European Long Term Investment Funds (ELTIFs)Updated on Friday 10th June 2016
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European Long Term Investment Funds (ELTIFs) represent a strategy dedicated to long-term investments. This type of fund is the result of the European Commission's policies, which established a financial vehicle dedicated to further develop the European economy. As such, it set up a European framework for long-term investments dedicated to professional investors, as well as retail investors.
The legislative proposal was made in June 2013. It was adopted in November 2014 and it became applicable from the beginning of 2016. Foreign investors interested in the investment environment available in Luxembourg can receive assistance on this matter from our financial experts.
ELTIFs - main characteristics
Foreign investors interested in setting up ELTIFs in Luxembourg should know that the state complies with the European directives, which have recently been introduced.
ELTIFs were created as a long-term measure which will ensure a high level of capital for investments in Europe. It is considered that this type of vehicle will provide to investors stable returns.
According to the Regulation EU 2015/760, the ELTIFs will provide long term financing to infrastructure projects, unlisted companies, or listed small and medium enterprises (SMEs) which have equity or debt with no buyer.
The ELTIFs in Luxembourg address to the needs of investors who have companies with activities in the insurance and pension market, which require a stable level of long-term investments.
ELTIFs provide protection to the professional and retail investors with financial activities in the European Union. The legislation in this sense offers a higher level of protection to retail investors; our financial representatives in Luxembourg can provide you with more information on the ELTIFs legislation.
ELTIFs - eligibility in Luxembourg
According to the European legislation on alternative investment fund managers (AIFM), only the alternative investment funds established in the European Union which are managed by AIFM can be eligible to ELTIFs.
The EU legislation also stipulates that ELTIFs must invest 70% of the capital in long-term investment assets, while the rest of 30% can be invested in other types of assets.
If you need further information on the ELTIFS in Luxembourg, please contact our financial consultants, who can provide you with assistance on the new directive.