ELTIF’s investment assets & strategies –a detailed and practical analysis in the context of the ELTIF Regulation review efforts

17 septembre 2021 par
vanessa Icardi Serrami

Many have spoken about the “Second Coming of Steve Jobs” or the “Second Coming of Apple” describing the most incredible comeback known in the tech industry with the introduction of the iMac. Will the ELTIF - as a fund form - likewise make history in part due to (i) two recent private rulings delivered by ESMA and the CSSF, and (ii) the ELTIF Regulation II which first draft is scheduled to come out in Q3 2021?

In this detailed article dedicated to ELTIFs’ investment assets and strategies, Ezechiel Havrenne, lecturer at the University of Luxembourg on investment funds gives practical insight on the extent to which managers may invest in real assets (including infrastructure, real estate and IP rights) and private equity together with a proper understanding of (i) eligibility requirements, (ii) diversification rules, (iii) co-investment rules and (iv) liquidity management possibilities. He also tackles recent ELTIF trends regarding the possibility to (i) lend small or large amounts to SMEs qualifying as "sole traders" (i.e. self-employed individuals, unincorporated family businesses, partnerships and associations), (ii) lend to French and Italian-based SMEs without further local authorisation or reporting obligation, (iii) comply with the “long-term” loan regulatory requirement whilst being able to include tranching features of a shorter duration (18 months + 1 day) with or without a built-in revolving mechanism, (iv) structure the entry of equity and debt investors alike, and (v) have the ELTIF contract short-term borrowings.

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