The European Fund and Asset Management Association (Efama) has expressed its support for the political agreement on European Long-term Investment Funds (Eltifs) reached on 26th of November.
The agreement was negotiated between the European Council and Commission and was subsequently endorsed by the European Parliament.
“On the very day that European Commission President Jean-Claude Juncker presented his investment plan for Europe, we have agreed on a structure to attract the savings of both individual and professional investors to finance long term investments in the European Union”, said Parliament’s rapporteur on Eltif’s Alain Lamassoure.
The regulation is aimed at boosting non-bank long term investments that deliver infrastructure, intellectual property or research results which benefit the real economy and society. With an entry level investment of €10.000, it is predominantly aimed at institutional investors, but is also open to the retail sector.
Eltif aims at directing investments into projects and companies in need of long term financing that have difficulties raising funds on stock markets or securing loans from banks. Funds that want to use the Eltif label will have to meet a number of requirements under the regulation, including being AIFMD compliant, Eltif’s can only invest in unlisted companies and the use of derivatives is restricted to managing currency risk.
Peter De Proft, Director General, EFAMA said: “We have long campaigned on the fact that asset managers have an important role to play in the changing landscape of a more capital market based economy. This shift is acknowledged as a tremendously important objective by institutions and regulators worldwide, and the ELTIFs framework has the potential to become an important tool for long-term financing –We stand ready to continue our engagement with EU policy-makers towards the important objective of financing growth in Europe.”
The Eltif agreement will now have to be endorsed by the Committee and the Member states, once implemented, it will be directly applicable in all member states.