The market for European Long-Term Investment Funds (Eltifs) is slowly gaining momentum. This is particularly true for the Eltif sub-division Private Equity, which makes it easier for retail investors to gain access to unlisted companies. Berlin-based digital asset manager Liqid, for example, is currently launching an Eltif that allows retail investors to put up as little as 20,000 euros (or 200 euros per month via a savings plan) in co-investments with US asset management giant Neuberger Berman, which manages the fund together with Liqid. Partners of the German asset manager, which manages a total of 3 billion euros, include HQ Capital, a family office of BMW heir Harald Quandt.

The Swiss financial investor Partners Group has also just launched a private equity Eltif fund. The minimum investment amount here is only 10,000 euros. And the Berlin start-up Moonfare – a digital private equity investor platform that has placed around 2.7 billion euros in assets from small investors in the funds of industry giants such as KKR – is also launching an Eltif.

„The aim is to give private investors access to assets in a way that only family offices can,“ says Moritz von Rhein, Head of Private Markets at Liqid. 15% of the fund volume is to be kept liquid so that investors can redeem shares at any time. There had already been problems at Blackstone when too many retail investors wanted to exit a Blackstone real estate fund at the same time. The management fee for Liqid's Eltif is 2.49% and the profit share is 12.5%. For institutional products, a 2% management fee and 20% profit participation are common. Prior to the introduction of Eltifs in 2015 via EU legislation which aimed to promote infrastructure investment, the rules only permitted only institutional investors and ultra-high-net-worth individuals to invest the required large amounts in these assets.

Now, Eltifs theoretically start at just 1 euro. „The new Eltif regulation (Eltif 2.0) is currently electrifying the markets," says Hosna Houbani from the fund rating agency Scope. „It makes things easier for both product providers and distributors.“ The majority of players expect the supply and demand for Eltifs to expand as a result. According to Scope, the Eltif market has grown to 95 funds and 14 billion euros. That is still a moderate size. "However, this development harbours risks, and regulation will be crucial for the protection of a broader group of investors,“ warns Moody's analyst Alexandra Aspioti.