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 or SIF) can apply for the ELTIF label and keep its domicile, gaining the retail passport on top of the vehicle (Macfarlanes, "Retailisation choices"). 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
| Dimension | ELTIF 2.0 (retail-marketed) | Luxembourg Part II UCI (plain AIF) |
|---|---|---|
| What it is | EU product label / regime on top of an AIF; authorised by the home NCA (in LU, the CSSF) | A CSSF-authorised fund vehicle under Part II of the 2010 Law; an AIF |
| Retail access across the EU | EU-wide retail passport — one authorisation, marketable to retail from Lisbon to Helsinki (2015/760 Art. 31) | No retail passport. AIFMD passport is professional-only; retail placement is country-by-country under each state's national private-placement / retail rules (Macfarlanes) |
| Retail minimum | No regulatory minimum; the €10,000 floor + 10%-of-portfolio cap were abolished. MiFID-style suitability test instead (Norton Rose) | No harmonised EU minimum; set by the vehicle and by each country's retail rules |
| Eligible assets | ≥55% of capital in "eligible investment assets" (private co's, real assets, qualifying funds, some listed <€1.5bn, green bonds, STS securitisations) (2023/606) | Effectively any asset class — no eligible-asset menu; the vehicle's own policy governs, within 25/901's risk-spreading limits (see 25/901) |
| Diversification | Max 20% in a single asset / issuer / fund (retail; raised from 10% under 1.0). No concentration/diversification limits for professional-only ELTIFs | 25/901: 25% per position if retail-marketable, 50% if reserved to well-informed/professional (25/901 pts 8, 11) |
| Leverage / borrowing | 50% of NAV if retail-marketed; 100% if professional-only (2023/606; up from 30% under 1.0) | 25/901: 70% of assets/commitments for investment purposes if retail-marketable; no CSSF cap (fund sets & discloses) if professional-only (25/901 pt 32) |
| Redemptions / liquidity | Can be closed- or open-ended; open-ended gated per the RTS (Del. Reg. 2024/2759) — gate tied to redemption frequency + notice period or liquid-asset % | Redemption terms set by the fund; 25/901 now mandates disclosure of gate mechanics incl. treatment of the unexecuted part (25/901 pts 43–45). Typical practice: ≤ monthly, ~90-day notice |
| Depositary | Retail ELTIF must have a UCITS-grade depositary (2023/606) | Full AIFMD depositary; UCITS-compliant depositary required if marketed to retail in Luxembourg (Elvinger Hoss) |
| Subscription tax | LU Part II/RAIF/SIF authorised as an ELTIF are exempt (Law of 21 July 2023) | Part II UCI: 0.05% taxe d'abonnement (reductions/exemptions for certain share classes) |
Primary: Regulation (EU) 2023/606 (ELTIF 2.0), Regulation (EU) 2015/760 (ELTIF 1.0, consolidated), Commission Delegated Regulation (EU) 2024/2759 (ELTIF RTS), Law of 17 December 2010, CSSF Circular 25/901. Exact article numbers for the ELTIF portfolio/borrowing rules: see To verify.
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.
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: 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 mandatory "investment advice" requirement of old Article 30 is gone; providing the suitability statement is not itself investment advice.
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 (2023/606; 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.
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 the AIFM calibrates the gate 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 (Arthur Cox).
- 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 — e.g. quarterly with a 20% liquid-asset floor allows up to 50% of that liquid pool.
The maximum redemption is applied to eligible assets at the redemption date plus prudently-forecast cash flows over the next 12 months. Notice periods shorter than 3 months must be notified to and justified with the NCA. And a February 2025 Commission Q&A confirmed an ELTIF cannot run different notice periods, gates or redemption frequencies across share classes.
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 on liquidity the ELTIF's constraint is a hard EU-level formula; the Part II's is a national disclosure-and-design 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.
What ELTIF 2.0 fixed relative to ELTIF 1.0
ELTIF 1.0 (2015/760, applicable Dec 2015) was, by common consent, a dead letter — only a double-digit number of funds launched in its first years. 2.0 (2023/606, applicable 10 January 2024) rewrote the retail economics.
| Feature | ELTIF 1.0 (2015/760) | ELTIF 2.0 (2023/606) |
|---|---|---|
| Retail minimum ticket | €10,000 minimum + max 10% of portfolio across ELTIFs | Both abolished; MiFID suitability instead |
| Mandatory investment advice for retail | Required (old Art. 30) | Removed; suitability statement suffices |
| Eligible-asset floor | 70% of capital | 55% of capital |
| Min. value per real asset | €10m per real asset | Removed; most real assets qualify (excl. art, wine) |
| Listed-company cap | Market cap < €500m | Market cap < €1.5bn |
| Single-asset diversification | 10% | 20% (retail); no limit if professional-only |
| Borrowing | 30% of capital | 50% retail / 100% professional |
| Fund-of-funds / master-feeder | Highly restricted | Broadened; fund-of-ELTIFs and feeder structures allowed |
| Redemptions before end of life | Effectively closed-ended | Open-ended permitted, gated per the 2024 RTS |
1.0 baseline: Regulation (EU) 2015/760 (consolidated). 2.0 changes: Regulation (EU) 2023/606, cross-checked against Dechert and Lexology. Specific 2.0 article numbers: see To verify.
Who is actually using which
The ELTIF market inflected sharply once 2.0 applied. Independent tracking by Scope Fund Analysis puts active ELTIFs at roughly 133 funds / €20.5bn at end-2024, growing to about 268 funds / ~€34bn by end-2025 (+55% AuM year-on-year, with ~113 new launches in 2025) — and Luxembourg is the dominant domicile, roughly two-thirds of market volume (Investment Officer, citing Scope; Scope ELTIF study 2024). These are Scope figures, not a regulator statistic — see To verify.
The tell for practitioners: most Luxembourg ELTIFs are built on a Part II UCI or RAIF underneath. 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
| If your priority is… | Reach for… | Because |
|---|---|---|
| Broad EU retail distribution, many countries | ELTIF (label on a Part II or RAIF) | Only wrapper with a harmonised retail passport; no per-country retail registration |
| A strategy that doesn't fit the eligible-asset / 20% concentration / 50% leverage cage | Plain Part II UCI | No eligible-asset menu; 25/901 limits are looser and scale with investor type |
| Professional / well-informed investors only | Part II or RAIF (ELTIF adds little) | AIFMD professional passport already reaches them; ELTIF's retail machinery is dead weight |
| Fastest route to an ELTIF label | ELTIF on a RAIF (~2 months) over a Part II (dual approval ~3–6 months) | RAIF isn't separately CSSF-authorised, so only the ELTIF label goes through the CSSF (Loyens & Loeff) |
| Retail reach limited to a few receptive states (e.g. DE, NL) | Plain Part II UCI | National retail registration in a handful of states can be cheaper than full ELTIF compliance |
| Tax efficiency on a retail private-assets fund | ELTIF label on Part II/RAIF/SIF | Subscription-tax exemption for ELTIF-authorised LU vehicles (Law of 21 July 2023) |
Structuring and timing: Macfarlanes, Loyens & Loeff. The gotcha: bolting an ELTIF label onto a Part II does not loosen your Part II obligations — it adds the ELTIF's tighter eligible-asset, 20%-concentration, 50%-leverage and RTS-redemption rules on top, and the stricter of the two governs. Decide the retail footprint first; the wrapper follows from it.
To verify
Not yet pinned to a primary article — treat as open, not fact:
- Exact article numbers in the consolidated ELTIF Regulation. The 55% eligible-asset floor, the 20% single-asset diversification limit, the 50%/100% borrowing limits and the professional-only exemptions are stated here from law-firm summaries and the 2023/606 amending text; they should be tied to the specific articles of the consolidated 2015/760 (as amended by 2023/606) — primarily Arts 13, 16 and 26 — before being relied on.
- Professional-only ELTIF relaxations. The removal of concentration/diversification limits and the 100% borrowing allowance for ELTIFs marketed solely to professionals is well-reported but the precise carve-out wording (Art. 2a / Art. 13(2)) needs confirming against the consolidated text.
- ELTIF market statistics. The ~133/€20.5bn (2024) and ~268/€34bn (2025) figures are Scope Fund Analysis estimates reported in secondary press, not an ESMA or CSSF statistic — no official ELTIF register count confirmed as at 2026-07-06.
- A Part II-UCI-only fund count and AuM. The CSSF headline UCI statistics lump Part II UCIs with SIFs and SICARs; a clean Part II-only number needs the CSSF's detailed UCI breakdown.
- Per-country retail eligibility of plain Part II UCIs. The "yes in DE/NL, no in FR/ES" split is from Macfarlanes; national retail-marketing rules change and each target state should be checked at the point of distribution.
- Part II redemption "monthly / 90-day notice". This is described market practice, not a hard regulatory cap — 25/901 point 45 expressly allows less-than-monthly redemption for private-assets policies. Confirm against the specific fund's documents.
- ELTIF RTS gate percentages. The 33.3% (Annex I) and 50% (Annex II) figures are worked examples from Arthur Cox; the full Annex I/II tables in Del. Reg. 2024/2759 should be read for the exact grid.
Changelog
- 2026-07-06 — page created. Baseline: Regulation (EU) 2023/606 (ELTIF 2.0) and consolidated Regulation (EU) 2015/760 (ELTIF 1.0) primary texts; Commission Delegated Regulation (EU) 2024/2759 (ELTIF liquidity RTS); Luxembourg Law of 17 December 2010 (Part II); CSSF Circular 25/901 (cross-linked). Cross-checked against Macfarlanes, Norton Rose Fulbright, Dechert, Arthur Cox, Loyens & Loeff and Elvinger Hoss commentary, and Scope Fund Analysis ELTIF market data (secondary — flagged in To verify).