What an ELTIF is
An ELTIF is an EU alternative investment fund, or a compartment of one, that has been authorised under Regulation (EU) 2015/760 to use the label. Only an EU AIFM authorised under the AIFMD may manage it, and the designation "ELTIF" is reserved to authorised funds (Articles 3 to 6). The rules were rewritten by Regulation (EU) 2023/606; ELTIFs authorised before 10 January 2024 are deemed to comply until 11 January 2029 and may opt into the new rules.
The label has grown quickly since the reform. ESMA's register showed 341 ELTIFs on 9 November 2026 — 66 authorised in 2024, 109 in 2025 and 76 so far in 2026 — with 185 in Luxembourg, 91 in France and 36 in Ireland. Of the 185 Luxembourg ELTIFs on the CSSF's list at 31 October 2026, 142 are UCI Part II funds, 39 RAIFs, three SIFs and one a SICAR.
Eligible assets
An ELTIF invests in eligible investment assets and, for the rest, in the liquid assets a UCITS may hold. Eligible are equity, quasi-equity and debt of qualifying portfolio undertakings, loans granted by the ELTIF with a maturity within its life, real assets, units of other ELTIFs, EuVECAs, EuSEFs, UCITS and EU AIFs that invest in eligible assets, simple, transparent and standardised securitisations of certain exposures, and green bonds issued by qualifying portfolio undertakings (Articles 9 and 10). The former minimum value for real assets no longer exists.
A qualifying portfolio undertaking is not a financial undertaking — unless it was authorised or registered less than five years before the investment — and is unlisted, or listed with a market capitalisation of no more than EUR 1,500,000,000. It may be established outside the EU if its country is not on the EU's list of high-risk third countries for money laundering or on Annex I of the EU list of non-cooperative tax jurisdictions (Article 11). Short selling, exposure to commodities and derivatives other than for hedging are prohibited (Article 9(2)).
Portfolio rules and borrowing
At least 55% of the ELTIF's capital goes into eligible investment assets. An ELTIF that may be marketed to retail investors invests no more than 20% in one qualifying portfolio undertaking, one real asset or one other fund, and no more than 10% in the liquid assets of one issuer; securitisations are limited to 20% in total (Article 13). The limits apply from the date set in the fund rules — at the latest five years after authorisation or half the life of the ELTIF, whichever is earlier — and are suspended for up to twelve months while capital is raised or reduced (Article 17).
Borrowing is limited to 50% of the net asset value for an ELTIF that may be marketed to retail investors and 100% for a professional-only ELTIF; borrowing that is fully covered by investors' capital commitments does not count (Article 16). Where the ELTIF is marketed solely to professional investors, the diversification limits do not apply at all; the 55% minimum and the list of eligible assets remain (Article 13(7)).
Life, redemptions and liquidity
The fund rules name a specific date for the end of the ELTIF's life and may allow extensions; the life must fit the life cycles of the assets (Article 18(1)). Redemptions before that date are possible where the manager shows an appropriate redemption policy and liquidity management tools: not before a minimum holding period, limited to a percentage of the liquid assets, and pro rata among investors. Investors are always entitled to be repaid in cash (Article 18(2) and (4)). The delegated regulation sets no fixed periods, but redemptions more often than quarterly and notice periods of less than three months must be justified (Delegated Regulation (EU) 2024/2759, Article 5). The rules may also provide for matching exiting investors with new ones (Article 19).
"Evergreen" is not a term of the Regulation, which still requires an end date; the European Commission has stated in a Q&A, which is not binding, that a perpetual ELTIF is also possible. An ELTIF that offers redemptions is an open-ended AIF: its manager selects at least two liquidity management tools under the AIFMD, and the CSSF has made the liquidity management of semi-liquid funds, including open-ended ELTIFs, a supervisory priority for 2026.
Retail investors
There is no minimum investment and no cap on the share of an investor's portfolio any more. Instead, an ELTIF is sold to a retail investor only after a suitability assessment, with a statement on suitability; if the investor buys without advice an ELTIF assessed as not suitable, express consent is required (Article 30(1)). Where the life of the ELTIF exceeds ten years, the investor receives a written alert that the product may not be fit for those unable to sustain such a long-term and illiquid commitment (Article 30(2)).
Retail investors may cancel their subscription during the subscription period and for two weeks after signing, are treated equally within their class, and cannot be asked for more than their original commitment (Article 30(5) to (7)). The manager applies the product-governance rules of MiFID II (Article 27), and the prospectus and marketing documents advise that only a small proportion of an investor's overall portfolio should be invested in an ELTIF (Article 23(4)).
Depositary, documents and costs
An ELTIF marketed to retail investors has a depositary of the kind required for a UCITS; the depositary cannot discharge its liability and may not reuse the assets for its own account (Article 29). Every ELTIF publishes a prospectus that sets out, among other things, the illiquid nature of the fund, the end of its life, the redemption rights and the risks of real assets, and that discloses one overall cost ratio (Articles 23 and 25).
For retail investors a key information document under the PRIIPs Regulation is published before marketing starts; in Luxembourg it is drawn up in Luxembourgish, French or German, and the CSSF may accept English. The annual report adds a cash-flow statement, the value of the individual holdings and the jurisdictions where the assets are located (Article 23(5)). In Luxembourg, Circular CSSF 24/856 on net asset value errors applies to ELTIFs whatever their vehicle.
Marketing and the passport
The manager may market the ELTIF to professional and retail investors in other Member States after a notification under the AIFMD; a Luxembourg AIFM notifies the CSSF under Article 29 or 30 of the AIFM law (Regulation (EU) 2015/760, Article 31). No local agent or physical presence is required in the host State; the facilities for investors follow the AIFMD.
Pre-marketing — testing interest before the ELTIF is authorised or notified — is open for professional investors only; the CSSF states that pre-marketing to retail investors is not possible unless the national law of the Member State concerned allows it. Distributors treat units of an ELTIF as complex instruments under MiFID II, which fits the suitability assessment the ELTIF Regulation requires in any case.
Authorisation by the CSSF
In Luxembourg the CSSF authorises ELTIFs, also where the vehicle itself is not supervised by it (Law of 16 July 2019). The application consists of the CSSF's ELTIF questionnaire with the draft fund rules, the draft prospectus, the depositary agreement and, where redemptions are offered, the justification of the redemption policy with liquidity stress tests. A new UCI Part II fund, SIF or SICAR files it with its product application through the eDesk portal; an existing fund, a new compartment or another Luxembourg AIF sends the questionnaire to the CSSF.
The Regulation requires a decision within two months of a complete application (Article 5(3)); the CSSF publishes no processing time of its own. The CSSF approves the AIFM for the ELTIF, and the AIFM may be established in another Member State. A UCI Part II fund, SIF or SICAR pays its ordinary CSSF fees; for an AIF that the CSSF does not otherwise supervise, the fee is EUR 1,100 for each compartment authorised as an ELTIF.
The Luxembourg vehicle
The label follows the investors of its vehicle. A UCI Part II fund is open to all investors, so an ELTIF for retail investors is in practice a UCI Part II fund. A SIF or a RAIF remains reserved to well-informed investors even as an ELTIF — institutional and professional investors, and others who confirm that status in writing and invest at least EUR 100,000 or are assessed by a bank, an investment firm, a management company or an authorised AIFM (SIF law Article 2; RAIF law Article 2).
A RAIF or an unregulated partnership that becomes an ELTIF is authorised and supervised by the CSSF for its ELTIF status only; it remains a fund that the CSSF has not authorised under a product law. An ELTIF can also be one compartment of an umbrella fund next to compartments without the label. Circular CSSF 25/901 on the investment limits of UCI Part II funds, SIFs and SICARs does not apply to a compartment authorised as an ELTIF; the limits of the Regulation apply instead.
Tax
The Regulation contains no tax rules; the ELTIF is taxed like its vehicle. A UCI Part II fund, SIF or RAIF pays no corporate income tax, municipal business tax or net wealth tax, and distributions bear no Luxembourg withholding tax. The annual subscription tax on net assets — 0.05% for a UCI Part II fund, 0.01% for a SIF or RAIF — does not apply to funds and compartments authorised as ELTIFs (UCI law Article 175; SIF law Article 68; RAIF law Article 46).
The exemption has applied since 28 July 2023 and is given compartment by compartment; the exempt net assets are declared separately. The management of the fund is exempt from VAT. How investors are taxed on income and gains from the ELTIF depends on their own country.
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