Debt funds play an increasingly important role in addressing the imbalance in liquidity supply/demand and helping businesses raise capital and stimulating economic growth. Regulators and policy makers in Europe are becoming aware of the benefits of non-bank intermediation and especially debt funds as they provide an alternative to the banking industry in proposing to the real economy a different source of financing with little maturity transformation and limited leverage. A key building block in the EU Commission’s Capital Markets Union (CMU) initiative for unlocking funding for Europe’s growth is to encourage “greater diversity in funding”.
Measures presented by the EU Commission in its “Investment Plan for Europe” for the short term include the implementation of the European Long-Term Investment Funds (ELTIF) regulation and ‘high-quality’ securitisation. The ELTIF regulation will enter into force in December 2015.
ALFI issued guidelines "Debt Funds - An Alternative Source of Financing for the European Economy” providing detailed information on this topic