Authorisation – To be marketed in the EU, an ELTIF must conform to the Alternative Investment Fund Managers Directive (AIFMD), published in 2011, which created the regulatory framework for all EU alternative investment fund managers.
Investment rules – ELTIFs must invest at least 50% of their capital in “eligible investment assets” and must not invest more than 20% of their capital in any single asset. Additionally, they may borrow no more than 50% of its Net Asset Value (NAV) and must disclose all borrowings.
Prohibitions – ELTIFs may not engage in short selling, securities lending, securities borrowing or repo transactions, purchase commodities, or use derivatives for anything other than hedging.