European Long Term Investment Funds: a bright new idea to foster the European economy

On December 9, the European Commission regulation creating European Long Term Investment Funds (ELTIFs) will come into force, as part of broader efforts to channel private sector savings and investment capital into the continent’s ‘real economy’ and boost recovery from the downturn of the past few years.

As the European Union’s foremost cross-border investment fund jurisdiction, with broad experience with both UCITS and Alternative Investment Funds, Luxembourg should be well placed to become a centre of expertise in the new vehicles. However, speakers at the Linklaters Luxembourg ELTIF Conference, held at the Neimënster complex in Luxembourg City on October 6, say the development of ELTIFs into a mainstream investment option for institutions and affluent individuals could well be a gradual process.

Key points:

  • ELTIFs represent the first bridge from the AIFMD framework toward the non-professional public
  • A dedicated law will create legal certainty as well as placing ELTIFs within the broader framework of Luxembourg fund products
  • By bringing capital collection and investment vehicles together, ELTIFs could make structures less complicated and costly, and would make the demonstration of substance easier
  • Second-tier institutional investors may not have the capability to assess individual assets but understand the economic case for using long-term assets to meet long-term liabilities
  • ELTIFs are essentially a way to encourage a wider range of sources for financing the EU economy, in line with the Commission’s objective of sustainable growth and job creation
  • You can download the full report of the speakers’ discussion here and view a video summary of the conference here.

Should you wish to discuss any of the issues raised or require further information, please do not hesitate to get in touch with your usual Linklaters contact.

Save the date:
4 February 2016 – Linklaters Luxembourg 6th Annual Magenta Horizons Event