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B. G., Opalesque Geneva: The European Union has decided to make European long-term investment funds (ELTIFs) more attractive and easier to invest in by removing obstacles in its regulatory framework. The redesign of the ELTIF framework will allow Europe to channel more financing to SMEs and long-term projects which will help achieve the digital transition.
ELTIFs are the only type of funds dedicated to long-term investments that can be distributed on a cross-border basis to both professional and retail investors. However, since the adoption of the regulation in 2015, only a few ELTIFs have been launched due to significant constraints on the demand side and stringent rules for the supply side. The co-legislators intend to overcome a number of those limitations. They clarified in particular the scope of eligible assets and investments, the portfolio composition and diversification requirements, the conditions for borrowing and lending of cash, and other fund rules, including sustainability aspects.
Since ELTIFs are designed to channel long-term investments, they are well placed to help finance inter alia the green and digital transitions and SMEs.
The Alternative Investment Management Association (AIMA) and its private credit affiliate, the Alternative Credit Council (ACC), which have assisted EU policymakers in the making of this new framework, welcomed the political agreement.
"The new rules will make it easier for asset managers to launch products tha...................... To view our full article Click here
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