In Luxembourg's dynamic investment landscape, European labels like ELTIF (European Long-Term Investment Funds), EuVECA (European Venture Capital Funds), and EuSEF (European Social Entrepreneurship Funds) stand distinct from traditional fund structures, serving as specialised European designations that overlay existing fund frameworks. Unlike fund structures such as UCI Part II, SIFs and RAIFs, which define the operational and regulatory environment of the fund, these labels indicate a fund's strategic focus and compliance with specific European Union objectives. By adopting one of these labels, a fund not only adheres to the regulatory and operational frameworks of its base structure but also commits to investing in accordance with the EU's goals for sustainable growth, innovation, and social impact, offering investors targeted opportunities within the broader European agenda. Let's dive into how these labels interact with Luxembourg's fund frameworks and the opportunities they present.

ELTIF: Financing Europe's Long-Term Growth

ELTIFs are AIFs designed to channel investments into long-term projects in the real economy, including (physical & social) infrastructure, real estate,  small and medium-sized enterprises (SMEs), vital for Europe's sustainable economic growth. ELTIFs can be set up under various Luxembourg fund structures, including UCI Part II Funds, SIFs, and RAIFs, provided they subsequently also comply with the ELTIF regulation requirements. This includes investing primarily in long-term assets, offering additional protection to investors, and contributing to European economic growth and job creation.

The resulting versatility ensures that ELTIFs can benefit from the regulatory, operational, governance and tax advantages of the respective underlying fund type while gaining the additional benefits under the ELTIF label.

EuVECA: Supporting European Innovation

A fund under the EuVECA label (short for European Venture Capital Funds) is a specialised investment vehicle that targets investments in emerging and growth-stage companies in Europe (i.e. Venture Capital), aiming to drive innovation and entrepreneurial success in the EU. Luxembourg fund regimes that can, voluntarily, adopt the EuVECA label include UCI Part II Funds, SIFs, SICARs and RAIFs, providing a dedicated framework for investors to engage with venture capital investments .

The EuVECA label is designed to facilitate cross-border fundraising and investment within the EU through a reduced burden of AIFMD (subject to applicable exemptions) imposed on managers of EuVECA funds while maintaining EEA marketing access through a dedicated EuVECA marketing passport.

EuSEF: Fostering Social Impact

Funds that adopt the EuSEF label aim to generate measurable social impacts alongside financial returns, investing in social enterprises that address societal challenges within the EU. Similar to EuVECAs, AIFs under the EuSEF label are able to benefit from a dedicated EuSEFs marketing passport allowing it to be marketed to Professional Investors and certain High Net Worth Individuals while being able to benefit from certain AIFMD exemptions (if applicable).

Integrating European Labels with Luxembourg Fund Regimes

The integration of ELTIF, EuVECA, and EuSEF labels with Luxembourg's fund regimes showcases the country's strategic position in aligning investor capital with the European Union's broader economic, innovative, and social objectives. Each label brings specific regulatory and marketing advantages, such as simplified marketing across the EU and the potential for a diversified investor base. For fund managers and investors alike, Luxembourg offers a dynamic platform to leverage these European labels within its sophisticated fund structures, combining regulatory & tax efficiency, operational flexibility, and a commitment to sustainable, long-term investment opportunities across Europe.