The proposal to create a further type of fund vehicle – European Long-Term Investment Funds (ELTIFs) – has taken a significant step forward in that the European Council has approved a compromise with the European Parliament (see link to compromise text).
Regulatory Roundup 50 advised that an ELTIF is designed to be a long term investment to provide monies for projects such as infrastructure development. As such, an ELTIF will set a specific term for the vehicle before which an investor will not be able to request redemption (although the Regulations allow the possibility of both a temporary extension of the term period and early redemption). Having said that, the Regulations do not prohibit the shares or units in an ELTIF from being traded on a regulated market or MTF.
Although only EU AIFs will be able to market themselves as ELTIFs, the vehicle will be open to both retail investors that meet specific parameters and investment by UCITS. In addition the authorisation of an ELTIF will be valid for all Member States.