Search for:

Luxembourg positions itself as the leading European jurisdiction for launching ELTIFs under the new regime

In brief

The regulatory reform of the European long-term investment funds (ELTIFs) enters into force on 10 January 2024, following its approval by the European Parliament and the Council in February 2023.

Regulation (EU) 2023/606 (“Regulation“) aims at revitalizing a vehicle that was put in place back in 2015 but which, in the words of the Regulation itself, “did not scale up as expected.”

With this in mind, the new regime tackles the shortfalls identified both on the managers’ side, as they will now find themselves dealing with a much more flexible product in items such as eligible assets, borrowing, or concentration and diversification rules, as well as on the side of the investors, notably retail investors, whose access to this investment product now becomes simpler.

In Luxembourg, which has positioned itself as the main European hub for ELTIFs (as more than 50% of the total ELTIFs authorized in Europe are domiciled in Luxembourg as of the date of this publication),1 market actors are keeping a close eye on that cornerstone, while it remains to be seen what the practical application of the reform will be.


For further information and to discuss what these new developments mean to you as an ELTIF manager, distributor or investor, please get in touch with your Baker McKenzie specialist.

Click here to read the full alert.


1 Register of authorized European long-term investment funds: https://www.esma.europa.eu/document/register-authorised-european-long-term-investment-funds-eltifs.

Author

Catherine Martougin is a partner in the Funds & Asset Management team of the Baker McKenzie Luxembourg office. She has more than 20 years' experience in business law. Prior to joining the Firm, she practiced in elite international law firms in Paris and Luxembourg.

Author

Laurent Fessmann is a Banking & Finance partner specializing in the formation and structuring of Luxembourg investment funds. He is a former managing partner of the Luxembourg office and the current co-chairman of the Baker McKenzie's Global Funds Steering Committee. He started his career in 1996 as in-house counsel in a French CAC40-listed company where he worked intensively on LBO transactions, capital markets and corporate law matters. Mr. Fessmann joined a Luxembourg business law firm where he became a partner prior to founding his own law firm in 2009. He is a highly regarded professional and recognized legal professional in Chambers, Legal 500, IFLR notably. He contributes time and knowledge in several market participant industry associations in particular as co-chairman of the ABBL/ALFI depositary forum working groups, the European Public Real Estate Association, the Luxembourg Private Equity Association and the Association of Global Custodians. He is also a regulator at fund conferences such as ALFI, IBCI and regularly invited to speak on internal or bank seminars.

Write A Comment