ELTIF 2.0 vs Part II UCI: which retail wrapper fits?

Two mainstream regulated routes take private assets to European retail investors: private equity, private credit, infrastructure and real estate. They are not really competitors. The ELTIF (European Long-Term Investment Fund, Regulation (EU) 2023/606 amending Regulation (EU) 2015/760) is a product label with an EU-wide retail marketing passport. The Luxembourg Part II UCI (Law of 17 December 2010, Part II) is a fund vehicle. It can be sold to retail investors, but only country by country, because no passport exists for that.

In Luxembourg the two are usually layered, not chosen between. The ELTIF is an overlay. A Part II UCI, a RAIF, a SIF or a SICAR can apply for the ELTIF label and keep its domicile. So can an AIF that is none of those, on the CSSF's own authorisation menu (CSSF, ELTIF). The vehicle gains the retail passport on top. Only an EU AIFM authorised under the AIFMD may apply to manage an ELTIF (2015/760 Art. 5(2)).

The real decision is therefore whether to add the ELTIF passport to a Part II vehicle. The alternative is to run the Part II as a plain AIF and place it with retail investors only where local rules allow. That is what this page compares. For what CSSF Circular 25/901 changed for the Part II vehicle itself, read the companion consolidated 25/901 page.

Sources for this page: Regulation (EU) 2023/606 (ELTIF 2.0) and Regulation (EU) 2015/760 as amended by 2023/606 (the consolidated text). ELTIF 1.0 is read from the 2015 text as adopted. Also Commission Delegated Regulation (EU) 2024/2759 (the ELTIF liquidity RTS), the Luxembourg Law of 17 December 2010 (Part II) and CSSF Circular 25/901. Scope Fund Analysis market data is secondary and is labelled as an estimate wherever it appears.

Primary: Regulation (EU) 2023/606 (ELTIF 2.0). Also Regulation (EU) 2015/760, consolidated as amended (applicable 10 Jan 2024), Commission Delegated Regulation (EU) 2024/2759 (ELTIF RTS), Law of 17 December 2010 and CSSF Circular 25/901. ELTIF article numbers are from the consolidated 2015/760 (as amended by 2023/606): Art. 13 covers portfolio composition and diversification, Art. 16 borrowing, and Art. 30 retail marketing and suitability.

One structural point changes how you read the two limit columns. A fund or compartment authorised as an ELTIF is carved out of Circular 25/901 entirely (25/901, point 2). MMFs, EuVECA and EuSEF funds, and closed-ended funds authorised before 19 December 2025 are carved out alongside it. So the CSSF's 25%/70% retail limits and the ELTIF's 20%/50% limits do not stack. Taking the ELTIF label on a Part II compartment substitutes the EU limit set for the CSSF one.

Read the table that way. For a retail fund the ELTIF is generally tighter on concentration (20% against 25%) and on borrowing (50% of NAV against 70% of assets or commitments). That is the price of the passport. Infrastructure widens the difference. Point 8(d) of the circular lets a retail-marketable Part II put 50% of its assets into one and the same infrastructure investment. Point 11 raises that to 70% for a professional or well-informed fund. The ELTIF caps the same asset at 20% and has no infrastructure variant. On a concentrated infrastructure strategy the label therefore costs more than the headline percentages suggest (see the position-by-position comparison).

The rest of the Part II framework is unaffected by the carve-out: CSSF authorisation, the depositary and the sales-document duties all stay (see our 25/901 page).

This is the one dimension where the two wrappers differ in kind. The ELTIF is the only EU wrapper that gives a harmonised retail marketing passport for private assets. You authorise once with your home NCA, notify under Article 31 of 2015/760, and market to retail investors across the EEA. The Part II UCI has no equivalent. Its AIFMD passport reaches professional investors only. To sell a plain Part II fund to retail investors, you register it under each target country's national regime, and those regimes differ. If the distribution plan is "European retail, many countries", the ELTIF label is the mechanism for it, not an option.

That country-by-country position is what the AIFMD says, not a gap in it. Under Article 43(1) of Directive 2011/61/EU, Member States "may allow" AIFMs to market AIFs to retail investors in their territory. That is a permission, not an obligation. A state that allows it "may impose stricter requirements on the AIFM or the AIF than the requirements applicable to the AIFs marketed to professional investors". The one thing it may not do is discriminate: an EU AIF established in another Member State cannot face stricter or additional requirements than a domestic one.

Article 43(2) then obliges each permitting state to tell the Commission and ESMA which types of AIF may be sold to retail investors there, and what additional requirements apply. So the national regimes a Part II has to clear are notified. They remain separate national regimes, each free to be stricter than the professional baseline. Read Article 43(1) against Article 1(3) of 2015/760 and the difference is in the two texts themselves. One expressly lets the host state add requirements. The other expressly forbids it. Which states are workable for a plain Part II today is listed under To verify.

The passport is also protected against national additions in a way a Part II placement is not. Article 1(3) of 2015/760 bars Member States from adding requirements in the field the Regulation covers. A European Commission answer in ESMA's Q&A tool applied that directly (ESMA_QA_2481, answered 14 March 2025). A Member State may not impose requirements on the nationality, domiciliation or location of the ELTIF or its manager. That holds even where the ELTIF is packaged inside an insurance product or embedded in a pension or savings plan. Much of continental Europe distributes retail private assets that way. An ELTIF authorisation "shall be valid for all Member States". The ELTIF's reach is a right the host state cannot condition on domicile. The plain Part II's retail reach is a permission each host state grants, varies or withholds.

The first limb of that answer concerns the structure chart rather than the sales channel, and it matters to a fund-of-funds structurer. The question was whether a Member State may require the master ELTIF to be established in the same Member State as the feeder. The Commission answered that Article 1(3) prohibits such requirements, "whether stemming from national law, regulations, guidance or administrative practices". The bar covers requirements "pertaining to the domiciliation or the establishment of the master ELTIF or the feeder ELTIF" (ESMA_QA_2481(a)).

Master-feeder is one of the structures ELTIF 2.0 opened up (see the 1.0 table below), and this answer makes it usable across a border. A Luxembourg master can be fed by a feeder authorised where the distribution sits, and that state cannot condition the arrangement on where the master lives. For a Part II vehicle, the local-feeder pattern (a domestic wrapper in each retail market feeding a Luxembourg fund) is therefore available as an ELTIF structure. For a plain Part II it remains a national arrangement.

What replaced the retail minimum

Under ELTIF 1.0, a retail investor whose financial-instrument portfolio did not exceed €500,000 had to put in at least €10,000. That investor could also hold no more than 10% of their financial-instrument portfolio across all ELTIFs. Investors with larger portfolios faced neither limit. That double restriction, combined with mandatory investment advice for every retail investor, held back retail take-up. ELTIF 1.0 Article 30(3), applying to portfolios of €500,000 or less, required that "the initial minimum amount invested in one or more ELTIFs is EUR 10 000". It also barred such an investor from investing "an aggregate amount exceeding 10 % of that investor's financial instrument portfolio in ELTIFs" (2015/760 as adopted, Art. 30(3)).

ELTIF 2.0 removed both the €10,000 floor and the 10% cap. In their place, Article 30(1) allows retail marketing only after a suitability assessment under Article 25(2) of MiFID II, with a suitability statement given to the investor under Article 25(6). The assessment applies however the units are acquired, including on the secondary market. Where the assessment is not given as investment advice, the ELTIF is judged unsuitable and the investor still wishes to proceed, the distributor must obtain the investor's express consent. Separately, Article 30(2)(a) requires a written alert where the fund's life exceeds 10 years. The mandatory "investment advice" requirement of old Article 30 is gone.

The 10% cap was abolished as a rule and kept as a disclosure. Article 23(4) covers "the prospectus and any other marketing documents". They must prominently "advise investors that only a small proportion of their overall investment portfolio should be" invested in an ELTIF (2015/760 Art. 23(4)(f)). Nothing measures it or enforces it against the investor, and no subscription is rejected for breaching it. But the sentence must appear in the document that sells the fund. The distributor's suitability file therefore sits beside a marketing document that tells the same investor to keep the allocation small.

The facilities duty that survived the deletion of Article 26

ELTIF 2.0 deleted Article 26 of the Regulation as originally adopted. That article required subscription, payment, redemption and information facilities in every Member State where the ELTIF was marketed to retail investors. Structuring notes often read the deletion as removing the obligation. It does not. Article 26 was a product-specific rule on top of a general one: Article 43a of the AIFMD ("facilities available to retail investors"). The cross-border distribution Directive inserted it (Directive (EU) 2019/1160, applicable from 2 August 2021). It requires facilities in each Member State where any AIF is marketed to retail investors. Removing the ELTIF's own provision left the AIFMD one in place.

Article 43a(1) lists six tasks the facilities must perform.

• (a) Process subscription, payment, repurchase and redemption orders on the terms of the fund documents.
• (b) Tell investors how those orders are made and how repurchase and redemption proceeds are paid.
• (c) Facilitate the handling of information on the exercise of investors' rights.
• (d) Make "the information and documents required pursuant to Articles 22 and 23" available. These are the annual report and the pre-investment disclosures, kept "for the purposes of inspection and obtaining copies thereof".
• (e) Give investors information on those tasks on a durable medium as defined in Article 2(1)(m) of Directive 2009/65/EC.
• (f) Act as the contact point for communicating with the competent authorities.

Article 43a(2) bars the host Member State from requiring a physical presence or the appointment of a third party. The facilities may be electronic. Article 43a(3) settles the rest. The facilities must be available in an official language of the host state or a language its competent authority approves. The AIFM may provide them itself, through a regulated and supervised third party, or both (AIFMD Art. 43a(3); Directive (EU) 2019/1160, Art. 1(4)).

One drafting detail matters. Article 43a(1), as inserted, opens "Without prejudice to Article 26 of Regulation (EU) 2015/760" (Directive (EU) 2019/1160, Art. 1(4)). The words survive verbatim in the consolidated AIFMD in force (consolidated text 02011L0061, 16.04.2026). That deference made sense in 2019, but it now points at a provision ELTIF 2.0 has repealed. The carve-out ran from Article 43a in favour of the ELTIF regime, not the reverse. Its subject disappearing therefore creates no exemption. Read it as "the AIFMD duty applies unless the ELTIF Regulation says otherwise", and the ELTIF Regulation no longer says otherwise. This reading is ours; no supervisory statement on the cross-reference has been located, and the Luxembourg transposition of Article 43a has not been read.

This is the one retail obligation on the page that treats both wrappers alike. It attaches to retail marketing, not to a label. A plain Part II UCI placed with retail investors in Germany carries it in Germany. A retail ELTIF carries it in every state it is passported into. Because Article 43a is a per-Member-State duty, a single authorisation does not buy a single set of facilities. Each state of retail marketing needs its own set of facilities, its own language regime and its own contact point with its own regulator. The passport removes the registration cost but not the servicing cost, and the servicing cost grows with the footprint. A cross-border retail budget built on "Article 26 was deleted" is understated by the number of countries in the plan.

The ELTIF prescribes what you can hold. At least 55% of capital must sit in "eligible investment assets". These are equity or debt of qualifying portfolio undertakings, real assets, and units of other ELTIFs, EuVECA, EuSEF, UCITS or EU AIFs that meet look-through tests. ELTIF 2.0 added recently authorised financial undertakings such as fintech firms. It added listed companies with a market capitalisation of no more than €1.5bn, green bonds, and simple, transparent and standardised (STS) securitisations (2015/760 Art. 13(1) and the Art. 10 eligible-asset list). ELTIF 2.0 also cut the eligible-asset floor from 70% to 55%. It dropped the €10m minimum value per real asset. Most real assets now qualify, but works of art, manuscripts, wine stocks and jewellery are excluded (Regulation (EU) 2023/606, Recital 8).

The Part II UCI has no eligible-asset menu at all. It can hold any asset class. Its only guardrails are the CSSF's risk-spreading and borrowing limits, now consolidated in 25/901. They are calibrated to the investor type the fund may be marketed to (see our 25/901 page). That flexibility is the reason to run a plain Part II when a strategy does not fit the ELTIF's eligible-asset and concentration limits. The price is country-by-country retail distribution.

The open field has two boundaries: safekeeping, and the UCITS line

"Any asset class" is the right first answer for a Part II UCI, but it has two edges. The first is custodial rather than regulatory. Circular 25/901 defines the Part II's universe. It is "any type of investment that may be entrusted to the depositary of the SIF or of the Part II UCI for safekeeping". See (25/901 point 5, read against Articles 89(1), 93(1) and 97 of the 2010 Law). The test is not whether an asset is on a list. It is whether a depositary will take it.

That moves the eligibility question out of the circular and into a commercial negotiation with the depositary bank. The answer depends on that bank's custody capability and risk appetite, not on Luxembourg product law. The CSSF publishes no list of assets a depositary may or may not hold, so point 5 marks a boundary without saying where it falls for a given asset. The ELTIF has the opposite shape. Its menu is closed and published in Article 10, and a retail ELTIF also needs a UCITS-type depositary. For the ELTIF the harder gate is the list, not the custodian.

The second edge applies to a fund whose strategy becomes more liquid. Point 6 of the circular requires a SIF or Part II UCI to have "an investment and borrowing policy that is different from that of a UCITS". That condition applies where "its main objective is to invest in assets eligible under that directive". Meeting it keeps the fund within the exemption in point (d) of Article 3 of the UCITS Directive (25/901 point 6; Directive 2009/65/EC, Art. 3(d)). The Part II regime is defined partly by not being UCITS. A fund whose main objective is UCITS-eligible assets must therefore show a policy feature a UCITS could not run, such as concentration, illiquidity, borrowing or derivative use. The circular does not say which features suffice; that reading is ours, drawn from the purpose of the exemption. The same provision explains the twelve-month ramp-up for UCITS-eligible-asset strategies noted below.

The two boundaries push in opposite directions. A book that becomes too illiquid or unusual may find no depositary, which engages point 5. A book that becomes too liquid and conventional engages point 6, because it starts to resemble the UCITS it is exempt from being. The middle ground is the private-assets book both wrappers were built for. There, the choice between them turns on the passport and the limits rather than on eligibility.

The prohibitions, not the percentages, rule strategies out

The limits above can be calibrated. Article 9(2) of 2015/760 is different: it lists activities an ELTIF shall not undertake, with no derogation, no professional-investor uplift and no supervisory route. An ELTIF may not short-sell assets. It may not take "direct or indirect exposure to commodities". The bar extends to exposure "via financial derivative instruments, certificates representing them, indices based on them or any other means or instrument that would give an exposure to them". It may not enter securities lending, securities borrowing, repurchase transactions "or any other agreement which has an equivalent economic effect" where more than 10% of its assets are affected. And it may not use derivatives "except where the use of such instruments solely serves the purpose of hedging the risks inherent to other investments of the ELTIF".

A Part II UCI can do each of those four things, subject to a limit rather than a bar. Only the per-issuer concentration limit caps short sales. It is 25% for a retail-marketable fund and 50% where units are reserved to well-informed or professional investors (25/901 points 8(b) and 11). Derivatives may serve any purpose, not just hedging. The fund "must ensure a comparable level of risk-spreading through an appropriate diversification of the underlying assets". It must also limit counterparty risk that is (i) not cleared by a clearing institution or (ii) not mitigated by collateral, such as a pledge (point 8(c)).

Repo, reverse repo and securities lending or borrowing are available to SIFs and Part II UCIs "to manage their portfolio more efficiently", with no percentage ceiling (points 28 to 30). Three tests apply instead. The technique must be economically appropriate, meaning it reduces risk or cost or generates additional capital or income. It must not change the fund's objectives or raise risk beyond what investors were told. And collateral must be diversified comparably to the investment limits. Circular 25/901 sets no commodity prohibition for a Part II UCI: its commodity restriction sits in the SICAR chapter. Circular 02/80 has been repealed. Whether any further restriction survives in the 2010 Law or in CSSF authorisation practice has not been read. Check the fund's own authorisation conditions.

This point decides the wrapper before any limit arithmetic. A long/short book, a commodities strategy, or any strategy that uses derivatives to create exposure rather than hedge it cannot carry the ELTIF label at all. No limit applies because Article 9(2) is a prohibition, and the Regulation offers no exception. For those strategies the retail passport is unavailable, and the plain Part II is the only one of the two routes still open. Model the prohibitions before the percentages.

How far the menu extends: intermediary vehicles, target funds and non-EU AIFs

The 55% menu is less restrictive in a structure chart than it looks on paper. Four European Commission answers in ESMA's ELTIF Q&A tool, all answered 14 March 2025, set out how much room there is.

• Intermediary vehicles are looked through and carry no eligibility test of their own (ESMA_QA_2468). An SPV or holdco used to reach an asset "is not itself an investment". Portfolio composition and diversification "shall be assessed by looking through such intermediary vehicles". So the vehicle need not meet the Article 11 qualifying-portfolio-undertaking conditions. Nor does it automatically become an AIF; that stays a case-by-case AIFMD assessment. An asset may also qualify under both Article 9(1)(a) and 9(1)(b) without being forced into one category.
• Target funds must hold eligible investments, but the look-through does not test eligibility (ESMA_QA_2470). A fund held under Article 10(1)(d) must itself invest in Article 9(1) and (2) eligible investments. Yet the look-through applies only to the investment-limit and diversification tests of Articles 13 and 16, not to eligibility. A target fund may therefore hold some non-eligible assets, provided the ELTIF's portfolio complies in aggregate.
• Non-EU funds are reachable, but not through the 55% (same answer). Units in a non-EU AIF are not an eligible investment asset, because the Article 10(1)(d) list reaches EU funds only. The exposure is still available through Article 9(1)(b). That point covers the assets in Article 50(1) of the UCITS Directive, whose point (e) includes collective investment undertakings established outside the EU that meet equivalence and cooperation conditions.

That last route has a consequence. Article 9(1)(b) is the ELTIF's liquid pocket, and redemption capacity is measured against it. Article 18(2)(d) limits redemptions to a percentage "of the assets of the ELTIF referred to in Article 9(1), point (b)", and the RTS Annex II floors use the same pool. Routing a non-EU fund allocation through Article 9(1)(b) therefore does more than sit outside the 55%. It enlarges the base on which the gate is calculated, with a holding that may be no more liquid than the private assets beside it. The eligibility question and the liquidity question draw on the same pool. The Article 9(1)(b) route is the Commission's answer. Its effect on redemption capacity is our reading of Article 18(2)(d), and no supervisory position on it has been located.

On look-through, the two regimes now work the same way. Circular 25/901 applies it to the Part II in one line. "When using intermediary vehicles, regardless of their legal form, the investment limits apply to the investments made through them, and not to the vehicles themselves" (point 10). An SPV that owes no eligibility test also gives no relief from the limits. In both regimes the fund is measured on the assets underneath it.

Concentration: the two limit sets are built differently, and infrastructure widens the difference

"20% against 25%" is the usual shorthand, and it is true of the headline position limit only. The ELTIF's limits are a grid of per-category caps measured on capital, meaning contributions plus uncalled commitments. They add a separate counterparty limit and a group-consolidation rule, and allow no derogation. The Part II's is one limit measured on assets or commitments to subscribe. It has a named exception for infrastructure, a sovereign carve-out, an economic-entity aggregation test and an express power for the CSSF to move it. Compared position by position, the ranking is not uniform.

Primary: Regulation (EU) 2015/760 as amended, Arts. 9(2), 13, 17 · Circular CSSF 25/901, points 8 to 12. ELTIF percentages are of capital (contributions plus uncalled commitments). Part II percentages are of assets or commitments to subscribe, except point 8(d)'s infrastructure limit, which the circular measures on assets alone.

The table yields three readings the headline comparison hides. First, on a diversified private-assets book the ELTIF is tighter, by more than 20 against 25 suggests. The 10% single-body limit on the liquid sleeve and the 10% counterparty limit have no Part II equivalent. A retail ELTIF running a treasury or hedging book meets fixed percentages. A Part II meets its 25%/50% position limits and the qualitative point 8(c) counterparty test instead.

Second, on a concentrated book the size of the gap depends on the asset. For infrastructure, a retail Part II may hold half the fund in one investment and a retail ELTIF one fifth, a factor of two and a half. The professional comparison produces no multiple. The Part II's infrastructure limit rises to 70%, while Article 13's diversification and concentration limits do not apply at all to an ELTIF marketed solely to professional investors.

Third, the Part II's numbers can be negotiated and the ELTIF's cannot. Point 12 is a two-way power. It lets a genuinely concentrated Part II strategy be authorised on a reasoned file. It also lets the CSSF tighten the limits for a specific investment policy, so a Part II sponsor cannot treat the published limits as the whole answer. The circular does not say what a "duly motivated justification" must contain, and no CSSF practice on point 12 has been read. The difference is one between the texts, not a measured difference in outcomes.

The structuring risk is easy to get backwards. Adding the ELTIF label to a Part II compartment substitutes the EU limit set for the CSSF one; it does not add to it. For an infrastructure fund the label therefore means rebuilding the concentration profile, not wrapping it. A two-asset retail infrastructure fund that sits inside point 8(d) may be authorised as an ELTIF during the Article 17 ramp-up period, when Article 13's limits do not apply. It must then diversify to meet Article 13(2)(b) by the fund's chosen ramp-up deadline. Count the positions before you count the countries. Note also that 25/901 does not define infrastructure. Nor does it say how to treat a portfolio of related assets, such as a grid of sites or a platform company holding several concessions. It could be one investment or several (see To verify).

When the limits start to apply: two ramp-up periods with different start dates

Neither regime requires the limits to be met on day one, and both say so. They differ on when the period starts, where the deadline is written and how long it lasts. On a fund of ordinary length, the regime that looks more generous is the tighter one.

Primary: Regulation (EU) 2015/760 Art. 17, consolidated as amended; Circular CSSF 25/901, section 4.2 (points 14 to 18). The Part II ramp-up and wind-down periods are annotated on our 25/901 page.

The "five years against four" headline hides three points. First, the periods start on different events. The ELTIF's runs from the date of authorisation. The Part II's runs from launch, which the CSSF ties to the first subscription. The two dates coincide only for a fund that closes the moment it is authorised. Every month between an ELTIF's authorisation and its first close uses up part of the five years with nothing invested.

Second, most funds never reach five years, because "whichever is earlier" decides it. The window is the shorter of five years and half the fund's life. A six-year ELTIF gets three years and an eight-year ELTIF gets four. Only a fund with a life of ten years or more reaches the full five. Against the Part II's flat four-year private-investment ramp-up, the ELTIF is tighter on any fund with a life under eight years, level at eight, and more generous only above it.

Third, where the date is written decides how hard it is to move. The ELTIF's sits in the rules or instruments of incorporation, so moving it is a constitutional amendment with whatever investor consent that requires. The Part II's sits in the sales document, which needs a new CSSF visa. The extension routes also differ. The CSSF asks for justification. The ELTIF's NCA asks for a duly justified investment plan, a document you must build around a pipeline you may not have. Set the Article 17(1)(a) date against the deployment model, not the five-year maximum. It is the one number on this page the manager chooses, and the fund lives with it for the whole ramp-up.

Both regimes cap borrowing and both scale the cap to the investor type, so the headline numbers look comparable. They are not. The ELTIF attaches four cumulative conditions to every drawing and the Part II attaches one, and the two caps are measured against different things.

Primary: Regulation (EU) 2015/760 Art. 16, consolidated as amended; Circular CSSF 25/901, Chapter 7 (points 31 to 34) and point 46. The Part II carve-outs are annotated on our 25/901 page.

The numbers hide three points. First, 50 against 70 understates the gap because the bases differ. The ELTIF's cap sits on net asset value, while the Part II's may sit on commitments to subscribe. On a largely undrawn fund, commitments are a far larger base than NAV. The same facility can therefore comply under one regime and breach the other. Compliance monitoring must run on whichever basis the sales document chose.

Second, the ELTIF's sufficiency test applies to each drawing, not to a portfolio ratio. Article 16(1)(b) permits borrowing only where the fund's cash and cash equivalents "are not sufficient to make the investment concerned". An ELTIF holding enough cash may not draw at all, however far below 50% it is. A supervisor will ask for the cash position at the moment of each drawing, not a month-end utilisation figure. Nothing in 25/901 imposes that test, and point 31 expressly lets a Part II borrow to meet redemptions. Whether the 2010 Law or CSSF authorisation practice adds a borrowing condition beyond Chapter 7 has not been read.

Third, the currency and maturity conditions are structural. An ELTIF's facility cannot outlive the fund. It cannot be raised in a currency other than the asset's unless the exposure is appropriately hedged. On a multi-currency book that is a treasury constraint with no Part II equivalent. Both regimes then agree on the point that matters most to a private-assets raise: a subscription line fully covered by undrawn commitments is outside the cap. The qualifications differ, though. The ELTIF's carve-out is unqualified, while 25/901's covers only temporary arrangements and adds "in general". The Part II wording reads as more generous but is the more conditional of the two.

The 12-month suspension is the exception, and it runs the other way. For an evergreen retail ELTIF that raises capital continuously, the limit is suspended whenever the fund raises or reduces capital. The binding constraint is then not the 50%. It is the "strictly necessary" test and the interests of investors, as your NCA assesses them. That is a supervisory judgement to be evidenced, not a figure to be monitored, and it is harder to pass.

A European Commission answer in ESMA's ELTIF Q&A tool settles two readings of that relief (ESMA_QA_2471, answered 14 March 2025). First, its reach. Article 16(4) and Article 17(1)(c) "apply to all ELTIFs, irrespective of whether they are closed-ended or open-ended". The suspension is not limited to open-ended funds or to borrowing. Article 17(1)(c) suspends the portfolio-composition and diversification requirements on the same terms. A closed-ended ELTIF drawing down its first vintage therefore has both reliefs running at once.

Second, its conditions. Throughout the suspension the manager must "take such measures as are necessary to comply with the composition and diversification requirements and/or the borrowing limits". It must do so "taking due account of the interests of the investors". Nor may it take certain steps while the fund sits above a limit. Those are decisions or actions "outside of the ordinary course of business in line with the terms of the ELTIF" that would further increase borrowing or concentration. That carve-out matters. An ordinary-course drawdown or follow-on that the ELTIF's own terms provide for is not caught.

The carve-out has two limbs, and a step must meet both. It must be in the ordinary course of business and in line with the fund's terms. Broad borrowing authority in the constitutional documents does not, on its own, make an unusual step permissible. Routine practice does not excuse a step the terms do not support. A supervisor will test the file against that rule. A suspended limit still needs a documented path back to compliance. The Part II has neither the relief nor the duty: 25/901 asks for a maximum in the sales document and compliance with it.

Annex I also tabulates two-week, one-month, six-month, nine-month and twelve-month notice periods, two-monthly, bi-weekly and weekly dealing, and two aggregation options.

ELTIF 1.0 already allowed redemptions during the fund's life under Article 18(2) conditions. ELTIF 2.0 rewrote those conditions for open-ended, partly liquid ELTIFs sold to private-wealth investors. The liquidity RTS (Commission Delegated Regulation (EU) 2024/2759, in force 26 Oct 2024) sets the mechanics. An open-ended ELTIF that permits redemptions must gate them. Under Article 5(5) the AIFM calibrates the maximum redeemable percentage in one of two ways:

• By notice period (Annex I). The maximum redeemable at a redemption date depends on redemption frequency and notice-period length. Quarterly dealing with a 3-month notice period caps redemptions at 33.3% of the redeemable pool. Monthly dealing with no notice allows just 8.3% (2024/2759 Annex I).
• By liquid-asset floor (Annex II). The fund holds a minimum percentage of liquid assets and can redeem up to a set share of them. In the RTS's own terms these are the UCITS-eligible assets of Article 9, the ELTIF's liquid pocket, not "cash". Quarterly dealing with a 20% liquid-asset floor allows up to 50% of that pool. Monthly dealing demands a 25% floor and permits only 20% of it (2024/2759 Annex II). Across both annexes, the more often a fund deals, the more of it must sit in liquid assets the strategy did not want.

The maximum redemption applies to the fund's liquid assets at the redemption date plus cash flows prudently forecast over the next 12 months (Art. 5(6)). Notice periods shorter than 3 months must be notified to the NCA with the reasons (Art. 5(8)).

An ELTIF cannot run different notice periods, redemption gates or redemption frequencies across unit or share classes. A European Commission answer in ESMA's ELTIF Q&A tool confirmed this (ESMA_QA_2013, answered 28 February 2025). Reading Recital 48 of 2023/606, the Commission held that different terms would give some investors preferred access to the liquid pocket. That would breach the fair-treatment and pro-rata redemption duty in Article 18(2)(e). It would also defeat the manager's duty to aggregate redemption requests across all unit or share classes. An institutional class dealing on shorter notice than the retail class is not available in an ELTIF.

The Commission answers that give managers room within the RTS

The Annex tables read like a fixed grid. A set of European Commission answers in ESMA's ELTIF Q&A tool, all answered 14 March 2025, show how much room the manager actually has. Four matter operationally.

• The Annex percentage is a ceiling, not a target (ESMA_QA_2482). A manager may set a redemption cap below the Annex I or II maximum. It may be a fixed percentage of net assets, an absolute amount, a NAV-based threshold or another measure. Article 18(2)(d) sets the maximum at each redemption date, and nothing forces the manager to use it.
• Daily dealing is not prohibited (ESMA_QA_2477). Neither the Regulation nor the RTS bars dealing more often than weekly, daily included. The Annexes are framed as "weekly/monthly or more frequent". The frequency must match the fund's liquidity profile, strategy and valuation method. That is a matter of supervisory evidence rather than a number.
• Falling below the Annex II liquid floor does not stop the fund (ESMA_QA_2475). Compliance is tested at each redemption date. A temporary breach caused by market moves or redemptions does not freeze the fund. The manager must take the Article 5(7) "necessary measures" to rebuild the minimum within a period suited to that ELTIF, in principle by the next redemption date. Those measures can include retaining income, applying new subscription cash, drawing unfunded commitments or selling long-term assets. The manager may keep accepting redemptions while the floor is rebuilt.
• Forecast cash flows need a high degree of certainty (ESMA_QA_2476). The manager must show "a high degree of certainty" that the 12-month flows in Art. 5(6) will materialise. Contractual payment timing and the absence of deferral clauses are the evidence. For a private-debt ELTIF that means interest and principal from non-defaulting issuers, assessed loan by loan. The answer expressly excludes selling long-term assets or raising new subscriptions.

The last answer matters most. The uplift managers tend to assume ("we can always sell something, or the next close will fund it") is the one the Commission ruled out. Redemption capacity is what the loan book contractually pays, not what the fund could sell.

Disclosure, holding periods and the matching mechanism

Five further points from the same Q&A series shape the terms you write.

• Choosing Annex II puts a number in the prospectus that Annex I does not (ESMA_QA_2472). Article 18(2)(d) concerns a maximum, and the Regulation imposes no general duty to disclose a minimum percentage of liquid assets. But where the manager calibrates using Annex II, the minimum becomes "an essential feature of the ELTIF's redemption policy" and must be disclosed under Article 23(4)(d). For an Annex I or closed-ended ELTIF disclosure is voluntary. Annex II therefore commits the fund publicly to a liquid-asset floor it must hold and rebuild.
• Minimum holding periods can run per investor or per fund (ESMA_QA_2478). Neither the Regulation nor the RTS prescribes the mechanics. A manager may run the period from the ELTIF's launch date for all investors, or from each subscription's capital-contribution date. The choice should fit the structure, fixed-term or evergreen, subject to fair treatment and disclosure.
• A holding period before distributions is allowed and is not a "cost" (ESMA_QA_2480). An ELTIF may set a period during which holders cannot benefit from distributions, provided the frequency and timing of distributions are disclosed under Article 23(4)(e). That arrangement "cannot be considered as a 'fee' or a 'cost'". It is not among the charges in Article 25(1) or the RTS, so it does not enter the five cost categories or the overall cost ratio. A distribution delay is therefore a structuring tool that does not show up in the number retail investors compare.
• The liquid-asset test applies at the dealing date, not when notice is given (ESMA_QA_2474). The maximum redemption is fixed at the "redemption date", which the Commission reads as "the actual dealing date (i.e. the date when a subscription or redemption order is processed)". It is not the earlier deadline for submitting the order. On a quarterly fund with a three-month notice period, a full quarter separates the investor's order from the liquidity position the gate is measured against. The manager carries the market risk across that period.
• Matching is not a dilution event (ESMA_QA_2479). Matching transfers units between investors without creating or cancelling any. No dilution arises, and the matching itself needs no anti-dilution levy. Anti-dilution tools may still apply to subscriptions or redemptions processed alongside it (RTS Art. 5(9)). Transfer fees that are not anti-dilution charges are permitted under Article 19(2a)(a)(vii).

The Part II has no statutory equivalent to matching. Article 19(2a) of 2015/760 is new in 2.0. An ELTIF's rules may provide for "full or partial matching of transfer requests of units or shares of the ELTIF by exiting investors with transfer requests by potential investors". The manager must have a policy that sets the transfer process, the request windows, the execution price, the pro-ration rules, the disclosure timing and the fees. Matching must treat investors fairly, with pro-rata matching where requests do not balance. It must also fit the fund's long-term strategy and liquidity-risk monitoring. Matching gives an exiting investor liquidity without touching the portfolio. It is the one liquidity route that neither uses the Article 9(1)(b) pocket nor triggers the gate. A Part II can write transfer arrangements into its documents, but only as a contract, not as a regulated feature.

The Part II UCI has no prescribed gate. The fund sets its own redemption terms. Commentary describes market practice for private-asset Part II funds as monthly or less frequent dealing with roughly 90-day notice. That is an observation, not a rule: point 45 of 25/901 expressly allows less-than-monthly redemption where the investment policy provides for private investments (25/901 pt 45). What 25/901 added is a disclosure duty, not a cap. The sales document must set out frequency, notice and settlement, the liquidity management tools and their triggers, and the treatment of the unexecuted part of gated orders. That means whether they are cancelled or carried forward, at which NAV and with what priority (25/901 pts 43 to 45). The ELTIF's constraint is a fixed EU-level formula, while the Part II's is a design-and-disclosure obligation. If you add the ELTIF label to a Part II, the RTS gate applies and the sales document must describe it.

Annex I and Annex II hold many more frequency and notice combinations than the summary table above. Read the full annexes for any calibration not shown. The Q&As cited here carry the answer date shown on ESMA's tool. That is 6 December 2024 for 2363, 28 February 2025 for 2013 and 14 March 2025 for the rest. Some commentary reports them as a batch published on 5 December 2025, which is likely when ESMA surfaced them. The ELTIF entries run ESMA_QA_2468 to 2482, plus 2013 and 2363; seventeen in all, of which fifteen carry a published answer and are reflected on this page. An ELTIF answer can sit anywhere in the tool's numbering, and the Commission continues to add to the series. Two related Commission questions remain unanswered (see To verify).

The layer over both: AIFMD II liquidity management tools

Since 2026 a third layer applies, and it treats both wrappers alike. AIFMD II requires the manager of an open-ended AIF to select at least two liquidity management tools (LMTs) from the AIFMD's new Annex V. The choice is limited to points 2 to 8 (Art. 16(2b)). Those are gates, notice extension, redemption fees, swing pricing, dual pricing, anti-dilution levies and redemption in kind. Suspension (point 1) and side pockets (point 9) do not count toward the two, and the selection may not consist only of swing pricing and dual pricing. The manager must calibrate, activate and deactivate them. Commission Delegated Regulation (EU) 2026/465 fixes each tool's characteristics (adopted 17 November 2025, OJ 27 February 2026). It applies from 16 April 2026, and AIFs constituted before that date have until 16 April 2027.

ESMA's guidelines on selecting and calibrating the tools followed on 12 March 2026. The CSSF adopted them into its supervisory practice by Circular CSSF 26/910 of 15 April 2026, on the same two dates. The full AIFMD II sequence is tracked on our AIFMD II implementation tracker.

An open-ended ELTIF and an open-ended Part II UCI are both open-ended AIFs, so both are covered. The Part II's liquidity terms are no longer purely national, and the ELTIF's RTS gate is no longer the only EU instrument involved. The RTS sets how much may be redeemed. The LMT regime governs the tools used when that is not enough. For a plain Part II, 25/901 also governs what the sales document must say about both. An ELTIF-authorised compartment sits outside 25/901 (point 2), so its disclosures follow the ELTIF Regulation.

Two further points apply. First, the duty binds the manager, not the fund. About a quarter of Luxembourg ELTIF units (41 of 176) are run by a French or Irish AIFM, on the CSSF's figures below. For those, the AIFM's home regulator applies its own version of the guidelines, not 26/910. Second, 26/910 applies to authorised AIFMs. It only recommends that open-ended Part II UCIs managed by a registered (sub-threshold) AIFM follow it. A sub-threshold manager should not read that as exemption from the 25/901 disclosure duties, which are not optional.

Credit is the strategy this comparison is most often run for, and the wrapper rules say little about it. The ELTIF Regulation covers lending in two lines of its eligible-asset article. Circular 25/901 does not cover it for a Part II UCI at all. Since 16 April 2026 the substantive rulebook for a fund that writes loans is AIFMD II, and it applies to both wrappers identically.

Two definitions decide whether any of it applies. Loan origination is "the granting of a loan". Limb (i) covers a loan granted "directly by an AIF as the original lender". Limb (ii) covers a loan granted "indirectly through a third party or special purpose vehicle which originates a loan for or on behalf of the AIF". That limb applies "where the AIFM or AIF is involved in structuring the loan, or defining or pre-agreeing its characteristics, prior to gaining exposure to the loan". An origination platform in front of the fund therefore does not take it outside the definition. A loan-originating AIF carries the heavier rules. It is an AIF "(i) whose investment strategy is mainly to originate loans". Or it is one "(ii) whose originated loans have a notional value that represents at least 50 % of its net asset value" (2011/61/EU Art. 4(1)).

The second limb is a ratio, not a strategy statement. A fund that describes itself as a mixed private-assets vehicle can become loan-originating through NAV movements alone, without changing what it does.

What each wrapper's own instrument says

Primary: Regulation (EU) 2015/760 Arts. 10, 11 and 13, consolidated as amended; Circular CSSF 25/901, points 8, 11, 20 to 21.

Circular 25/901 imposes no loan-origination rule on a Part II UCI. That is read from what the circular does not say, not from a provision stating there is none. Whether the 2010 Law or CSSF authorisation practice adds a lending condition for a Part II UCI has not been read.

The AIFMD II layer: the same on both, from 16 April 2026

Everything below applies to a Luxembourg Part II UCI and a Luxembourg ELTIF alike. Both are AIFs, and the duties bind the AIFM. A comparison of the two wrappers cannot help with this part of a credit fund's rulebook, and it is most of it. What varies is the fund's constitution date, not the wrapper. Read this table with the Article 61(6) transitional that follows before applying it to an existing fund.

Primary: Directive 2011/61/EU, Arts. 4(1), 15 and 16, consolidated to 16 April 2026, as inserted by Directive (EU) 2024/927. Art. 4(1) defines "capital of the AIF" as "aggregate capital contributions and uncalled capital committed to an AIF". These are amounts "calculated on the basis of amounts investible after the deduction of all fees, charges and expenses that are directly or indirectly borne by investors". The AIFMD II sequence is tracked on our AIFMD II implementation tracker.

Three points follow from the two tables. First, which instrument prevails where they overlap. The operative text answers it. The Art. 15(4a) cap is stated "without prejudice to the thresholds, restrictions and conditions set out in … Regulation (EU) 2015/760". Recital 22 of 2024/927 gives the principle: the ELTIF Regulation's specific product requirements "should take precedence over the more general rules set out in Directive 2011/61/EU". But precedence operates only where the ELTIF Regulation actually covers the point, and for most of the second table it does not. It has no provision on risk retention, originate-to-distribute, lending to your own depositary or the closed-ended presumption. Those apply to an ELTIF in full.

Second, the caps use different bases, and the tighter one is often not the one being modelled. The AIFMD 20% single-borrower cap and the ELTIF's own 20% both sit on capital, meaning contributions plus uncalled commitments. The 175%/300% leverage cap sits on net asset value, as does the ELTIF's 50%/100% borrowing cap. The two caps measure different things. The ELTIF cap counts cash borrowing. The 175%/300% ratio counts total exposure on the commitment method, which includes the assets that borrowing buys and any derivative exposure. A fully invested fund borrowing 50% of NAV already sits near 150% exposure before derivatives. A retail credit ELTIF must therefore run both calculations. For a plain Part II credit fund the position reverses. 25/901 caps borrowing at 70% of assets or commitments but says nothing about total exposure. The AIFMD's commitment-method ratio is then the only constraint on overall leverage. A derivative-heavy book can sit well inside the borrowing limit and outside the leverage one.

Third, the two 20% caps are different caps, and a credit ELTIF is subject to both. The ELTIF's applies to a single qualifying portfolio undertaking and pools equity and loans in one bucket. The AIFMD's applies to a single borrower, but only where that borrower is a financial undertaking, an AIF or a UCITS. They catch different exposures. A unitranche loan to a trading company falls inside the ELTIF limit and outside the AIFMD one. A loan to a fund or a newly authorised specialist lender can fall inside both, on two different bases with two different start dates. The ELTIF's runs from the ramp-up date under Art. 17(1). The AIFMD's runs from the 24-month date under Art. 15(4c).

The closed-ended presumption is the hardest constraint in this section, and no Level 2 standard yet defines the way out. An open-ended private-credit fund under either wrapper is a loan-originating AIF if its strategy is mainly to originate loans or its originated loans reach 50% of NAV. A fund that only buys loans others originated does not meet either test automatically. A loan-originating AIF must be closed-ended unless its AIFM can show its home regulator a compatible liquidity-risk-management system (Art. 16(2a)). For an ELTIF that is a second gate, separate from the RTS. Calibrating the Annex I or II redemption grid does not satisfy it. The RTS answers how much may be redeemed, and Art. 16(2a) answers whether the fund may be open-ended at all.

The instrument that would define "compatible" is not in force, and the Commission has said it will not arrive soon. Article 16(2f) mandates ESMA to draft technical standards setting the requirements for a loan-originating AIF to stay open-ended. They were due to the Commission by 16 April 2025 (Art. 16(2i)). ESMA delivered them in its final report ESMA34-671404336-1345, dated 21 October 2025. The report closes with the standard line that the draft RTS "have been submitted to the European Commission for adoption". It adds that the Commission "shall take a decision on whether to adopt the RTS within three months".

The Commission had already decided otherwise three weeks earlier. On 1 October 2025 the Director-General of DG FISMA wrote to the chairs of ESMA, EIOPA, the EBA and AMLA. The letter classed 115 of the 430 Level 2 empowerments in the 2019 to 2024 financial-services acquis as "non-essential for the effective functioning of the Level 1 legislation". It undertook that the Commission "will not adopt the non-essential Level 2 acts listed in the annex to this letter before 1 October 2027" (Commission letter Ares(2025)8295022). Entry 45 of the annex is "RTS on open-ended Loan Originating Funds". It names basic act "AIFMD2/UCITSD6 – (EU) 2024/927" and legal basis "Art. 16(2f)", listed as a "Shall". The standards that did arrive are different: Delegated Regulation (EU) 2026/465 implements the sibling mandate in Art. 16(2g) on liquidity management tools, not this one.

The two documents do not refer to each other. ESMA's report says a three-month adoption clock is running. The Commission's letter, published three weeks earlier, says that clock does not apply to this mandate until at least October 2027. Nothing in the final report mentions the de-prioritisation. The absence of a standard is therefore stated policy with a horizon, and it is the operating condition for 2026 and 2027. A manager launching an evergreen credit fund under either wrapper must argue for open-endedness against a draft standard. The regulator has no adopted grid to measure it by, and none is expected soon. Build the liquidity-risk file to persuade, not to tick boxes.

The letter also has a second limb. Where a de-prioritised empowerment carries a legal deadline, the Commission "will propose to amend or repeal the empowerment" during any ongoing revision of the relevant Level 1 act. Article 16(2i) sets such a deadline, and it has passed. The draft standard may therefore never be adopted, not merely be late. The letter is an administrative undertaking, not a legal instrument, and it does not amend Article 16(2f) or (2i). What follows from the Commission holding a "Shall" empowerment unexercised past its deadline has not been read. No proposal touching Article 16(2f) has been located, and whether the Commission has revised the list since 1 October 2025 has not been re-checked. Nor has any interim CSSF or other NCA statement on what a "compatible" system means, or whether a supervisor treats ESMA's draft as its working standard. The transitional below changes the position for existing funds.

Who the loan-origination regime binds: the Article 61(6) transitional

Everything in the table above is the law in force. For a large part of the existing market it is not yet the law that binds. The transitional sits in Article 61(6) of the AIFMD, inserted by Directive (EU) 2024/927. Secondary commentary often cites "Article 61(5)". The same Directive deleted paragraph 5. The loan-origination transitional is paragraph 6, and a reader who looks up 61(5) in the consolidated text finds nothing there.

Primary: Directive 2011/61/EU, Article 61(6), consolidated to 16 April 2026, as inserted by Directive (EU) 2024/927. Read paragraph by paragraph from the consolidated text. The same amending Directive deletes the former Article 61(5).

Four points follow. First, the pivot date is not the application date. Every limb turns on 15 April 2024, the day before AIFMD II entered into force. It does not turn on 16 April 2026, when the rules started to apply. Funds constituted between 16 April 2024 and 16 April 2026 therefore fall outside every limb, even though they pre-date application. That reading is ours, drawn from the dates in the text. No Commission, ESMA or CSSF statement on that window has been located.

Second, the relief is not open-ended headroom. Until 16 April 2029 the standstill works in two ways. A fund already above the Art. 15(4a) or (4b) limits "shall not increase that value or that leverage", so it is held at its current level. A fund below the limits may grow, but "shall not increase that value or that leverage above those limits". Being deemed to comply therefore lets a compliant fund use the space up to the caps, and stops a fund over them from going further.

Third, the grandfathering works at two levels, and only one is the fund. Article 15(4a) to (4d) and Article 16(2a) are relieved fund by fund, on the constitution date. Article 15(3)(d) and Article 15(4e) to (4i) are relieved loan by loan, and only for loans originated before 15 April 2024. An old fund writing a new loan today is fully subject, for that loan, to the credit-policy duty, the prohibited-borrower list, the originate-to-distribute ban and the 5% retention. At fund level it benefits from deemed compliance with the concentration and leverage caps, subject to the standstill. "We are grandfathered" is never a complete answer. Ask which provision, and whether it attaches to the fund or to the loan.

Fourth, the opt-in is a notification, not an application. An AIFM that prefers the new rules, perhaps because a distributor, an investor or a downstream ELTIF authorisation expects them, elects in by telling its home competent authority. The text has no approval step. It is the simplest route on this page.

One qualification softens an earlier point. The closed-ended presumption of Article 16(2a) has no adopted Level 2 standard, as described above. It is also one of the provisions a pre-15-April-2024 loan-originating fund is deemed to comply with until 16 April 2029. An existing evergreen credit fund therefore need not make the liquidity-risk-management case to its home regulator yet, and the missing Article 16(2f) standard costs it nothing meanwhile. The exposure falls on the new fund, which must argue open-endedness against a draft standard. It falls on the existing fund in 2029, when the standard may exist and the fund will have five years of operating history to be measured against. Consider now whether that history will help or hurt. The Directive and the Luxembourg law state the relief as "deemed to comply", and whether the CSSF asks anything further of a fund relying on it has not been read.

Where the rules sit in Luxembourg, and the national option Luxembourg took

A Luxembourg file cites the national law, not the Directive. Luxembourg transposed AIFMD II by the Law of 3 March 2026 (Mémorial A n° 115 of 9 March 2026, the former Bill 8628). It amends the 2010 Law and the Law of 12 July 2013 on AIFMs. It entered into force on 16 April 2026, except its Articles 16 and 42, points 1° and 2°. Those two enhanced supervisory-reporting limbs apply from 16 April 2027 (Art. 57). The transposition is minimal: the substance is the Directive's, but the article numbers differ. Both wrappers sit under the same map, because both are AIFs managed by an AIFM subject to the 2013 Law.

Primary source. Loi du 3 mars 2026 … en vue de la transposition de la directive (UE) 2024/927. It amends the laws of 17 December 2010 and 12 July 2013. Published in Mémorial A n° 115 of 9 March 2026 (Arts. 29, 35, 36, 41, 54, 57). Read against Directive 2011/61/EU consolidated to 16 April 2026. The domicile-by-domicile version of this regime, including Ireland's transposition, is on our loan-originating funds: Ireland vs Luxembourg page.

The option changes strategy, not just citations. Article 15(4g) lets a Member State prohibit AIF lending to consumers in its territory, and Luxembourg took it. The new Article 4-1 of the 2013 Law is in two limbs. Loan-originating AIFs "ne sont pas autorisés à octroyer, au Luxembourg, des prêts à des consommateurs au sens de l'article L. 010-1 du Code de la consommation pour les contrats de crédit régis par le livre 2, titre 2, chapitre 4, du Code de la consommation". A second limb adds that AIFs "ne sont pas autorisés à s'occuper de la gestion de crédits accordés à de tels consommateurs au Luxembourg". Servicing a Luxembourg consumer-credit book is therefore prohibited along with origination. That reaches a fund that bought the portfolio rather than wrote it.

The prohibition changes only one of the two wrappers. An ELTIF could not make these loans anyway. Its lending is an eligible asset only where the borrower is a qualifying portfolio undertaking under Article 11 of 2015/760, which is an undertaking, not a household. Article 4-1 therefore has no practical effect inside the label. For a plain Part II UCI it is the first hard borrower-identity rule the vehicle has carried. It comes from the AIFM law, not from Circular 25/901, which says nothing about Part II lending. Elsewhere on this page the ELTIF's limits are the price of the passport. Here the plain Part II gains nothing from being outside them, because the restriction is national and applies whatever the wrapper.

Article 4-1 does not define "au Luxembourg". It could refer to the borrower's residence, the place the credit contract is concluded or the fund's own establishment. The reading here is that a Luxembourg fund lending to consumers in another Member State is a question for that state, because the Article 15(4g) option is national. That follows the wording but is ours, and no CSSF position on it has been located.

The transitional lands in Article 58(7), and it tracks Article 61(6) limb for limb. AIFMs managing loan-originating AIFs constituted before 15 April 2024 are deemed to comply with Art. 14(5) to (8) and Art. 15(3) until 16 April 2029. The standstill bars a fund above the limits from increasing the single-borrower notional or the leverage, and bars a fund below them from increasing either above the limits. A fund raising no additional capital after 15 April 2024 is deemed compliant with no stated end date. The opt-in is a notification, with the CSSF as the authority to be informed. The law says "pour autant que la CSSF … en soit informée" and asks for nothing else in its text.

The last subparagraph needs close reading. Loans originated before 15 April 2024 may be managed without complying with Art. 14(3)(d) and paragraphs 9 to 12 "et à l'article 4-1", in respect of those loans. Luxembourg thus makes clear that the carve-out extends to its own consumer-lending prohibition. That is how the Directive's Art. 15(4e) to (4i) range transposes when one of those limbs has moved to a national article.

The transposition is also notable for what it leaves out. The law amends the 2010 Law only in its UCITS and management-company provisions: Articles 12, 26 to 28, 41, 49, 101, 102, 110, 111 and 115. Part II's own chapter is untouched. Nothing about loan origination was added to the Part II product law, because the rules bind the manager, not the vehicle. That matters for a Part II UCI run by a non-Luxembourg AIFM, an arrangement a third of the Luxembourg ELTIF population already uses (see the manager split below). The 20% borrower cap, the leverage ratios, the closed-ended presumption and the consumer prohibition then arrive through that AIFM's own home transposition, not this law. A Luxembourg Part II managed from Paris or Dublin reads the French or Irish text for nine of the eleven rows above. Article 4-1's territorial limb still catches lending it does in Luxembourg. The fund has two rulebooks, and its domicile determines only one of them.

"Evergreen" is a commercial description, not a legal one. Article 18(1) of 2015/760 applies to every ELTIF, open-ended ones included. Its rules must "clearly indicate a specific date for the end of the life of the ELTIF". They may also provide a right to extend that life temporarily, with the conditions for using it. An open-ended ELTIF is therefore a long-dated fund with a stated end date and an extension mechanism. That does not bar a perpetual product.

A European Commission answer in ESMA's ELTIF Q&A tool says so directly (ESMA_QA_2363, answered 6 December 2024). The Regulation "enables ELTIFs to have a life and/or a life-cycle determined by the ELTIF managers on a case-by-case basis". Managers "can set up ELTIFs with the life and the life-cycle they deem appropriate, subject to the requirements of the ELTIF Regulation". And "setting up a perpetual ELTIF is also a possibility".

The two statements fit together because Article 18(1) fixes the form of the answer, not its length. The rules must name a date and may give a right to extend it. Nothing in the Regulation caps how far out that date is set or how often the right may be used. "Perpetual", in the commercial sense, is a drafting question rather than an authorisation one. That is why the fund-life row of the comparison table compares extension routes, not end dates. This reconciliation is our reading. Neither text explains it, and no NCA authorisation practice on how distant an end date may be has been read. Do not draft a perpetual structure on this paragraph alone.

Redemptions before the end date are possible only on the Article 18(2) conditions. None may be granted before the end of a minimum holding period or before the Article 17(1)(a) date, so a fund can rely on either. The minimum-holding-period condition does not apply to a feeder ELTIF investing in its master. The RTS asks only whether a minimum holding period exists (2024/2759 Art. 5(1)(g)). The redemption policy and liquidity management tools must be ones the manager can show the NCA are compatible with the long-term strategy, at authorisation and throughout the life. Procedures must be disclosed. Redemptions are limited to a percentage of the Article 9(1)(b) assets, with pro-rata fair treatment where requests exceed it.

The end date also triggers a filing with a fixed lead time. Under Article 21(1) the ELTIF must inform its competent authority of the orderly disposal of its assets at the latest one year before the end-of-life date. The itemised disposal schedule is submitted only upon the request of the competent authority. Where requested, it must contain four elements (Art. 21(2)). They are an assessment of the market for potential buyers and an assessment and comparison of potential sales prices. They also include a valuation of the assets to be sold and a timetable for the disposal. Put that date in the fund calendar as soon as the end date is fixed. Have the schedule ready by then, because a request can follow the notification at any point.

The Part II has no statutory end of life; its term is whatever the constitutive documents say. Where a Part II does have a term, Circular 25/901's ordinary route permits extensions "by one year, up to a maximum of three times". They must be necessary "to allow the investments to reach their full potential", and the fund's instruments or the compartment's sales document must provide for them. In exceptional circumstances the CSSF may grant a derogation on a duly motivated justification (25/901 point 49). The ELTIF Regulation sets no numeric limit and leaves the conditions to the fund's own rules. 25/901 also requires the sales document to describe the procedure for changing the investment policy or making another material change. It notes that a notice period with a free-of-charge redemption option may be required (point 48).

25/901 grandfathers funds authorised before 19 December 2025 (point 50). Whether a pre-existing Part II whose documents carry a longer extension mechanism may keep relying on it has not been confirmed with the CSSF.

An ELTIF-authorised compartment sits outside 25/901 entirely (point 2), so the ordinary three-extension route does not travel with the label. A plain Part II is not barred at a fourth year either, because point 49 gives the CSSF an exceptional derogation power. The choice is therefore between a Part II case made to the CSSF and an ELTIF whose Regulation sets no numeric limit. It is not a choice between three years and a hard stop.

The carve-out is not the main reason. The other half of ESMA_QA_2363 answers the question directly. Member States "are not allowed to introduce limitations on the life and/or the life-cycles of ELTIFs", because Article 1(3) bars them from adding requirements in a field the Regulation covers. The Commission names Article 18(1) to (3) and the RTS as the instruments that already cover it. A national ceiling on a fund's term, general or fund-specific, therefore could not bind an ELTIF whether or not 25/901 had carved it out. This is the passport asymmetry again, on a different dimension. The Part II's term sits under a Luxembourg rule the CSSF can tighten. The ELTIF's does not.

The limits get the attention, but the conduct chapter shapes the distribution agreements, the fee grid and the subscription process. Taking the ELTIF label on a retail-marketable fund brings in obligations the Part II has no equivalent for.

• MiFID product governance applies to the fund manager. Article 27 subjects the manager of a retail-marketable ELTIF to Article 16(3), second to fifth and seventh subparagraphs, and Article 24(2) of MiFID II. These cover the product-approval process and target-market rules. An AIFM that is not a MiFID firm takes on those duties through the label.
• Point-of-sale written alerts. Under Article 30(2) the distributor, or the manager where it offers or places directly, must issue a clear written alert in two cases. Where the ELTIF's life exceeds 10 years, the product "might not be fit for retail investors that are unable to sustain such a long-term and illiquid commitment". Where the rules provide for matching, its availability "does not guarantee or entitle the retail investor to exit". Article 30(3) disapplies paragraphs 1 and 2 for some retail investors. The investor must be senior staff, a portfolio manager, director, officer, agent or employee of the manager or an affiliate, and has sufficient knowledge about the ELTIF.
• Equal treatment inside the class. Article 30(5) sets a rule for a retail-marketed ELTIF. All investors must "benefit from equal treatment". No "preferential treatment or specific economic benefit" may go "to individual investors or groups of investors within the relevant class or classes".
• No further liability. The legal form must not create any liability or commitment for the retail investor beyond the original capital commitment (Art. 30(6)).
• A two-week cancellation right. Retail investors may cancel during the subscription period and for two weeks after signing the initial commitment or subscription agreement. They get their money back without penalty (Art. 30(7)).
• Complaints in the investor's own language. Procedures must let a retail investor file a complaint in an official language of their Member State (Art. 30(8)).
• A single cost number. Beyond the five prescribed cost categories, the prospectus "shall disclose an overall cost ratio of the ELTIF" (Art. 25).
• Feeder disclosure. A feeder ELTIF must state in its marketing communications that it permanently invests 85% or more of its assets in the master (Art. 30(4)).

The Part II's retail conduct duties are narrower and sit in one place. They apply where a fund or compartment may be marketed to unsophisticated retail investors and invests significantly in private investments. The sales document must then warn that the investment may involve a high level of risk and suits only persons able to bear it. It must also say that "the average subscriber is advised to invest only a portion of the sums allocated to long-term investments" (25/901 point 47).

Both regimes now carry a ten-year warning, and they trigger on different facts. The ELTIF's falls on the distributor at the point of sale and turns on the fund's life. The Part II's sits in the sales document. It turns on the life "or the period during which the investors cannot exit" exceeding, or possibly exceeding, ten years. A seven-year Part II with a lock-up that could run past ten years falls inside the Part II warning and outside the ELTIF one. The two do not apply to the same fund. An ELTIF-authorised compartment is carved out of 25/901, so it gives the Article 30 alert and not point 47's.

Article 30(5) is the main risk, and it affects distribution teams rather than portfolio teams. Anchor economics, seed-investor fee rebates and founder classes on better terms are normal in a private-assets raise. Inside a retail ELTIF class, "no preferential treatment or specific economic benefit" rules them out. A Part II can grant side letters to its well-informed investors, and nothing in 25/901 bars it. What the Part II owes instead is disclosure. AIFMD Article 23(1)(j) requires the AIFM to disclose, before investors commit, how it ensures fair treatment. It must also act "whenever an investor obtains preferential treatment or the right to obtain preferential treatment". It then describes that treatment, the type of investors who get it and, where relevant, "their legal or economic links with the AIF or AIFM".

The two regimes therefore answer the side letter differently. The ELTIF prohibits it inside the retail class; the AIFMD requires it to be disclosed. The label's real price is not the 20% concentration limit. It is a conduct rulebook that reaches the distributors, the fee grid and the settlement design, plus a two-week window in which subscription money must be returned without penalty. Model the distribution agreements before the portfolio.

The cost ratio is the most under-modelled part of the label, because a distributor's product-comparison screen will sort on it.

Start with what does not differ. Article 23(1) of 2015/760 has two sentences. Units "shall not be marketed in the Union without prior publication of a prospectus". They "shall not be marketed to retail investors in the Union without prior publication of a key information document in accordance with Regulation (EU) No 1286/2014". Neither sentence is new; both appear word for word in the 2015 text. A retail-marketed Part II UCI reaches the same KID by a different route. The duty is PRIIPs Article 5(1), which requires the manufacturer to draw one up "before a PRIIP is made available to retail investors" and publish it on its website. It is the same document under a different rulebook.

For a Part II UCI, that relies on PRIIPs applying to the vehicle as a packaged retail investment product. That is a reading of the PRIIPs scope and definitions, not a statement by the CSSF or the ESAs that every retail-marketed Part II UCI is a PRIIP. Confirm the classification for the specific share class.

Primary: Regulation (EU) 2015/760 Arts. 23 and 25, consolidated as amended; Commission Delegated Regulation (EU) 2024/2759, Art. 12; Directive 2011/61/EU, Art. 23, consolidated to 16 April 2026; Regulation (EU) No 1286/2014 (PRIIPs), Art. 5(1); Circular CSSF 25/901, Chapter 8 (points 35 to 49). The lettering (d), (e), (f) of Art. 23(4) is confirmed in the consolidated Directive.

Three points decide what the cost chapter costs. First, the overall cost ratio is a published, annually refreshed number, and its denominator changed. Under ELTIF 1.0 the prospectus disclosed "an overall ratio of the costs to the capital of the ELTIF" (2015/760 as adopted, Art. 25(2)). On the Article 2 definition, capital includes uncalled committed capital. The RTS now measures the ratio against net asset value per annum. For a fund with a large undrawn commitment base, the denominator shrinks. An identical cost base therefore publishes as a larger percentage than the 1.0 formula would have given. That consequence is our arithmetic from the two texts. If your fee grid came from a 2023-vintage model, re-run it.

Second, a retail ELTIF publishes two cost figures under two methods. The prospectus ratio is built under RTS Article 12, and the KID's cost figures under the PRIIPs rules. Art. 25(3) told ESMA to have regard to the PRIIPs standards, but neither instrument says whether the two must reconcile or which prevails if they diverge. The RTS's annual-update duty applies to the ratio. A prospectus left unamended for three years therefore carries an out-of-date statutory figure, which is a likely supervisory finding.

The Commission has also said what does not count. A period during which unit-holders cannot benefit from distributions "cannot be considered as a 'fee' or a 'cost'" (ESMA_QA_2480). A distribution delay therefore changes neither the ratio nor any cost line.

Third, the Part II's cost transparency is not where a Luxembourg manager might look for it. Chapter 8 of Circular 25/901 is titled "Transparency". Its fifteen points cover investment policy, redemptions, borrowing and warnings. It has no cost chapter; its only fee point is point 39, on investments in vehicles of the same initiator or manager. Its opening point explains why: the chapter is "without prejudice to the information that the manager must communicate under Article 23 of the AIFMD" (25/901 pt 35). The Part II's cost disclosure therefore comes entirely from the AIFMD. The instrument that changed it on 16 April 2026 was AIFMD II, not the CSSF circular rewritten four months earlier. A manager who read 25/901 as the new Luxembourg rulebook on fee disclosure read a circular that never claimed to cover it.

ELTIF 1.0 (2015/760, applicable Dec 2015) attracted little take-up, and the Commission said so when it proposed the rewrite. "Only 57 ELTIFs (as of October 2021) have been launched with a relatively small amount of net assets under management". The Commission added that "total assets under management are estimated at approximately EUR 2.4 billion in 2021". They were domiciled "in only four Member States (Luxembourg, France, Italy and Spain)" (COM(2021) 722, explanatory memorandum). That is six years, 57 funds and four countries. ELTIF 2.0 (2023/606, applicable 10 January 2024) rewrote the retail economics.

1.0 baseline: Regulation (EU) 2015/760 as originally adopted. 2.0 changes: Regulation (EU) 2023/606. Key figures are pinned to the consolidated 2015/760: 20% diversification (Art. 13(2)), 50%/100% borrowing (Art. 16(1)(a)) and retail suitability (Art. 30(1)). The borrowing, facilities and conduct rows are read letter by letter against both texts: old Art. 16(1)(a) to (e) and Art. 26 in the as-adopted Regulation, against Art. 16, 25, 27 and 30 in the consolidated text.

The 1.0 rulebook still binds part of the market until 11 January 2029

Read the left-hand column above as live law. ELTIF 2.0 was enacted as an amending Regulation, and its own Article 2 grandfathers funds authorised under the old text. The third subparagraph covers "ELTIFs authorised in accordance with and complying with the provisions of Regulation (EU) 2015/760 applicable before 10 January 2024". They "shall be deemed to comply with this Regulation until 11 January 2029". Those same ELTIFs "which do not raise additional capital shall be deemed to comply with this Regulation". That second sentence carries no end date. The fourth subparagraph adds the opt-in. "Notwithstanding the third subparagraph", such an ELTIF "may choose to be subject to this Regulation". The condition is "that the competent authority of the ELTIF is notified thereof" (Regulation (EU) 2023/606, Art. 2).

The wording does more than "grandfathered" suggests. The fund must have been authorised in accordance with the old provisions and be complying with them. This does not suspend a rulebook; it permits the fund to keep running the old one. A 1.0 ELTIF therefore still carries every number in the left column. These are the €10,000 retail minimum and the 10%-of-portfolio cap for portfolios of €500,000 or less. They also include mandatory investment advice, the 70% eligible-asset floor, the 10% concentration limit and borrowing capped at 30% of capital. There is no third state in which the fund complies with neither text. If it falls out of the old provisions, the deeming stops.

Three points in Article 2 are open to interpretation. It is the final article of an amending Regulation. "Deemed to comply with this Regulation" is read here as compliance with 2015/760 as amended, which the text does not spell out. The no-additional-capital limb carries no date, unlike the AIFMD's "after 15 April 2024". The text does not say whether a further closing on existing commitments or a new compartment counts as raising capital, or from when that is measured. And whether an NCA asks anything of a fund relying on the deeming, or of an opt-in beyond notification, has not been read for Luxembourg or elsewhere.

The opt-in is procedurally the simplest route, a notification with no approval step in the text. Substantively it is one of the most expensive, because the whole rulebook comes with it. Much of the retail conduct chapter already applied under 1.0: the ten-year alert, equal treatment, the two-week cancellation right and local-language complaints (old Arts. 28(2), 30(4) to (7)). A manager electing in to shed the €10,000 floor, the 10% cap and mandatory advice moves to the 2.0 versions of those rules. It newly takes on MiFID product governance under Article 27, the suitability regime of Article 30(1) and the matching alert. Its overall cost ratio is then measured on NAV under Article 25 and the RTS. The retail economics and the retail rulebook come together in one election.

A pre-2024 credit ELTIF sits under this transitional and the AIFMD one at the same time, and they differ on every point. The pivot dates differ: 10 January 2024 for the product regime and 15 April 2024 for the AIFMD's loan-origination regime under Article 61(6). The sunsets differ: 11 January 2029 and 16 April 2029. The opt-ins are separate notifications, and electing into one does not elect into the other.

The difference that matters most is the standstill. Article 61(6) bars a fund above the limits from increasing its single-borrower notional or leverage, and bars a fund below them from crossing them. Article 2 of 2023/606 has no equivalent condition. On the ELTIF's own product limits the grandfathered fund is deemed compliant, with no standstill. The same balance sheet can be unconstrained under one transitional and capped under the other. The AIFMD's no-further-capital limb is dated ("after 15 April 2024") and the ELTIF's is not dated at all. This comparison of the two transitionals is ours, read from the two texts; no supervisory statement addresses how they interact.

The affected population is not small. Of the CSSF's 176 Luxembourg fund units, 54 were authorised in the seven years to 2023, the last on 15 December 2023 (figures below). At EU level, ESMA's register reads the same way. Of its 327 entries, 238 were authorised on or after 10 January 2024 and 13 carry no authorisation date, which leaves 76 that pre-date the rewrite. That figure is our subtraction, not one ESMA or the CSSF publishes, and the 13 undated entries could fall either side.

Roughly a quarter of the authorised ELTIF universe was therefore authorised under the old text. Those funds may be entitled to run the left-hand column until 2029, or indefinitely if they stop raising capital. How many of those funds have since elected into 2.0 is not published on either list. Anyone comparing "the ELTIF" with a Part II UCI is comparing against two rulebooks, not one. When the fund already exists, the first question is not what the Regulation says. It is whether the fund has notified.

The two review dates in the Regulation

Structuring memos eventually ask whether another rewrite is coming. The Regulation answers with two dates. Article 37 requires the Commission, after consulting ESMA, to report to the European Parliament and the Council by 10 April 2030. The review covers, among other things, whether the eligible-asset list, the portfolio-composition, diversification and concentration rules and the borrowing limits should be updated. It also covers how Article 18 has worked on redemption policy and fund life, and whether the marketing provisions protect retail investors effectively. It comes "where appropriate, by a legislative proposal" (2015/760 Art. 37). The limits on this page sit under that general review. At Level 1 they are stable until 2030 unless the Commission proposes otherwise. Any change before then is likely to come from the Level 2 texts and the Commission's Q&A answers, as it has so far.

The second date has passed, and that review is narrower. Article 37a required the Commission, by 11 January 2026, to assess and report to the European Parliament and the Council, again "accompanied, where appropriate, by a legislative proposal". The report had to cover at least three questions. First, whether an optional designation of "ELTIF marketed as environmentally sustainable" or "green ELTIF" is feasible, and on what basis it would be granted. Second, whether ELTIFs should comply with the "do no significant harm" principle in all their investment decisions, or only when marketed as environmentally sustainable. Third, how the regime's contribution to the European Green Deal could be strengthened without undermining its objectives (2015/760 Art. 37a).

That review has no legal effect by itself. Its main subject is sustainability labelling, but not only that. Point (a)(ii) asks whether a green designation should require all or a significant part of eligible or total assets in sustainable activities. Point (b) asks whether every ELTIF should apply the "do no significant harm" principle in its investment decisions. A legislative proposal following the report could therefore change what an ELTIF may invest in. The eligible-asset, concentration, borrowing and redemption limits themselves sit under the 2030 review. The immediate risk lies on the marketing side. No green-ELTIF designation exists in the Regulation as consolidated to 10 January 2024. An ELTIF sold today on its environmental credentials is making an SFDR and Taxonomy claim, not an ELTIF one, and there is no ELTIF-level label to show a distributor. Whether the Article 37a report was delivered, and what it concluded, is not confirmed here (see To verify).

The comparisons above set an EU Regulation against a CSSF circular. A third instrument also applies. A Luxembourg structuring file that leaves it out misses two things: the route through which the label is granted, and the chapter that sanctions a breach. Regulation 2015/760 is directly applicable, but it leaves the competent authority, the supervisory powers and the sanctions to national law. Luxembourg put all three in Chapter 2, Articles 6 to 10, of the Law of 16 July 2019 on the operationalisation of European regulations in the field of financial services.

Primary: Loi du 16 juillet 2019 relative à l'opérationnalisation de règlements européens dans le domaine des services financiers, Chapter 2 (Arts. 6 to 10), as amended by the Law of 6 February 2025. Read from the Journal officiel text as adopted plus the 2025 amending law, not from a coordinated version. The CSSF's coordinated version has not been compared line by line. The exact publication date that triggers entry into force has not been confirmed, and later amendments to Chapter 2 have not been checked.

That chapter was realigned to ELTIF 2.0. Article 1 of the Law of 6 February 2025 amends Article 8(1) of the 2019 Law, moving the cross-references to sanctionable breaches onto the renumbered Regulation. The reference to Article 13(1) to (6) becomes Article 13(1) to (5), with parallel corrections to Articles 18, 19, 20, 26, 27, 29 and 30. Article 29 of that law brings it into force on publication in the Journal officiel (ELI reference A n° 38). The derogations it grants (to Articles 2 and 4, on other regulations) do not reach the ELTIF amendment. The sanctions article is tied provision by provision to the Regulation, so when the Regulation was renumbered, the national fine schedule had to follow.

Four routes, and one is not a product-law vehicle

The CSSF sets out the application routes for the label on its own ELTIF page. The list is broader than the "label on a Part II or RAIF" description this page opened with.

• "ELTIF as (part of) a new UCI Part II, SIF or SICAR": the label taken at launch on a product-law vehicle, through the eDesk UCI Approval module.
• "ELTIF authorisation of a new compartment in an existing fund": a new compartment under an existing umbrella takes the label.
• "ELTIF authorisation of an existing compartment or of an existing fund": the retrofit, through which a live Part II acquires a passport it launched without.
• "ELTIF authorisation of a (compartment of a) new other Luxembourg AIF (i.e. other than a UCI Part II, SIF or SICAR)": the route this page has not yet covered.

Read the fourth route against the CSSF's own condition for the label. To be authorised as an ELTIF, an AIF "must be managed by an authorised EU Alternative Investment Fund Manager ('AIFM')". It must also "comply with all the requirements set out in the ELTIF Regulation" (CSSF, ELTIF). The condition is that the vehicle is an AIF with an authorised EU manager, not that it sits under a Luxembourg product law. The ELTIF authorisation can therefore be the only product-level authorisation a Luxembourg vehicle has. The RAIF entries on the CSSF's ELTIF list already use that route, because a RAIF is not CSSF-authorised at product level either. 39 of the 176 fund units on the list are RAIFs.

Whether a standalone ELTIF on an unregulated vehicle such as a plain SCSp has actually been authorised is not visible from the list. Its 176 units split across Part II (133), RAIF (39), SIF (3) and SICAR (1), which sum to the total. Its product key names "Other AIF" as a category with no entries as at 31 August 2026. That fits either no such ELTIF existing or none being separately labelled. The two cannot be told apart from the published columns, so do not read the arithmetic as zero uptake.

The label also changes the enforcement exposure, which never appears in a limits comparison. Taking the ELTIF authorisation swaps the investment rulebook (the 25/901 carve-out above). It also gives the CSSF a product-specific sanctions chapter keyed to Articles 3 to 31 of the Regulation. Those articles cover the eligible-asset floor, the diversification and borrowing limits, the redemption rules, the cost disclosures and the retail conduct duties described on this page. A breach of any of them can bring a fine of up to €5m or a tenth of turnover. Article 10 then publishes the decision under your name once the appeal window closes.

For a wrapper sold to retail investors through third-party distributors, a named enforcement notice on the regulator's website affects distribution as much as compliance. Treat the conduct obligations as matters a supervisor can fine and publish, not as drafting points. The 20-against-25 percent comparison does not capture that difference. The Part II's enforcement basis is the 2010 Law and the 2013 AIFM Law. Their sanction ceilings have not been read against the ELTIF ones. This page does not claim the label raises maximum exposure, only that it adds a separate, product-specific chapter with a mandatory publication rule.

Every dimension above compares rulebooks. None shows what the supervisor is actually reviewing this year, and on that measure the two wrappers stop being different. The CSSF's published programme is keyed to the shape of the fund, not to its label. It names the population as "open-ended private assets funds (so-called 'semi-liquid funds', including open-ended ELTIFs)". The CSSF says it "will conduct further thematic, sample-based reviews". These concern "the liquidity risk management processes employed by IFMs managing such funds" (CSSF, The CSSF's 2026 priorities for supervising the investment fund sector, 31 March 2026). An open-ended Part II UCI holding private assets and an open-ended ELTIF holding the same book are in the same sample population. Four of the published strands apply to a private-assets fund under either wrapper.

Primary: CSSF, The CSSF's 2026 priorities for supervising the investment fund sector, 31 March 2026. These are the CSSF's stated work programme for the year, not results. No feedback report on the semi-liquid liquidity-risk or private-debt credit-risk reviews had been published at the verification date of this page, and the statement sets no date for one.

The valuation report both wrappers are benchmarked against

One strand has already produced a document, and it is the one to read before the sample is drawn. On 4 June 2026 the CSSF published the feedback report on its thematic review of the valuation framework for less liquid and illiquid assets. The review began at the end of 2023 and ran through 2024 and 2025. It covered a limited sample of Luxembourg IFMs not covered by the 2022 ESMA common supervisory action. It focused on AIFs invested in private equity, real estate, infrastructure, private debt or funds of funds. UCITS "trash ratio" investments under Article 41(2) of the 2010 Law were addressed on an ancillary basis.

Its legal basis is why it matters here. The observations rest on Article 17 of the 2013 AIFM Law and Articles 67 to 74 of Delegated Regulation (EU) No 231/2013. Those are the valuation duties of the AIFM of any AIF. A Part II UCI and an ELTIF are held to the same text. The report states that its observations also apply to closed-ended AIFs where the applicable rules make them relevant. The request is unqualified. The CSSF "asks all IFMs to carry out a benchmarking exercise against these observations". It asks them "to proceed in a next step, if applicable, to the necessary corrective measures." Four observations weigh most on a semi-liquid book.

• Valuation frequency must match NAV frequency. The CSSF restates its expectation for "open-ended UCIs to have an alignment between the frequency of the net asset value determination and the frequency of the valuation of investments". It points to Article 74(2) of the Delegated Regulation. Other assets are the private-asset bucket, as opposed to financial instruments. For them, valuation is required at least annually and "every time there is evidence that the last determined value is no longer fair or proper". As a result, the AIFM "has to ensure that the necessary valuation controls are in place". They must verify "at any NAV calculation date that the last determined value is still fair or proper." Monthly dealing on a quarterly-valued book is not itself the finding. Running it without a control at each NAV date confirming that the last quarter's value still holds is.
• Policies must separate normal from stressed conditions. For a limited number of IFMs, the CSSF found that policies and methodologies "did not yet specifically address the valuation processes applicable under exceptional situations / stressed market conditions". It had recorded the same gap in the ESMA CSA round, where policies "do not generally make an explicit distinction between normal and stressed market conditions". For an open-ended private-assets fund this is the scenario that matters, because stressed valuation and the gate arrive on the same day.
• Escalation is an explicit requirement. The CSSF expects policies and procedures to "provide for specific provisions ensuring a timely and appropriate escalation process of the valuation issues / problems (i.e. fund-specific or market-driven) to both the senior management / dirigeants of the IFM and the dirigeants of the AIFs / UCITS". That means two boards, not one, whether or not a valuation committee owns the issue.
• A third-party valuer you rely on is not an external valuer. Relying on third-party experts or valuation service providers does not make them external valuers under Article 17(4)(a) of the AIFM Law. The valuation function stays internal, and so does the liability. The CSSF expects "specific and appropriate checks and controls" over "the inputs / information received" from them, on a risk-based approach. It also expects "thorough due diligence and … ongoing oversight". Outsourcing the valuation does not outsource responsibility for it.

The report is also notable for what it omits. The 2023 round asked IFMs to remediate gaps "by 31 December 2023 at the latest". The 2026 report sets no date. That is the stricter reading, not the softer one. The benchmarking is expected to be done and evidenced whenever the questionnaire, the on-site visit or the next thematic sample arrives. Whether the CSSF fixes a date in follow-up supervision is not addressed in either document.

The review that follows the manager, not the fund

A second review covers the same population from the manager's side. On 3 July 2026 ESMA launched a common supervisory action with the national competent authorities on the risk management function. It spans both the UCITS and AIFMD frameworks and assesses the function's effectiveness, independence and expertise. It covers governance and organisation; the identification, measurement and monitoring of risks; and reporting to senior management and governing bodies. Market, credit, liquidity, counterparty and operational risk are all named. It runs through 2026 and 2027, with a final report in 2028. The CSSF's 2026 priorities place its part in the second half of 2026.

That produces the same split as the LMT layer, for the same reason: the duty is the manager's. A Luxembourg ELTIF or Part II UCI run by a French or Irish AIFM falls within a CSA run by that AIFM's home regulator, on its timetable and sampling. The CSSF's own thematic work covers the Luxembourg-managed book. A promoter running one strategy through two management companies faces more than one supervisory calendar.

For the wrapper choice, the conclusion is one a limits comparison never shows. Supervisory intensity is not a reason to pick either wrapper, because the reviews target open-endedness and private assets. What differs is the consequence of a finding. On the same facts about the same fund, the ELTIF label brings in the product-specific sanctions chapter described above. That means CSSF powers across Articles 3 to 31 of the Regulation and fines up to €5,000,000 or 10% of total annual turnover. It also means publication of the unappealed decision under the fund's name. A plain Part II answers through the 2010 Law and the 2013 AIFM Law. Price the passport with its supervisory consequences, not just its investment limits.

Source: ESMA register of authorised ELTIFs (ESMA34-46-101), maintained under 2015/760 Art. 3(3). The register carries no stated as-at date. The most recent entry-level "last update" on it is 31 August 2026, and the latest authorisation date recorded is 21 August 2026. Counts are of register entries, which for Luxembourg are compartment-level. That is the same unit of count as the CSSF list below, but not the same population or date. Read 13 September 2026.

Market estimates (Scope)

The ELTIF market grew sharply once 2.0 applied. Scope Fund Analysis estimated total ELTIF volume at roughly €20.5bn as at 31 December 2024 across 150 authorised ELTIFs (Scope ELTIF study 2025, published 27 March 2025). It put the end-2025 figure at about 268 funds and ~€34bn, up 55% in assets year on year. There were 113 new launches in the year (Scope, "AuM rose by 55% to EUR 34bn in 2025").

These are estimates built partly on extrapolation. At end-2024 Scope had fund-level volume data for 118 of the ELTIFs it counted and estimated the rest. Coverage is similar for end-2025. The 2026 study counts 268 authorised ELTIFs, and 47 asset managers supplied fund-level data on 137 of them, of which 127 (€21.3bn) had assets under management. Roughly half the population is measured directly and the rest is estimated. They are not an ESMA or CSSF statistic. Neither register holds assets under management, so Scope is the only source for them.

Luxembourg is the dominant domicile on an end-2025 split. Scope's fifth annual study reports ELTIF volume by supervisory authority as at 31 December 2025 (Scope, Mass start successful: ELTIF study 2026, 16 April 2026). The CSSF leads with €22.0bn across 120 ELTIFs that have actively raised capital and are still active. The AMF (France) is second with €10.3bn across 54. Consob (Italy) follows at €856.7m across 14, then the CNMV (Spain) with six funds. The CBI (Ireland), BaFin (Germany) and FMA (Liechtenstein) have one, two and one respectively.

On Scope's authorised-product counts at the same date, Luxembourg holds 151 of the market's ELTIFs. France has 71, Ireland 20, Italy 14, Spain 7 and Germany 3, with one each in Liechtenstein and the Netherlands. The Dutch AFM authorised its first ELTIF in 2025. Of the 113 ELTIFs launched in 2025, 55 were Luxembourg and 38 French. Scope reads at least 41 of the 55 Luxembourg products as authorised for pan-European distribution.

Two points in that split matter more than Luxembourg's lead. First, €22.0bn of €34bn is roughly two-thirds of ELTIF money in one domicile. The end-2024 reading held for end-2025 on the same source's numbers, so the concentration is structural rather than one year's launch pattern. The study does not say whether the per-authority volumes sum to its €34bn total or exclude funds outside its data set. Read the 65% as an order of magnitude.

Second, France's second place reflects a different product. Scope records that the AMF "primarily authorises ELTIFs that are marketed exclusively to professional investors", and puts their volume at around €5.4bn. That is why the AMF has the market's highest average fund size while Luxembourg has the retail breadth. Read with the register's marketing column below, the pattern is clear. The retail passport is overwhelmingly a Luxembourg instrument, and the professional-only ELTIF is disproportionately French.

Every figure in this subsection is Scope's, counts included. That covers the €20.5bn, €34bn, €21.3bn, €22.0bn, €10.3bn, €856.7m and €5.4bn volumes. It also covers the counts 150, 118, 268, 137, 127, 120, 54, 151, 113 and 55. The figures under the next three headings come from the CSSF list, the ESMA register and the CSSF's own statistics, except where Scope is named.

The CSSF's own list (regulator figures)

The regulator's own list is the better guide for practitioners. The CSSF publishes the Luxembourg fund units authorised under the ELTIF Regulation. As at 31 August 2026 it held 176 fund units across 109 funds (CSSF, list of fund units subject to Regulation 2015/760, as of 31 August 2026). The list enumerates fund units, meaning compartments, so unit and fund counts differ; both are given here.

The split by underlying vehicle shows the layering in the regulator's own figures. 133 of the 176 units, and 75 of the 109 funds, sit on a Part II UCI. 39 units (30 funds) sit on a RAIF, 3 on a SIF and 1 on a SICAR. Roughly three-quarters of Luxembourg's ELTIF units are Part II vehicles carrying the label. The list carries no net-asset figures, so this is a split of vehicle counts, not of money.

The same list dates the regime's growth. 122 of the 176 units were authorised on or after 10 January 2024, the day ELTIF 2.0 applied. Seven units in ten of the Luxembourg ELTIF stock therefore post-date the rewrite, against 54 units in the seven years from 2017 to 2023. The last of those was authorised on 15 December 2023. The most recent authorisation on the list is dated 21 August 2026.

The list also shows the product is managed cross-border as much as it is sold that way. 119 units are managed by a Luxembourg AIFM and 57 by a manager elsewhere: 25 French, 16 Irish, 11 Spanish, 2 Norwegian and one each German, Italian and Swedish. The domicile is Luxembourg but the manager often is not. That is the arrangement ESMA_QA_2481 says a host Member State cannot condition.

How much of the passport is used (ESMA register figures)

Research houses estimate the ELTIF universe. Article 3(3) of 2015/760 obliges ESMA to publish it: a central public register naming every authorised ELTIF, its manager and its competent authority. That register is the one EU-wide count on this page that is not an estimate (ESMA, register of authorised ELTIFs, ESMA34-46-101).

The domicile column hides three points. First, the post-2024 growth shows at EU level: 238 of the 327 were authorised on or after 10 January 2024, and 13 entries carry no authorisation date. Second, the regime is being used for its intended purpose. 211 of the 327 are flagged as marketable to retail investors, alone or alongside professionals. 81 are professional-only and 35 state neither.

The third point should temper every "EU-wide passport" line on this page, ours included. The register records the Member States where each ELTIF is marketed. On that column, 117 of the 327 are marketed in exactly one Member State, and a further 62 record no Member State at all. Of those 62, forty-seven are recorded as "Not yet marketed" and four as "no more marketed"; the remaining eleven are blank. Only 148 cross a border at all. 70 reach ten or more states, and seven reach thirty or more.

The breadth is also concentrated by domicile. A Luxembourg ELTIF averages 8.5 marketing states; one domiciled anywhere else averages 1.4. The passport is real and does what only it can do for the most widely distributed funds. Yet the median ELTIF is a single-country product that a national retail registration could also have carried. Before buying the passport with a 20% concentration limit and a 50% borrowing cap, count the countries you will actually notify. 179 of the 327 funds authorised under this Regulation currently notify one or none.

The forty-seven "not yet marketed" entries are a different fact from the single-country ones. An ELTIF is authorised before it is distributed, so a group of authorised but unlaunched products is what a fast-growing pipeline looks like on the register. Scope reports the same from the manager side. Ten of the 137 ELTIFs its respondents reported on had not yet started raising capital (Scope ELTIF study 2026, 16 April 2026). The marketing column therefore shows three groups: funds in one market, funds in many, and funds not yet started.

Four limits apply to the register reading. (1) It is a list, not a statistic, and carries no stated as-at date. Each home NCA maintains its own entries, so completeness and currency vary by column and authority. (2) The unit of count is a register entry, compartment-level for Luxembourg. ESMA shows 176 Luxembourg entries and the CSSF list shows 176 fund units on reads eleven days apart. The two lists are close but are not the same population or date, and the matching totals have not been reconciled entry by entry. (3) The retail/professional flag is free text ("Retail", "Retail + Pro", "Pro" and "Professional"), and 35 entries state neither. The 211 figure is a reading of that column, not a supervisory classification. (4) The marketing column is also free text. Counting all 62 status or blank entries as "no Member State" is right for current footprint but mixes three situations: not launched, withdrawn and not reported. It is not comparable with an earlier read of the same column recorded as 10. Treat the passport-usage conclusion as a floor on cross-border activity, not a census.

The Part II population (CSSF figures)

The Part II regime is far larger than the ELTIF market. The CSSF's own breakdown, as at 31 July 2026, shows €278.985bn of net assets across 317 Part II funds (CSSF, basic statistical data on UCIs, July 2026). Part II is a general-purpose alternative wrapper, not a retail-passport product. Read against the ELTIF list, that population gives the layering its denominator. 75 Part II funds carry an ELTIF label, so a little under one Part II fund in four has taken the passport.

Three quarters of Luxembourg's ELTIF units sit on a Part II vehicle, and three quarters of Part II funds do not use the label. Both are true; they are the same fact read from opposite ends. The counts come from lists a month apart: the ELTIF list as at 31 August 2026, the population as at 31 July 2026. Neither carries net assets for both sides. Read the ratio as an order of magnitude, not a decimal.

The two wrappers do not compete for the same money. The CSSF list shows the Part II as the usual vehicle and the ELTIF as the passport added for cross-border retail. A plain Part II UCI with no ELTIF label is the choice in two cases. One is where the strategy does not fit the ELTIF's limits and retail reach is narrow (the home market plus one or two receptive states). The other is where the investors are professional or well-informed and the ELTIF adds nothing.

Adding an ELTIF label to a Part II does not add a layer. It swaps the rulebook for the fund's investment limits, because the ELTIF authorisation takes the compartment out of Circular 25/901 (point 2). The fund leaves 25%/70% for 20%/50%. It takes on the RTS redemption gate and the eligible-asset floor. It keeps every Part II obligation that is not an investment limit under the 2010 Law. A book built to a 25% concentration limit does not automatically fit a 20% one. Decide the retail footprint first; the wrapper follows from it.