Uncovering ELTIFs

Why ELTIFs?

A design that breaks down barriers to entry.

The ELTIF is the first wrapper that allows a scalable and regulated pan-European distribution of private markets investments across different investor types. This stands in stark contrast to the traditional approach of creating individual wrappers per jurisdiction.

Moreover, the EU has recently approved changes to make the ELTIF vehicle even more attractive by providing greater flexibility regarding eligible assets and simplifying access.¹

Driving Europe's economic growth.

The EU views the ELTIF as a powerful vehicle to boost investment in infrastructure and other long-term projects and businesses - both within the real economy of the EU and beyond. As such, investors in ELTIFs provide local companies and infrastructure with additional financing, driving economic growth within the EU.

Democratising private markets for European investors.

Adding private markets to a clients' portfolios may lead to increased diversification, enhanced returns and a hedge against inflation. It also provides the opportunity to invest in tangible and socially responsible undertakings, such as wind farms, schools, hospitals, or SMEs.

Risk: Diversification and asset allocation may not fully protect you from market risk.

Diversification

Private markets investments are investments that are not readily available in public markets. Their underlying risks are uncorrelated or less correlated with traditional investments such as listed bonds or equities. The low correlation with traditional asset classes provides an opportunity to diversify portfolios, reducing overall risk exposure across investments.

Risk: Diversification and asset allocation may not fully protect you from market risk.

Seeks stable income

Private markets investments, especially real assets (infrastructure and real estate), have the potential to deliver long-term stable cash yield throughout a varied market cycle.

Inflation mitigation

Real assets investments are investments in physical assets such as wind farms, offices, warehouses, airports, etc. Investing in such 'real' assets may be a useful addition to the toolkits for those looking to mitigate the impact of inflation during inflationary environments. For example, infrastructure projects frequently have their revenues linked to an inflation index. This means that when the inflation goes up, the revenues will also go up, mitigating inflation.

Enhanced return potential

In addition to their diversifying nature, allocations made to private market have the potential to increase a portfolio's total return as private markets have historically been able to outperform their public market equivalents:

Private credit
Annualised return of private credit vs US bonds.²

Private Credit represented by the Cliffwater Direct Lending Index. Private credit reflects rolling quarterly returns and most recent return from 9/30/15 (index inception) to 3/31/22 (latest available data). Refer to the end of the page for additional details of US aggregate which are US bonds indices.

Past performance does not guarantee or indicate future results. Index performance is shown for illustrative purposes only. It is not possible to invest directly in an unmanaged index.

Asset class comparison is used to demonstrate private market performance compared to public market performance during comparable time periods. There are material differences in individual index/ manager universe methodologies (both public and private) and differences in the way public and private market performance is calculated; the comparisons shown may not fully reflect these differences. In general, public market indexes are unmanaged, represent a group of constituent securities which may change over time, reflect the reinvestment of dividends but do not reflect the deduction of any fees or expenses. Private market manager universes and indices often rely on self-reporting by managers. Therefore, there may be survivorship bias given that fund managers have discretion to report, or to discontinue reporting for various reasons (e.g. due to liquidation), and therefore private market manager universes and indices may reflect a bias towards funds with track records of success. Private Equity represented by the Burgiss Private Equity Manager Universe for the 20-year period ending 30/09/22. Burgiss data reflects quarterly time-weighted returns. Burgiss data is sourced from limited partners of these private funds and calculates results net of fees and carried interest, providing results that are updated and published on a quarterly basis. Private Credit represented by the Cliffwater Direct Lending Index. Private credit reflects rolling quarterly returns and most recent return from 30/09/15 (index inception) to 31/12/22 (latest available data). For more information on the individual indexes, please scroll down to the end of the webpage.

Why BlackRock for ELTIF?

BlackRock was one of the first movers to offer ELTIFs to retail and institutional investors in Europe and has successfully grown its platform to four ELTIFs across private equity and private infrastructure so far. BlackRock's ELTIF platform aims to regularly launch new private market ELTIFs to its European client base.

Previous ELTIF fundraises: