic and financial stability benefits.

About AIMA

The Alternative Investment Management Association (AIMA) is the global representative of the alternative investment industry, with around 2,100 corporate members in over 60 countries. AIMA’s fund manager members collectively manage more than US$2.5tn in hedge fund and private credit assets. AIMA draws upon the expertise and diversity of its membership to provide leadership in industry initiatives such as advocacy, policy and regulatory engagement, educational programmes and sound practice guides. AIMA works to raise media and public awareness of the value of the industry.

AIMA set up the Alternative Credit Council (ACC) to help firms focused in the private credit and direct lending space. The ACC currently represents over 200 members that manage US$450bn of private credit assets globally. AIMA is committed to developing skills and education standards and is a co-founder of the Chartered Alternative Investment Analyst designation (CAIA) – the first and only specialised educational standard for alternative investment specialists. AIMA is governed by its Council (Board of Directors).