Legal Ease: Eltifs’ bright future in France

Hong_Ma_and_Stanislas_HaurensEU proposals that should make ELTIF fund structures more accessible could prove particularly helpful for asset managers in France who target retail investors, say Ngoc-Hong Ma and Stanislas Haurens of Linklaters, Paris.

European Long Term Investment Funds (Eltifs) are alternative investment funds benefiting from a marketing passport for both professional and retail investors across the EU and investing in long-term assets subject to specific diversification rules. Designed to channel private savings into long-term investment in the real economy, Eltifs were introduced in 2015. The market has been slow to grow: only 68 have been set up since 2015 in four jurisdictions (Luxembourg, France, Italy and Spain). However, it has been rapidly growing. The volume of Eltif assets was recently estimated to be over €7 billion (compared to around €2.4 billion in 2021).

Proposed amendments
A review process of the Eltif Regulation to foster growth is ongoing. The latest proposal stems from the negotiating position of the Council published in May 2022. In line with recommendations from both national regulators and market associations, the current amendment proposal looks to:

  • increase the access of retail investors to Eltifs by removing the €10,000 minimum investment threshold and the aggregate maximum 10% threshold of the relevant investor’s own financial portfolio and by aligning the specific suitability assessment with the standard MiFID II assessment;
  • impose lighter requirements for Eltifs limited to professional investors, in particular by removing most of the various diversification ratios and increasing the leverage limit for borrowings of cash (from 30% of the Eltif capital to 100%); and
  • generally lower the requirements applicable to Eltifs (limited to professional investors or not) by lowering the minimum investment threshold in eligible assets from 70% to 60%, expanding the possibility of carrying out a fund-of-fund streategy, raising the threshold market capitalisation threshold for eligible portfolio companies (from €500 million to €1 billion), easing the investment by Eltifs in special purpose vehicles, etc.

France’s further incentives
In France, the new Eltif regime could prove to be crucial. Eltifs are the only loan-originating funds that may be marketed to retail investors in France. However, existing entry barriers make it difficult to actually market to retail investors. The removal of these restrictions will make it a very viable option for lending strategies marketed to retail investors.

Similarly, non-Eltif French professional funds authorised to originate loans are limited in their ability to distribute the loans they have granted. Eltifs are not subject to such limits, and together with their future lighter regime, should constitute a very competitive option for professional lending strategies.

Lastly, we note that while the French retail market is mostly accessed through unit-linked life insurance, French insurance law prohibits investment in foreign alternative investment funds through such unit-linked insurance policies. Therefore, setting-up Eltifs in France compared to other EU jurisdictions could prove essential to targeting the French retail market.

Ngoc-Hong Ma is a partner and Stanislas Haurens is an associate in the financial regulation team at Linklaters, Paris

© 2022 funds europe

Thought leadership


What should investors expect in 2024?

For the year ahead we expect lower growth, lower inflation and limited interest rate easing. Find out more in AXA IM’s Outlook 2024.

Ocorian switching admins native

Why are managers switching fund administrator?

13% of alternative fund managers are looking to switch their fund administrator over the next 18 months. Find out why.



This whitepaper outlines key challenges impeding the growth of private markets and explores how technological innovation, when bolstered by the operational experience and global reach of FMIs, can provide solutions to unlock access to private market funds for a growing investor base.


Transporting goods by sea is the lowest carbon way of transporting goods. That said, the shipping sector contribute 3% of global carbon emissions, so we need it to get to net zero. Breakthrough technologies have the power to reshape the industry and drastically reduce its environmental footprint.


Executive Video Interviews

Why fund admin tech is a key competitive advantage

Cian Hyland, Strategic Client Relationship Director at Deep Pool Financial Solutions spoke to us about how technology enables efficient data management, reporting automation and secure data access.

Insights from State Street

Cuan Coulter, Global Head of Asset Managers and Head of UK and Ireland at State Street, discusses how fund managers decide between the two cross-border fund domiciles, namely Ireland and Luxembourg, and why asset managers find managing data so difficult.

Unlocking access to private markets

Vincent Clause, who heads the global funds strategy at Euroclear and David Genn, CEO of Goji, sit down with Funds Europe to explain how technological innovation, bolstered by operational experience and global reach, can provide solutions that unlock access to private markets.

Sustainable investing in the DC world

Claire Felgate, a specialist in UK defined contribution pension schemes at asset manager BlackRock, talks with Funds Europe editor Nick Fitzpatrick about how - and the pace at which - DC pension schemes are adapting to the requirements of sustainable investment.



Watch our webinar for a deep dive into the findings of the fresh-off-the-press EU Taxonomy 2023 Insights Report, based on Clarity AI's best-in-class coverage of EU Taxonomy reported data and CDP industry-leading environmental datasets. 

In this webinar, we discuss tools for optimising fund data management and distribution, the role of global fund classifications and ratings, and how technology and automation enhance data integrity and insights.