The European Commission’s (Commission) clarifications, published on ESMA’s Q&A tool in December 2025, deliver the most authoritative guidance to date on the operation of ELTIF 2.0 and the ELTIF RTS.
The responses provide welcome legal clarity on structuring via intermediary entities commonly used in private markets, the interaction of eligibility and liquidity rules, and the limits of national discretions, with immediate implications for managers of open‑ended and evergreen European Long-Term Investment Funds (ELTIFs).
Key takeaways
Intermediary entities benefit from look-through treatment
The Commission confirms that ELTIFs can use special purpose vehicles (SPVs), securitization or aggregator vehicles to structure their investments, with portfolio composition and diversification rules applying on a look-through basis to the underlying assets rather than to the intermediary itself. This provides welcome clarity for managers using multi-layer structures and should help resolve uncertainty that has arisen in certain jurisdictions around whether aggregators might be treated as alternative investment funds (AIFs) subject to fund-of-funds limits.
Target funds may hold some non-eligible assets
When an ELTIF invests through EU target funds, those target funds do not need to hold only ELTIF-eligible assets. The key is that the ELTIF itself meets the overall composition, diversification and borrowing requirements on a look-through basis, and that target funds invest no more than 10% in other Undertakings for Collective Investment (UCIs). This gives ELTIF fund-of-funds structures more flexibility when selecting target funds.
No nationality-based barriers to ELTIF distribution
The Commission makes clear that member states cannot require ELTIFs or their managers to be locally established. In practice, this means a feeder ELTIF does not need to be domiciled in the same country as its master fund, and member states cannot restrict eligibility for unit-linked or pension products to locally established ELTIFs. This is particularly relevant for France, where certain national rules have been understood to exclude non-French ELTIFs from insurance wrappers, as being outside of the ELTIF Regulation remit. It remains to be seen how member states will engage with this guidance.
For a deeper analysis of these points and additional Q&A topics covered by the Commission, access our full alert below.
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