Brussels, 27/11/2014 (Agence Europe) - On Wednesday 26 November, the European Parliament and the Italian Presidency of the Council of the EU reached a political agreement on the proposed regulation bringing in a European Long-Term Investment Fund (ELTIF) structure.
The political agreement was reached on the same day as the European Commission presented its investment plan (EUROPE 11205), although the technical inter-institutional negotiations continued on Thursday 27 November. “ELTIFs will provide for a reliable tool to invest in sectors where a long-term perspective is needed, such as SMEs and infrastructure”, said Paola De Micheli, Italian Secretary of State for the Economy, in a press release. As “an element of the capital market union, they will support the EU's investment plan”, commented the Commissioner for Financial Services, Jonathan Hill. Alain Lamassoure (EPP, France), who steered the negotiations on behalf of the European Parliament, believes that the ELTIFs will see the light of day early next year.
Only hedge funds and venture capital funds accredited in the EU in line with directive 2011/61 ('AIFM') can be labelled 'ELTIFs' (EUROPE 11108). They will be obliged to invest the majority of their capital in clearly defined categories of long-term assets, for example in projects or businesses which struggle to secure bank loans.
The ELTIFs must comply with the information requirements, so that potential investors (pension funds, insurance companies, retail investors) understand the risks they face and are aware of the safety period during which they can get back their investment. According to the EP, retail investors will be able to be reimbursed before maturity if they wish, as long as the ELTIF has sufficient liquid assets. (MB)