ELTIF 2.0 vs Luxembourg Part II UCI — and vs ELTIF 1.0

If you want to sell private assets — private equity, private credit, infrastructure, real estate — to European retail investors, you have two mainstream regulated routes, and 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 that can be sold to retail but only country-by-country, with no passport for retail.

The nuance that most head-to-head framings miss: in Luxembourg these are usually layered, not chosen between. An ELTIF is an overlay — a Lux Part II UCI (or a RAIF, SIF or SICAR, or on the CSSF's own authorisation menu an AIF that is none of those) can apply for the ELTIF label and keep its domicile, gaining the retail passport on top of the vehicle (CSSF, ELTIF; Macfarlanes, "Retailisation choices"). Only an EU AIFM authorised under AIFMD may apply to manage one (2015/760 Art. 5(2)). So the real decision is: do you bolt the ELTIF passport onto your Part II wrapper, or run the Part II as a plain AIF and place it retail only where local rules let you? That is what this page compares. For what CSSF Circular 25/901 just changed for the Part II vehicle itself, see our consolidated 25/901 page — it is the companion to this one.

The comparison at a glance

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

One structural point that changes how you read the two limit columns above: a fund or compartment authorised as an ELTIF is carved out of Circular 25/901 entirely (25/901, point 2) — alongside MMFs, EuVECA/EuSEF funds and closed-ended funds authorised before 19 December 2025. 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 tighter on concentration (20% vs 25%) and on borrowing (50% of NAV vs 70% of assets/commitments), and that is what you pay for the passport. The rest of the Part II machinery — CSSF authorisation, depositary, sales-document duties — is unaffected by the carve-out (see our 25/901 page).

Retail access — the passport is the whole point

This is the one dimension where the two are genuinely different in kind. The ELTIF is the only EU wrapper that gives you a harmonised retail marketing passport for private assets: authorise once with your home NCA, notify under Article 31 of 2015/760, and market to retail across the EEA (Macfarlanes). The Part II UCI has no equivalent — its AIFMD passport reaches professional investors only. To sell a plain Part II fund to retail you register it under each target country's national regime, and those regimes diverge sharply: retail placement is workable in some states (e.g. Germany, the Netherlands) and effectively closed in others (e.g. France, Spain) (Macfarlanes). If your distribution plan is "European retail, many countries", the ELTIF label is not optional — it is the mechanism.

That country-by-country position is not a gap in the AIFMD; it is what the AIFMD says. Under Article 43(1) of Directive 2011/61/EU, Member States "may allow" AIFMs to market AIFs to retail investors in their territory — a permission, not an obligation — and in that case "may impose stricter requirements on the AIFM or the AIF than the requirements applicable to the AIFs marketed to professional investors". The one thing they may not do is discriminate: an EU AIF established in another Member State cannot be held to 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 there and what additional requirements it imposes — so the national regimes a Part II has to clear are notified, but they are fifteen separate rulebooks, each free to be stricter than the professional baseline. Read Article 43(1) against Article 1(3) of 2015/760 and the asymmetry is on the face of the two texts: one expressly authorises the host state to add requirements, the other expressly forbids it.

And the passport is defended against national gold-plating 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, and a European Commission answer in ESMA's Q&A tool (ESMA_QA_2481, answered 14 March 2025) applied that directly: a Member State may not impose requirements pertaining to the nationality, domiciliation or location of the ELTIF or its manager — and that holds even where the ELTIF is packaged inside an insurance product or embedded in a pension or savings plan, which is precisely how retail private assets are distributed in much of continental Europe. An ELTIF authorisation "shall be valid for all Member States". That is the structural asymmetry in one line: the ELTIF's reach is a right the host state cannot condition on domicile, whereas the plain Part II's retail reach is a permission each host state grants, varies, or withholds.

The first limb of that same answer reaches the structure chart rather than the sales channel, and it is the one a fund-of-funds structurer needs. Asked 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 Member States from imposing requirements — "whether stemming from national law, regulations, guidance or administrative practices" — "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 things ELTIF 2.0 opened up (see the 1.0 table below), and this is what makes it usable across a border: a Luxembourg master can be fed by a feeder authorised in the state where the distribution actually sits, without that state conditioning the arrangement on where the master lives. The practical read for a Part II chassis is that the local-feeder pattern — a domestic wrapper in each retail market, feeding a Luxembourg fund — is available as an ELTIF structure, not only as the national workaround it has to be for a plain Part II.

What replaced the retail minimum

Under ELTIF 1.0, a retail investor had to put in at least €10,000 and no more than 10% of their financial-instrument portfolio across all ELTIFs — a double-lock that, combined with mandatory investment advice, throttled retail take-up. ELTIF 2.0 scrapped both the €10,000 floor and the 10% cap and replaced them with a MiFID-aligned suitability test (2015/760 Art. 30(1)): the distributor assesses suitability, gives the retail investor a suitability statement, and — where the ELTIF's life could lock the investor in — a written notice that they should only commit what they can leave invested long-term (Norton Rose; Dechert). The original wording is worth seeing, because it explains the dead decade: ELTIF 1.0 Article 30(3) required that "the initial minimum amount invested in one or more ELTIFs is EUR 10 000" and that a retail investor with a portfolio of €500,000 or less not invest "an aggregate amount exceeding 10 % of that investor's financial instrument portfolio in ELTIFs" (2015/760 as adopted, Art. 30(3)). The mandatory "investment advice" requirement of old Article 30 is gone; providing the suitability statement is not itself investment advice.

The gotcha is that the 10% cap was abolished as a rule and kept as a disclosure. Article 23(4) requires that "the prospectus and any other marketing documents" 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, nothing enforces it against the investor, and no subscription is rejected for breaching it — but the sentence must be in the document that sells the fund. The constraint moved off the subscription form and onto the page, which is a very different thing to model: the distributor's suitability file has to sit comfortably 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 — the duty to maintain subscription, payment, redemption and information facilities in every Member State where the ELTIF was marketed to retail — and structuring notes routinely read the deletion as removing the obligation. It does not. Article 26 was the product-specific rule sitting on top of a general one: Article 43a of the AIFMD ("facilities available to retail investors"), inserted by the cross-border distribution Directive (Directive (EU) 2019/1160, applicable from 2 August 2021), requires facilities in each Member State where any AIF is marketed to retail investors. Removing the ELTIF's own provision left the AIFMD one standing alone.

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" — the annual report and the pre-investment disclosures — available to investors "for the purposes of inspection and obtaining copies thereof"; (e) give investors information relevant to those tasks on a durable medium as defined in Article 2(1)(m) of Directive 2009/65/EC; and (f) act as the contact point for communicating with the competent authorities. Article 43a(2) then bars the host Member State from requiring a physical presence there or the appointment of a third party — the facilities may be electronic or provided by other means of distance communication. Article 43a(3) settles the rest: they must be available in an official language of the host Member State or a language its competent authority approves, and may be run by the AIFM itself, by a third party subject to regulation and supervision for the tasks concerned, or by both (AIMA).

One drafting detail is worth knowing before anyone argues the point at you. Article 43a(1), as inserted, opens "Without prejudice to Article 26 of Regulation (EU) 2015/760" (Directive (EU) 2019/1160, Art. 1(4)) — a deference to the ELTIF's own facilities rule that made sense in 2019 and points at a provision ELTIF 2.0 has since repealed. The carve-out was from Article 43a in favour of the ELTIF regime, not the reverse, so its subject disappearing does not create an exemption: it removes the thing Article 43a was standing aside for. Read as "the AIFMD duty applies unless the ELTIF Regulation says otherwise", and the ELTIF Regulation no longer says otherwise.

This is the one retail obligation on the page that does not distinguish between the two wrappers, and that is the useful part. It attaches to retail marketing, not to a label — so a plain Part II UCI placed with retail investors in Germany carries it in Germany, and a retail ELTIF carries it in every state it is passported into. The gotcha is the arithmetic that follows. Article 43a is a per-Member-State duty, so the ELTIF's single authorisation does not buy a single set of facilities: fifteen states of retail marketing means fifteen sets, fifteen language regimes and fifteen contact points with fifteen regulators. The passport removes the registration cost and leaves the servicing cost, and it is the servicing cost that scales with the footprint. A cross-border retail budget built on "Article 26 was deleted" is understated by the number of countries in the distribution plan.

Eligible assets — a fixed menu vs an open field

The ELTIF prescribes what you can hold. At least 55% of capital must sit in "eligible investment assets" — equity or debt of qualifying portfolio undertakings, real assets, units of other ELTIFs/EuVECA/EuSEF/UCITS/EU AIFs meeting look-through tests, and, new under 2.0, fintech firms, certain listed companies with market cap below €1.5bn, green bonds, and simple-transparent-standardised (STS) securitisations (2015/760 Art. 13(1) & the Art. 10 eligible-asset list; Lexology overview). 2.0 also cut the old eligible-asset floor from 70% to 55% and simplified real assets (most types now qualify, art and wine excluded), with no per-asset minimum value.

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

The prohibitions, not the percentages, are what rule strategies out

The comparison above is about limits you can calibrate around. Article 9(2) of 2015/760 is a different thing: a list of activities an ELTIF simply shall not undertake, with no derogation, no professional-investor uplift and no supervisory calibration route. An ELTIF may not short-sell assets; may not take "direct or indirect exposure to commodities, including via financial derivative instruments, certificates representing them, indices based on them or any other means or instrument that would give an exposure to them"; 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 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".

Set that against the Part II, where each of those four is available with a limit rather than a bar. Short sales are permitted, capped only by the per-issuer concentration limit — 25% for a retail-marketable fund, 50% where units are reserved to well-informed or professional investors (25/901 points 8(b) and 11). Derivatives are permitted for any purpose, not just hedging, provided the fund "must ensure a comparable level of risk-spreading through an appropriate diversification of the underlying assets" and limits counterparty risk that is neither centrally cleared nor collateralised (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 — the tests are that the technique be economically appropriate (risk reduction, cost reduction, or generating additional capital or income), that it not change the fund's objectives or raise risk beyond what investors were told, and that collateral be diversified comparably to the investment limits (points 28–30).

The gotcha, and it is the one that decides wrapper choice before any of the limit arithmetic: a long/short book, a commodities strategy, or any strategy that uses derivatives to create exposure rather than hedge it, cannot wear the ELTIF label at all. Not at a tighter limit — at no limit, because Article 9(2) is a prohibition and the Regulation offers no way round it. For those strategies the retail passport is not expensive, it is unavailable, and the plain Part II is the only one of the two routes still open. Model the prohibitions before the percentages.

How porous the menu is — intermediary vehicles, target funds and non-EU AIFs

The 55% menu looks tighter on paper than it is in a structure chart, and 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 burden 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". It follows that the vehicle need not satisfy the Article 11 qualifying-portfolio-undertaking conditions, and that it does not 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 police 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 approach applies only to the investment-limit and diversification tests of Articles 13 and 16, not to eligibility. So a target fund may 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. The exposure is still available through Article 9(1)(b) — the assets referred to in Article 50(1) of the UCITS Directive, whose point (e) covers collective investment undertakings established outside the EU that meet equivalence and cooperation conditions.

That last route has a consequence worth working through before you use it. Article 9(1)(b) is not a spare corner of the fund — it is the ELTIF's liquid pocket, and it is the pool your redemption capacity is measured against: 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 are set on the same bucket. So routing a non-EU fund allocation through Article 9(1)(b) does not just sit outside your 55% — it enlarges the denominator that your gate is calculated on with a holding that may be no more liquid than the private assets it sits beside. The eligibility question and the liquidity question are answered out of the same bucket, which is the structuring trap in this page's two hardest sections at once. (The Article 9(1)(b) route is the Commission's; reading its effect on redemption capacity is ours — see To verify.)

On the plumbing, the two regimes have converged. Circular 25/901 does the same look-through for 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). The SPV that owes no eligibility test of its own is also the SPV that buys you no shelter from the limits — in both regimes you are measured on what sits underneath it.

When the limits start to bite — two ramp-up clocks, started by different guns

Every limit compared above is one the fund does not have to meet on day one, and both regimes say so in terms. What they do not share is when the clock starts, where the deadline is written down, or how long you actually get — and on a fund of ordinary length the regime that looks more generous is the tighter of the two.

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

Three readings the "five years versus four" headline does not give you. First, the clocks start on different events. The ELTIF's runs from the date of authorisation; the Part II's from launch, which the CSSF ties to the first subscription. Those are the same date only for a fund that closes the moment it is authorised. Every month between an ELTIF's authorisation and its first close is a month of the five spent holding nothing — the label starts the clock at the regulator's desk, the circular starts it when the money arrives.

Second, five years is a ceiling most funds never see, because "whichever is the earlier" does the work. The window is the shorter of five years and half the fund's life, so 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. Read 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. The wrapper that looks slower to bite is the faster one on a mid-length fund.

The gotcha is where the date lives, and it decides how hard the deadline is to move. The ELTIF's sits in the rules or instruments of incorporation — moving it is a constitutional amendment with whatever investor consent that carries — while the Part II's sits in the sales document, a visa round. And when the deadline arrives anyway, the two extension routes cost different things: the CSSF asks for justification, the ELTIF's NCA asks for a duly justified investment plan, which is a document you have to build, evidencing a pipeline you may not have. Set the Article 17(1)(a) date with the deployment model in front of you, not the five-year maximum — it is the one number on this page you choose yourself, and the only one you have to live with for the fund's whole ramp.

Borrowing — the percentage is the least of the rule

Both regimes cap borrowing and both scale the cap to the investor type, which makes 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 not measured against the same thing.

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

Three readings the numbers do not give you. First, 50 versus 70 understates the gap, because the denominators differ: the ELTIF's cap sits on net asset value while the Part II's may sit on commitments to subscribe. On a fund that is largely undrawn, commitments are a far larger base than NAV, so the same nominal facility can be compliant under one regime and well over the line under the other. Whichever basis the sales document picked is the one your compliance monitoring has to run.

Second, the ELTIF's sufficiency test is a per-drawing test, not 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" — so an ELTIF sitting on cash may not draw at all, however far below 50% it is. The evidence a supervisor will ask for is the cash position at the moment of each drawing, not a month-end utilisation figure. Nothing in 25/901 imposes that, and point 31 expressly lets a Part II borrow to meet redemptions.

Third, the currency and maturity conditions are structural, and they bind quietly. An ELTIF's facility cannot outlive the fund, and cannot be raised in a currency other than the asset's unless the exposure is appropriately hedged — a treasury constraint on a multi-currency book that has no Part II equivalent. Both regimes then converge on the one point that matters most to a private-assets raise: a subscription line fully covered by undrawn commitments is outside the cap. Note which way the two carve-outs are hedged, though — the ELTIF's is unqualified, while 25/901's is limited to temporary arrangements and softened with "in general". The Part II wording reads more generous and is in fact the more conditional of the two.

The gotcha is the 12-month suspension, and it points the opposite way to everything else on this page. For a continuously-raising evergreen retail ELTIF, the limit is suspended whenever the fund raises or reduces capital — so the binding constraint is not the 50% at all, it is the "strictly necessary" test and the interests of investors, assessed by your NCA. That is a supervisory judgement to be evidenced, not an arithmetic one to be monitored, and it is the harder of the two to pass.

A European Commission answer in ESMA's ELTIF Q&A tool (ESMA_QA_2471, answered 14 March 2025) settles two readings of that relief which structuring notes get wrong in opposite directions. 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 an open-ended-fund concession, and it is not confined to borrowing — Article 17(1)(c) suspends the portfolio-composition and diversification requirements on the same terms, so a closed-ended ELTIF drawing down its first vintage has both reliefs running at once. Second, its price: it is not a holiday. 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, taking due account of the interests of the investors", and must not take decisions or actions "outside of the ordinary course of business in line with the terms of the ELTIF" that would further increase the level of borrowing or the concentration of exposures while the fund sits above a limit. Read that carve-out carefully, because it is doing real work and structuring notes routinely drop it: an ordinary-course drawdown or follow-on that the ELTIF's own terms provide for is not caught, and the answer does not prohibit it. But read the carve-out as the two limbs it is: the step has to be both 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 carry an unusual step across, and routineness does not excuse one the terms do not support. That is the operating rule a supervisor will test the file against: a suspended limit still needs a documented path back to it, and the entry that will be read against you is the one you cannot show was both ordinary course and within the fund's terms. The Part II has neither the relief nor the duty — 25/901 asks for a maximum in the sales document and compliance with it.

Liquidity and redemptions — the RTS is the ELTIF's hardest edge

ELTIF 2.0 opened the door to open-ended, partially-liquid ELTIFs for a private-wealth investor base — but the liquidity RTS (Commission Delegated Regulation (EU) 2024/2759, in force 26 Oct 2024) sets the mechanics. An open-ended ELTIF permitting redemptions must gate them, and under Article 5(5) the AIFM calibrates the maximum redeemable percentage one of two ways:

• By notice period (Annex I): the maximum redeemable at a redemption date is a function of redemption frequency and notice-period length — e.g. quarterly frequency with a 3-month notice period caps redemptions at 33.3% of the redeemable pool (monthly with no notice, just 8.3%) (2024/2759 Annex I; Arthur Cox).
• By liquid-asset floor (Annex II): the fund holds a minimum percentage of liquid assets — in the RTS's own terms the UCITS-eligible assets of Article 9, i.e. the ELTIF's liquid pocket, not "cash" — and can redeem up to a set share of them: e.g. quarterly with a 20% liquid-asset floor allows up to 50% of that liquid pool, while monthly dealing demands a 25% floor and permits only 20% of it (2024/2759 Annex II; Maples). Read across the two annexes: the more often you deal, the more of the fund you must park in liquid assets you did not want to hold.

The maximum redemption is applied 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)). And a European Commission answer in ESMA's ELTIF Q&A tool (ESMA_QA_2013, answered 28 February 2025) confirmed an ELTIF cannot run different notice periods, redemption gates or redemption frequencies across different unit/share classes: reading Recital 48 of 2023/606, the Commission held that differentiated terms would give some investors advantaged access to the liquid pocket, against the fair-treatment and pro-rata redemption duty in Article 18(2)(e), and would defeat the manager's obligation to aggregate redemption requests across all unit or share classes. If your distribution plan assumed an institutional class dealing on shorter notice than the retail class, that structure is not available in an ELTIF.

The Commission answers that soften the RTS in practice

The Annex tables read like a hard grid, but a set of European Commission answers in ESMA's ELTIF Q&A tool — all answered 14 March 2025 — tell you 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/II maximum — as a fixed percentage of net assets, an absolute amount, a NAV-based threshold or otherwise. Article 18(2)(d) sets the maximum permitted at each redemption date; nothing forces you to use it.
• Daily dealing is not prohibited (ESMA_QA_2477). Neither the Regulation nor the RTS bars a redemption frequency more frequent than weekly, daily included — the Annexes are framed as "weekly/monthly or more frequent". The constraint is that the frequency must match the fund's liquidity profile, strategy and valuation method, which is a supervisory-evidence problem rather than a numeric one.
• Falling below the Annex II liquid floor is survivable (ESMA_QA_2475). Compliance is tested at each redemption date, but 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 reconstitute the minimum — retaining income, applying new subscription cash, drawing unfunded commitments, or selling long-term assets — within a period appropriate to that ELTIF, in principle by the next redemption date. Critically, the manager is not barred from accepting redemptions while the floor is being rebuilt.
• Forecast cash flows need a high degree of certainty (ESMA_QA_2476). The 12-month cash-flow uplift in Art. 5(6) is not a forecasting free-for-all: the manager must show "a high degree of certainty" the flows will materialise, evidenced by contractual payment timing and the absence of deferral clauses. For a private-debt ELTIF that means interest and principal from non-defaulting issuers, assessed loan by loan — and it expressly excludes the possibility of selling long-term assets or raising new subscriptions.

The gotcha in that last one: the uplift most managers instinctively reach for — "we can always sell something, or the next close will fund it" — is the one the Commission ruled out. Your redemption capacity is what the loan book contractually pays you, not what you could liquidate.

What you must disclose, how holding periods run, and the matching window

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

• Choosing Annex II puts a number in your prospectus that Annex I does not (ESMA_QA_2472). Article 18(2)(d) is about 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 of the RTS, 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 it is voluntary. So the two calibration routes are not disclosure-equivalent: Annex II commits you publicly to a liquid-asset floor you then have to hold and rebuild.
• Minimum holding periods can run per investor or per fund — your choice (ESMA_QA_2478). Neither the Regulation nor the RTS prescribes the mechanics, so a manager may run the period from the ELTIF's launch date for all investors, or separately from each subscription's capital-contribution date. Pick for the structure — fixed-term or evergreen — subject to fair treatment and the disclosure duties.
• A holding period before distributions is allowed, and is not a "cost" (ESMA_QA_2480). An ELTIF may set a period during which holders of its units or shares cannot benefit from distributions, provided the frequency and timing of distributions are disclosed under Article 23(4)(e). And that arrangement "cannot be considered as a 'fee' or a 'cost'" — it is not among the charges enumerated in Article 25(1) or in the RTS, so it does not enter the five cost categories or the overall cost ratio. A distribution ramp is therefore a structuring lever that does not show up in the number retail investors compare products on.
• The liquid-asset test bites at the dealing date, not when notice is given (ESMA_QA_2474). The maximum redemption size is determined 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)" — not the earlier deadline for submitting the order. On a quarterly fund with a three-month notice period that is a full quarter between the order the investor gave and the liquidity position the gate is measured against, and the manager carries the market risk across it.
• Matching is not a dilution event (ESMA_QA_2479). Matching transfers units between investors without creating or extinguishing them, so no dilution arises and an anti-dilution levy is not needed for the matching itself. Anti-dilution tools may still apply to any subscriptions or redemptions processed alongside it (RTS Art. 5(9)), and transfer fees that are not anti-dilution charges are permitted under Article 19(2a)(a)(vii).

That last one points at a facility the Part II has no statutory equivalent to. Under Article 19(2a) of 2015/760 — 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", subject to a manager policy that fixes the transfer process, the request windows, the execution price, the pro-ration rules, the disclosure timing and the fees, to fair treatment with pro-rata matching where requests do not balance, and to compatibility with the fund's long-term strategy and liquidity-risk monitoring. The practical point: matching hands an exiting investor liquidity without touching the portfolio — it is the one liquidity route that does not consume the Article 9(1)(b) pocket or trigger the gate. A Part II can build transfer machinery into its documents, but it does so as a contractual arrangement, not as a regime feature with a rulebook behind it.

The Part II UCI has no such prescribed gate. Redemption terms are set by the fund — market practice for private-asset Part II funds clusters at monthly-or-less frequency with roughly 90-day notice (Macfarlanes). What 25/901 added is not a cap but a disclosure duty: the sales document must now spell out frequency, notice and settlement, the liquidity management tools and their triggers, and the treatment of the unexecuted part of gated orders — cancelled or carried forward, at which NAV, with what priority (25/901 pts 43–45). So the ELTIF's own constraint is a hard EU-level formula, while the Part II's is a design-and-disclosure obligation. If you bolt an ELTIF label onto a Part II, the RTS gate wins and your 25/901 redemption disclosure has to describe it.

The layer that now sits over both — AIFMD II liquidity management tools

Since 2026 the liquidity comparison has a third layer, and unlike the others it does not distinguish between the two wrappers. AIFMD II obliges the manager of an open-ended AIF to select at least two liquidity management tools — LMTs, the suspension/gate/notice-extension/redemption-in-kind and anti-dilution machinery listed in the AIFMD's new Annex V — and to calibrate, activate and deactivate them. The characteristics of each tool are fixed by Commission Delegated Regulation (EU) 2026/465 (adopted 17 November 2025, OJ 27 February 2026), which applies from 16 April 2026, with AIFs constituted before that date given until 16 April 2027. ESMA's guidelines on selecting and calibrating them followed on 12 March 2026, and 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.

Both an open-ended ELTIF and an open-ended Part II UCI are open-ended AIFs, so both are inside it — which reframes the section above. The Part II's liquidity terms are no longer purely a national matter, and the ELTIF's RTS gate is no longer the only EU instrument in the picture: the RTS sets how much may be redeemed, the LMT regime governs the tools you reach for when that is not enough, and 25/901 governs what the sales document must say about both. Two edges are worth noting. First, the duty binds the manager, not the fund — so for a Luxembourg ELTIF run by a French or Irish AIFM (a third of them, on the CSSF's own numbers below) it is that AIFM's home regulator applying its own version of the guidelines, and 26/910 is not the circular you are being read against. Second, 26/910 applies to authorised AIFMs but only recommends that open-ended Part II UCIs managed by a registered (sub-threshold) AIFM consider it — a softer footing that a sub-threshold manager should not mistake for exemption from the underlying 25/901 disclosure duties, which are not optional.

Loan origination — the chapter neither wrapper's own instrument writes

Credit is the strategy this comparison is most often run for, and it is the one where both columns above are the wrong place to look. The ELTIF Regulation legislates lending in two lines of its eligible-asset article; Circular 25/901 does not legislate it for a Part II UCI at all. Since 16 April 2026 the substantive rulebook for a fund that writes loans is neither — it is AIFMD II, and it lands on both wrappers identically.

Start with the two definitions, because they decide whether any of it reaches you. Loan origination is "the granting of a loan: (i) directly by an AIF as the original lender; or (ii) indirectly through a third party or special purpose vehicle which originates a loan for or on behalf of the AIF, 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" — so an origination platform in front of the fund does not put you outside it. A loan-originating AIF — the fund type that picks up the heavier rules — is an AIF "(i) whose investment strategy is mainly to originate loans; or (ii) whose originated loans have a notional value that represents at least 50 % of its net asset value" (2011/61/EU Art. 4(1)). Read the second limb as the trap it is: it is a ratio, not a strategy statement, so a fund that describes itself as a mixed private-assets vehicle can cross into loan-originating status through NAV movement alone, without changing anything 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, 20–21.

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

Everything below applies to a Luxembourg Part II UCI and to a Luxembourg ELTIF alike, because both are AIFs and the duties bind the AIFM. This is the part of a credit fund's rulebook that a comparison of the two wrappers cannot help you with, and it is most of it. What does vary is not the wrapper but the fund's constitution date — read this table against the Article 61(6) transitional set out after it before applying any of it to a fund that already exists.

Primary: Directive 2011/61/EU, Arts. 4(1), 15 and 16, consolidated to 16 April 2026, as inserted by Directive (EU) 2024/927. "Capital of the AIF" is defined in Art. 4(1) as "aggregate capital contributions and uncalled capital committed to an AIF, 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 readings the two tables do not give you. First, which instrument wins where they overlap. The Regulation-versus-Directive question is answered in the operative text rather than left to interpretation: the Art. 15(4a) cap is stated "without prejudice to the thresholds, restrictions and conditions set out in … Regulation (EU) 2015/760", and Recital 22 of 2024/927 gives the principle — the specific product requirements of the ELTIF Regulation "should take precedence over the more general rules set out in Directive 2011/61/EU". But precedence only operates where the ELTIF Regulation actually legislates the point, and on most of the second table it does not. There is no ELTIF provision on risk retention, on originate-to-distribute, on lending to your own depositary, or on the closed-ended presumption. Those reach an ELTIF unabated.

Second, the caps are measured on different bases and the tighter one is rarely the one being modelled. The 20% single-borrower cap and the ELTIF's own 20% both sit on capital — contributions plus uncalled commitments — while the 175%/300% leverage cap sits on net asset value, and the ELTIF's 50%/100% borrowing cap sits on net asset value too. For a retail ELTIF the arithmetic settles itself: 50% of NAV of cash borrowing is so far inside 175% that Art. 15(4b) will never bind, and the number to monitor stays the ELTIF's. For a plain Part II credit fund the position inverts — 25/901 caps borrowing at 70% of assets or commitments but says nothing about total exposure, so the AIFMD's commitment-method ratio is the only constraint on the fund's overall leverage, and a derivative-heavy book can sit well inside the borrowing limit and outside the leverage one.

Third, the two 20% caps are not the same cap and a credit ELTIF is inside both. The ELTIF's runs to a single qualifying portfolio undertaking and pools equity and loans in one bucket; the AIFMD's runs to a single borrower but only where that borrower is a financial undertaking, an AIF or a UCITS. They catch different exposures: a unitranche to a trading company is inside the ELTIF limit and outside the AIFMD one; a loan to a fund or a newly-authorised specialist lender can be inside both, on two different denominators, with two different start dates — the ELTIF's ramp-up under Art. 17(1), the AIFMD's 24-month date under Art. 15(4c). Two clocks again, and this time they are not even measuring the same thing.

The gotcha is the one door in this section that is shut by default and has no Level 2 to open it. An open-ended private-credit fund under either wrapper is a loan-originating AIF that must be closed-ended unless its AIFM can demonstrate a compatible liquidity-risk-management system to its home regulator (Art. 16(2a)). For an ELTIF that is a second gate, wholly separate from the RTS: calibrating the Annex I/II redemption grid does not discharge it, because the RTS answers how much may be redeemed and Art. 16(2a) answers whether the fund may be open-ended at all. And the instrument that would tell you what "compatible" means is not in force — and now carries a date on which it is officially still not coming. Article 16(2f) mandates ESMA to draft technical standards determining the requirements a loan-originating AIF must meet to maintain an open-ended structure, for submission to the Commission by 16 April 2025 (Art. 16(2i)). ESMA delivered: its final report ESMA34-671404336-1345 is dated 21 October 2025 and closes on the standard line that the draft RTS "have been submitted to the European Commission for adoption", on which the Commission "shall take a decision on whether to adopt the RTS within three months". That decision had been taken three weeks earlier, in the other direction. On 1 October 2025 the Director-General of DG FISMA wrote to the chairs of ESMA, EIOPA, the EBA and AMLA de-prioritising 115 of the 430 Level 2 empowerments in the 2019–2024 financial-services acquis as "non-essential for the effective functioning of the Level 1 legislation", and 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", against basic act "AIFMD2/UCITSD6 – (EU) 2024/927" and legal basis "Art. 16(2f)" — this mandate, listed as a "Shall". Note which standards did arrive: Delegated Regulation (EU) 2026/465 supplements the sibling mandate in Art. 16(2g), on the characteristics of the liquidity management tools — not this one.

Read the two documents together, because they do not read each other. ESMA's report tells you a three-month adoption clock is running; the Commission's letter, published three weeks before it, tells you the clock does not apply to this mandate until at least October 2027. Nothing in the final report acknowledges the de-prioritisation. So the gotcha is not that the grid is late — it is that the absence is now policy, with a stated horizon, and it is the operating condition for the whole of 2026 and 2027 rather than a gap that might close before your launch. A manager launching an evergreen credit fund under either wrapper is making a supervisory case for open-endedness against a standard that exists only as a draft, to a regulator that has no adopted grid to measure it by and no near-term prospect of one. Build the liquidity-risk file to persuade, not to tick — and note the second limb of the letter before assuming the draft is merely delayed: where a de-prioritised empowerment carries a legal deadline, the Commission "will propose to amend or repeal the empowerment" in the course of any ongoing revision of the relevant Level 1 act. Article 16(2i) sets exactly such a deadline, and it has already passed. The standard ESMA drafted may not arrive late so much as not arrive at all. Note too the one thing that can take the door off its hinges for five years — the transitional regime immediately below.

Who the loan-origination regime actually binds — the transitional nobody cites correctly

Everything in the table above is the law in force. It is not, for a large part of the existing market, the law that binds. The transitional sits in Article 61(6) of the AIFMD, inserted by Directive (EU) 2024/927 — and note the paragraph number, because secondary commentary almost uniformly cites "Article 61(5)". The same Directive deleted paragraph 5; the loan-origination transitional is paragraph 6, and a reader sent to 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 readings the grandfathering headline does not give you. First, the pivot date is not the one the regime runs on. Every limb turns on 15 April 2024 — the day before AIFMD II entered into force — not on 16 April 2026, when it started to apply. The line was therefore drawn two years before the rules bound anyone, and the funds that fall the wrong side of it are the ones constituted between 16 April 2024 and 16 April 2026: they pre-date application entirely and get nothing. If your fund's constitution date sits in that two-year window, the transitional is not a question you need to ask.

Second, the relief is a freeze, not headroom, and the second limb of the standstill is the one that is read backwards. It is easy to see why a fund already over the limits may not go further. The harder sentence is the next one: a fund below the limits "shall not increase that value or that leverage above those limits". So the relief does not let a compliant-today fund grow into the space between its current position and the cap. Being deemed to comply buys you your 15 April 2024 posture and nothing above it — which for a fund still deploying is a materially different thing from a five-year exemption.

Third, the grandfathering splits at two different levels, and only one of them is the fund. Article 15(4a)–(4d) and Article 16(2a) are relieved fund by fund, on the constitution date. Article 15(3)(d) and Article 15(4e)–(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 inside the credit-policy duty, the prohibited-borrower list, the originate-to-distribute ban and the 5% retention on that loan, while remaining outside the concentration and leverage caps at fund level. There is no wrapper in which "we are grandfathered" is a complete answer — the correct question is which provision, and then whether it attaches to the fund or to the loan.

Fourth, the opt-in is a notification, not an application. An AIFM that would rather run the new rulebook — because a distributor, an investor or a downstream ELTIF authorisation expects it — elects in by telling its home competent authority, with no approval step in the text. That is the cheapest of the routes on this page, and the only one where the burden is a letter.

The gotcha reaches back up this section and softens its hardest sentence. The closed-ended presumption of Article 16(2a) — the door described above as shut by default, with no adopted Level 2 to open it — is one of the provisions a pre-15-April-2024 loan-originating fund is deemed to comply with until 16 April 2029. So an existing evergreen credit fund does not have to make the liquidity-risk-management case to its home regulator at all yet, and the missing Article 16(2f) standard costs it nothing in the meantime. The exposure lands on the new fund, which must argue open-endedness against a draft standard, and on the existing one in 2029, by which time the standard will presumably exist and the fund will have five years of operating history to be measured against it. Whether that history helps or hurts is the question to put in the file now, not in 2028.

Where those rules actually sit in Luxembourg — and the one national option Luxembourg took

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

Primary: Loi du 3 mars 2026 portant modification de la loi modifiée du 17 décembre 2010 … et de la loi modifiée du 12 juillet 2013 …, en vue de la transposition de la directive (UE) 2024/927, 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 is the part that changes a strategy rather than a citation. 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 reads that 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", and adds a second limb that is easy to miss: AIFs "ne sont pas autorisés à s'occuper de la gestion de crédits accordés à de tels consommateurs au Luxembourg". So it is not only origination that is shut — servicing a Luxembourg consumer-credit book is shut with it, which reaches a fund that bought the portfolio rather than wrote it.

Read the prohibition against the two wrappers and it bites on only one of them. 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 — an undertaking, not a household — so Article 4-1 is a dead letter inside the label. For a plain Part II UCI it is the first hard borrower-identity rule the vehicle has ever carried, and it arrives from the AIFM law rather than from Circular 25/901, which says nothing about lending for a Part II at all. This page's running theme — that the ELTIF cage is the price of the passport — reverses here: on consumer credit the plain Part II gains nothing from being outside the cage, because the constraint is national and wrapper-blind.

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)–(8) and Art. 15(3) until 16 April 2029; the standstill bars increasing the single-borrower notional or the leverage, whether the fund sits above the limits or below them; a fund raising no additional capital after 15 April 2024 is deemed compliant with no stated end date; and 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 on the face of the text. The last subparagraph is the one worth reading twice. Loans originated before 15 April 2024 may be run on without complying with Art. 14(3)(d) and paragraphs 9 to 12 "et à l'article 4-1" in respect of those loans — Luxembourg spelling out that the carve-out reaches its own consumer-lending prohibition, which is how the Directive's Art. 15(4e)-to-(4i) range transposes when one of those limbs has been moved to a national article.

The gotcha is where the transposition is silent. 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 — and leaves Part II's own chapter untouched. Nothing about loan origination was added to the Part II product law, because nothing needed to be: the rules bind the manager, not the vehicle. That is the practical consequence for a Part II UCI run by a non-Luxembourg AIFM, the arrangement a third of the Luxembourg ELTIF population already uses (the manager split below). The 20% borrower cap, the leverage ratios, the closed-ended presumption and the consumer prohibition arrive through that AIFM's own home transposition, not through this law — so a Luxembourg Part II managed from Paris or Dublin is reading the French or Irish text for nine of the eleven rows above, while Article 4-1's territorial limb still catches lending it does in Luxembourg. Two rulebooks, one fund, and the fund's domicile picks only one of them.

Fund life, extensions and the wind-down filing

"Evergreen" is a commercial description, not a legal one. Article 18(1) of 2015/760 requires that the rules or instruments of incorporation of every ELTIF — open-ended ones included — "clearly indicate a specific date for the end of the life of the ELTIF", and may provide for a right to extend that life temporarily together with the conditions for exercising it. An open-ended ELTIF is therefore a long-dated fund with a stated terminal date and an extension mechanism — but do not read that as a bar on a perpetual product. A European Commission answer in ESMA's ELTIF Q&A tool (ESMA_QA_2363, answered 6 December 2024) says the opposite in terms: 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 — flatly — "setting up a perpetual ELTIF is also a possibility". The two statements sit together because Article 18(1) fixes the form of the answer and not its length: the rules must name a date and may provide a right to extend it, and nothing in the Regulation caps how far out that date is set or how often the right may be exercised. Perpetual, in the commercial sense, is a drafting question rather than an authorisation one — which is why the fund-life row of the table above compares extension ceilings and not terminal dates. Redemptions before that date are possible only on the Article 18(2) conditions: a minimum holding period; a redemption policy and liquidity management tools the manager can demonstrate to the NCA are compatible with the long-term strategy, at authorisation and throughout the life; disclosed procedures; redemptions limited to a percentage of the Article 9(1)(b) assets; and pro-rata fair treatment where requests exceed it.

The end date then carries a regulator-facing deliverable with a hard lead time. Under Article 21 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, and the schedule must contain four named elements: an assessment of the market for potential buyers, an assessment and comparison of potential sales prices, a valuation of the assets to be divested, and a time-frame for the disposal. That date belongs in the fund calendar the day the terminal date is fixed — it is a year of lead time on a valuation and market-sounding exercise, not a filing you assemble in the last quarter.

The Part II has no statutory end of life at all; term is whatever the constitutive documents say. But this is the one dimension where the comparison reverses. Where a Part II does have a term, Circular 25/901 permits extensions "by one year, up to a maximum of three times", and only where they are necessary "to allow the investments to reach their full potential" and the fund's instruments or the compartment's sales document provide for them (25/901 point 49). The ELTIF Regulation sets no numeric ceiling on the extension right — it leaves the conditions to the fund's own rules. 25/901 also requires the sales document to describe the procedures for changing the investment policy or making any other material change, and notes that a notice period with a free-of-charge redemption option may be required (point 48).

The gotcha follows from the carve-out established above: because an ELTIF-authorised compartment sits outside 25/901 entirely (point 2), the three-extensions ceiling does not travel with the label. If your base case runs to a fourth extension year, the wrapper you assumed was the constraint is the one that permits it — and the plain Part II is the one that stops at three. The carve-out is not even the load-bearing 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 — and the Commission names Article 18(1)–(3) and the RTS as the instruments that already occupy 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 one out. Same asymmetry as the passport, on a different dimension: the Part II's term sits under a Luxembourg rule the CSSF can tighten, the ELTIF's does not.

The retail rulebook you take on with the label

The limits get the attention; the conduct chapter is what reaches your distribution agreements, your fee grid and your subscription plumbing. Taking the ELTIF label on a retail-marketable fund pulls in a set of obligations the Part II has no analogue for.

• MiFID product governance lands on the fund manager. Article 27 subjects the manager of a retail-marketable ELTIF to the requirements of Article 16(3), second to fifth and seventh subparagraphs, and Article 24(2) of MiFID II — the product-approval process and target-market machinery. An AIFM that is not a MiFID firm acquires those duties by virtue of 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 that, 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"; and, where the rules provide for matching, that its availability "does not guarantee or entitle the retail investor to exit". Neither obligation applies where the retail investor is senior staff, a portfolio manager, director, officer, agent or employee of the manager (Art. 30(3)).
• Equal treatment inside the class. Article 30(5) requires the rules of a retail-marketed ELTIF to provide that all investors "benefit from equal treatment and that no preferential treatment or specific economic benefit is granted to individual investors or groups of investors within the relevant class or classes".
• No further liability. The legal form must not create any further liability or additional 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 signature of the initial commitment or subscription agreement, and have the money returned 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. Where a fund or compartment may be marketed to unsophisticated retail investors and invests significantly in private investments, the sales document must warn that the investment may imply a high level of risk, that it is only suitable for persons able to bear that risk, and 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 are deliberately worth reading side by side, because they trigger on different facts. The ELTIF's rides on the distributor at the point of sale and turns on the fund's life. The Part II's sits in the sales document and turns on the life "or the period during which the investors cannot exit" exceeding — or merely could exceeding — ten years. A seven-year Part II with a lock-up that could run past ten is inside the Part II warning and outside the ELTIF one. They do not stack on 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.

The gotcha is Article 30(5), and it catches distribution teams rather than portfolio teams. Anchor economics, seed-investor fee rebates and a founder class on better terms are the ordinary currency of a private-assets raise — and inside a retail ELTIF class, "no preferential treatment or specific economic benefit" removes them. A Part II can side-letter its well-informed investors; nothing in 25/901 bars it. What the Part II owes instead is daylight: AIFMD Article 23(1)(j) requires the AIFM to disclose, before investors commit, how it ensures fair treatment and — "whenever an investor obtains preferential treatment or the right to obtain preferential treatment" — a description of that treatment, the type of investors who get it and, where relevant, "their legal or economic links with the AIF or AIFM". So the two regimes answer the side letter differently rather than one being silent: the ELTIF prohibits it inside the retail class, the AIFMD publishes it. The label's real price is not the 20% concentration limit. It is that you sign up to a conduct rulebook reaching your distributors, your fee grid and your settlement design, and a two-week window in which subscription money must come back without penalty. Model the distribution agreements before the portfolio.

Costs and the retail disclosure pack — the one number only one wrapper publishes

Both wrappers put a key information document in a retail investor's hands, and only one of them puts a single all-in cost figure in the prospectus. That second point is the most under-modelled part of the label, because it is the number a distributor's product-comparison screen will sort on.

Start with what is not different. Article 23(1) of 2015/760 is two sentences: units "shall not be marketed in the Union without prior publication of a prospectus", and "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 stand word for word in the 2015 text. A retail-marketed Part II UCI arrives at the same KID by a different road: 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. Same document; different rulebook amending it.

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 35–49).

Three readings that decide how much the cost chapter actually costs you. First, the overall cost ratio is a published, annually-refreshed number, and its denominator moved. 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)) — and capital, on the Article 2 definition, includes uncalled committed capital. The RTS now measures the ratio against net asset value per annum. For a fund carrying a large undrawn commitment stack the denominator shrinks, so an identical cost base publishes as a materially larger percentage than the 1.0 formula would have produced. If a 2023-vintage model is where your fee grid came from, re-run it.

Second, a retail ELTIF publishes two cost numbers computed under two methodologies: the prospectus's overall cost ratio, built under RTS Article 12, and the KID's cost figures, built under the PRIIPs rules. Nothing in either instrument reconciles them, and the RTS's own annual-update duty applies to the ratio — so a prospectus that sits unamended for three years is carrying a stale statutory number, which is a supervisory finding waiting to happen rather than a drafting nicety. Note also what the Commission has said does not enter the count: a period during which unit-holders cannot benefit from distributions "cannot be considered as a 'fee' or a 'cost'" (ESMA_QA_2480), so a distribution ramp shortens no ratio and lengthens no cost line.

The gotcha is where the Part II's cost transparency actually lives, and it is not where a Luxembourg manager would look. Chapter 8 of Circular 25/901 is titled "Transparency" and runs to fifteen points on investment policy, redemptions, borrowing and warnings — and contains no cost or fee chapter at all. Its opening point says why: the chapter is "without prejudice to the information that the manager must communicate under Article 23 of the AIFMD" (25/901 pt 35). So the Part II's cost disclosure is entirely AIFMD-derived — which means the instrument that moved it on 16 April 2026 was AIFMD II, not the CSSF circular that was rewritten four months earlier. A manager who read 25/901 as the new Luxembourg rulebook on what to tell investors about fees read a circular that never claimed to say anything about them.

What ELTIF 2.0 fixed relative to ELTIF 1.0

ELTIF 1.0 (2015/760, applicable Dec 2015) was a dead letter, and the Commission said so in its own words 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 (total assets under management are estimated at approximately EUR 2.4 billion in 2021)", domiciled "in only four Member States (Luxembourg, France, Italy and Spain)" (COM(2021) 722, explanatory memorandum). Six years, 57 funds, four countries. 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, cross-checked against Dechert and Lexology. Key figures pinned to the consolidated 2015/760: 20% diversification (Art. 13(2)), 50%/100% borrowing (Art. 16(1)(a)), retail suitability (Art. 30(1)). The borrowing, facilities and conduct rows are read letter-by-letter against both texts: old Art. 16(1)(a)–(e) and Art. 26 in the as-adopted Regulation, against Art. 16, 25, 27 and 30 in the consolidated text.

The 1.0 rulebook is not history — it binds part of the market until 11 January 2029

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

Note what the relief is, because the wording is doing more work than "grandfathered" suggests. The fund must have been authorised in accordance with the old provisions and be complying with them. This is not a suspension of a rulebook — it is permission to keep running the old one. A 1.0 ELTIF therefore still carries every number in the left column above: the €10,000 retail minimum, the 10%-of-portfolio cap, 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: fall out of the old provisions and the deeming stops.

The opt-in is procedurally the cheapest route on this page — a notification, with no approval step in the text — and substantively one of the most expensive, because the rulebook arrives whole. A manager electing in to shed the €10,000 floor and the 10% cap takes with them the Article 30 conduct chapter, the two-week cancellation right, the bar on preferential terms inside a retail class, MiFID product governance on the manager under Article 27 and the published overall cost ratio under Article 25. The retail economics and the retail rulebook are the same election.

Now set that against the other transitional on this page, because a pre-2024 credit ELTIF sits under both at once and they line up on nothing. The pivot dates differ — 10 January 2024 for the product regime, 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 in to one carries you nowhere in the other. And the difference that actually bites is the standstill: Article 61(6) freezes the fund at its 15 April 2024 posture, barring any increase in single-borrower notional or leverage above the limits, while Article 2 of 2023/606 carries no equivalent condition — on the ELTIF's own product limits the grandfathered fund is deemed compliant, not frozen. The same balance sheet can be free to move under one transitional and pinned under the other. Note too that the AIFMD's no-further-capital limb is dated ("after 15 April 2024") and the ELTIF's is not dated at all — see To verify before relying on when that one starts to run.

The gotcha is that this is not a rounding error in the population. Of the CSSF's 167 Luxembourg fund units, 54 were authorised in the seven years to 2023, the last on 15 December 2023 — the figures already given below. At EU level the same split reads off ESMA's register: 315 entries, 223 authorised on or after 10 January 2024 and 14 carrying no authorisation date, which leaves 78 that pre-date the rewrite. So roughly a quarter of the authorised ELTIF universe is running the column this page had been treating as history, and will be entitled to until 2029 — or indefinitely, if it stops raising capital. The practical consequence for anyone comparing "the ELTIF" with a Part II UCI is that the ELTIF is currently two rulebooks, not one. When the fund in front of you already exists, the question is not what the Regulation says. It is whether it has notified.

On the question every structuring memo eventually asks — is another rewrite coming? — the Regulation answers it with two dates, and only one of them is in 2030. Article 37 requires the Commission, after consulting ESMA, to report to the European Parliament and the Council by 10 April 2030, reviewing among other things whether the eligible-asset list, the portfolio-composition, diversification and concentration rules and the borrowing limits should be updated, how Article 18 has worked in practice on redemption policy and fund life, and whether the marketing provisions protect retail investors effectively — accompanied "where appropriate, by a legislative proposal" (2015/760 Art. 37). That is the general review, and it is the one the limits on this page sit under: at Level 1 they are stable to the end of the decade unless the Commission proposes otherwise. The movement between now and then, if it comes, will come from the Level 2 texts and the Commission's Q&A answers — which is exactly where it has come from so far.

The second date has already passed, and it is a narrower review than the first. Article 37a required the Commission, by 11 January 2026, to carry out an assessment and submit a report to the European Parliament and the Council — again "accompanied, where appropriate, by a legislative proposal" — on at least three things: whether an optional designation of "ELTIF marketed as environmentally sustainable" or "green ELTIF" is feasible, and on what basis it would be granted; whether ELTIFs should be obliged to comply with the "do no significant harm" principle in their investment decisions generally, or only where marketed as environmentally sustainable; and how the regime's contribution to the European Green Deal could be strengthened without undermining its objectives (2015/760 Art. 37a).

Note what that review can and cannot move, because a structuring file does not need to price it in. It is a sustainability-labelling review: nothing in the eligible-asset, concentration, borrowing or redemption columns above turns on it, and the 2030 review is where those sit. The gotcha is for the marketing side rather than the portfolio side. No green-ELTIF designation exists in the Regulation as consolidated — so 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 point a distributor at. Whether the Article 37a report was delivered, and what it concluded, is not pinned here — see To verify.

The Luxembourg layer — which door the label comes through, and what enforces it

Everything above sets an EU Regulation against a CSSF circular. There is a third instrument in the stack, and a Luxembourg structuring file that leaves it out is missing two things: the door the label actually comes through, and the chapter that punishes a breach of it. Regulation 2015/760 is directly applicable, but it leaves the competent authority, the supervisory powers and the sanctions to national law — and 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. 6–10), as amended by the Law of 6 February 2025.

That chapter was itself realigned to ELTIF 2.0. Article 1 of the Law of 6 February 2025 amends Article 8(1) of the 2019 Law, moving the sanctionable-breach cross-references onto the renumbered Regulation — the reference to Article 13(1)–(6) becomes Article 13(1)–(5), with parallel corrections touching Articles 18, 19, 20, 26, 27, 29 and 30. Article 29 of that law puts it in force on publication in the Journal officiel, and the derogations it grants (to Articles 2 and 4, on other regulations) do not reach the ELTIF amendment. The tidy-up is worth noticing for what it implies: the sanctions article is pinned provision-by-provision to the Regulation, so when the Regulation moved, the national fine schedule had to be re-pointed to keep matching it.

Four doors, and one of them is not a product-law vehicle

The CSSF sets out the application routes for the label on its own ELTIF page, and the list is broader than the "label on a Part II or RAIF" framing 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 chassis takes the label.
• "ELTIF authorisation of an existing compartment or of an existing fund" — the retrofit, which is how 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 door this page had not opened.

Read that fourth route against the CSSF's own gate for the label: "to be authorised as an ELTIF, an Alternative Investment Fund ('AIF') must be managed by an authorised EU Alternative Investment Fund Manager ('AIFM') and comply with all the requirements set out in the ELTIF Regulation" (CSSF, ELTIF). The qualifying condition is that the vehicle is an AIF with an authorised EU manager — not that it sits under one of the Luxembourg product laws. So the ELTIF authorisation can be the only product-level authorisation a Luxembourg vehicle has, rather than a layer on top of one that already exists. The RAIF entries on the CSSF's own ELTIF list are that route already in use — a RAIF is not CSSF-authorised at product level either — and 37 of the 167 fund units on the list are RAIFs.

The gotcha is what the label does to your enforcement exposure, and it is the part of the price that never appears in a limits comparison. Taking the ELTIF authorisation does not just swap the investment rulebook (the 25/901 carve-out established above) — it hands the CSSF a product-specific sanctions chapter keyed to Articles 3 to 31 of the Regulation, which is to say to the eligible-asset floor, the diversification and borrowing limits, the redemption rules, the cost disclosures and the retail conduct duties this page has spent ten sections describing. Every one of those is a sanctionable breach carrying up to €5m or a tenth of turnover, and Article 10 then publishes the decision under your name once the appeal window closes. For a wrapper whose whole purpose is selling to retail through third-party distributors, a named enforcement notice on the regulator's website is a distribution event, not a legal one. Model the conduct obligations as things a supervisor can fine you for and publish, not as drafting points — that is the difference between the label and the plain vehicle that the 20-versus-25 percent comparison does not capture.

Who is actually using which

The ELTIF market inflected sharply once 2.0 applied. Independent tracking by Scope Fund Analysis put total ELTIF volume at roughly €20.5bn as at 31 December 2024 across 150 authorised ELTIFs (Scope ELTIF study 2025, published 27 March 2025), growing to about 268 funds / ~€34bn at end-2025 — +55% AuM year-on-year, with 113 new launches in the year (Scope, "AuM rose by 55% to EUR 34bn in 2025"). Luxembourg is the dominant domicile. On the last domicile split Scope published, the CSSF accounted for €13.7bn of that €20.5bn — about two-thirds of market volume — across 85 active ELTIFs, with the AMF second at ~€5.9bn, and 98 of the 150 authorised ELTIFs were Luxembourg products (Scope ELTIF study 2025, as at 31 December 2024). Scope's interim update kept Luxembourg in front on new business: of at least 82 ELTIFs launched in the first three quarters of 2025, 44 were Luxembourg, 24 France and 10 Ireland (Scope ELTIF market update, 4 November 2025). These are Scope figures, not a regulator statistic — and the domicile split is an end-2024 reading, not an end-2025 one; see To verify.

The tell for practitioners is in the regulator's own list, not in market commentary. The CSSF publishes the Luxembourg fund units authorised under the ELTIF Regulation, and as at 31 July 2026 it held 167 fund units across 104 funds (CSSF, list of fund units subject to Regulation 2015/760, as of 31 July 2026). The split by underlying vehicle is the layering argument stated as a regulator statistic rather than an inference: 126 of the 167 units — 71 of the 104 funds — sit on a Part II UCI, 37 units (29 funds) on a RAIF, 3 on a SIF and 1 on a SICAR. Roughly three-quarters of Luxembourg's ELTIF units are Part II vehicles wearing the label. The same list dates the regime's turn: 113 of the 167 units were authorised on or after 10 January 2024, the day ELTIF 2.0 applied — two-thirds of the entire Luxembourg ELTIF stock post-dates the rewrite, against 54 units in the seven years from 2017 to 2023, the last of them authorised on 15 December 2023. It also shows the product is managed cross-border as much as it is sold that way: 113 units are managed by a Luxembourg AIFM, 24 by a French one, 15 Irish and 10 Spanish — the domicile is Luxembourg, the manager frequently is not, which is precisely the arrangement ESMA_QA_2481 holds a host Member State cannot condition. Note the unit of count: the list enumerates fund units — compartments — so unit and fund counts differ, and both are given here.

The EU-wide population, from the regulator's own register — and how little of the passport is used

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. Read on 4 August 2026 it holds 315 ELTIFs across eight home Member States (ESMA, register of authorised ELTIFs, ESMA34-46-101):

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 10 July 2026 and the latest authorisation date recorded is 9 July 2026. Counts are of register entries, which for Luxembourg are compartment-level — the same unit of count as the CSSF list above, not the same population or the same date. Read 4 August 2026.

Three readings the domicile column does not give you. First, the same post-2024 inflection shows at EU level: 223 of the 315 were authorised on or after 10 January 2024 (14 entries carry no authorisation date). Second, the regime is being used for what it was rewritten for — 204 of the 315 are flagged as marketable to retail investors, alone or alongside professionals, against 77 professional-only and 34 that state neither.

The third is the gotcha, and it is the number that should temper every "EU-wide passport" line on this page, ours included. The register records the Member States each ELTIF is marketed in, and on that column 166 of the 315 are marketed in exactly one Member State and a further 10 record none at all. Only 139 cross a border at all, 65 reach ten or more states, and five reach the full thirty of the EEA. The breadth is also concentrated by domicile: a Luxembourg ELTIF averages 8.3 marketing states, one domiciled anywhere else 1.6. So the passport is real, it is doing what only it can do at the top of the distribution, and the median ELTIF is nonetheless a single-country product that a national retail registration would also have carried. Before you buy the passport with a 20% concentration limit and a 50% borrowing cap, count the countries you will actually notify — because more than half the market authorised under this Regulation is currently notifying one.

The Part II regime dwarfs the ELTIF market in its own right — the CSSF's own breakdown puts Part II UCIs at €273.222bn of net assets across 315 funds as at 30 June 2026 (CSSF, basic statistical data on UCIs, June 2026) — because Part II is a general-purpose alternative wrapper, not a retail-passport product. Reading that population against the ELTIF list gives the layering argument its denominator, and it is the more sobering direction of the ratio: 71 Part II funds carry an ELTIF label, so a little over one Part II fund in five has taken the passport and the rest have not. Three quarters of Luxembourg's ELTIF units sit on a Part II chassis, and four fifths of Part II funds have no use for the label — both are true, and they are the same fact read from its two ends. (The counts come from lists a month apart — the ELTIF list as at 31 July 2026, the population as at 30 June 2026 — so read the ratio as an order of magnitude, not a decimal.) The two are not rivals for the same money — the Part II is frequently the chassis and the ELTIF is the passport bolted on for cross-border retail (Macfarlanes). A plain Part II UCI with no ELTIF label is the choice where the strategy does not fit the ELTIF cage and retail reach is narrow (home market plus one or two receptive states), or where the investor base is professional/well-informed and the ELTIF buys you nothing.

Which wrapper when

Structuring and timing: Macfarlanes, Loyens & Loeff. The gotcha: bolting an ELTIF label onto a Part II does not simply add a layer — it swaps the rulebook for the fund's investment limits. The ELTIF authorisation takes the compartment out of Circular 25/901 (point 2), so you leave 25%/70% and land on 20%/50% plus the RTS redemption gate and the eligible-asset floor — while keeping every Part II obligation that isn't an investment limit. Model the portfolio against the ELTIF numbers before you commit to the label, not after: a book built to the 25% concentration limit does not automatically fit a 20% one. Decide the retail footprint first; the wrapper follows from it.