European Long Term Investment Funds (ELTIFs)

Overview: 

The European Long-Term Investment Fund (ELTIF) Regulation was established in 2015 to support greater debt and equity investments in non-listed European businesses and reduce the SME finance gap.

Current work:

The Alternative Credit Council (ACC) and the Alternative Investment Management Association (AIMA) submitted a response to the European Commission’s review of the ELTIF regulatory framework.

The ACC and AIMA outlined the need for targeted reform of the ELTIF Regulation in order to encourage the growth of market-based lending across the European Union and better align with the needs of investors. The response provides detailed comments in response to the questions posed by the review, focusing on the following aspects of the Regulation:

  • fund structuring requirements;
  • operating requirements;
  • conflict of interest and co-investment rules;
  • borrowing rules;
  • retail marketing and distribution requirements;
  • local facilities requirements; and
  • withholding tax considerations.

In addition, ACC and AIMA encouraged policymakers to refrain from using the ELTIF Regulation to target specific assets or operating models to avoid an overly prescriptive framework.

Upcoming actions: 

The European Commission is considering responses with draft legislative proposal expected in due course.

(Last updated: 29 June 2021)