On 19 October 2020, the European Commission launched a public consultation on EU rules for long-term investment funds. European long-term investment funds (ELTIFs) is an EU scheme to facilitate investment – through alternative investment funds – in longer-term assets such as transport and social infrastructure projects (energy, hospitals, social housing), property and small firms.
The overall objective of the consultation is to evaluate the effectiveness of the ELTIF framework and identify the reasons for the market’s failure to develop in line with expectations.
Since the adoption of the ELTIF legal framework in April 2015, only a small number of ELTIFs have launched with a relatively small amount of net assets under management. There are currently approximately 27 ELTIFs in the EU, however a number of Member States have no ELTIFs. The fact that market acceptance has not met expectations highlights the need to better understand the reasons for the low take-up and develop potential measures to address any issues identified.
By reviewing the legal and policy elements of the ELTIF framework, the Commission is seeking to increase the number of ELTIF funds and overall investment in the real economy. In June 2020, the High Level Forum (HLF) on the Capital Markets Union (CMU) made a set of specific recommendations calling for a review of the ELTIF Regulation broadening the scope of eligible assets and reducing potential barriers to investment. The Commission is assessing the recommendations from the HLF as part of the overall ELTIF review and the CMU Action Plan.