What is ELTIF? A financial expert explains it

What is ELTIF? A financial expert explains it

According to a report by www.faz.net, the ELTIF (European long-term investment funds) has existed in Europe since 2015, which enables private investors to invest in long-term, alternative investments. Examples include private equity, private debt, infrastructure projects and real estate projects. However, there have so far only been a few ELTIFs and the assets invested have been comparatively small. The financial industry criticized the ELTIF regulations as too complicated and inflexible.

An analysis by the analysis company Scope shows that a total of only 77 ELTIFs had been launched by the end of 2022. The invested assets amounted to a good 11 billion euros. In comparison, fund companies in the EU manage significantly more assets with 13 trillion euros, primarily in equity, bond and mixed funds. The distribution is reversed: only 10 percent of assets are tradable on stock exchanges, while 90 percent are not listed. This creates an injustice as only large investors can participate in such projects.

The lack of success of the ELTIF could have far-reaching effects on the market and the industry. Due to the limited range of alternative investments, private investors have fewer diversification options in their portfolios. In addition, companies that rely on private assets could have less capital available. This could have a negative impact on competitiveness and innovation in various industries.

It is therefore important that the ELTIF regulations are revised and made more flexible in order to give private investors easier access to long-term, alternative investments and to make investing in these assets more attractive.