Long-term Investment Funds (ELTIF) (Regulation)
With the creation of a new type of European investment fund (ELTIF), the Commission wants to channel "patient" capital from both professional and retail investors into infrastructure projects, property and non-listed companies.
EU-wide legislation on funds permitted to be sold as ELTIFs reduces information deficits for investors and thus increases investor confidence. The ability to lend to qualified portfolio undertakings is appropriate thanks to restrictive rules. The blanket ban on the use of derivatives does not serve the desired purpose of investor protection. The redemption ban reduces the attractiveness of ELTIFs, especially for retail investors. A strict application of the matching maturities principle reduces the profitability of the ELTIF: on the one hand it reduces the ability to sell long-term investments and thus realise profit-taking even prior to maturity of the ELTIF. On the other hand, it increases the cost of borrowing.