ELTIF 2.0 Regulation and Alternative Investment Funds
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Alternative Investment Funds, European Long-term Investment Funds, ELTIF 2.0, Investment Service Providers, ISPs, Collective Investment Vehicles, CIVs, UCITS, Transferable Securities, Unlisted Companies, Debt Financing, Equity Investment, Banking Monopoly, Credit Operations, Financial Instruments, Monetary and Financial Code, Article L.511-6, Leverage, LBO, Leveraged Buyout, Small and Medium-d Enterprises, SME, Professional Investors, Non-Professional Investors, Asset Management, Risk Diversification, Securities, Shares, Obligations, Real Estate Funds, Capital Risk, Investment Services, Financial Regulation, Alternative Finance.
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Abstract
The ELTIF 2.0 regulation allows alternative investment funds to lend to companies, providing a new financing option for small and medium-sized enterprises.
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[...] - Alternative Investment Funds who, them, have the right to use leverage. These latter can therefore take on debt beyond the value of their assets in the hope that the return on their investments will allow them to face the cost of their debt and even generate a profit. FIA are partly reserved for professional investors, but also open to certain non-professional investors. Funds intended for professionals invest mainly in assets represented by unlisted company shares and are subject to specific regulation. [...]
[...] Or, the the function of a PSI is not to make credit. In fact, PSIs are only intermediaries between the market and their clients who give them buy or sell orders. However, the provisions of the code monetary and financial the authorised to carry out credit operations in favour of their clients so that they mobilize the necessary amounts for the acquisition of financial instruments on the market. On can in this regard see some connected operations in so far as they are linked to investment services. [...]
[...] It is therefore a kind of reciprocity in access to these activities. II. Alternative Investment Funds Certain alternative investment funds, the European long-term investment funds (Regulation of 15 February 2023 "ELTIF are also concerned by the derogation mentioned in article 511-6. The collective investment vehicles (CIVs) are collective investment vehicles holding diverse assets, including < b >securities shares of listed or unlisted companies, of obligations, of the immovable property or even more of the parts of real estate funds. These funds allow investors, whether they are professionals or not, to invest in a portfolio of assets rather than in isolated securities. [...]
[...] Banks, even if they sometimes complain of unfair competition, have in reality abandoned this clientele. In fact, if banks remain strongly present among fast-growing companies or in leveraged buyout (LBO) operations, they are less involved in the financing of small and medium-sized enterprises. These companies thus encounter more difficulties in obtaining debt financing, unlike medium-sized companies or large companies. The ELTIF funds respond therefore to an unmet need by banks. The credit operations granted by the ELTIF funds are not not connected services, but a total derogation from the banking monopoly. [...]
[...] Why has this evolution, which directly competes with credit institutions, been encouraged? Unlike the opening of the bond market in the années 80, where the banks were able to offset the loss of certain loans by subscribing to bonds issued by companies, this time, the situation is different. Banks are not funds, and funds are not banks. Although certain large credit institutions are also involved in collective management and may structure or hold [...]
