European Long-Term Investment Funds (ELTIFs)

September 27, 2013

The European Commission published its draft proposal of a regulation regarding European long-term investment funds (“Draft Proposal”) on June 26, 2013, heralding the creation of a new type of fund with a long-term investment horizon. The ELTIF regime is intended to address specific needs of investors (such as insurance companies and pension funds) that commonly invest on a long-term basis. The asset classes in which ELTIFs are permitted to invest are expected to provide investors with long-term, stable returns. By permitting the marketing of ELTIFs to retail, as well as institutional, investors, the Draft Proposal offers retail investors the opportunity to gain exposure to long-term capital appreciation. The creation of ELTIFs aims to strengthen Europe’s “real” economy – the access to patient (non-bank) “capital” to finance long-term projects (especially tangible assets and infrastructure projects with long lives) is to be eased for businesses.

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