klimaVest Windpark und Solarpark

klimaVest opens up new opportunities for investors ELTIF reloaded: new rules, new opportunities

04.04.2023 3 Reading Time

klimaVest: Redakteurin Luisa Schaus
Luisa Schaus
For several years now, the ELTIF financial instrument has also enabled retail investors to invest in companies or infrastructure projects in the European real economy. Now, with its ELTIF reform, the EU has set new rules – opening up entirely new opportunities for investors.

ELTIFs at a glance

The introduction of ELTIFs ("European Long-Term Investment Funds") in 2015 provided new impetus for the financial market. Investment projects in the areas of infrastructure, digitalisation or renewable energies were no longer aimed exclusively at institutional investors.
With ELTIF investment products, retail investors were also given the opportunity to integrate their capital more strongly into the European economy – and thus promote long-term investments with an economic and social impact in a targeted way.

the start on the financial market was rather slow. It is only in recent years that demand for these new fund products has increased noticeably and ensured an increasing supply: 77 ELTIFs were on the market at the end of 2022, around 60 percent of which were explicitly aimed at retail investors. With a total volume of more than 11 billion euros, the ELTIF market today has a lot of financial leverage. However, an investment in an ELTIF is (still) subject to strict requirements, which primarily serve to protect investors. Only those who have net assets of at least 100,000 euros may invest in an ELTIF, with a minimum investment amount of 10,000 euros. For investors with assets under 500,000 euros, an investment limit of no more than 10 percent of their assets applies.

ELTIF 2.0: the revised success model

As promising as the concept may have been in theory, the strict regulations made it more difficult for retail investors in particular to access the ELTIF market in practice. High entry amounts and a lack of risk diversification ensured that the market did not develop as quickly as initially hoped. The EU ultimately drew the necessary conclusions of its policy and adopted a significantly updated ELTIF Regulation – after almost eight years. 

From 2024 at the latest, the regulations of ELTIF 2.0 will apply. Many things will then become simpler, easier to deal with and more flexible – not only for investors, but also for ELTIF providers and fund and asset managers.
The changes include new opportunities for a global investment strategy, more flexibility in the asset selection, and more relaxed entry barriers for investors.
But what does this mean in practice? And what exactly is changing for investors? Using the example of the klimaVest ELTIF, we will take a closer look at the upcoming update.

Invest in renewable energy with klimaVest

klimaVest is a new fund with big ambitions. As early as 2021, more than two thirds of the entire market in Germany was accounted for by the ELTIF from Commerz Real – and that only one year after its launch.
klimaVest now has more than one billion euros in fund capital, with a market volume of 1.49 billion euros. This makes it not only the biggest ELTIF on the German financial market by far – but also the only one with a certified focus on sustainability. With its fund portfolio, consisting of more than 40 investments in wind farms and solar parks, klimaVest is currently specifically promoting the expansion of sustainable European energy infrastructure.

With the new ELTIF regulations, klimaVest now has the opportunity to expand its investment strategy to other countries and invest in infrastructure projects in Norway, New Zealand and the US, for example. As a result, the fund not only achieves greater geographic diversification, but also a more balanced risk spread. Under ELTIF 2.0, significantly more assets will now also be eligible for investment. With the lowering of the minimum value from 10 million to 1 million euros, asset management has more freedom in selecting future investment properties – and thus also the opportunity to promote smaller energy and infrastructure projects.

Investors will also enjoy significantly more relaxed investment conditions with ELTIF 2.0: anyone wishing to invest in ELTIFs such as klimaVest will soon also be able to invest smaller amounts – both the minimum investment of 10,000 euros and the asset limit of at least 100,000 euros will no longer apply under ELTIF 2.0. Investors will now also have the opportunity to invest more than 10 percent of their assets in ELTIFs and thus structure their portfolio even more independently.

ELTIF 2.0 and klimaVest: new opportunities for even more investors

With ELTIF 2.0, the EU has taken a major step towards making the financial instrument more effective and enabling even more investors to invest with a long-term impact. If you decide to invest in klimaVest you will now actively contribute to driving this development forward. The more capital invested, the more impact can be achieved with klimaVest investments. This also increases the potential returns for investors.

More fund assets also means more freedom in the selection of projects: in addition to wind and solar power, the fund can also focus on innovative future industries such as energy storage or energy distribution – without throwing its portfolio out of balance.
With the help of the new regulations surrounding ELTIF 2.0, funds such as klimaVest now finally have the opportunity to put their potential into practice and thus finance a more sustainable real economy in Europe together with investors.