EU Fundraising Routes

ELTIF 2.0 RTS

The Regulatory Technical Standards became effective October 26, 2024, making semi-liquid retail fund designs operational. The RTS specify redemption policies, liquidity-management tools deployment, transfer request matching, asset disposal criteria, and cost disclosures.

AIFMD II Changes

Five targeted areas receive updates:

• Delegation oversight: Explicit expectations around supervisor documentation and reporting lines
• Liquidity risk management: Clearer LMT governance and stress-testing protocols
• Loan-originating AIFs: Harmonized frameworks for portfolio composition limits and retention rules
• Supervisory reporting: Expanded data granularity to NCAs/ESMA
• Depositary/custody: Clarifications aligning responsibilities

Scope

EU AIFMs marketing EU AIFs to professional investors (MiFID II definition) across multiple notified Member States without reapplying locally.

Registration Timeline

Submit Article 32 notification to home NCA including:

• AIF rules and constitutional documents
• PPM/IM materials
• Article 23 disclosures (fees, valuation, liquidity, leverage, conflicts)
• Target jurisdictions and marketing plan
• Confirmation of Annex IV reporting compliance

Processing takes approximately 4 weeks after NCA confirms file completeness, following 20 working days for host-state notification.

Costs

Budget €10k-€40k for legal/filings depending on AIF complexity, localization, and NCA fees. Validate with multiple quotes.

Advantages

• Pan-EU professional investor reach via single notification
• Single supervisory home NCA as primary contact
• Consistent Annex IV reporting across notified states

Requirements

• AIFM organization and governance meeting standards
• Contracted depositary
• Documented valuation and liquidity-risk policies
• Conflicts and delegation frameworks
• Annex IV reporting capability

Operational Checklist

• Article 23 cross-walk mapping PPM/IM to disclosure headings
• Host-state legend pack with pre-approved footers and language versions
• Annex IV readiness with dry-run mock filing
• Distributor/placement agreement verification
• Version control log for post-notification updates

Scope

Mechanism for non-EU AIFMs or EU AIFMs marketing non-EU AIFs to professional investors under AIFMD Article 42. Country-specific rather than pan-EU, generally excluding retail marketing.

Core Conditions

• Provide Article 23 disclosures
• File annual reports and regulatory reports (Annex IV style) quarterly/semi-annually/annually based on AUM and leverage
• Confirm regulatory cooperation arrangements between host NCA and home supervisor
• Verify fund/manager not in FATF high-risk third country
• Observe host-state marketing rules including legends, language, record-keeping, facilities/local contact requirements

Timeline and Costs

Approximately 2-4 weeks post-complete file submission. Per-country budgets of €5k-€15k typical, increasing with parallel vehicles, feeders, or leverage complexity.

AIFMD II Impact

No abolition of NPPR; Member States retain discretion. Expect process refinements in reporting content/timing mirroring AIFMD II enhancements by April 2026.

Appropriate Use Cases

• Testing demand in 1-2 Member States before EU AIFM commitment
• Non-EU AIFMs without EU management footprint targeting specific countries
• Strategies not requiring retail/private-wealth access

Operational Guardrails

• Avoid over-reliance on reverse solicitation
• Check local law regarding pre-marketing before teasers
• Maintain country-specific marketing legends and translations
• Dry-run Annex IV filings with administrator
• Diarize annual renewals and fee payments by country
• Create one-pager summaries per jurisdiction

Scope

Regulated wrapper allowing EU-authorised AIFMs to distribute funds to retail and professional investors across the EU for long-term assets, private equity/credit, infrastructure, real assets, and certain securitisations.

Commercial Appeal

• Opens private-wealth distribution channel at scale via wealth managers and platforms
• Permits periodic redemptions without daily-liquidity promises using calibrated gates and notice periods
• Benefits from pan-EU passport for consistent rules and documents across Member States

Operational Demands

• Depositary, administrator, and distributors capable of retail-scale appropriateness/suitability checks
• KID/PRIIPs delivery and AML/KYC at retail volume
• Codified LMT toolkit including gates, notice periods, redemption queues, anti-dilution levies/swing pricing, side-pockets
• Derivatives primarily for hedging; leverage-based return engineering constrained
• Richer reporting including standard AIFMD plus investor-facing cost breakdowns and liquidity metrics aligned to RTS

Operating Mode Design

Start with dealing frequency and notice period (60-90 days typical). Size liquidity sleeve as cash, near-cash, or secondaries meeting expected net redemptions under conservative scenarios. Define gates (5-10% NAV per window typical), queuing rules, and transfer-request matching to secondary buyers if redemptions exceed capacity. Write ex-ante asset-disposal criteria specifying which assets, sale order, valuation protections. Build valuation governance around infrequent markets. Disclose prominently in prospectus and investor materials; mirror in administrator and distributor SOPs.

Documents and Distribution

• ELTIF prospectus and constitutional docs
• Cost disclosure annexes
• Target market and distribution agreements
• Retail-grade onboarding (e-subs, KID delivery, risk acknowledgments)
• FAQ/illustratives for redemption calendars and LMT triggers
• Portal supporting multi-jurisdiction legends, eligibility checks, two-way messaging

Timeline and Budgets

6-8 months from mandate to first dealing day. Setup budgets €50k-€100k; ongoing €10k-€20k annually for ELTIF-specific obligations, layering standard fund admin, audit, and custody costs.

Data Room Contents

• AIFMD II Readiness Memo (delegation map, LRM/LMT playbook, LO-AIF applicability, reporting plan)
• Policy pack (updated Delegation, LRM, Valuation, Conflicts, Credit Lifecycle)
• Reporting samples (mock Annex IV, liquidity dashboard, board pack extracts)

Q1 2025

Run formal AIFMD II gap assessment. Map delegation, LRM, conflicts, depositary/custody, loan-origination controls. Produce AIFM II Readiness Memo with owners and deadlines.

Q2-Q3 2025

Prepare passport file. Build Article 32 notification pack (AIF rules, depositary appointment, Article 23 disclosures, marketing legends). Target 20-working-day clock completion.

Interim to April 2026

For non-passport routes, maintain NPPR country matrix with filings, timelines, fees, legends. Diarize renewals and updates.

Post-April 2026

Operate under transposed AIFMD II rules as each Member State completes lawmaking.

Optional in Parallel

Design ELTIF 2.0 from RTS backward (redemption frequency, gates/notice, transfer-request matching, liquidity sleeves, cost disclosure). Involve distributor and depositary early.

Why ELTIF 2.0 Matters Commercially

Private banks, RIAs, and fund platforms need standardized, well-disclosed products operable at scale. With ELTIF 2.0, managers design periodic-dealing access to PE/credit or infrastructure while avoiding false daily-liquidity promises. Distributors can run appropriateness checks, deliver KIDs, and onboard through existing portals.

For managers, the prize is broader LP base and stickier capital: advised retail, family offices, private-bank clients wanting long-term exposure with occasional liquidity. Trade-offs are operational: depositary, ELTIF-comfortable admin, MiFID product-governance distributor agreements, conservatively-sized liquidity sleeves.

Pragmatic Pattern: Dual-Track Distribution

Keep institutional AIF for professionals; add sister ELTIF vehicle/share class engineered from RTS backward (quarterly dealing, 60-90 day notice, calibrated gates, explicit cost tables). Reach private-wealth without diluting institutional terms; future-proof fundraising as platforms expand ELTIF shelves.