Over the past few years, all private market funds — from venture capital to private debt and infrastructure — have shared a common obsession: diversifying their sources of capital. It’s no longer just about institutional LPs. The new frontier is broader, more international, more wealth-driven. The “Wealth” segment — IFAs, family offices, digital platforms, private banks — has become a key battleground for capital raising strategies.
In this context, ELTIF 2.0 (European Long-Term Investment Fund), which came into effect in January 2024, was expected to act as a catalyst: a unified European framework to distribute long-term funds across the continent, targeting both retail and professional investors. Hopes were high — create a true European passport, unlock access to long-term savings, and reconcile returns with impact.
But just a few months in, reality is more complicated. The framework is there — but the execution is being held back by the Member States themselves.
A Promising Regulatory Framework
ELTIF 2.0 brought two major innovations.
First, a genuine European passport: a fund authorized in one country should be distributable across all EU member states, without systematic re-validation.
Second, the opening of private markets to retail investors, with lower entry thresholds (dropping from €100,000 to €10,000 to €1), and structural compatibility with tax-efficient wrappers like life insurance — thanks to open or semi-open (evergreen) fund formats.
It’s a regulatory turning point: illiquid assets are finally accessible to long-term savings, which were previously stuck in listed UCITS. On paper, it’s the marriage of patient capital and the real economy.
A Patchy Reality
But then comes the catch: while the regulation is European, implementation is still national.
In practice, national regulators still control many steps: document approvals, local tax compatibility, translations, technical requirements. And very few Member States are fully on board. Only Luxembourg, Ireland, and Italy currently treat the ELTIF label as a truly operational passport.
Elsewhere, barriers remain: local validation requirements, local domiciliation obligations, administrative red tape…
The result? Out of ~150 ELTIFs registered in Europe by the end of 2024, 100 are based in Luxembourg, and 31 in France. While France is the second-largest market, it remains largely closed to foreign ELTIFs. For instance, under current French tax law, only French-domiciled ELTIFs are allowed in life insurance wrappers.
Where the passport was supposed to simplify access, it now requires a “local clone” just to enter the market.
Retail Access… On Paper
Sure, access to individual investors has technically been opened: the minimum ticket has dropped from €10,000 to as low as €1, and portfolio diversification rules have been relaxed. But in practice, commercial barriers persist.
MiFID classification rules make it harder for non-professional clients to subscribe with small tickets.
As a result, most funds continue to target individuals able to invest at least €100,000. Semi-open (evergreen) structures are also on the rise — but they come with constraints: their promised liquidity often relies on 10–40% liquid asset pockets, which are typically lower-performing. Managers have to constantly balance commercial appeal with financial efficiency.
So Why All This Reluctance?
Many Member States are trying to protect their domestic asset managers from European or American competition. Behind the technical restrictions lies a clear protectionist strategy.
In France, this shows up as a refusal to allow foreign ELTIFs into life insurance wrappers, or in a passport system that’s not fully recognized in practice.
But this mindset is short-sighted. These very barriers are what’s slowing down the global competitiveness of our funds.
Luxembourg, meanwhile, is attracting all the major US asset managers and exporting ELTIFs across Europe. France is stuck in its own backyard — trapped by outdated habits.
So What Needs to Change?
If ELTIF 2.0 is to live up to its promise, we need political and operational momentum.
Authorize all ELTIF 2.0-labeled funds at the national level
Automate subscription processes to keep lowering entry thresholds
France has everything it takes to be a leader here: abundant savings, recognized fund managers, a strong retail distribution culture. But we need to play as a team.
Growth comes from openness and competition — not protectionism.
ELTIF 2.0 could become the go-to vehicle for a truly impactful European finance. But only if Member States agree to unlock the gates.
The ball is now in the hands of national regulators. And it would be a shame to miss the European train — just when it’s finally starting to move.
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Catch you soon!
Gives you something to do.
You should be a professor
You know. Those pundits with the robes and those funny looking hats. Lol.