Expert View

A new dimension for ELTIFs

Date: 18 July 2023

Asset managers are eager to unlock the true potential of ELTIFs and cater to the growing demand for long-term investment options. Choosing the right provider for fund administration and transfer agency services is crucial for seamless operations and superior investor experiences. efa, with its expertise in administering liquid, illiquid and hybrid funds, is a top contender in the market.

The Changing Landscape and ELTIF 2.0

In 2015, the European Parliament's Regulation (EU) 2015/760 launched ELTIFs with the aim to channel investments into long-term projects and businesses in need of capital. Designed for investors seeking long-term investment opportunities beyond traditional stock markets or UCITS funds, ELTIFs offer diversification and risk-spreading benefits. With a focus on real assets, ELTIFs enable investments in sectors such as infrastructure, renewable energy, and real estate. By catering to retail and professional investors, ELTIFs have the potential to become a complementary source of financing for the European real economy.

Recognizing the need for improvements, the ELTIF Regulation was revised, with Regulation (EU) 2023/606 and will apply from 10 January 2024. The proposed changes aim to enhance the appeal and effectiveness of ELTIFs, while addressing the shortcomings of the original framework. Key amendments include broader eligibility criteria for assets, increased flexibility in fund rules, improved access for retail investors, and harmonization with MiFID II regulations. These changes aim to stimulate investor interest and encourage asset managers to explore the potential of ELTIFs. The entry into force of the revised Regulation is supported by Luxembourg in the sense that ELTIF will be exempt from the subscription tax and will have access to a broader range of available legal structures.

The challenge of Fund Administration and Transfer Agency Services

When launching an ELTIF, asset managers should carefully consider the selection of a reliable provider for fund administration and transfer agency services. One such provider is efa, offering a comprehensive range of ELTIF fund services. As an established player in the industry, efa has a track record of successfully administering liquid, illiquid, and hybrid funds. efa’s expertise in fund administration, transfer agency, and investor servicing ensures efficient operations and seamless investor experiences.

  • Fund administration plays a crucial role in ELTIFs. Fund accounting, financial reporting, investment compliance monitoring for highly heterogeneous assets are key to ensure compliance with regulatory requirements. With portfolios combining and liquid and illiquid investments, ELTIFs require robust systems and expertise to handle valuation, pricing, and NAV calculations. Asset managers should seek a fund administration provider with a proven track record, advanced technology solutions and a deep understanding of the regulatory ground of such products.
  • Flexible and efficient transfer agency services are vital to ensure the success of your ELTIF. While it remains of upmost importance to ensure a smooth investor journey, as ELTIFs cater to both retail and professional investors, it becomes imperative to offer a seamless and transparent investor experience for both type of investors.
  • efa offers premium TA services, out of a same platform for both liquid funds and illiquid funds, serving indifferently investment funds with professional investors, with well-informed investors or with a large retail investor base. This technological bias allow us to seamlessly accommodate hybrid set-up, from pure subscription model, to capital call mechanism, and to offer on-the shelf solutions that will allow the funds to meet its statutory liquidity obligations (redemption processing, gating management, liquidity management tools).
  • efa ensures swift and accurate transaction processing, fostering investor confidence and satisfaction.

Considering this favourable environment and the revised regulation, ELTIFs are set to become more attractive and gain access to a broader range of investors: efa is a strong partner to support fund managers in the launch of their ELTIFs.

For more information on how efa can help you, please visit the ELTIF page or contact us