The European Long-Term Investment Fund (ELTIF) Regulation came into force on 8th June 2015. This new regulation, applicable in all EU Member States as of 9th December 2015, aims to promote long-term investment in the ‘real economy’ and is part of the European Commission’s Action Plan for building a Capital Markets Union.
ELTIFs funds are a category of EU-domiciled alternative investment fund (AIF) and comply with AIFMD requirements, such as the mandatory appointment of a depositary. They benefit from a European passport and label.
Eligible assets - at least 70% of investments must be composed of non-listed companies, direct holdings of real assets with a value of over EUR 10 million, units of other ELTIFs, European Venture Capital Funds, real estate funds. Assets eligible under UCITS IV can account for no more than 30% of the holdings. ELTIF must be managed by a licensed AIFM.
Funds have a lock-up period, during which redemptions are not permitted. Full redemption is only possible after this period, however, there are special rules for private investors.
Funds can be marketed to retail and institutional investors.
Challenges and opportunities for AIF funds
- Compulsory use of a Depositary
- Investment stability
- Stringent regulatory ratios
- Transparency requirements
- Regulatory reporting
- European cross-border distribution
CACEIS helps fund managers comply with and take full advantage of the ELTIF regulations
- Depositary and custody related services
- Fund structuring and cross-border fund distribution support
- Prospectus and KIID outsqourcing services
- Execution and clearing services
- Middle and Back Office outsourcing
- Reporting services (AIFMD, risk and performance measurement, Solvency II, trade repositories, FATCA, AEOI)