Buy ELTIFWhat retail investors should look out for and how to do it step by step

ELTIFs offer an exciting opportunity to invest in the European real economy over the long term. This opens up new investment opportunities, especially for retail investors, especially since the ELTIF update of January 2024.
But as promising as ELTIFs may be, they are still a young and complex financial instrument that requires considerable consideration for successful investment. In this article, you will find out what you need to look out for in order to successfully buy ELTIFs and benefit from them in the long term.

What is an ELTIF?

The ELTIF ("European Long-Term Investment Fund") is a relatively young financial instrument developed by the EU, first introduced in 2015 and relaunched in 2024. ELTIFs are investment funds designed to facilitate long-term investment in the European real economy.

As a bridge between the financial market and the economy, ELTIFs are designed to activate private investors’ capital and direct it directly into infrastructure, renewable energy and other European tangible investments. Private equity, real estate and private debt are also among the asset classes in which ELTIFs can invest. This opens up a new investment segment for private investors in particular, which was previously reserved primarily for institutional investors.

Several billion euros have now been invested in the German ELTIF market; estimates are around 4.4 to 5.1 billion euros, depending on the delimitation.¹ Around 1.8 billion euros alone are attributable to the ELTIF klimaVest. This makes klimaVest the currently largest ELTIF for private investors ² across Europe. The fund invests primarily in renewable energies and sustainable infrastructure, with the portfolio comprising over 43 assets from the fields of solar and wind power as well as electricity grids, spread across 6 European countries.

Buy ELTIF: What needs to be considered?

Those who want to buy ELTIFs have already had it significantly easier than before since the 2024 update. However, there are still a number of aspects to consider in order to invest successfully. The most important information in advance: Don't invest in a financial product you don't understand.

This also applies to ELTIFs, as they are still a complex financial instrument despite the eased investment conditions. A certain prior knowledge of the specific form of investment and the dynamics of the financial market is a benefit. Otherwise, you risk tying up your capital and only then realising that this specific investment is not for you. In this case, it can be complicated and costly to withdraw your money early.

So, be as detailed as possible about your planned investment - including ELTIFs. Here you will find the most important information at a glance:

What return do ELTIFs provide?

Returns in the ELTIF market typically range between 3 and 14 percent per year, depending on the asset class, structure and debt ratio of the fund.³ However, the upper half of this range is usually target returns from marketing documents, unrealised performance. To date, no ELTIF has demonstrated double-digit returns in a multi-year, audited track record for retail investors.

In principle, The level of return depends on the strategy, structure and performance of the relevant fund. The return opportunity is also linked to the risk expectation: The longer-term and more security-oriented the ELTIF is designed, the more stable its value is generally - but this also means that the return opportunities are likely to be lower than, for example, with shorter-term and therefore more risky investments.

For long-term investments such as ELTIFs, the return is also more evenly distributed over the term. For example, wind or solar farms can reliably generate regular yields for many years after development, construction and commissioning, which in turn provide equally stable return opportunities.

The broad independence from stock market fluctuations also contributes to the fact that the purchase of ELTIFs offers particularly solid return opportunities. Short-term (mainly exchange traded) investments, on the other hand, are much more vulnerable to external shocks due to cyclical fluctuations and losses in value.

Sonja Knorr, analyst at the Scope analysis company, sees an opportunity for private investors in the breadth of asset classes: "ELTIFs offer extensive investment opportunities, the keyboard is very extensive. This can help to spread one’s own assets more widely."⁴

The market across the asset classes looks like this:

• Private debt: typical interest rates in the range of 5 to 7.5 percent per year, which compensate for an increased default risk of the financed companies.
• Infrastructure: in the moderate single-digit range. The higher the target return, the more it depends on debt capital or narrow diversification.
• Private Equity: Target returns usually in the high single-digit to low double-digit range, i.e. around 9 to 14 percent per year. This increases the risk accordingly, and the investment is only suitable for experienced investors.
• Multi-Asset: Mixed forms that lie between the individual modules depending on their weighting.

Before buying, it is worth taking a look at the relevant fund’s key information document (KIID). In a sample of 29 ELTIFs distributed in Germany, the BIBs reported return expectations of between 1 and 16 percent per year for the recommended holding period in the moderate scenario, for risk classes between 2 and 7.⁵ Anyone wishing to buy an ELTIF should compare the advertised target returns with the mandatory information in the BIB and take into account that ongoing costs can significantly reduce the realised net return.

Particular caution is required in the case of high target returns. An example from the same study: An ELTIF with a solar focus showed an annual return of 15.8% at moderate risk (class 3) in the “medium scenario”. Upon request, the provider itself described this figure as unrealistic, stating 5 to 6 per cent as realistic over the entire term. 

The risks of ELTIFs

The greatest risk with an ELTIF is the experience of the fund management. In a scope survey, 34 per cent of ELTIF providers rated reputational risk from inexperienced managers themselves as one of the biggest industry threats - the highest score before maturity transformation risks (32 per cent) and disappointing performance (29 per cent).⁷

“Since you don't know in advance whether an ELTIF will be successful with its investments, investors should choose providers with a strong history,” says Sonja Knorr, analyst at Scope. “Such established companies have already proven that they can also be successful in difficult market phases.”⁴

Other risks of an ELTIF are the limited liquidity, the periodic valuation of investments, a narrower diversification spectrum compared to ETFs, high and multi-layered costs as well as market and interest rate risks of the respective asset class.

The risks of ELTIFs also depend primarily on their fund structure and investment strategy. This includes, in particular, the assets in which an ELTIF invests and the specific investment risks associated with them.

Investments in infrastructure assets, for example, such as wind or solar power plants, only act downstream and thus offer some crisis resilience compared to investments that follow classic economic cycles. Asset classes such as private debt or private equity, on the other hand, may involve higher investment risks, as these asset classes often involve greater fluctuations in value and default risks.

However, regardless of the investment strategy or the individual assets, an ELTIF investment can also carry risks - for example, if investors do not have the necessary investment horizon or are generally uncomfortable with illiquid money investments. There is then a risk that they will have to withdraw their capital prematurely - which usually involves additional costs such as redemption fees.

In addition, ELTIFs - like any type of financial investment - carry the risk of total loss. The total loss would only occur if all of the fund’s assets develop poorly at the same time, for example because the (world) economy collapses or unforeseen laws are passed. A broad spread and diversification reduces the risk, but does not completely exclude it.

The cost of ELTIFs

Those wishing to buy an ELTIF have to anticipate different costs. The fees of an ELTIF are generally composed of the one-off purchase fees and the ongoing costs. The initial charges include the initial charge on the purchase of the units and any transaction costs with the custodian. The initial charge is usually between 0 and five percent of the purchase amount.

Ongoing costs can be fund-related costs such as performance fees, flat-rate fees, portfolio transaction costs and custodian-related costs such as custodian fees. The latter may vary depending on the provider.

How does redemption work in an ELTIF?

ELTIFs are generally semi-liquid investment funds. They cannot be sold on a daily basis like ETFs, but are also not completely locked up until maturity like traditional closed-end funds. Anyone wishing to redeem shares is bound by the redemption mechanisms set out in the Fund’s prospectus.

Before buying, you should know three deadlines: the minimum holding period, the notice period and the redemption window.

• Minimum holding period: Period after purchase during which units cannot be redeemed at all.
• Delivery deadline: Period between registration of the return and payment.
• Return window: fixed dates on which the Fund accepts redemptions at all.

As a market standard, a quarterly frequency has been established for return windows.³ Daily returns are the exception. In a sample of 29 ELTIFs distributed to retail investors in Germany, the minimum holding period ranges from three months to eight years; some funds only accept redemptions at all at the end of the term. klimaVest is the only ELTIF in this sample without a minimum holding period and offers redemption on a daily basis.⁵

However, “semiliquid” does not mean “almost liquid”. The term describes the possibility of return, not its guarantee. If redemption requests reach a Fund’s liquidity limit, the Fund may serve redemptions pro rata or temporarily suspend redemptions. ³

Maturities of ELTIFs

In the 2026 market, there are three widespread ELTIF structures, each with its own maturity logic:

• Closed ELTIFs: fixed maturity, capital tied over several years.
• Semi-liquid ELTIFs: periodic return windows allow you to exit before the end of the term.
• Evergreen ELTIFs: very long or open maturity, often invested for decades.

According to the scope, closed private equity ELTIFs have an average maturity of around 9 years, while closed infrastructure ELTIFs have an average maturity of around 16 years. Evergreen designs run over decades: Some are invested for 99 years, while klimaVest is invested for 50 years with a two-time extension option for five years each.

At the maturity of an ELTIF, the Fund Management Company begins to sell all assets and pay out the proceeds pro rata. How long this takes depends on the assets: A company investment cannot be sold in weeks, and an offshore wind farm certainly cannot. The Fund Management Company is therefore typically entitled to extend the term twice by a few years each time if the orderly sale takes more time.

How much should you invest in an ELTIF?

As a rule of thumb, ELTIFs should not represent more than 5 to 10 percent of your liquid assets. The Consumer Centre recommends an upper limit of 5 percent.¹⁰ Sonja Knorr, analyst at Scope, cites 10 percent as a sensible upper limit: "The actual strength of an ELTIF lies in this order of magnitude. A well-designed fund can balance a highly equity-based custody account with the stability of long-term tangible assets".⁴

Where you end up within this range depends on your profile. Those who already have a broad custody account of ETFs, shares and bonds, have a long investment horizon and experience with investments in tangible assets can approach the upper limit. Those who are just starting to set up a custody account or foreseeably need liquidity should not opt for an ELTIF.

Requirements for an ELTIF investment

In the first draft ELTIF framework, adopted in 2015, a minimum investment amount of EUR 10,000 was applied to retail investors. In addition, no more than 10% of the assets could be invested in an ELTIF. This means that retail investors had to have at least EUR 100,000 in assets to be able to invest in an ELTIF.

The ELTIF 2.0 reform completely abolished the formal minimum investment amount at EU level. In practice, each provider sets its own minimum amounts. The range ranges from 1 euro for individual online brokers to 10,000 euros and more for classically advised products.⁵ The specific investment requirements therefore always depend on the respective ELTIF.

In order to maintain investor protection despite a lower entry barrier, the regular MiFID II requirements apply when selling ELTIFs to retail investors.

Whether a suitability check or just a suitability check is carried out depends on whether the ELTIF is purchased with investment advice or without advice. This is to ensure that investors can understand the risks and characteristics of the products. 

What documents should you check before buying?

Before purchasing an ELTIF, you should have read five documents: Key Information Document (KID), prospectus or information memorandum, the latest half-yearly or annual report, the SFDR documents for sustainability-oriented funds, and, after consultation, the suitability statement.

• Key Information Document (KID): Standardised summary with risks, costs, recommended holding period and performance scenarios. Mandatory document for every retail product.
• Prospectus or Information Memorandum: The legally central detailed document. You will find the full terms and conditions, fees, risks and redemption mechanisms here.
• Half-yearly or annual report: This shows the real holdings, performance, ongoing costs and changes in the portfolio.
• SFDR documents: For sustainability-oriented ELTIFs, they show whether a fund is disclosed under Article 8 (ESG characteristics) or Article 9 (sustainable investment objective).
• Declaration of conformity: After the MiFID II mandatory advice, you will receive a written statement as to whether the product suits your financial situation, risk profile and investment objectives.¹¹

At klimaVest, all mandatory documents are publicly available in the download area: BIB, information memorandum, investment strategy, half-yearly and annual reports and fact sheet. The SFDR documents for Article 9 classification are stored on the Commerz Real Fund Management disclosure page.¹²
 

What should you look for when selecting a provider?

When selecting an ELTIF provider, four main criteria count:

• Experience in the underlying asset class
• Operational routine in liquidity management
• Transparency in reporting and documentation
• A robust track record

The asset class is the most strategically important point here. With an ELTIF, you can enter asset classes that are not accessible via classic ETFs and equity funds. Tangible assets with stable, long-term contractually secured cash flows, such as from renewable energies or regulated infrastructure, are particularly interesting for a portfolio addition. Properly constructed, such an ELTIF can be a solid, low-volatility investment and balance a highly equity-based custody account.

Other ELTIF strategies such as private debt or private equity follow a different logic with significantly higher fluctuations in value and default risks. So it doesn't matter which asset class an ELTIF invests in.

Equally important is the question of whether the provider has mastered the selected class for years. Scope names the reputational risk of inexperienced asset managers as the largest industry risk in 2025/2026. In 2025, 113 new ELTIFs were added, many of which were houses that had not previously launched an ELTIF. The younger the market, the more important the question becomes whether a provider really has experience in the selected asset class or is only using a new product envelope.¹³

Sonja Knorr, analyst at Scope, says: "Since you don't know in advance whether an ELTIF will be successful with its investments, investors should choose providers with a strong history. Such established companies have already proven that they can also be successful in difficult market phases."⁴

Brand awareness does not replace a track record in the specific asset class. The decisive factor is whether the company can demonstrate years of operational experience in the selected asset class.

Focus or broad spread: Which ELTIF is recommended?

There are two typesof ELTIFs: thematically focused funds that invest in a clearly defined asset class and multi-asset ELTIFs that bundle several asset classes under one roof. Both approaches have their justification, but they require different testing.

A focused ELTIF is easier to understand for retail investors. Anyone investing in an infrastructure ELTIF with a focus on renewable energies knows: The capital flows into wind and solar farms, electricity grids and contractually secured feed-in tariffs. Strategy, risk and sources of income are clear - including how to measure the competence of asset management.

In the case of multi-asset ELTIFs, the range of content is often wide. Labels such as “Multi Asset” or “Infrastructure” can include a combination of direct investments, target funds and equity and debt capital. Stiftung Warentest documents an ELTIF for 2026, for example, which invests in firefighting helicopters under the label “Infrastructure” - not what most investors first think of when it comes to the keyword infrastructure. This can diversify, but also makes the product more complex to look through. The mandatory documents are often difficult to understand, warns Warentest further.⁵

Regulatory dispersion is also fraudulent. An ELTIF may invest up to 20 per cent in a single investment and must hold at least five properties. In ELTIFs, “diversified” can therefore be meant more narrowly than the word suggests. Again, you should ask yourself: Do you understand diversification? Does the idea convince you?

The more robust choice for a portfolio addition is usually the more comprehensible one: an ELTIF whose strategy can be explained in one sentence and whose income comes from a source that you understand.

What are the taxes for ELTIFs?

ELTIFs are taxed in Germany under the Investment Tax Act (InvStG) like other investment funds. Distributions, current flat-rate taxes and gains on the sale of fund units may be taxable.

Withholding tax applies to private investors with a custody account with a domestic bank: 25% plus solidarity surcharge and, if applicable, church tax. The custodian bank usually settles them automatically. The lump sum savings amount of EUR 1,000 (individual investment) or EUR 2,000 (total investment) also applies here.

A partial exemption - i.e. a flat-rate exemption of part of the income - is not fixed on the ELTIF label, but on the tax classification of the specific fund. Whether and to what extent it applies must be checked on a fund-by-fund basis. According to provider information, klimaVest cannot currently expect a partial exemption.¹⁴

This overview does not replace tax advice. The burden that arises in each individual case depends on the personal tax situation.

SIP vs. one-time investment: What is possible when buying an ELTIF?

Both are possible, but the one-time investment is the standard case. Anyone buying an ELTIF usually invests a fixed amount and then holds the units for the recommended holding period.

Savings plans are still the exception for ELTIFs. They are less dependent on the fund itself than on the distribution channel: Neobrokers sometimes allow instalment investments from 1 euro per instalment, but only offer a small selection of ELTIFs. Products requiring advice, on the other hand, often require a five-digit minimum investment. Stiftung Warentest documented this range in March 2026.⁵

Before making a decision, it is worth looking at two points:

• Although a savings plan smooths the entry point, it does not change the limited liquidity on redemption. The cost average effect is only effective at the beginning.
• Savings plans are more organisationally complex for products requiring advice, because each instalment is technically a subscription.

With klimaVest, the minimum investment amounts to EUR 10,000 after investment advice. klimaVest is currently not available as a savings plan.