Modern European economy suffers from the lack of investments into the business which impedes their innovative development. The legal base should be improved in order to be able to attract more investors. The EU’s legislation is constantly being improved in order to create all the favorable conditions for collective investments.

ELTIF

The European long-term investment funds preview the investment into a wide range of long-term activities. These funds are created for such projects as infrastructure, transport, power production, education projects; investments into the enterprises which are not listed (these are, usually, small and medium enterprises) and investments into real estate and infrastructural objects. According to the Instructions from 2011/61 only the Alternative Investment funds (AIFS), managed by the AIFM, have the right to present themselves as ELTIF. The fund has concrete rules, according to which they have to invest 70% of their capital into a concrete sphere of the economy (for long-term). They may also provide the money for other spheres of activities, but not for long-term projects and not more than 30% of the funds. ELTIF provide very flexible conditions for the investors. In such a way, this kind of investments becomes more attractive.

The managers of the fund will have to guarantee that the retail investors with the portfolio up to € 500 000 will be able to invest not more than 10% of the sum into the long-term project. The minimum first-time investment is agreed on the level of € 10 000. If ELTIF will be working more than 10 years, the manager or the distributor of the fund decline the collaboration with retail investors as they may fail to manage such a long-term obligation.

The money received from ELTIF can be used for the introduction of innovative technologies into the production or for the research and development of innovations. These investments into innovations will help to leverage the economy of the country and make the business more profitable and sustainable. In the era of fast changes of trends and technology, the companies cannot use outdated tools and technologies as they will lose their competitiveness on the market.

ELTIF is a great tool to solve not only the economic problems, but also crucial political issues of the European Union as it creates the possibility of the coverage of the deficit of weak European countries by means of the investments from the countries with a more sustainable economy.