An overview of ELTIF in Luxembourg

ELTIF in figures 

The Luxembourg legal and regulatory framework for ELTIFs is proving effective. In October 2020, 13 out of the 28 European ELTIFs in existence across Europe were based in Luxembourg. By April 2025, 117 out of the 184 European ELTIFs in existence across Europe (reflecting a significant increase in the number of ELTIFs due mainly to the revamping of the ELTIF regime) were based in Luxembourg. This gives Luxembourg a 64% market share in terms of the number of funds.

ELTIF regime

Updates to the ELTIF regime, known as ELTIF 2.0, entered into force on 10 January 2024. The revamped regime was widely welcomed by market participants. However, since the adoption of ELTIF 2.0, particular concerns have been expressed regarding its impact on open-ended ELTIFs.

The Commission Delegated Regulation (EU) 2024/2759 (the Delegated Regulation) was published in the Official Journal of the EU on October 2024. It supplements the ELTIF regime as regards to regulatory technical standards and directly addresses these concerns by clarifying and harmonising the ELTIF manager's operational requirements - in particular, transparency obligations with regard to redemptions and liquidity management tools.

On 6 February 2025, Luxembourg's bill of law N°8387 (the Law) was adopted with its publication in the Luxembourg Official Journal on 10 February 2025. The Law amends the Luxembourg law of 16 July 2019, implementing Regulation (EU) 2015/760 on European long-term investment funds (ELTIF 1.0).

By implementing the requirements of Regulation (EU) 2023/606 amending ELTIF 1.0. (becoming ELTIF 2.0) into domestic legislation, the Law aims to align the Luxembourg Commission de Surveillance du Secteur Financier's (the CSSF) administrative powers with the updated ELTIF regulation.

Following the adoption of the Delegated Regulation, and to align with authorisation and operational rules applied to ELTIFs and their managers, the CSSF has updated its ELTIF application questionnaire, effective from October 2024.

ELTIF in practice

The democratisation of private asset investment has been accelerated by the revised ELTIF regulation, which aims to make it easier for private capital to finance the real economy.

The reformed ELTIF regime now offers a pan-European passport for distribution to both professional and retail investors, broadening its remit beyond real estate and infrastructure to include diverse asset classes such as target funds and securitisation. The updated regulation also lowers barriers for retail investors, making these funds more accessible.

The ELTIF label can apply either to the entire fund or solely to a specific compartment within an umbrella structure depending on the sponsor’s requirements, thereby providing additional structuring flexibility.

We have also observed a renewed interest in UCIs (undertaking for collective investment) governed by Part II of the 2010 Law on undertakings for collective investment, particularly in the context of the democratisation of private assets. This renewed interest is attributable, inter alia, to the flexibility in potential investment strategies offered by Part II funds, the leverage limits and semi-liquid options available under this product, as well as the regulatory modernisation of Luxembourg’s product laws in 2023.

Part II funds may also target retail investors. While they lack a marketing passport for EU retail investors, they remain accessible under local rules in many jurisdictions. The ELTIF regime can serve as an add-on to Part II funds, enabling them to benefit from the passport for distribution to retail investors across the EU. Indeed, Part II funds are the most popular vehicle for retail ELTIFs in Luxembourg.

In practice, as legal practitioners in Luxembourg, we see ELTIFs being utilised in a range of contexts, spanning alternative investment funds with infrastructure strategies, fund of funds strategies, and pan-European lending strategies. This includes their use by US credit fund sponsors seeking to develop their strategy in Europe and requiring a passport to overcome the regulatory hurdles of banking monopoly in certain European jurisdictions.

We have also observed that ELTIFs are of particular interest to insurance companies in Europe, serving as vehicles that provide access to private assets whilst also offering the reassurance of regulatory supervision. 

How Ogier can help

Luxembourg offers a broad and highly flexible legal framework to meet the needs of ELTIFs, ELTIF managers and investors, making it the first choice for the launch of ELTIFs.

Our dedicated Investment Funds team in Luxembourg can advise funds and their managers on compliance with the new rules and their implementation. For more information, please reach out to the team listed below.