Oct 27, 2022
Amendments to the ELTIF Regulation: A New Attractiveness for ELTIFs?
The European Long Term Investment Fund (ELTIF) was created by Regulation (EU) 2015/760 of the European Parliament and of the Council of 29 April 2015 on European long-term investment funds (the “Regulation”), which has been applicable since 9 December 2015. It was conceived as a hybrid product, applying the rules arising from the Alternative Investment Fund Managers Directive (AIFMD) to the management of funds, and rules similar to the ones arising from the Directive on Undertakings for Collective Investment in Transferable Securities (the “UCITS Directive”) for what relates to investments restrictions, diversification and concentration rules. The co-existence of those two regimes is intended to allow the ELTIF to be an alternative investment fund (AIF) open to retail investors
The rationale underpinning the creation of the ELTIF was twofold:
- the creation of a new tool that could participate in financing the European real economy and certain particular projects or entities, for which bank financing can sometimes be scarce, such as infrastructure projects, financing of unlisted companies and small and medium enterprises; and
- this alternative source of financing was aimed at offering access to retail investors to an investment product that could offer better returns than UCITS, which were, at the time, the sole harmonised investment funds available to retail investors within the European Union.
The new Alternative Funds 2022 guide covers 17 jurisdictions. The guide provides the latest legal information on fund structures, tax regimes, double-tax treaties, disclosure/reporting requirements, the legal structures used by fund managers, the rules concerning permanent establishments, the marketing of alternative funds, and FATCA/CRS compliance regimes.
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