ELTIFs need to be made more attractive to long-term institutional investors, federation argues

Written by Adam Cadle

19/10/2020

Europe’s insurers are urging the European Commission (EC) to make European Long-Term Investment Funds (ELTIF) more attractive by making changes around fund design, portfolio composition and eligibility of investment assets.

In its response to an inception impact assessment conducted by the EC on the revision of ELTIF regulation, Insurance Europe said “because the ELTIF legal framework has a one-size-fits-all design, ELTIFs offer institutional investors less flexibility and are less likely to meet their investment needs than other alternative investment funds”.

Insurance Europe argued that ELTIFs should not be limited to closed-end funds, but should instead be able to offer regular subscription and redemption possibilities at appropriate frequencies.

In addition, it said ELTIFs should be refined to “provide more flexibility and targeted investor protection, in particular for thresholds on portfolios of financial instruments and in regard to their strict and restrictive diversification requirements”.

The Commission’s objective in developing ELTIFs is to attract investment from institutional and private investors to increase the amount of private finance available for European companies.

Related Articles