The European long-term investment fund (ELTIF) is a pan-European framework for Alternative Investment Funds (AIFs). These funds raise capital and invest it directly into long-term projects that support the real economy, focusing on priority areas aligned with the EU’s goals for smart, sustainable, and inclusive growth.

Luxembourg, a leading jurisdiction for ELTIF

As of July 2025, the ESMA Register lists 211 ELTIFs in the EU, with 124 domiciled in Luxembourg, nearly 60% of the total. Most Luxembourg ELTIFs invest in infrastructure, private equity, and private debt, and are marketed across multiple European countries.

ELTIFs are governed by a clear regulatory framework that offers investors access to a diversified range of long-term alternative assets while ensuring investor protection.

Characteristics of an ELTIF

The ELTIF plays a central role in the EU’s strategy to attract private investment into sectors like infrastructure, real estate, sustainable energy, transport, SMEs, and newly eligible financial institutions like FinTechs.

An ELTIF must be authorised and supervised by the competent authority in the European Economic Area (EEA), and its manager must be a licensed EEA Alternative Investment Fund Manager (AIFM). Thanks to the EU/EEA cross-border distribution passport, ELTIFs can be marketed to institutional, professional, and retail investors across the EEA. This positions the ELTIF as a cornerstone in advancing a truly cross-border European investment landscape.

55% of the ELTIF capital must be invested in qualified eligible investments, which are a mix of long-term and liquid assets. Eligible investment assets may include exposures to qualifying portfolio undertakings (including equity, quasi-equity, debt and loans); real assets; units or shares of one or several other AIFs; certain securitisations; and green bonds. ELTIFs can also invest in eligible assets for UCITS (Undertakings for Collective Investment in Transferable Securities) such as equities, bonds and other UCITS.

What can an ELTIF look like?

The ELTIF framework offers flexibility, allowing fund managers to structure ELTIFs in various forms:

• Real estate funds: investing in assets such as nursing homes, schools, hospitals, or social housing.
• Debt funds: focusing on debt instruments, particularly loans to SMEs.
• Infrastructure funds: targeting projects like ports, roads, renewable energy, and power stations.
• Private equity funds: investing in equity or equity-like instruments of SMEs, including some newly eligible financial institutions such as FinTechs.
• Real assets: covering immovable property such as transport networks, communication infrastructure, and health or education facilities, as well as industrial sites, intellectual property, machinery, or equipment.
• Other fund types: investing in other ELTIFs, EuVECAs, EUSEFs, or EU AIFs.

ELTIF rules

The ELTIF Regulation sets out minimum requirements that funds must meet to be authorised by the CSSF as a “European long-term investment fund” (ELTIF).

It includes detailed rules on authorisation, eligible investments, fund lifetime, transfer of units or shares between investors, asset distribution and disposal, transparency obligations, and marketing to both professional and retail investors.

For detailed information on the rules that apply to ELTIFs and their managers, check the 2024 ALFI brochure on ELTIF 2.0.

ELTIF 2.0

Regulation (EU) 2023/606, also referred to as ELTIF 2.0 (ELTIF II) from 15 March 2023, amends Regulation (EU) 2015/760 (ELTIF 1.0) and sets out a revised framework of the ELTIF regime. The main changes relate to investment policies, operating conditions, eligible assets, portfolio composition and diversification requirements, and other fund rules.

ELTIF 2.0 entered into application on 10 January 2024.

Key changes include:

• More flexibility in eligible investment assets, portfolio composition and diversification requirements
• Simplification of the definition of “real assets”
• Possibility to set up ELTIF master-feeder structures
• Possibility to set up ELTIF Fund of Funds
• Possibility to implement full or partial matching of requests from existing investors to transfer units or shares of the ELTIF with transfer requests by potential investors, before the ELTIF’s end of life
• Changes to the provisions on marketing of ELTIFs to retail investors
• More flexibility on the use of borrowing
• Carve-outs for ELTIFs sold only to professional investors