The European Parliament voted to formally approve amendments to the European long-term investment funds (Eltif) regulation on 15 February 2023. Following its publication in the EU’s official journal on 20 March, the regulation will enter into force 20 days later--on 9 April 2023. Eltifs that have been authorised before 10 January 2024 may decide to opt-in to the Eltif 2.0 regime if they notify their national competent authority, as noted in the regulation. In Luxembourg, Eltifs can therefore be subject to the new regime starting 9 April.
A communiqué published on 20 March by law firm Elvinger Hoss Prussen in Luxembourg highlighted the benefits that the new regulation would bring to funds, including a broader scope of eligible assets, a broader definition of “real assets,” the possibility to set up fund-of-fund strategies or master-feeder structures, the removal of minimum investment thresholds for retail investors and more flexible portfolio compositions.
“Eltifs that are already authorised under the current Eltif Regulation have until 11 January 2029 to comply with Eltif 2.0, unless they do not raise additional capital, in which case they shall be deemed to comply with the revised regulation,” added the Elivner Hoss Prussen communiqué.
Eltifs can invest in long-term assets such as small and medium-sized enterprises or in energy, transport and communications infrastructure and can be distributed across borders. The first Eltif was launched in the grand duchy in January 2016. The aggregate size of net assets of authorised Eltifs was approximately €2.4bn in 2021, according to the newly published regulation in the EU’s official journal. As of January 2023, there are 84 Eltifs in Europe, with the majority domiciled in Luxembourg.