Six months on from the rollout of Eltif 2.0, the BlackRock private markets team believes the wrapper has the potential to become the vehicle of choice for investments into private markets.
European Long-Term Investment Funds (Eltifs) are the only wrapper that allows the distribution of private market investment strategies to all investor types across Europe.
The updated 2.0 structure, launched in January, aimed to overcome some of the structural barriers that have hindered broader adoption of private markets.
See also: EuroFSS: UK fund selectors reduce exposure to private equity
The new regulation introduced an evergreen, semi-liquid open-ended structure to ease the concerns of investors who do not wish to be subject to long lock-up periods.
The BlackRock private markets team said it expects the changes to significantly broaden the commercial use case for Eltifs, accelerating the adoption of private markets to all types of investors.
“The popularity of open-ended strategies is a relatively recent phenomenon in the private markets’ world, but they have been long-established for mutual funds,” Fabio Osta, BlackRock Emea head of alternatives specialists team, wealth, said.
“This means that open-ended Eltifs will be able to draw on some of the key operational features that have made mutual funds so scalable. We see Eltifs as the only wrapper capable of distributing private markets investment strategies to all investor types across Europe and look forward to this regulation making this asset class more widely accessible.”
The Eltif market is estimated to have reached €13.6bn by the end of 2023, and the Alternative Investment Management Association estimates inflows of around €100bn in the next few years.
A recent European Fund Selector Study by Neuberger Berman found that while UK-based fund selectors have reduced their exposure to private markets, investments into the sector are growing in Europe. José Cosio, head of intermediary Emea & Latam at Neuberger Berman, said the firm believes Eltifs will become the “gold standard” of investor access to private markets in years to come.
