You are one of the first players to have launched a European long-term investment fund (Eltif), domiciled in Luxembourg, with the ambition of reaching out to retail investors. How does this new European product open up new prospects?
Kai Nemec. – “This Eltif, with an infrastructure investment strategy, is aimed at individual clients in Germany, the market where we are mainly active. In fact, we want to reach retail banking customers, who can now open up their portfolios thanks to easier access to private assets via these new European products. The new version of Eltif, through which Europe intends to promote long-term investment, in particular to meet the financing needs of transition projects, opens up the possibility of addressing this clientele. It gives us the right to do so. It gives us the right to do so. This is something new.
We tend to think that investing in private assets requires advanced knowledge, in particular to understand the nature of the assets and the associated risks. Is the product in line with the expectations of this market?
“As with any new product, an educational effort is needed, particularly in terms of training distribution partners so that they can offer solid support to the end customer. Nevertheless, we believe that the possibilities offered by these products meet the needs of the market. In our view, they open up new diversification opportunities for portfolios that have already begun to invest. While institutional investors currently have a 5-10% private equity component in their portfolios, these new products should enable retail investors to adopt similar approaches. The challenge is to offer them additional diversification leverage. However, you are right, it remains essential for each investor to have a good understanding of the nature of the asset. But this is a market under construction, destined to develop.
What are the elements that private investors need to be aware of?
“With an Eltif, you're looking at long-term investment. It's not a traditional fund, like a Ucits, from which you can easily exit at any time. Here, the logic of valuation is different. What's more, investors cannot withdraw their money overnight. These factors are linked to the nature of the assets in which we invest. Customers' risk tolerance must therefore be carefully assessed. Investors must be able to weather periods of turbulence, with the prospect that the assets will regain their value over the longer term. In this respect, Eltif is designed to reduce the effect of turbulence in a retail portfolio thanks to its low volatility (5% per annum).
Why did you choose to launch your first fund dedicated to infrastructure rather than another asset class, such as private equity?
“We felt it was appropriate to approach the private asset market through infrastructure, firstly because the return prospects associated with these assets are robust, and secondly because they generate cash on a regular basis. Our ambition, however, is to extend our offering to include other strategies and other assets, such as private equity. With this type of asset, you don't benefit from regular cash flows. These long-term investments are more difficult to understand.
How do you see the market developing?
“Developing the market will take time. We need to explain, explain and explain again what an Eltif is, the needs it meets and the associated opportunities and constraints. What's more, the relevance of Eltifs must be demonstrated over time. In other words, the product has to prove itself. We are already seeing customers following the infrastructure market closely and actively discussing Eltif investment opportunities with their bank advisers. Asset managers have a crucial role to play in the success of these products.
How does this happen?
“Managers are genuinely enthusiastic about this new product. The increase in the number of Eltif applications in recent months bears witness to this. However, several major challenges remain. The first is to find relevant investment targets. In this market-building phase, it is essential to be particularly selective in order to offer investors the best performance and win their confidence.
Secondly, managers need to implement robust management approaches, particularly in terms of liquidity, by offering products that are tailored to investors' requirements. The aim is to strike a balance that offers a degree of flexibility while maintaining attractive returns. To achieve this, we need expertise in private asset management, which we have mastered, as well as the ability to serve a broader market. We need to move beyond the 'boutique' approach that has so far characterised the management of these assets."
124 Eltif in Luxembourg
In July 2025, the Esma register listed 211 Eltif in the EU, including 124 domiciled in Luxembourg, i.e. almost 60% of the total. Most Luxembourg Eltif invest in infrastructure, private equity and private debt, and are marketed in several European countries.
Eltif are governed by a clear regulatory framework that offers investors access to a diversified range of long-term alternative assets while guaranteeing their protection.
Expert in risk management
This article was written for the Private Assets supplement of Paperjam magazine's October 2025 issue, published on September 24. It is published on the site to contribute to the full Paperjam archive. Click this link to subscribe to the magazine.
