News

European Long-Term Investment Funds (ELTIFs) were launched with high expectations. However, regulatory uncertainties initially hindered the development of the market for these private market funds. Now, with open questions resolved, the boom is underway. “We anticipate strong growth in offerings, which will particularly benefit long-term investors,” says Michael Patzelt, Head of Sales DACH at Moventum.

ELTIFs make private markets accessible to a broader audience. They invest in private equity and private debt, infrastructure projects, and property. They are particularly suitable for investors with a long-term investment horizon. While ELTIFs are not traded daily on stock exchanges, an increasing number of providers now offer regular redemption options. “Nevertheless, capital is typically tied up for at least two years in most cases, which aligns with the purpose of the investment,” explains Patzelt. “In return, there is the prospect of above-average returns.”

The growth of the ELTIF market was delayed last year by a pending reform of the Regulatory Technical Standards (RTS) set for late 2023. However, the revised ELTIF legislation came into force in late October 2024, providing not only regulatory certainty but also greater flexibility for fund managers, advisers, and investors. The new regulations simplify options regarding minimum liquidity requirements, notice periods, redemption volumes, and frequencies, offering fund managers more variation opportunities. According to the RTS, minimum holding periods for products or investors are no longer mandatory. Additionally, ELTIFs must disclose all costs borne by investors transparently and in a comparable manner.

The impact on the market is evident: even before the legislative reform, many ELTIF authorisations were submitted. The total number of new product authorisations reached a record high in 2024, with 38 ELTIFs authorised by autumn—compared to a maximum of 20 in previous years. Most new authorisations are focused on private equity, followed by private debt and infrastructure. Half of these target professional investors, while the other half are designed for retail investors.

“The real boom is expected in the next two years,” says Patzelt. According to surveys conducted by the ratings agency Scope, investments in ELTIFs in Europe could reach £30 to £35 billion by the end of 2026. Moventum is among the pioneers in this field: “We are currently working with seven different ELTIF providers, including Allianz, Schroders, M&G Investments, and Neuberger Berman,” explains Patzelt. Moventum receives support in fund selection from FondsConsult. “Additionally, our platform offers digital transaction processing for purchases,” Patzelt adds. “In this regard, we are among the market leaders in the platform sector.”